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HRnetGroup
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why no one talk about this HRNET GROUP?
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Joelton
Supreme |
03-Nov-2023 11:04
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3Q2023 unemployment remains stable, RHB maintains ' buy' on HRnetGroup
RHB Bank Singapore analyst Alfie Yeo has maintained a &ldquo buy&rdquo on HRnetGroup CHZ 0.72% with a target price of 91 cents on the back of a more compelling valuation.
Citing Ministry of Manpower&rsquo s Labour Market Advance Release for the quarter, Yeo points out that total employment numbers continued to increase while retrenchment and unemployed residents rose, dragged mainly by the wholesale trade sector.
Nonetheless, overall unemployment remained low at 2%, Yeo adds. Resident employment growth was driven by financial services and professional services as well as the health and social services sectors while non-resident employment growth was led by retail trade, food and beverage services administration and support services and construction.
That said, Yeo describes the latest data as a mixed bag. This year, overall unemployment remained stable at 1.8% to 2%, well below the 2013-2022 average of 2.4%. Overall unemployment of 2% was also consistent with July and August, Yeo notes.
&ldquo Even though retrenchment trended higher, total employment increased, albeit slightly lower than 2Q2023&rsquo s numbers. Our economists expect Singapore&rsquo s GDP growth to accelerate from 1.5% this year before posting a 3% GDP growth in 2024, with China&rsquo s GDP forecast to accelerate from 2022&rsquo s 3% to 4% and 4.5% in 2023 and 2024,&rdquo
As RHB is neutral on the latest data, Yeo is not making changes to his earnings estimates. His two year FY2023 to FY2025 earnings growth CAGR estimate remains at 5% as RHB is positive on a hiring recovery from next year onwards on the back of accelerating economic growth.
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Joelton
Supreme |
15-Aug-2023 11:04
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Maybank, PhillipCap and RHB lower TPs on HRnetGroup as recruitment disappointed in 1HFY2023
Maybank Research, PhillipCapital and RHB Bank Singapore have lowered their target prices for HRnetGroup to 80 cents, 88 cents and 91 cents, respectively, down from 85 cents, 98 cents and $1 previously. Maybank has kept its &ldquo hold&rdquo call, while PhillipCapital and RHB have maintained &ldquo buy&rdquo on the staffing company.
In his report dated Aug 13, Maybank analyst Eric Ong says he is waiting for &ldquo dark clouds&rdquo over the challenging job market to pass after HRnetGroup recorded a soft 1HFY2023 ended June 30 core performance with its patmi down 18.3% y-o-y to $28.3 million.
The company&rsquo s two biggest markets, Singapore and North Asia, took the brunt of the faltering economic recovery as seen in the sharp slowdown in its professional recruitment segment, according to Ong. Revenue for the segment slumped 34% y-o-y to $34.3 million in 1HFY2023 against the backdrop of strong economic headwinds that affected hiring sentiment across most sectors, especially in the mid-to-senior level.
For the period, HRnetGroup&rsquo s gross profit margin stood at 24.3% compared to 29.3% in 1HFY2022 due to the shift in sales mix amid a tough external environment. The proportion of gross profit derived from flexible staffing surpassed that of professional recruitment in 1HFY2023 for the first time and formed 49.8% and 47.9% of gross profit, respectively, compared 41.5% and 56.6% in the first half of last year.
Ong believes Singapore holds the key to the company seeing any recovery in FY2024. &ldquo As Singapore is the group&rsquo s largest market contributing 66.8% of turnover in 1HFY2023, management is focusing on volume-based but lower margin hiring projects for some of its key clients and has even initiated preferential fee structures for those that hired displaced talent.&rdquo he says.
Compared to its interim dividend per share (DPS) of 2.13 cents in 1HFY2023, HRnetGroup has declared an interim DPS of $1.87 cents for the six months just passed, or a payout ratio of 62%.
In view of lower volumes and pricing assumptions given current macroeconomic uncertainties, the Maybank analyst has adjusted his FY2023 to FY2024 earnings per share (EPS) estimates by 2% to 9%. Although his target price is still based on a 15x FY2024 price-to-earnings (P/E) ratio, it has been lowered from 85 cents to 80 cents.
