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
- Going forward, HRnetGroup's management continues to see strong local prolonged COVID-19 pandemic.
- See
Eric Ong
Maybank Kim Eng Research
|
https://www.maybank-ke.com.sg/
2021-08-16
SGX Stock
Analyst Report
01.02
UP
0.990
