Beijing Career International Co.Ltd(300662) (300662)
[key investment points]
Flexible employment business drives the release of leading performance of human services. The company started with headhunting business in 1996 and landed on the gem in 2017. Now it has developed into a leading integrated human resources service provider in China. From 2012 to 2020, the company's operating revenue and performance continued to grow rapidly, with CAGR of 31% and 25% respectively; In 2020, the company's operating revenue was 3.932 billion yuan (YoY + 9.6%), and the net profit attributable to the parent company was 186 million yuan (YoY + 22.4%). Among them, the proportion of flexible employment business continues to increase, which constitutes the main driving factor for the company's scale expansion. From 2014 to 2020, the proportion of flexible employment revenue increased from 46% to 80%, and the proportion of gross profit increased from 15% to 54%.
China's flexible employment industry has ushered in a development dividend period. 1) The reversal of labor supply and demand structure, policy support and the catalysis of post epidemic market education jointly promote the rapid growth of China's flexible employment industry. China's recruitment rate has remained above 1 since the fourth quarter of 2010. It has increased to 1.53 in the third quarter of 2021, and the talent demand gap continues to expand. 2) From 2014 to 2020, the scale of China's flexible employment market increased from 23.2 billion yuan to 91.6 billion yuan, the CAGR was 26%, and the employee end penetration rate increased from 0.09% to 0.23%. It is estimated that the scale of China's flexible employment market will grow to 177.1 billion yuan in 2023, and the penetration rate still has a large room for improvement compared with the mature markets in the United States and Japan, which is mainly driven by the increase in the number of flexible employees due to the improvement of employee penetration. 3) From the perspective of the number of people in China's flexible employment market in 2020, CR3 is 5.57%. Based on the strong replication brought by the high standardization of flexible employment business and the positive feedback between b-end enterprise customer reputation and C-end flexible worker employee resources, there is a logic to improve the industry concentration.
"Front store and back factory" + vertical operation to ensure personnel post matching efficiency, Ka drive + platform interconnection to open up growth space. 1) the company set up a resident consultant in the "front store" to directly touch the customers. In the "post factory" relying on the search center to mobilize resources to complete the delivery, the business process is separated and the effective matching between the candidate and the employment post is formed through the analysis and decision of "thousands of people and thousands of Posts". By the end of 2016-2020, the number of professional consultants of "QianDian" was 27%, which has increased to 2600; The number of paying customers CAGR is 28%, and there are more than 5300 at present. "Houchang" is located in Suzhou, Xi'an, Tianjin, Dongguan, Chengdu and Bangalore, India, with 10 million candidate information. 2) The key customers of the top 500 enterprises that have been deeply engaged in the human services industry for many years are highly viscous and have a strong sustainability of the demand for flexible employment; At the same time, the company's three main businesses give full play to synergy, provide customers with all-round services and maximize customer value. As the middle and high-end industries with flexible employment positions account for a relatively high proportion, the per capita contribution revenue of Beijing Career International Co.Ltd(300662) linggong employees is significantly better than that of peers. At the same time, the B-port monument accumulated by Kerui's leading enterprise customers in the industry helps the company further open the market and open the scale boundary through the industrial interconnection platform.
[investment advice]
Due to the high increase in the number of flexible employees of 2021q3 company, we raised our forecast for the company's operating revenue and net profit attributable to the parent company from 2021 to 2023. It is estimated that from 2021 to 2023, the company's operating revenue will be RMB 6.213/93.63/13.177 billion respectively, with a year-on-year growth rate of 58.00% / 50.71% / 40.73% respectively; The net profit attributable to the parent company was 272 / 357 / 430 million yuan respectively, with a year-on-year growth rate of 45.78% / 31.25% / 20.60% respectively; EPS is 1.38/1.81/2.18 yuan / share respectively; The corresponding PE is 45 / 34 / 28 times respectively. We believe that driven by the flexible employment business, the company's scale and performance will continue to maintain a high growth rate, giving the company 40 times PE in 2022, corresponding to the target price of 72.4 yuan and 72.4 yuan within 12 months, maintaining the "buy" rating.
[risk tips]
The macroeconomic slowdown leads to the decline of labor demand;
The working age population's willingness to work decreased;
Human resources industry policy risk;
The company's on-the-job flexible employees grew less than expected.
