On November 24th, KANZHUN LIMITED released the Q3 performance report for 2021. During the performance period, the company achieved revenue of 1.211 billion yuan, an increase of 105% over the same period last year, in line with the previous performance guidelines and better than market expectations. After deducting equity incentive fees, the company's net profit reached 385 million yuan.
Under the strong bilateral network effect, the average number of monthly active users (MAU) of KANZHUN LIMITED Q3 continues to remain at 28.82 million, with a year-on-year increase of 28.8%. The scale of MAU still leads the industry. The average ratio of DAU to MAU also remained stable at 27.5%.
It can be said that KANZHUN LIMITED's performance report has brought a large expectation gap to the market. After KANZHUN LIMITED was included in the cyber security review in July, when the platform stopped registering new users, some investors worried that the company's Q3 performance would grow and the number of monthly active users would decline sharply. But in fact, the overall performance growth rate of KANZHUN LIMITED Q3 is still much higher than that of the industry, which strongly proves the stability of its company's basic business market, as well as the resilience of its business model and user structure.
First, focus on the recruitment needs of small and medium-sized enterprises, Q3 performance verifies the resilience of the business model
When KANZHUN LIMITED went public, the author defined it as a "new species" in the recruitment industry, but this perception has not changed. After a little analysis of the company's business situation, we can find that the company's business model focusing on the recruitment needs of small and medium-sized enterprises, the growth of business data, and the internal drivers of growth are still unique and advantageous. This is also the reason why KANZHUN LIMITED is able to resist the fluctuations of the complex external environment.
In answering analysts' questions at this quarter's earnings call, KANZHUN LIMITED CEO Zhao Peng also gave a vivid example:If we put five bowling balls in a net pocket and hit them with an eight-pound hammer, the concussion will actually be so great that the balls may break or get hurt. But if we put 1000 ping-pong balls in the net pocket of the same volume and hit them with an eight-pound hammer, we will find that the two ping-pong balls that may be faced head-on are broken, but most of the ping-pong balls as a whole are intact. This is my understanding of an economy dominated by large enterprises and an economy dominated by numerous small and micro enterprises. In the face of fluctuations, it shows a different degree of strength at the micro level.
KANZHUN LIMITED focuses on a large number of small and medium-sized customer groups, and the stock customers deposited on the platform show deep potential. At this stage, the proportion of small and medium-sized enterprises among the existing users of KANZHUN LIMITED platform has reached 83.6%, creating nearly 50% of the company's revenue. This quarter's financial report revealed that the number of paying users has reached 4 million. The large stock of the platform provides maintenance and digging opportunities for companies to reduce the impact of stopping new additions to a manageable range.
During the Q3 period, the high loyalty shown by SME customers is more valuable, and it also brings stronger earthquake resistance to KANZHUN LIMITED's performance. The recruitment demand of small and medium-sized enterprises is characterized by scattered, small quantity and low unit price, which is not suitable for the high price and low efficiency of the traditional recruitment platform. On the other hand, terminal job seekers usually prefer the opportunities of large companies, which aggravates the recruitment difficulties of small and medium-sized enterprises.
Under the Internet recruitment model of "Mobile + Direct chat + Intelligent matching" pioneered by KANZHUN LIMITED, the average unit price of the platform can be kept at around 800yuan, more than seven times lower than that of peers. The strategy of parity and low threshold not only ensures the base of paying users, but also retains the room for future growth.
Technology-driven accurate matching and real-time feedback between employers and employees also make the recruitment process more efficient, solve the two major problems of cost and efficiency, and form a profound brand awareness. In fact, the pursuit of cost and efficiency is more prominent in small and medium-sized enterprises, and it is also applicable to medium-sized and large enterprises, which lays a foundation for the penetration of KANZHUN LIMITED's business solutions in multiple enterprise types.
Back to now, QM data has visually shown that KANZHUN LIMITED's user stickiness is higher than that of similar enterprises. The company Q3 continues to lead the MAU data, which further shows that the company has established a solid user barrier among the SME customer base.
From the perspective of long-term development, locking the customers of small and medium-sized enterprises has determined KANZHUN LIMITED's background of long-term doctrine. Small and medium-sized enterprises are a new force in China's economic and social development and an important support for improving people's livelihood and expanding employment. the government firmly supports the development of small and medium-sized enterprises, and many regular and long-term support mechanisms have been formed. According to IDC, China's small and medium-sized enterprises have maintained a compound annual growth rate of nearly 10 per cent over the past four years, with the number of enterprises reaching 45 million in 2020, an increase of 13.2 per cent over the same period last year, and the scale is still expanding.
