Event: The company issued the 2023Q3 announcement. 2023Q3 achieved revenue of 1.6 billion yuan, a year-on-year increase of 36%, and accelerated month-on-month growth; NON-GAAP net profit of 426 million yuan, an increase of 101% over the previous year; non-GAAP adjusted net profit of 714 million yuan, an increase of 90% over the previous year; excluding investment income and adjusted operating profit of 549 million yuan, mainly due to gross margin growth combined with a reduction in sales expenses ratio. Cash receipts amounted to $1,636 billion, up 32% year on year and slowed down from 23Q2. We believe that the difference in marginal changes in revenue and cash receipt growth may be related to the decline in the willingness of leading companies to pay in advance; it will still take time for them to recover.
By business, online recruitment revenue was 1,592 billion yuan, an increase of 36.7% over the previous year, mainly driven by user growth and increased user participation; revenue from other services was 0.01.5 billion yuan, an increase of 7% over the previous year, mainly benefiting from the expansion of the user base. Among them, the number of paying enterprise customers was 4.9 million/ +32.4%, up 8.9% from 4.5 million in the previous quarter, and MAU reached a record high of 44.6 million, +37.7% year-on-year and +2.3% month-on-month.
Expense investment increased year-on-year. We are optimistic that after building brand awareness and user mentality, the scale effect will drive the profit side. The sales/R&D/management expense ratio was 28.5%/25.8%/13.7%, year-on-year -3.2/+1.2/-0.01pct. The increase in sales expenses was mainly due to the increase in employee expenses and advertising expenses. The increase in R&D expenses was mainly due to the increase in employee expenses and technology investment, and the increase in management expenses was mainly due to the increase in equity incentive expenses.
The cash dividend plan was announced for the first time since listing. The proposed total amount is approximately US$80 million. The Company will pay cash dividends in US dollars to common stock holders and American depository share holders on December 5, 2023, respectively, at $0.09 per common share, or $0.18 per American depository share, for a total dividend of approximately $80 million.
Profit forecast and investment advice: The company expects revenue to increase by 39.6%-43.3% year on year to 1,51.55 billion yuan in 2023Q4. Long-term optimism about the company's innovative model and the resulting network effects and brand bargaining power, potential penetration rate and monetization space brought about by increased market share. We expect the company's adjusted net profit of 20/25.3 billion yuan in 2023-2025. The current stock price corresponds to PE24/19/1.6 billion yuan, giving it a “recommended” rating.
Risk warning: industry competition is intensifying, macroeconomic recovery falls short of expectations, recruitment market recovery falls short of expectations, etc.