Ong adds that HRnetGroup&rsquo s balance sheet remains robust with a net cash position of $262 million or some 35% of its market capitalisation, supported by its unique co-ownership and asset-light business model. &ldquo Despite the lacklustre 1HFY2023 results, annualised dividend yield is decent at around 5%, in our view. We think the share price should be well supported by its existing share-buyback program and undemanding valuation of about 8.4x ex-cash P/E,&rdquo he says.
Meanwhile, Paul Chew of PhillipCapital has also cut his FY2023 earnings forecast by 11% to an adjusted patmi of $56 million with lower professional recruitment volume and price assumptions. Nonetheless, he has maintained his &ldquo buy&rdquo call and believes that even with a lower target price of 88 cents, HRnetGroup would still be trading at a &ldquo huge discount&rdquo to global peers.
See also: ' Bumpy take-off' for China Aviation Oil has OCBC Investment Research lowering TP to $1.10
Chew believes hiring activities will trend sideways in 2H2023 after the &ldquo stellar growth&rdquo shown in 2022, as they are propped up by technology and pandemic-related placements. Relative to its peers, HRnetGroup sees upside from its net cash position while it enjoys economies of scale from its nearly 700 recruitment consultants across 16 cities.
While the outlook for both business and candidate confidence in professional recruitment remains weak, negatively impacting demand and supply, the PhillipCapital analyst is positive on flexible staffing to provide a stable platform for HRnetGroup.
He expects flexible staffing, which remained resilient in 1HFY2023 despite the absence of pandemic-related hiring, to remain the near-term growth driver as corporates pivot towards contingent workers in an uncertain macro backdrop. Chew notes that sectors supporting the segment during the period were banking, luxury retail, consumer and logistics.
He adds that another growth pillar of HRnetGroup&rsquo s flexible staffing segment is from its expansion overseas to Taipei, Hong Kong and Jakarta, where its track record, technology and capital would be advantageous.
The strength of the company&rsquo s ownership model was also reflected by the flexibility to reduce employee expenses during the period. In line with the weaker revenues, employee cost in 1HFY2023 was down 19% y-o-y, from lower bonus payout and headcount reduction of 83, notes Chew.
Meanwhile, he points out that from the $30 million share buyback plan announced in June 2022, there is still a balance of $16.6 million to be completed.
RHB' s Alfie Yeo says that his reduced target price of 91 cents after cutting his earnings forcasts for FY2023 to FY2025 by 9% to 11% still offers a 22% upside and an FY2023 yield of around 5%. " Nonetheless, we stay positive on the stock in anticipation of accelerating GDP going forward and compelling valuations," says Yeo.
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Joelton
Supreme |
11-Aug-2023 10:36
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HRnetGroup H1 profit down 18.3% to S$28.3 million amid economic slowdown
RECRUITMENT company HRnetGroup : CHZ -0.68% on Thursday (Aug 10) reported a net profit of S$28.3 million for the first half ended Jun 30, 2023, down 18.3 per cent from S$34.6 million in the corresponding period last year.
H1 revenue saw a 6.2 per cent year-on-year decline to S$294.8 million, from S$314.2 million a year ago. This came after the group&rsquo s professional recruitment and flexible staffing segments both registered decreased topline earnings from the year-ago period.
The professional recruitment segment plunged 34.3 per cent year on year to S$34.3 million, from S$52.2 million previously.
&ldquo Strong economic headwinds (impacted) permanent hiring first, resulting in weak hiring sentiment across most sectors and levels, in line with the wider recruitment industry across the world,&rdquo said HRnetGroup in a bourse filing. This was especially so for its business in mainland China, which took the brunt of the faltering economic recovery, it added.
Placement volume also fell by 21 per cent in H1.
Meanwhile, revenue from its flexible staffing segment slipped a marginal 0.5 per cent to S$258.6 million, from S$259.8 million a year ago &ndash mainly because &ldquo flexible staffing is more resilient in challenging conditions as demand is better suited to a flexible solution for clients&rdquo , it said.