Oriental Securities predicts that the compound growth rate of the online recruitment market will remain at 16.5% in the next five years, driven mainly by the growth of small and micro enterprises and service enterprises, which will contribute 90% of the increase. This means that KANZHUN LIMITED has seized the new increment and new market, which will help the company to continue to speed in the fast lane of development.
Second, tamp the construction of technological infrastructure and magnify the inclusive effect of the platform.
In complex external situations, KANZHUN LIMITED clearly puts a considerable amount of business focus on technological evolution and the release of inclusive values.
During the performance period, KANZHUN LIMITED continued to increase investment in technological infrastructure. According to the financial report, the R & D expenditure of Q3 company reached 209 million yuan, an increase of 50% over the same period last year, which is much higher than the industry benchmark. In the small and medium-sized enterprises live room to achieve a "3-5 minutes response, million-level accurate matching".
Another differential advantage of KANZHUN LIMITED's technological evolution is that a large number of active users and interactive information provide the platform with huge static and dynamic data and continuously optimize the matching accuracy. In the case of the same basic technical ideas, KANZHUN LIMITED's technology accumulation far higher than that of other peers will stabilize the company's matching advantages, strengthen technical barriers, and ultimately drive platform users to become more sticky and willing to pay for conversion.
With the blessing of technology, the inclusive attribute of the platform has also been further strengthened, and a great deal of practice has been carried out in three typical aspects: promoting fair distribution of resources between employers and recruiters, paying attention to industries and long-tail needs that are difficult to standardize, as well as job-hunting security and information truthfulness.
For example, during the performance period, the "universal benefits of attention" project promoted by KANZHUN LIMITED paid real-time attention to and assisted the realization of the need for the education and training industry to change jobs; the platform included more agricultural enterprises, enterprises in border areas and ethnic minority underdeveloped areas; and the offline security audit team expanded to 50 cities and checked the authenticity of addresses and employers for more than 90% of the enterprise-end traffic. These actions, which are difficult to achieve remarkable results in the short term, are precisely one of the foundations of KANZHUN LIMITED's sustainable development.
The company's multi-measures are expected to alleviate the current employment contradiction, strengthen the service role of the platform, and then transform into a new infrastructure in the era of high-quality development. While helping the stable development of society, the company will expand the scope of user access and service tentacles, and is expected to dig out deep-seated new service needs among more users. With the continuous improvement of KANZHUN LIMITED's technology and platform capabilities, the company's inclusive and social effects will be magnified again, and achieve greater value release in the strong resonance with the trend of the times.
Summary
Through KANZHUN LIMITED's Q3 performance, it is not difficult to find that the competitive core of the recruitment platform still lies in efficiency competition. KANZHUN LIMITED's persistent investment in digital and intelligent technology has improved the matching accuracy at both ends of the application, promoted the improvement of his own service efficiency, and at the same time, encouraged the progress of the overall efficiency of the industry. it can be seen that the superiority of the efficient model in the face of the inefficient model has been recognized by the industry and the market. Traffic is the second battlefield after efficiency, KANZHUN LIMITED's MAU ranks first in the industry, and an endless stream of small and medium-sized enterprises also provide a strong traffic backing for the platform, which will provide a solid escort for the fundamentals of the company.
The attitude towards regulation at the company level is also very clear. With regard to a series of recent laws and regulations on data security and personal privacy protection, the company said that it will set high standards in the standard industry and continue to strengthen data security and privacy protection. Zhao Peng, founder, chairman and CEO of KANZHUN LIMITED, made it clear that data security and privacy protection belong to the core capacity-building and are of sustainable value to the company's long-term operation. With the end of the follow-up corporate network security review, the pent-up growth potential on the platform is also expected to explode.
In fact, the market has been paying attention to and affirming the uniqueness and long-term value of KANZHUN LIMITED. Against the backdrop of the dismal overall performance of Chinese-listed stocks this year, KANZHUN LIMITED has remained steady, with a market capitalization of about $13 billion to $15 billion since its listing in June this year. The admission of large organizations can also reflect KANZHUN LIMITED's business success. Data show that during the performance period, KANZHUN LIMITED attracted 36 institutions, including T.Rowe, JPMorgan Chase & Co, Morgan Stanley, Canadian Pension Plan Investment Committee and Goldman Sachs Group, to build positions and increase their holdings. In addition, KANZHUN LIMITED was included in the MSCI China Index in the November quarterly index review released by MSCI.