Summary of the report:

Renrui talents announcement annual results in 2020, the company achieved revenue of 2.83 billion yuan / + 27.5%, adjusted net profit of 183 million yuan / + 36.5%. 2020H2 realized income of 1.634 billion yuan / + 35.1%, and adjusted net profit of 130 million yuan / + 71.8%. The company intends to pay a dividend of HK $0.42 per share.

Flexible employment drives rapid growth of performance, and non-spiritual workers' business blossoms at many points. In 2020, the company's flexible employment business achieved revenue of 2.576 billion yuan / + 19.8%, accounting for 91.0% of revenue. When social security deductions were excluded, the company's spiritual worker income increased by 28.9% compared with the same period last year. Flexible labor dispatch and employees reach 35762 / + 42.4%, the contribution of old customers is more than 80% and will continue to grow. New customers expand to achieve better cooperation with leading well-known companies in medical services, online education, community e-commerce, Internet payment, and new energy vehicles. The distribution of flexible employment business is still dominated by the new economy, accounting for 87.8%, and financial institutions / real estate / other industries account for 3.5%, 8.5%, 0.3% respectively. The gross profit margin of flexible employment business in 2020 is 7.4% Maxime 1.5 pct. Although the epidemic has a certain impact on the industry and the company's performance, the demand for flexible employment in the company's main industry has increased due to the increase in the epidemic after a short trough. The normalization of the epidemic is expected to further promote the penetration of flexible labor, and the company, as the largest flexible employment service provider, will lead the growth of the industry. The non-psychic business blossomed at many points, and the professional recruitment / business process outsourcing / other human resources solutions business contributed revenue of RMB 0.69 million / 1551 million respectively, an increase of 9.1% / 190.9% / 158.2% over the same period last year, and the revenue share was 2.4% / 5.3% / 1.2% respectively. The business growth of BPO is remarkable, and the business process outsourcing division has achieved rapid growth in 2020. The company innovates to expand the joint venture model and carries out the epitaxial partner business plan, which effectively helps the company to expand its BPO business rapidly. In 2021, the company will continue to speed up the industrial layout, mergers and acquisitions and joint ventures.

Investment advice:

It is estimated that the return net profit of the company from 2021 to 2023 is 222,313,000,000 RMB respectively, corresponding to the PE of 16-11-9, and the valuation is low. Give the company 25 times in 2021, maintaining a "buy" rating.

Risk tips: intensified competition in the industry, mergers and acquisitions and overseas market expansion risks.