Earnings per share for the period stood at S$0.0286 per share, down from S$0.0345 per share in the same period in 2022.
The group&rsquo s directors declared an interim dividend of S$0.0187 per share, representing a payout ratio of 62 per cent. It will be paid on or around Sep 11, 2023.
Despite macroeconomic uncertainties and fears of recession, HRnetGroup remains confident that the markets in Asia will eventually recover.
&ldquo We will continue to invest in people, startups and ventures, taking a long-term view and gearing up the capacity for the economic recovery when it comes,&rdquo it said.
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Joelton
Supreme |
28-Jun-2023 09:10
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CGS-CIMB downgrades HRnetGroup to ' hold' with lowered TP of 80 cents
CGS-CIMB Research has downgraded its &ldquo add&rdquo call to &ldquo hold&rdquo for HRnetGroup (HRnet) CHZ 0.00% as a result of weak Singapore macroeconomic conditions and a challenging labour market in China.
Analysts Kenneth Tan and Lim Siew Kee have lowered their target price from $1 to 80 cents, based on a 13x FY2024 P/E, 0.5 standard deviation below FY2017-FY2022 mean, as they anticipate greater earnings uncertainties.
Tan and Lim expects Singapore to record a lacklustre gross domestic product growth of 1.3% y-o-y in 2023, given trade headwinds from a global slowdown. This is a key risk to the volume of jobs that HRnet can match, they say.
&ldquo Key exports declined steeply (-15% y-o-y) for the eighth consecutive month in May as electronics exports came in weak. While the unemployment rate remained low at 1.8% (as at 1QFY2023 ended in March), the job vacancies to unemployed persons ratio declined q-o-q to 2.28, signalling that labour market tightness has started to ease, in our view.&rdquo the analysts say.
In addition, Tan and Lim say that the pace of recovery in China, which is one of the company&rsquo s key markets, looks uncertain. They note that HRnet said in its FY2022 annual general meeting that its China operations were &ldquo severely impacted in 1QFY202&rdquo due to challenges in building business pipelines.
The latest China economic data released in June also seems to corroborate with this, with both industrial output and retail sales falling short of Reuters consensus expectations.
&ldquo We turn more bearish on the pace of recovery as HRnet&rsquo s China operations are mostly focused on clients in the industrial and technology sectors, which we view as vulnerable to the ongoing slowdown in global demand.&rdquo the analysts conclude.
Finally, Tan and Lim highlight downside risks to their permanent placement volume assumptions as employers turn more cautious amidst weakening macroeconomic conditions and the weaker-than-expected labour market recovery in China.
They also expect slower average placement revenue growth, despite rising wages, due to lower contribution from the technology and semiconductor industries which typically command higher salaries as compared to sectors such as retail and travel.
&ldquo While resilient flexible volumes and further recovery in travel related revenue should help, we believe these are insufficient to offset the earnings impact from weaker perm. As such, we cut our FY2023-FY2025 permanent placement revenue by 4%-6% this reduces our earnings per share forecasts by 4%-8% due to the lower margin mix.&rdquo they add.
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Joelton
Supreme |
26-Apr-2023 08:42
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Maybank downgrades HRnetGroup to &lsquo hold&rsquo on economic slowdown
MAYBANK Securities downgraded its call on HRnetGroup to &ldquo hold&rdquo from &ldquo buy&rdquo and slashed its target price to S$0.85 from S$1.04. It anticipates a decline in the recruiting and consulting company&rsquo s earnings amid a slowdown in Singapore&rsquo s economy.
The revised target reflected lower earnings estimates for FY2023 to FY2025 after assuming lower placement volumes, especially for the company&rsquo s professional recruitment segment.
It remains based on a 15 times FY2023 price-to-earnings ratio estimate.
Maybank&rsquo s downgrade came as Singapore&rsquo s gross domestic product (GDP) growth for the first fiscal quarter came in weaker than expected, said analyst Eric Ong on Monday (Apr 24).
