HRnetGroup - Maybank Kim Eng 2021-08-16: Warming Job Market

HRNETGROUP LIMITED (SGX:CHZ) | SGinvestors.io HRNETGROUP LIMITED (SGX:CHZ)

HRnetGroup - Warming Job Market


Solid growth momentum; maintain BUY

  • HRnetGroup (SGX:CHZ)'s 1H21 headline PATMI jumped 71.2% to S$35.9m, partly boosted by net fair value and disposal gains on financial assets totalling S$6.8m (1H20: loss of S$1.2m), which more than offset the lower government grants. But excluding these non-recurring items, core earnings still came in ahead of our and street’s estimates, attributed to solid growth momentum for both its Flexible Staffing (FS) and Professional Recruitment (PR) segments.
  • Maintain BUY on HRnetGroup with a higher target price of S$1.02, pegged at 18x FY22E P/E after raising our core EPS marginally by 3% in 2022 due to stronger volumes.



Healthcare sector is the brightest spot

  • Revenue rose 30.8% y-o-y to S$275.1m, fuelled by strong hiring on pent-up demand and employment churn, especially in North Asia, Malaysia and Indonesia given the robust economic recovery with rollout of vaccination programmes.
  • Notably, the healthcare life science sector (which includes Pharma, Medical service & Research) now accounts for 26% of its topline (from 15% in 1H20).
  • Overall GPM remained stable at 29.7% as the Professional Recruitment (PR) / Flexible Staffing (FS) business mix of 16.0% / 83.5% was fairly similar to last year’s 16.7%/82.8%.


Strong rebound in flexible staffing volume growth

  • On a segmental basis, turnover from our assumptions, largely to reflect the stronger-than-expected volume growth for its FS business.


Recruiting for the gig economy






Eric Ong Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-08-16
SGX Stock Analyst Report BUY MAINTAIN BUY 01.02 UP 0.990



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