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HRnetGroup - RHB Invest 2022-08-17: A Strong 1H22; Keep BUY

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

HRnetGroup - A Strong 1H22; Keep BUY

  • HRnetGroup announced a strong 1H22, in line with our estimates. Revenue rose 14.2% y-o-y to S$314.2m, while core net profit after tax rose to 36.2% y-o-y to S$42.6m.
  • Going forward, we see hiring remaining resilient despite the possibility of a slight slowdown.
  • A S$0.0213 interim dividend has also been declared by HRnetGroup. We believe that the current share buyback (SBB) programme will be a positive to HRnetGroup's share price.
  • Maintain BUY and target price of S$1.01, 28% upside and ~6% yield.



HRnetGroup's FY22F will likely end well

  • For 1H22, HRnetGroup (SGX:CHZ)’s flexible and professional recruitment grew by 13.2% and 18.6% y-o-y, while Singapore continues to remain its largest market.
  • Going forward, hiring is still expected to be strong from the technology, healthcare and consumer sectors. There is potential for a slowdown in hiring, especially if a recession hits, but for now, signs show hiring is still healthy.


HRnetGroup announced S$30mil Share buyback programme.

  • Management intends to buy up to S$30mil of HRnetGroup shares via the open market. The maximum number of shares which may be purchased by the company under the share buyback programme is 100,377,338 (amounting to 10% of its issued shares). Depending on the prices at which the shares are purchased, the programme could take more than a year to be completed.
  • As at 16 Aug 2022, HRnetGroup's management has already purchased 0.21% of the total shares outstanding. We expect the share buyback programme to continue and be positive for HRnetGroup's share price.


Attractive dividends likely to continue.

  • HRnetGroup has declared the first ever interim dividend of 2.13 cents. With the positive performance likely to continue, we expect management to reward shareholders with attractive dividends. As a result, we expect a 5.5% dividend yield for HRnetGroup in FY22F, or a 60% payout ratio.

Hiring activity still positive; maintain BUY.



ESG.

  • Using our in-house proprietary methodology, we derive an ESG score of 3.0, which is on par with the country median. As a result, we apply a 0% premium to our target price.





Jarick Seet RHB Securities Research | https://www.rhbgroup.com/ 2022-08-17
SGX Stock Analyst Report BUY MAINTAIN BUY 1.010 SAME 1.010



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