&ldquo With headline GDP growth rising by just 0.1 per cent in Q1, our macro team believes the country risks entering a technical recession if the boost from China&rsquo s reopening fails to materialise in Q2,&rdquo he added.
Despite HRnetGroup&rsquo s management remaining optimistic of a potential recovery in the second half of the financial year, Ong said the stock is &ldquo unlikely to perform in the near term&rdquo .
The analyst lowered his earnings per share forecasts for FY2023 to FY2025 by 15 per cent to 18 per cent to account for slower hiring momentum in Singapore, which contributes to the bulk of HRnetGroup&rsquo s topline.
The lower projections are also based on the mainboard-listed company&rsquo s expectations that its performance in the first half will be &ldquo significantly lower&rdquo than in the same period last year, despite modest recovery in Q2.
While the downgrade is premised on Singapore&rsquo s economic slowdown, Ong believes China&rsquo s recovery in the near term may point to re-rating opportunities for HRnetGroup.
&ldquo That said, there have been mixed levels of hiring momentum across various sectors in China,&rdquo he said. &ldquo The next two months will be critical to see how H1 pans out.&rdquo
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Joelton
Supreme |
06-Apr-2023 09:12
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HRnetGroup subsidiary signs 3-year extendable contract with Singapore Pools
HRnetGroup&rsquo s CHZ 0.00% Singapore subsidiary RecruitFirst has secured a three-year extendable contract for the recruitment of part-time and temporary manpower positions for Singapore Pools.
Singapore Pools has been engaging the company&rsquo s flexible staffing business over the last two years, according to RecruitFirst group business leader Jacelyn Chua.
The two have also partnered in embracing change and innovation by digitalising the process of managing Singapore Pools&rsquo part-time workforce.
&ldquo It is our pride and honor to continue servicing Singapore Pools as they strive to uplift the community through channeling all surpluses to the Tote Board to fund worthy causes that better the lives of Singaporeans,&rdquo says Chua.
The transaction does not have a material impact on HRnetGroup, the company said in a filing.
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finjungle
Veteran |
08-Mar-2023 14:13
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Why no one talk about this counter???? The reason is simple - investors do not believe in the reports!!!
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Joelton
Supreme |
08-Mar-2023 08:55
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Analysts keep ' buy' call on HRnetGroup, trim target price on FY2022 earnings miss and near term pressure
Analysts are keeping their " buy" calls on HRnetGroup CHZ 0.62% but have all lowered their target prices after the company' s earnings for the FY2022 ended Dec 31, 2022, stood at $67.5 million, up 3.1% y-o-y. HRnetGroup' s revenue for the year grew by 3.6% y-o-y to $611.8 million.
RHB Group Research analyst Alfie Yeo has kept his &ldquo buy&rdquo call on HRnetGroup, but with a slightly reduced target price of $1 from $1.01, as the recently reported FY2022 earnings fell slightly short of expectations and lower earnings seen in the near term.
Yeo, in his March 7 report, points out that HRnetGroup&rsquo s earnings and revenue stood slightly below his expectations, because of lower contribution from the professional recruitment segment.
Contributions from the flexible staffing grew healthily, with demand especially coming from the retail, healthcare and hospitality industries in markets such as Taiwan, China and Singapore.
Yeo&rsquo s price target is based on 14x FY2023 earnings estimate, which has been reduced by between 7% and 8%. The stock is now trading at 13x. Despite the lower earnings forecast, the stock&rsquo s earnings per share is seen to drop by a smaller magnitude because of the company&rsquo s share buybacks.
&ldquo We continue to like HRnetGroup, as it is well-positioned for a recovery in 2HFY2023 despite near-term labour market headwinds,&rdquo writes Yeo.
&ldquo The stock enjoys diversified exposure across multiple Asian economies and industries. It has strong cash flow-generating ability, a net cash balance sheet and an attractive dividend yield, too,&rdquo he adds.
The company has declared a final dividend of 1.87 cents, bringing full-year dividend to 4 cents, translating into a payout ratio of 60%.
Possible downside risks include a slower-than-expected labour market recovery in the key operating markets of Singapore, China and Taiwan, notes Yeo.
