The company released the 2020 annual report: 1) 2020: achieve revenue of 2.830 billion yuan / YoY+23.7%, if excluding the impact of partial reduction of flexible employment service fees to customers during the epidemic, the corresponding revenue growth rate in 2020 is + 32.3% (announcement caliber). Excluding the fair value loss of composite financial instruments and listing expenses, the high performance of the corresponding adjusted net profit of 188 million yuan / YoY+36.5%, is in line with expectations. 2) 2020H2: the revenue of 1.634 billion yuan / YoY+34.93%, was further accelerated compared with 11.0% of 2020H1, and the adjusted net profit of 130 million yuan / YoY+71.05%, was reversed compared with the 2020H1 of-9.3% compared with the same period last year. 3) Cash flow: the company realized net cash flow of operating activities of 156 million yuan / YoY+3.39% in 2020. 4) operating capacity: the company's 2020 adjusted accounts receivable turnover days are 48 days, which is basically the same as the 46 days in 2019.

Flexible labor income to maintain growth for 20 years + 20% dint H2 recruitment demand recovery, flexible labor service rate recovery led to gross profit margin repair. 1) flexible employment business (accounting for total revenue 91.00%/-3.00pct) realized revenue of 2.576 billion yuan / YoY+19.76%. The turnover rate of flexible employees has dropped from about 9.9% in 2019 to about 9.0% in 2020, mainly because the project turnover rate has become an important assessment indicator. By the end of 20 years, the company had sent 35762 flexible workers / 44851 YoY+42.4%, recruits / YoY+28.3%; gross profit margin of 7.4% Mobil 1.5 pct, mainly due to the reduction of customer labor demand caused by the epidemic, but the rigidity of various costs such as rent and labor. The premium rate for 2020H2 flexible employment services gradually returned to the normal level, leading to an increase in gross profit margin. 2) Professional recruitment business (accounting for total revenue 2.5%/-0.3pct) realized revenue of 69 million yuan / YoY+9.1%, gross profit margin of 39.6%/+4.1pct (significantly higher than 2020H1 gross profit margin of 20.1%), mainly due to the recovery of recruitment demand of H2 new economy enterprises and the company's acquisition of high-value customers with urgent labor demand. 3) Business process outsourcing (accounting for total revenue 5.3%/+3.0pct) achieved revenue of RMB 151 million / YoY+190.7%, is mainly due to the additional outsourcing business assigned by the company's old flexible customers (flexible labor service accounts for about 64.6% of the outsourcing business) and the partner business plan launched by the company in June 2020. The gross profit margin is 16.0% Universe 0.9 pct. The increase in gross profit margin is mainly due to the improvement of the company's internal management ability to promote the efficiency of outsourcing business, while the social security waiver from February to December lowers labor costs.

The recovery of flexible labor rates led to the repair of gross profit margin, the integrated labor system promoted the improvement of human efficiency, and the net profit rate increased slightly. 1) overall gross profit margin: 9.6% Maxime 0.9pct, mainly due to a decline in the gross profit margin of the flexible employment business, which accounts for a large proportion of the company's revenue, which is somewhat fixed compared with the 2020H1 gross profit margin of 8.3%; 2) expense rate:

The rate of sales expenses is 1.89% / basically the same as the same period last year; the rate of R & D expenses is 0.49% Morelle 0.09pct, which is due to the adjustment of the personnel structure of the 2020H1 R & D team; and the rate of management expenses is 2.62% Maxime 1.3 pct, mainly due to the end of listing expenses in 2019. 3) other income: the 20-year realized income of 32.6 million yuan / YoY+53.8%, is mainly caused by government subsidies and tax relief during the epidemic. 4) adjusted net interest rate: 6.47% pound 0.57pct, mainly due to the use of an integrated human resources ecosystem to enhance the efficiency of operating leverage.

Looking forward to 2021: 1) at the industry level, the flexible labor market is growing rapidly: according to the report, China's flexible labor market is expected to grow at an annual rate of 20.6% in 2021. In the context of the rapid growth of China's flexible employment industry and the Chinese government's emphasis on stable employment, the company, as a long-term human resource supplier for enterprises in the new economy, is expected to seize the opportunity when the economy begins to recover. 2) at the company level, increase the flexible employment market for IT posts: the company established a flexible employment service department for IT posts in the second half of 2020, and plans to adopt the "partner Entrepreneurship Plan" to deepen the flexible employment business of IT posts through the establishment of joint ventures or acquisitions, which is expected to further enhance the profitability and business volume of flexible employment business.

Core logic: increasing acceptance of flexible employment model, focusing on new economic customers + IT system to improve efficiency, enjoy high growth dividends. Flexible employment has been increasingly accepted in China in recent years, and under the circumstances of macroeconomic uncertainty, enterprises prefer flexible employment in order to reduce employment risks and hidden costs, and superimpose national policy support. flexible use of work is expected to benefit directly from the best employment model of enterprises in the context of macroeconomic uncertainty. Considering that the domestic flexible employment penetration rate is still low, and the leading market share is lower than overseas, the industry is still in the primary stage of rapid development and increment, and the competition is still relatively mild. As the largest flexible employment enterprise in China, the core of the company focuses on the new economy enterprise customers, actively grasps the flexible labor dividend in the new economy field, overlays the IT system to build high barriers, and is expected to usher in high growth against the trend.

Investment advice: buy-An investment rating, 6-month target price of HK $33.50. It is estimated that the overall income for 2021-23 is 5616,635 million yuan respectively, with a corresponding growth rate of + 49.51%, 32.74% and 18.14%, respectively, and the net profit of returning home is 2.37, 354 and 430 million yuan, respectively, with a growth rate of + 29.9%, 49.3% and 21.3%. Give a Buy-An investment rating.

Risk tips: COVID-19 influence, intensified competition in the industry, rising labor costs, macroeconomic fluctuations and so on.