Under the wave of the digital economy, along with the emergence of various new business formats and models, the flexible employment market, which is characterized by platformization and flexibility, is showing a rapid development trend.

According to the “2022 China Flexible Employment Market Research Report” report released by iResearch, in 2022, the size of China's flexible employment market will exceed 1 trillion yuan, an increase of 34.9% over the previous year, a record high in the past 5 years. In 2023, the size of the flexible employment market is expected to continue to grow to 1.4 trillion yuan.

At this time, a Swiss talent (06919), driven by self-transformation and evolution and equipped with digital genes, is welcoming us. This can be seen from his latest financial report.

On August 23, Rui Talent, a leader in flexible employment, revealed its financial report for the first half of 2023. Data show that in the first half of 2023, the company achieved revenue of about 2,068 billion yuan, an increase of about 19.3% over the previous year; net profit to the mother was about 10.1 million yuan, turning a loss into a profit over the previous year. At the same time, the company's gross profit also increased significantly: in the first half of the year, Renrui Talent's gross profit was about 168 million yuan, an increase of 154.8% over the previous year.

The reasons given by Renrui Talent for the significant increase in revenue and gross profit were “due to the rapid increase in revenue from the digital technology and cloud services business.”

The impressive financial data shows the company's good business results in the past. More importantly, only by having a deeper understanding and understanding of the good results achieved by the company can we better understand the operating rules and context of the industry behind it. Next, let's further analyze it through Renrui Talent's financial report: What is the deeper reason behind the company's strong performance growth? Will the growth potential of the company continue to be the same in the future?

First, focusing on digital technology, catalytic digital technology and cloud service businesses are growing exponentially.

Looking at the split business structure, Renrui Talent's business is mainly divided into two segments: one is the comprehensive flexible employment business sector; the other is professional recruitment and other human resources solutions. Among these, the comprehensive flexible employment business is the company's core revenue source segment, covering the three major business segments of general service outsourcing, digital technology and cloud services, digital operations, and customer service.

In recent years, in order to better grasp the development opportunities of the digital wave and respond to the employment needs of enterprises and the strategic needs of digital transformation, Renrui Talent has begun to focus on the digital field. Through a “endogenous extension” strategic layout, the company's brand effect in the information technology and digital talent service market has been expanded, thus encouraging the digital technology and cloud services of the company's comprehensive flexible employment business segments to explode.

According to financial reports, in the first half of 2023, due to the active implementation and successful implementation of the business upgrade strategy, the company achieved explosive growth in the digital talent business through endogenous growth and acquisitions: during the period, the company achieved revenue of 736 million yuan from digital technology and cloud services, a year-on-year increase of 560.5%. The share of comprehensive flexible industrial business revenue increased from 6.6% in the same period in 2022 to 35.9%; the number of digital and information technology talents reached about 7,830, an increase of 6,616 over the same period in 2022; and with the explosive growth of the digital technology and cloud service business The company's comprehensive flexible employment business revenue increased significantly. The sector achieved revenue of 2,051 billion yuan during the period, an increase of 21.0% over the previous year.

As can be seen, following the trend of the industry, Renrui talents have grasped the development dividends of the digital economy, and it is no coincidence that the company's performance has shown a strong growth trend; it is due to the company's strategic layout of forward-looking focus on the digital field.

Second, increasing R&D investment and improving operational efficiency will promote the long-term increase in the company's profitability.

Of course, Renrui's talents want to focus on the digital field through strategic transformation, and it's not for nothing that Renrui talents are unfounded. During the period, the company increased investment in R&D and further enhanced its digital technology and cloud service capabilities through technology empowerment measures. According to financial data, in the first half of 2023, the company's R&D expenditure was 26.2 million yuan, an increase of 97% over the previous year, mainly due to the company's use of digital technology to upgrade business operations and management, especially the further development of Ruizhi Systems, which focuses on human resources solutions for digital and information technology talents, and Shanghai Sirui's R&D expenses.

Actions to increase R&D investment and improve operational efficiency have also led to a significant increase in the profitability of Renrui talents — in the first half of 2023, the company's gross margin was about 8.1%, a significant increase of 4.3 percentage points over the previous year. The reason for the increase was mainly due to the company's high-value digital talent service. The service achieved strong sales performance among new and old customers, added more than 200 new customers, and achieved strong growth in the automotive industry, communications industry and financial industry.

Regarding this, Renrui Talent also stated in its financial report, “As the company further expands the scale of digital technology and cloud services, there is still a lot of room for improvement in the company's gross margin.”

The expansion of revenue scale and the sharp increase in profitability have all prompted Renrui talents to hand over a relatively high-quality report card.

However, looking at its performance in the secondary market, the Zhitong Finance app observed that the value of Renrui's talents seems to have been underestimated: up to now, the stock price is less than HK$4, a sharp drop from the previous high of HK$54.5, and is clearly in a “low level of undervaluation”. This also means that Renrui talents are in urgent need of re-valuation.

Today, Renrui Talent's digital technology and cloud service business is exploding. In the digital economy, for the company and investors who follow it, this is certainly an unmistakable “value transition” opportunity, and its stock price surging by more than 8% the next day is the best proof.