The company released the 2022 interim report: 2022H1 achieved revenue of 1.734 billion yuan /-18.5% and net profit of-25 million yuan /-133.95%, mainly due to the expiration of major customer contracts in January 2022. Excluding the revenue from this customer, 2022H1 earns 1.635 billion yuan / + 29.2%.
Affected by the termination of major customer cooperation, the income of spiritual workers has declined significantly, high-margin jobs have been actively developed, and jobs in digital technology and cloud services have grown rapidly. 1) flexible employment business (accounting for total revenue 97.8%/+0.5pct) realized revenue of 1.695 billion yuan / YoY-18.1%. As of June 30, 22, the company had flexible employees of 28873 / YoY-36.2%. Among them, the revenue from general service outsourcing is 1.461 billion yuan /-24.6%, accounting for 86.2%; digital technology and cloud services are 111 million yuan / + 332.9%; the number of spiritual workers has increased from 231 in June 2021 to 1214; digital operation and customer service 120 million yuan The reduction of gross profit margin to 3.1%/-3.2pct is mainly due to the high premium of agreed services terminated in January and the high vacancy rate of Xi'an service center which was put into use in 2021. 2) Professional recruitment business (accounting for total revenue 1.7%/-0.6pct) realized revenue of 30 million yuan / YoY-39%, gross profit margin of 23.4%/-12.5pct, mainly due to reduced customer demand but relatively rigid rent, labor and other costs. 3) the gross profit margin of other human resources solutions is 0.09 billion yuan / YoY-9.6%;, which is mainly due to the decline of gross profit margin of labor dispatch services and no income from training services affected by the epidemic.
The termination of the key customer agreement has a great impact on the gross profit margin, and the company actively takes measures to control costs. 1) overall gross profit margin: 3.8%/-3.5pct, mainly due to the decline in revenue caused by the termination of contracts by major customers, but the costs are relatively rigid; the company has closed seven secondary service locations and integrated its business into the regional center to continue to serve, centralized management, and it is expected that costs can be effectively controlled. At the same time, actively adjust the business structure, expand the posts with higher service fees, and the gross profit margin is expected to be increased; 2) expense rate: sales expense rate 1.4%/-0.5pct, the reduction of sales expenses is mainly due to the reduction of market promotion fees for companies looking for talents with reduced customer demand; R & D expense rate 0.8%/+0.5pct, management expense rate 3.3%/+1.1pct.
Investment advice: give a buy-A rating with a 12-month target price of HK $7.03. It is estimated that the income in 2022-2023 will be 3.66 billion yuan, with a corresponding growth rate of-22.71% and 28.09%, with a net profit of 4.5 million yuan and 67.2 million yuan.
Risk tips: the impact of the epidemic is higher than expected, the impact of macroeconomic fluctuations and so on.