Performance is growing rapidly, and customer types are more diverse. The company announced 24H1 results. In the first half of the year, it achieved revenue of 3.62 billion yuan, +30.9% year on year, net profit of 0.659 billion yuan, +92.5% year on year, and adjusted net profit of 1.249 billion yuan, +53.6% year over year. Looking at revenue split, KA customers achieved revenue of 0.812 billion yuan, +47.1% year over year, medium-sized customers achieved revenue of 1.246 billion yuan, +25.1% year over year, and small customers achieved revenue of 1.519 billion yuan, or +28.4% year over year. The rapid growth in performance is mainly due to strong user growth, and there are more diverse user types, such as blue-collar workers, small and medium-sized enterprises, and users in low-tier cities.
The scale effect is increased, and marketing expenses are reduced. 24H1's gross profit margin was 83.1%, +1.8pct year on year. The increase in gross margin was mainly due to the increase in revenue scale and scale effect. The marketing expense ratio was 31.1%, -8.7pct year on year. The sharp decline in marketing expenses was mainly due to the reduction in advertising expenses and the increase in revenue scale. The R&D expense ratio remained stable, highlighting the company's determination to continue to invest in technology research and development. The net profit margin was 18.2%, +5.8pct year on year.
The number of active users on the platform continues to grow, and the blue collar recruitment market has broad prospects. The average number of monthly active users of 24H1 reached 50.6 million, an increase of 21.3% over the same period in '23, and the 24H1 “average number of daily active users/number of monthly active users” index reached 25.2%, the same as in the same period in '23. The company continued to maintain its leading position as an online recruitment platform. According to the Insight Consulting Report, it is estimated that by 2026, China's blue-collar online recruitment market will reach 152.4 billion yuan in terms of revenue. The compound annual growth rate from 2021 to 2026 is 36.3%, outperforming the white-collar online recruitment market and the overall online recruitment market. BOSS direct employment has an advantage in the blue-collar job search market. The main mobile terminal lowers the threshold of use for both B&C; the “direct chat” mode omits the resume process and allows direct contact information exchange; the platform's intelligent matching can actively help blue-collar job seekers find suitable jobs, which is expected to gain greater market share in the blue-collar recruitment and declining market.
Due to slow recovery in the macro environment, recruitment demand fell short of expectations. We lowered the company's revenue side forecast and raised the cost side expenditure forecast. The adjusted net profit for 24-26 is 2.19/3.192/3.75 billion dollars (the original 24-25 forecast is 2.597/3.494 billion yuan). Using a free cash flow valuation, the corresponding market value is $57.384 billion, Hong Kong dollar to RMB 0.92, corresponding to HK$62.996 billion, and the target price is HK$69.98 per share , maintaining a “buy” rating.
Risk warning
As a result of macroeconomics, recruitment demand has fallen short of expectations; industry competition has intensified; efficiency improvements have fallen short of expectations; new business expansion has fallen short of expectations, etc.