Event: The company released its 2024Q1 financial report. 24Q1 revenue slightly exceeded the upper limit of the previous quarter's guidance. It is expected that the growth rate of cash receipts in Q2 may accelerate. 24Q1 achieved revenue of 1.7 billion yuan/ +33%, slightly exceeding the upper limit of the previous quarter's guidance (previous quarter guidance of 1.64 to 1.67 billion yuan), adjusted net profit of 530 million yuan/ +117%, corresponding to an adjusted profit margin of 23%; cash receipts of 2.05 billion yuan/ +24%.

Paying customers are growing strongly, and there is plenty of room for growth in customer unit prices and number of customers. By business, 2024Q1's online recruitment revenue was 1.68 billion yuan, up 34% year on year, mainly driven by user growth and increased user participation; revenue from other services was 20 million yuan, up 12.6% year on year, mainly benefiting from the expansion of the user base. Among them, the number of paying enterprise customers was 5.7 million, +42.5% year over year; MAU was 46.6 million, +17% year over year.

Investment in R&D and management expenses increased year-on-year, and we are optimistic that the scale effect will drive the profit side after building brand awareness and taking over user mentality. The sales/R&D/management expense ratio was 24%/27%/16%, compared to -15pct/+1/+3pct. The decrease in sales expenses was mainly due to a reduction in advertising and marketing expenses, the increase in R&D expenses was mainly due to an increase in employee-related expenses and technology investment, and the reduction in management expenses was mainly due to an increase in employee-related expenses.

With the acquisition of “My Job Network”, the Conch Plan continues to advance, and blue-collar service capabilities continue to improve. The company completed the acquisition project of the talent exchange platform “My Job Network”. At the same time, the Conch Plan continues to advance. 24Q1 Conch Preferred Online Jobs exceeded 26w, covering 2,700w of job seekers.

Profit forecast and investment advice: The company expects revenue to increase 28.4% to 31.7% year on year in 2024Q2 to 19.96 billion yuan. It is optimistic about the company's innovation 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 adjusted net profit of the company to return to mother in 2024-2026. The current stock price corresponds to PE 28/21/16X, maintaining the “recommended” rating.

Risk warning: Competition in the industry intensifies, macroeconomic recovery falls short of expectations, recruitment market recovery falls short of expectations, etc.