Events:
The company released its semi-annual report for 2021. During the reporting period, the company achieved revenue of 2.128 billion yuan, an increase of 78.0% over the same period last year, adjusted net profit of 81 million yuan, an increase of 52.8% over the same period last year, and revenue of 2.069 billion for flexible employment of the company's core business, an increase of 77.6% over the same period last year.
Comments:
1. Flexible employment and RPO business continued high growth, performance boom continued. The company's performance achieved rapid growth in the first half of 2021, with revenue of 2.128 billion yuan / + 78%, adjusted net profit of 81 million yuan, an increase of 52.8% over the same period last year. From the perspective of income structure, comprehensive flexible labor employment is 2.069 billion / + 77.6%, accounting for total revenue 97.3%/-0.1pct, professional recruitment 48 million / + 151.3%, accounting for total revenue 2.2%/+0.6pct, other human resources solutions 10 million. Accounts for 0.5%/-0.5pct of total revenue. The comprehensive gross profit margin of 2021H1 is about 7.3%/-1pct, which is split by business and the gross profit margin of comprehensive flexible employment / professional recruitment / other human resources solutions reaches 6.3%, respectively, with a year-on-year change of-1.1pct/+15.8pct/-2.2pct.
two。 The company's major customer strategy remains the same, business capacity continues to rise, and the number of flexible employees has reached a new high. 2021H1, the revenue contribution of the top five customers is about 1.262 billion yuan, accounting for 59.3%. At the end of the 2021H1 period, the number of flexible employees was 45244 / + 48.8%. During the reporting period, a total of 22018 people / + 152.7% were recruited. The recruitment success rate continued to climb, and the conversion rate of issuing entry invitations to candidates was about 58.3%/+3.4pct.
3. Technology enabling has become a development trend, and Saas products are launched in Q3. 2021H1, the company's R & D expenditure is 72 million / + 22%. The main achievements of digital construction are as follows: 1) the company uses its own recruitment platform and robot process automation technology to add intelligent matching functions for candidates and positions, which greatly improves the recruitment efficiency of project managers. 2) the recruitment model of information technology personnel is developed in Ruixiang system. 3) the SAP system is launched internally to open up the settlement of many business systems, such as contract management system, Ruiyun, Ruiping, currency and capital system, process center, personnel management system, and so on, so as to realize integrated management. 4) began to try to commercialize the R & D technology of systems related to human resources, and launched an open recruitment online registration system for the Human Resources and Social Security Bureau of a city in Xinjiang, China in the first half of 2021. The company launched a new human resources SaaS product in July 2021, and will build a career ecological chain and set up technical and competitive barriers for more job seekers in the future.
4. The business of major customers is self-operated, and it is difficult to change the long-term business boom with a short-term impact. The company issued an announcement on June 30, the largest customer to terminate flexible employment business cooperation. The termination of the cooperation is that the customers put the flexible employees into their own business out of strategic considerations, which has nothing to do with the service ability of Renrui talents. We predict that although the largest customer has a high contribution to revenue, short-term shocks will not change the two logic.
First, the long-term high prosperity of the industry continues. At present, China's flexible employment penetration rate is still very low, the future labor market supply and demand gap continues to exist, flexible labor market is expected to expand, leading companies benefit from this. Second, Renrui talents' own service ability has not been lost as a result. Renrui talents have accumulated a large number of candidates, 2021H1, on the basis of the existing comprehensive flexible employment service centers in Yingkou, Shangrao, Changsha, Taian and Chengdu high-tech zones. Four new comprehensive flexible employment service centers have been built in Xi'an, Panjin, Foshan and Jinniu District of Chengdu. The business capacity covers the whole country, and the efficient delivery capacity of large quantities of spiritual workers will not be lost. Based on the above two logic, long-term optimistic about the future value of the company.
Investment suggestion: based on the broad prospects for flexible employment, and considering the impact on the performance caused by the loss of the company's largest customer, we expect to achieve a net profit of 151 million / 167 million / 185 million and YoY-17% YoY 5% 11% in 21-22-23, corresponding to dynamic PE:
9.65Accord 8.74Compact 7.88, with a "recommended" rating.
Risk tips: changes in policies and regulations in the human resources industry, the company's digitization process is not as expected, and the epidemic situation is repeated.