DBS Group Research' s Andy Sim has also kept his " buy" call with a lower target price of $1.07, from $1.08 previously.
Though HRnetGroup' s earnings and revenue for FY2022 stood in line with Sim' s expectations, Sim has lowered his earnings estimates for FY2023 and FY2024 by 2% and 3% respectively. " [This is] as higher margin Covid-related revenue scales back, offset partially by expectations of higher professional recruitment fees on wage growth," he writes.
" Our target price is based on 11.5x FY2023 earnings, which is close to the mean ex-cash P/E of the company&rsquo s peers," he adds.
In his report, Sim remains positive on the company' s prospects with Singapore' s labour market remaining " tight" and the market likely to stay " resilient" in 2023.
" Singapore&rsquo s economy is expected to grow 0.5%-2.5% with the job market remaining tight, with the job vacancy-to-unemployed person ratio at 2.2. Although companies are turning more cautious, hiring sentiment stays positive with 64.6% and 25.3% of employers intending to hire and raise wages, respectively, in the next three months (m-o-m). This bodes well for HRnet&rsquo s placements and gross profit per placement, which are key earnings drivers," he says.
HRnetGroup' s operations in North Asia also look set to benefit from China' s post-Covid economic recovery. Taiwan should also stand to gain from long-term structural tailwinds as capacity expands in the semiconductor industry, alongside border reopening, notes Sim.
" As such, we project professional recruitment placements and gross profit growth of 3% and 6% respectively in FY2023," he adds.
Finally, Maybank Securities analyst Eric Ong has kept his " buy" call with a target price of $1.04, down from his previous target price estimate of $1.07.
To him, HRnetGroup' s 2HFY2022 earnings of $32.9 million stood within his expectations though the company' s revenue of $297.6 million for the same period came lower than estimated.
Despite the cautious market, Ong notes that there are " pockets of opportunities" for the company, China' s reopening being one of them.
" Following the abandonment of its zero-Covid policy and the re-opening of its economy since early 2023, hopes are building that China can stage a strong rebound. In fact, the Chinese government is aiming to boost domestic consumption and woo more foreign investors this year as it seeks to revive the country&rsquo s Covid-hit economy. As such, management believes labour demand is likely to rise, from manufacturing to retail, food and beverage (F& B) as well as in the travel-related hotel and hospitality sectors," he writes.
Ong also notes HRnetGroup' s " rock solid" balance sheet and sees room for the company to further increase its payout ratio despite the " decent" dividend yield of 5%.
" [This is] especially given its asset-light business model," Ong writes.
" Valuation is also attractive at less than 8x ex-cash P/E, in our view," he adds.
That said, Ong has lowered his forecasts for FY2023 and FY2024 by 3% to 5% on lower placement volumes.
His new target price is still based on an FY2023 P/E of 15x.
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Joelton
Supreme |
24-Feb-2023 10:10
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HRnetGroup posts 3.1% growth in FY2022 earnings to $67.5 mil
Recruitment firm HRnetGroup CHZ -0.61% announced that its earnings for FY2022 ended Dec 31, 2022, has increased by 3.1% y-o-y to $67.5 million from $65.5 million in FY2021.
While revenue sported a 3.6% y-o-y gain to $611.8 million from $590.5 million, sub-contractor expenses saw a larger increase of 5.3% y-o-y to $437.6 million. Hence, gross profit saw a slight 0.4% decline to $174.2 million.
The revenue growth was led by higher contribution from the group&rsquo s business in North Asia (China, Taiwan, Hong Kong, Japan and South Korea) and Rest of Asia (Malaysia, Thailand and Indonesia), but partially offset by lower contribution from the Singapore market.
Comparing the group&rsquo s business segments, flexible staffing revenue grew to achieve another record high of $510.1 million, up 3.6%. The scale back of Covid-related staffing volume in the Singapore healthcare sector was substantially made good by general business volume increases across most parts of Asia which resumed normalcy during the year, said the group.
