The company issued a 19-year results announcement on March 26, with a total operating income of 3.042 billion yuan, an increase of 22.1% over the same period last year, and a net profit of 110 million yuan belonging to the parent company's continuing business, an increase of 15.9% over the same period last year After deducting the effects of one-time listing expenses, goodwill impairment losses and share option expenses, the adjusted profit of the continuing business belonging to the parent company was 135 million yuan, an increase of 19.3% over the same period last year. At the same time, the company announced a dividend of HK $0.27 per share for 19 years, totaling HK $56 million, accounting for 45 per cent of the net profit of continuing operations for the year.
Revenue side: revenue increased by 22.1% over the same period last year, maintaining a steady trend. In 19 years, the company achieved a total revenue of 3.042 billion yuan, an increase of 22.1% over the same period last year, mainly due to the strong growth of flexible employment business in the mainland and Taiwan. From a regional perspective, the growth of the mainland is strong, while that of Hong Kong and Macao has slowed down. The income of the mainland reached 1.512 billion yuan, an increase of 28.2 percent over the same period last year, and the proportion of income increased to 49.7 percent in 19 years. Taiwan's income reached 831 million yuan, an increase of 20.6 percent over the same period last year, accounting for relatively stable income in the past two years. Hong Kong and Macao achieved 698 million yuan of income, an increase of 12.2 percent over the same period last year, and the proportion of income decreased to 23.0 percent in 19 years.
In terms of business, flexible employment business increased by 26.4% compared with the same period last year, while talent hunting business decreased by 10.1%.
The income of flexible employment business was 2.685 billion yuan, an increase of 26.4% over the same period last year, and the proportion of revenue increased to 88.3% in 19 years. The revenue of talent hunting business reached 245 million yuan, down 10.1% from the same period last year, and the proportion of revenue dropped to 8.1% in 19 years. Recruitment process outsourcing business achieved revenue of 336 million yuan, an increase of 11.6% over the same period last year Revenue from other human resources services reached 778 million yuan, an increase of 20.2% over the same period last year.
Cost side: the proportion of psychic business increases the gross profit margin, and the operating improvement expense rate goes down. On the cost side, the 19-year gross profit margin was 19.3%, down 3.4% from 18 years, mainly due to the continuous increase in the revenue share of flexible labor business with low gross margin. On the expense side, the sales expense rate was 11.4%, down 2.1%; the management expense rate was 2.5%, down 0.2%, mainly due to the improvement of operational efficiency. Profit side: adjusted net profit increased by 19.3% compared with the same period last year, while net interest rate declined.
In 19 years, the net profit was 110 million yuan, an increase of 12.2% over the same period last year. After deducting non-recurrent profit and loss effects such as one-time listing expenses, the adjusted profit was 135 million yuan, an increase of 19.3% over the same period last year.
In terms of net interest rate, the net profit in 19 years was 3.96%, which was 0.59% lower than that in 18 years. After excluding the impact of non-recurrent gains and losses such as listing expenses, the adjusted net profit was 4.44%, a slight decrease of 0.10% compared with 18 years.
Cash flow side: 800 million cash on hand at the end of 19 years, operating cash flow is good. The company's 19-year operating net cash flow of 111 million yuan, accounting for 92.3% of the net profit, has maintained a steady trend in recent years.
And the company went public in July 19, with a total net fund of about 458 million yuan, and a total of about 807 million yuan in monetary funds and time deposits at the end of 19th. Abundant cash is conducive to the stable and sustainable development of the company's follow-up business.
Strategic side: focus on flexible employment, speed up the layout of science and technology, and actively seek mergers and acquisitions. Since 19 years, the company has actively promoted the "All-in Staffing" strategic plan internally to promote the cross-selling of flexible employment business to existing and new customers. Since the listing by the CEO personally led, actively speed up investment and research and development of human resources platform, has launched "Tian Tian U Cai", "Tian Tian U Fu" and other staff recruitment and service segmentation products, SaaS platform has launched the first phase of HR SaaS products, the layout of vocational skills category "WoSKill" platform, the first half of 20 years plan to launch "Tiantian U single" intelligent recruitment platform to speed up the layout of science and technology. In terms of strategic acquisition and cooperation, the company has joined hands with Wande Technology to set up a flexible employment company focusing on the financial services industry to speed up the penetration of subdivided industries and stabilize its leading position.
Investment suggestion: as the largest human resources solution service provider in Greater China, the flexible employment business in mainland China is expected to continue to grow. And since the listing, actively speed up the investment and research and development of human resources platform, led by the CEO himself, technology empowerment is expected to further improve operational efficiency. Under the background of the epidemic forcing the human resources industry to accelerate development, the company's advantages such as scale effect, capital advantage, professional and rapid market response ability are highlighted, and the follow-up market share is expected to further increase. Affected by COVID-19 's epidemic situation, the resumption of work is blocked and the entry time of employees is delayed, which has a certain drag on the company's income in the first half of 20 years, so the net profit for 20-21 years is reduced from 158 million to 133 million respectively. We expect the company's 20-22 net profit to be 1.33 billion, respectively, and the current market capitalization corresponds to 14/11/9xPE, maintaining the buy rating.
Risk hint: COVID-19 's epidemic dragged down income in the first half of the year, economic slowdown superimposed instability in Hong Kong dragged down headhunting business, and the distribution of science and technology was not as expected.