Events:
On the morning of September 16, 2021, Renrui Talent (06919.HK) announced that it would spend 80 million to acquire 51% of the shares of Jiangnan Financial Technology (Changzhou) Co., Ltd. and Shanghai leading time Human Resources Service Co., Ltd., and the company's market share in flexible employment is expected to continue to increase and maintain its "recommended" rating.
Comments:
1. The two companies specialize in flexible employment in the banking sector, and 21H1 achieved a total net profit of 10.788 million, with excellent fundamentals. Jiangnan Financial Technology (Changzhou) Co., Ltd. and Shanghai leading time Human Resources Service Co., Ltd. are wholly owned subsidiaries of Shanghai Qihang Yantian Technology Co., Ltd., providing flexible employment services for 120 urban and rural commercial banks across the country. Over the past 20 years, the two companies have achieved a combined revenue of 180 million / + 32.8%, a net profit of 18.977 million / + 36.8% and a net profit of 21H1. The two companies have achieved a combined revenue of 115 million and a net profit of 10.788 million. After the table, the profit of Renrui talents has further improved.
two。 The acquisition target brings a huge amount of customer resources, Renrui cut into the local banking system flexible labor market, strong delivery ability to help business coordination, M & A to achieve a win-win situation. The advantage of the acquisition target lies in customer resources, 21H1. There are more than 1500 rural commercial banks and about 130 urban commercial banks in China. The target company has established business cooperation with about 120 rural and urban banks. As of July 31, 2021, the target company has 3400 flexible employees in 130 cities across the country, mainly in the lobbies of banks and financial institutions, IT staff and customer service center staff. The advantage of Renrui talents lies in the deep resources of the whole industry chain of flexible employment and the ability of personnel recruitment and delivery. The combination of the two will greatly enhance the existing business capacity, improve delivery efficiency, further expand the scope of services, and achieve a win-win situation.
3. From the new economy to the financial sector, the expansion of market share is non-stop, and diversified layout contributes to the sustainable development of psychic giants. The rapid development of Renrui talents in the past has to some extent benefited from the rapid expansion of unicorn enterprises in the new economic field.
The demand for high-speed and flexible employment positions continues to release help Rui talent revenue and market share continue to grow rapidly. By the end of July 2021, the company had 41900 flexible employees, an increase of 42.9% over the same period last year. Market share continues to maintain a leading position in China's flexible employment industry. In the face of the scale of China's flexible employment of more than one million people, the company's share is still huge. This acquisition, the company will be regional banks, rural commercial bank customers into the bag, reflecting the company's diversified layout ideas, the company will also move closer to the field of intelligent manufacturing in the future, continue to cultivate flexible labor market in many industries.
Investment suggestion: based on the broad development prospect of flexible employment, this acquisition is expected to increase the homing net profit by 12.5 million in 23 years. We expect the company to achieve homing net profit of 151 million / 179 million / 199 million in 21-22-23, YoY-17% 18% gamma 11%, corresponding to dynamic PE:10.10/8.53/7.69, given a "recommended" rating.
Risk tips: changes in policies and regulations in the human resources industry, the acquisition effect is not as good as expected, and the epidemic situation is repeated.