HRnetGroup Ltd (SGX: CHZ) recently announced its FY 2024 results, revealing a 2% year-on-year (YOY) revenue decline and a more significant 30% drop in net profit.
While the sharp profit decrease initially appears concerning, it’s crucial to understand the underlying factors. Primarily, this decline stemmed from reduced other income, notably government subsidies, some of which were deferred to 2025, and mark-to-market losses on financial assets.
Amid industry headwinds, HRnetGroup’s resilient operational performance is evident in the above image, which compares profit growth among major recruitment companies.
This operational strength reinforces its position as the leading recruitment firm in Singapore, achieving an approximate 20% market share in profit generation, despite not being the largest in headcount or sales.
Notably, HRnetGroup maintained its final dividend at S$0.0213 per share, bringing the total dividend to S$0.04. This consistent dividend payout, even without a formal fixed dividend policy, underscores management’s commitment to shareholder returns.
More importantly, the company’s outlook is increasingly optimistic.
Management reports a less conservative stance among businesses in their core markets, Singapore and China, compared to the previous year.
Furthermore, HRnetGroup is strategically expanding its sales channels.
In its Professional Recruitment (PR) segment, the company is moving towards higher-value Executive Search for senior roles. The Flexible Staffing (FS) segment is focusing on securing recurring mega-contracts, particularly with government entities.
To further capitalise on emerging staffing needs and future growth, HRnetGroup has established new business units and expanded into new geographical market – Vietnam.
While short-term market uncertainties persist, I share HRnetGroup’s optimistic long-term growth prospects. Consequently, I have partially repurchased shares that I previously divested.
Discover more from The Fat Investor
Subscribe to get the latest posts sent to your email.