HRnetGroup - Maybank Research 2022-10-10: Acquires Stake In Fintech Start-Up Octomate; Adding An External Wing


HRnetGroup - Acquires Stake In Fintech Start-Up Octomate; Adding An External Wing

  • HRnetGroup (SGX:CHZ) is acquiring a 51% stake in fintech startup Octomate for S$676.5K from an unrelated third party. Refer to HRnetGroup's announcement dated 2022-10-03. The move will facilitate the integration of Octomate’s Instant Payment solution with HRnetGroup’s Ease Works app that allows contractor employees to be paid instantly after approval of their timesheets.
  • While there is no material impact on our EPS forecasts for HRnetGroup, we think Octomate is in a sweet spot to extract potential synergies as it enables cross-selling to the group’s new and existing clients.

Octomate - Offering instant payment to entice contractors

  • Set up in 2019, Octomate is a cloud-based workforce management solution, designed to help enterprises manage their contractors from onboarding to roster and timesheet management. It is built on blockchain for maximum security and scalability.
  • The breakout star in its suite of offerings is the ability to power instant payments (i.e salary, reimbursements of claims, or even rewards). Octomate is the first of its kind to offer hybrid HR tech and fintech solution on one platform.

An independent brand with strong clientele base

  • According to management, Octomate will remain an independent brand of HRnetGroup. It intends to develop this young start-up further as a value-added product offering.
  • Currently, Octomate has over 3,000 daily active users with blue chip customers such as Amazon, H&M, and Hyundai Motor Group, etc. There is a one-time implementation / activation fee charged to customers to go live, as well as recurring subscription fees by tier or volume of transactions, depending on clients’ nature of business.
  • Octomate’s CEO and Co-Founder Zoey Tong will become the 37th business co-owner of HRnetGroup.

The fight for top global talent is on

Eric Ong Maybank Research | https://www.maybank-ke.com.sg/ 2022-10-10
SGX Stock Analyst Report BUY MAINTAIN BUY 1.070 SAME 1.070