Revenue from professional recruitment segment also reached a record high of $97.0 million, up 2.4%, as the group channelled its resources toward higher value assignments as it rode on the economic recovery and wage inflation wave.
Revenue from the others segment increased by 47.5% y-o-y to $4.6 million. This segment involves HR complementary businesses, including payroll outsourcing, talent mapping, HR solutions and training.
As at Dec 31, 2022, cash and cash equivalents stood at $284.6 million.
The board has declared a final dividend of 1.87 cents per share. Along with the 2.13 cents interim dividend previously paid out, the group&rsquo s total FY2022 dividend come up to 4.0 cents per share.
On the outlook, the group is upbeat on the structural shifts in professionals, managers, executives & technicians (PMETs) among employed residents and the rising median income in Singapore. &ldquo These shifts represent tailwind for our business,&rdquo says the group.
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GoldenPig
Veteran |
23-Feb-2023 22:41
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2022 results just released.
https://links.sgx.com/1.0.0/corporate-announcements/KFLIW9EAOH0W10GU/747527_HRnetGroup%20Limited_FY2022%20Results%20Announcement.pdf 2H 2022 net profits dropped 16.4% compared to 2H 2021. Full year 2022 earnings dropped 27.9% compared to full year 2021. Final dividend of 1.87cts proposed. Together with 2.13cts interim dividend paid in Sep 2022, total dividends of 4cts, same as for FY2021.
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Rammerjammer
Veteran |
14-Oct-2022 10:26
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China, Taiwan and HK businesses sure drag down this bugger... | ||||
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Joelton
Supreme |
04-Oct-2022 08:31
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HRnetGroup acquires majority stake in local fintech Octomate
RECRUITMENT and consulting company HRnetGroup : CHZ 0% is acquiring a majority 51 per cent stake in fintech startup Octomate from both an independent seller and Octomate&rsquo s chief executive and co-founder Zoey Tong.
HRnetGroup will acquire a total 49 per cent interest in the startup through a cash payment of S$650,000 to an unnamed independent seller. Another 2 per cent of the company will be sold to the group by Tong.
The total consideration of the acquisition amounts to S$676,530.61. The group said it will announce the consideration paid to Tong once it enters into a sale and purchase agreement with her.
Founded in 2019, Singapore-headquartered Octomate is a cloud-based workforce management software built on blockchain technology. Its solutions include the automation of salary and reimbursement of claims.
In an announcement on Monday (Oct 3), HRnetGroup said its acquisition of the startup will facilitate the integration of Octomate&rsquo s instant payment solution with its own Ease Works app, which allows contractor employees to be paid instantaneously upon approval of their timesheets.
HRnetGroup&rsquo s executive director and chief corporate officer Adeline Sim said the transaction will introduce a new benefit of earned wage access to contractors at &ldquo absolutely no cost to them&rdquo .
The acquisition is expected to complete by Oct 10.
Going forward, the group intends to develop Octomate &ldquo further as an exciting product offering&rdquo . The startup will remain an independent brand of HRnetGroup.
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Joelton
Supreme |
12-Aug-2022 09:35
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HRnetGroup reports earnings of $34.6 million, to pay interim dividend of 2.13 cents
Staffing agency HRNetGroup has reported earnings of $34.6 million, down 3.7% y-o-y. If one-off and other items are excluded, the company&rsquo s underlying earnings would have increased by 36.2% y-o-y to $42.6 million.
Revenue in the same period was up 14.2% y-o-y to $314.2 million, with clients from the healthcare, life science segment generating the most revenue.
Clients from the technology sector was another key driver, pushing the proportion of revenue from 13% to 19%, with the growth coming from semiconductor sector hiring in China and Taiwan.
The company plans to pay an interim dividend of 2.13 cents.
Citing its cash balance of $312.7 million, and no bank borrowings, the company believes it is shielded from the impact of rate hikes.
&ldquo As a veteran operator of this business for the last 30 years, the group generated strong operating cashflow of $54 million before deploying $20 million of that into working capital for our growing businesses,&rdquo the company states.
