Recommended logic: 1) the domestic human service industry is still in the stage of rapid development and has great potential for growth: the human service industry is less affected by the epidemic. In 2021, the scale of China's human service industry is 2.46 trillion yuan, an increase of 20.9% over the same period last year, and the industry policy is gradually improved. Market concentration is expected to increase, and it is expected to maintain an industry growth rate of 15-20% in the next 3-5 years. 2) the company is rich in customer resources, and cross-selling promotes the growth of new business: in 2021, the number of customers exceeded 50000, an increase of more than 20% over the same period last year, the proportion of private enterprises gradually increased, the distribution of customer industries was diversified, and combined with the advantages of the company's traditional personnel business, cross-selling serves as a "diversion" for new business.
Role; 3) vigorously promote digital transformation, epitaxial mergers and acquisitions to consolidate business advantages: the company raises 961 million, all used for digital upgrading, with reference to overseas human service leader development experience, the company implements mergers and acquisitions and resource integration at home and abroad through capital operation. In the future, it will continue to expand its competitive advantage and consolidate its leading position.
The contradiction between supply and demand in the labor market has intensified, and the human service industry has maintained rapid growth. China's labor market demand ratio has risen from 2010 to 1.53 in 2021. The imbalance between supply and demand continues to expand, and the scale of the market is expected to increase. With the gradual improvement of the regulatory policy of the industry, with reference to the development experience of overseas markets, in countries with strict supervision of the industry, the higher the market concentration, the leading companies will benefit first.
The company is rich in customer resources, cross-selling to promote the growth of new business. The company has more than 50000 customers in 2021, an increase of more than 20% over the same period last year. Among them, the proportion of domestic customers is close to 50%, the distribution of customers is diversified, and there is a certain degree of overlap between new business and traditional business, and cross-selling can achieve "drainage" for new business.
Vigorously promote digital transformation, epitaxial mergers and acquisitions to consolidate business advantages. The company raised 961 million yuan, all for digital upgrading, and took the lead in starting the construction of human resources service information platform in the human service industry. The company acquires 51% of Yuanmao shares in China and promotes Asia-Pacific distribution and market expansion through the acquisition of 35% shares in Singapore's FSG-TG Group overseas. With reference to the development path of global human resources service leading enterprises, the company is expected to implement mergers and acquisitions and resource integration through capital operation in the future, expand its competitive advantage and consolidate its leading position.
Profit forecast and investment advice. The company's homing net profit is expected to maintain a compound growth rate of 14.81% from 2022 to 2024. The company has been engaged in the human service industry for nearly 40 years and is a leading supplier of comprehensive human resources solutions in China. Combined with the advantages of SOTP valuation and the coordinated development of foreign service holding multi-business, we believe that the reasonable value of the company is 15.32 billion yuan, corresponding to the target price of 6.71 yuan, with a "buy" rating for the first time.
Risk hints: repeated risks of epidemic situation, increased risks of industry competition, and risks of macroeconomic fluctuations.