&ldquo Whilst the macro environment for 2H may be uncertain with inflationary-led fears of a recession, we are inclined to believe that the global &ldquo battle for talent&rdquo is a longer-term trend that will transcend fluctuations of the market,&rdquo says Adeline Sim, the company&rsquo s chief corporate officer and executive director.
&ldquo Typically we deliver growth above GDP growth rates as we have the benefit of quickly maneuvering to work on pockets of growth opportunities within our sector specializations,&rdquo she adds.
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Joelton
Supreme |
18-Jul-2022 09:12
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HRnetGroup
On Jul 8, recruitment company HRnetGroup bought back 202,300 of its shares at S$0.7787 each.
The company paid a total consideration of S$158,007.19 for the shares.
HRnetGroup in June said it would buy back up to S$30 million of its shares under its new buyback programme. The programme allows the recruitment company to purchase up to 10 per cent of its issued shares when they are undervalued due to market conditions.
Earlier in the week, HRnetGroup also noted that it has increased its stake in UK recruitment company Staffline.
In a filing on Jul 5, the company said its current stake represent 15 per cent of the Staffline&rsquo s voting rights. It noted that it had originally acquired the shareholding interest as part of its strategy to opportunistically enter new markets in the human resources space.
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Joelton
Supreme |
23-Jun-2022 08:31
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PhillipCapital sees FY2022 being record year for HRnetGroup on the back of robust demand for jobs and regional expansion
As Singapore sees a robust recovery in jobs with employment growth seen across all sectors in the 1Q2022, PhillipCapital analyst Paul Chew is expecting HRnetGroup to see a record year of earnings.
In addition, the company is set to further expand its business regionally as it adds several new co-owners in Indonesia, Taiwan, Malaysia, Hong Kong and China.
&ldquo Co-owners are an important incentive tool to grow the regional franchise with local management. Co-owners get a stake in the company&rsquo s earnings, are entitled to dividends and a pre-agreed exit path,&rdquo writes Chew in his June 20 report.
HRnetGroup&rsquo s scale with its network of over 700 recruiters across 14 Asian cities is also a positive factor in Chew&rsquo s view.
&ldquo While the barrier to entry in the recruitment industry may be low, we believe the barriers to scale are immense&hellip These barriers allow HRnet to maintain an asset-light model with minimal fixed assets of $1.5 million. The reported return on equity is 16% but arguably much higher,&rdquo he says.
With a total attributable equity of $370 million, which is almost equivalent to the company&rsquo s net cash of $327 million, HRnet could return a large chunk of capital to its shareholders and still sustain profitability, the analyst notes.
In his report, Chew has kept his &ldquo buy&rdquo call on the company with an unchanged target price of $1.18.
&ldquo Our valuation is benchmarked to the mid-range of the historical five-year range, 12x PE FY2022 ex-cash,&rdquo he writes. &ldquo HRnetGroup&rsquo s dividend yield is 5% based on their guided payout of 50% of a recurrent net profit.&rdquo
To him, the company&rsquo s drivers for growth will come from higher volumes, higher salaries and a widening footprint in the region.
&ldquo Demand for flexible hiring is expected to move away from Covid-19 related work to manufacturing and tourism,&rdquo he says.
Also working in HRnetGroup&rsquo s favour, is its strategic 14.47% investment in Staffline Group, which returned to profitability in the FY2021.
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Joelton
Supreme |
17-Jun-2022 09:04
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HRnetGroup starts $30 mil share buyback diverging actions at Uni-Asia
HRnetGroup has on June 13 bought 200,000 shares at 76.43 cents each. On June 15, it paid 77.7 cents each for another 136,300 shares. This follows the company&rsquo s announcement before the market opened on June 13 that it has launched a $30 million programme to buy its own shares &ldquo when such shares may be undervalued due to market conditions&rdquo . HRnetGroup&rsquo s share price closed at 77 cents on June 13, up 4.5% for the day, and down 3.75% year to date.
With the standard 10% cap on annual buybacks, HRnetGroup can potentially buy back up to 100.38 million shares, and the buying can take up to a year or so. According to the company, the shares will be held as treasury shares and can be either used for employee share plans, or to help fund potential mergers and acquisitions.
HRnetGroup is seen by analysts as having a very asset-light yet cashed-up balance sheet. It enjoys a strong business moat because of its extensive network across the region, matching the large corporates hiring, and job-seekers.
For example, on April 27, HRnetGroup announced that its subsidiary, RecruitFirst, has secured a contract from the Singapore General Hospital to help hire administrative and ancillary positions from 2022 to 2024, with a further option to extend for another year. On March 30, it announced it won a four-year contract with the Ministry of Education.
Tangs up stake
Gordon and Celine Tang, the couple controlling Chip Eng Seng Corp, have recently added to their stake in the construction firm. On June 8, they paid $562,846.32, or 43.74 cents each, for nearly 1.29 million shares. On June 9, they paid 44 cents each, or $93,808.00, for another 213,200 shares. They now have a total stake, including both direct and indirect stakes, of nearly 299.8 million shares, equivalent to 38.23% of the company.
On May 12, Chip Eng Seng announced that its 55%-owned joint venture company, H+E Technologies, has been awarded a $67.54 million contract by the Exyte Group to help build an industrial wastewater plant in Malaysia.
For the year ended December 2021, Chip Eng Seng reported a loss of $31.5 million, 61.2% lower versus the preceding FY2020. Revenue in the same period was up 65.3% to $1.1 billion, with a significant pick-up seen at both its construction and property arms. As at Dec 31, its construction book stood at $1.36 billion.
As at Dec 31 2021, Chip Eng Seng&rsquo s net asset value per share was 96.78 cents, versus 103.38 cents as at Dec 31, 2020.
Besides Chip Eng Seng, the Tangs control another listed company, OKH Global, which focuses on industrial and logistics properties. Earlier in January this year, they privatised SingHaiyi Group, which focuses on residential and commercial properties.
Buying and selling
Michio Tanamoto, executive chairman of Uni-Asia Group, has recently bought shares in the company. On June 13, he paid $156,000 for 150,000 shares, which works out to $1.04 each. This brings his total holdings to 2.7 million shares, equivalent to 3.44%. This follows Tanamoto&rsquo s earlier buying on June 9, when he paid $1.085 for 50,000 shares.
Kenji Fukuyado, CEO of Uni-Asia, bought shares recently too. On June 1, he paid $74,679 for 70,000 shares, or $1.067 per share. Fukuyado now holds 1.47 million shares, equivalent to 1.87% of the company.
However, the combined buying of Tanamoto and Fukuyado pales in comparison to the selling by one Ham Yong Kwan, a substantial shareholder of Uni-Asia Group.
On June 9, Ham, who used to hold more than 10% of the company, made another bout of divestment in the company. He sold 745,500 shares for $776,161.87, or $1.04 each. Most recently, on May 24, he sold nearly 1.92 million shares for $2,010,429.51, which works out to $1.048 per share each. Ham is now left with just under 4.7 million shares, equivalent to 5.97%.
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brchkho1
Master |
14-Jun-2022 13:18
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Thanks, Q to buy more.
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Joelton
Supreme |
14-Jun-2022 08:44
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HRnetGroup establishes S$30m share buyback programme
HRNETGROUP : CHZ +4.05% intends to buy back up to S$30 million of its shares under its new buyback programme, it said in a bourse filing on Monday (Jun 13).
The programme allows the recruitment company to purchase up to 10 per cent of its issued shares when they are undervalued due to market conditions. This means HRnetGroup can buy back up to 100.4 million shares via market purchases.
The group said it will hold the repurchased shares as treasury shares which could be used for employee share plans and also as possible currency for merger and acquisition activities.
&ldquo As the group embarks on acquisitions, using shares as acquisition currency would help align the interests of co-owners of acquired businesses with that of the group,&rdquo HRnetGroup added.
It noted that the share buyback programme could take more than a year, depending on the prices at which the shares are purchased.
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brchkho1
Master |
13-Jun-2022 16:15
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Suddenly alive now
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PingPongBall
Member |
27-Apr-2022 21:02
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Your question has been answered today - sudden death.
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