KANZHUN 22Q4 Earning Report: Performance Growth is Confirmed, But the Valuation Premium is too High

KANZHUN's 22Q4 revenue was 1.0823 billion yuan, a slight decline of less than 1% year-on-year. The revenue in 2022 will be 4.511 billion yuan, YoY+5.9%, slightly exceeding market expectations, reflecting that the company still maintains a certain degree of competitiveness in the face of macro headwinds. Among them, in 22Q4, the online recruitment service revenue for corporate customers was 1.07 billion yuan, a year-on-year decrease of 1.1%, mainly due to the high macroeconomic uncertainty, the slowdown in corporate recruitment demand, and the business contraction of the largest customer Internet company. In 22Q4, the revenue of other services (mainly paid value-added services for job seekers) was 12.6 million yuan, a year-on-year increase of 44.8%. The user base of this business is small, and the revenue growth mainly benefits from the expansion of the user base. In 22Q4, the company's cash collection was 1.1045 billion yuan, a year-on-year decrease of 5.6%, reflecting that the company's demand is still mainly short-term demand.

The company’s revenue guidance for the first quarter this year is a year-on-year increase of 9.8%-11.6%, and the revenue growth rate has returned to positive growth, mainly due to the recovery of the macro economy and the company’s 10%-20% price increase for customers in some industries. Increased average payout. At the performance conference call, the company expects that in the first quarter of 2023, the company's calculated cash receipts will reach a record high, with a quarter-on-quarter and year-on-year increase of more than 45% and a year-on-year increase of more than 25%. The recovery is relatively optimistic, and the company is expected to benefit.

In addition, the company's balance sheet is very healthy, with a balance of cash and cash equivalents and short-term investments of RMB 13,209.9 million (USD 1,915.3 million) at the end of 2022.

In 22Q4, the company turned from profit to loss, with a net loss of 185 million yuan, while the net profit in 21Q4 was 233 million yuan, and the non-GAAP net profit was 59.5 million yuan, which was a sharp drop from last year (349 million yuan), mainly due to the increase in total operating costs and expenses. Substantial growth. Among them, the biggest increase is the sales expenses. The 22Q4 sales expenses increased by 82.6% year-on-year to 682 million yuan, mainly due to the increase in advertising expenses, especially the sponsorship of the 2022 FIFA World Cup. Consistent with the idea of the 2018 World Cup in Russia, Boss Zhipin has been using the model of "burning money" in exchange for growth to increase user traffic and revenue. However, in terms of current volume, the money-burning model is no longer as effective as before. Sponsoring the World Cup in 2010 achieved double-digit user growth and only achieved double-digit user growth this year.

In addition, the company's equity incentive expenses increased by 111.4% to 244.2 million yuan due to the dual listing; research and development expenses increased by 47.9% year-on-year to 199 million yuan; general and administrative expenses increased by 107.7% year-on-year to 248 million yuan, mainly due to the cost of dual listing increase.

Although the fiercely competitive market can not avoid increasing marketing expenditures, since the company will not have large-scale marketing expenditures such as sponsoring the world in 2023, and there will be no increase in equity incentives and related expenses brought about by dual listing, it is estimated that the cost and expenses will continue to decline year-on-year, further releasing profits.

In 22Q4, the company's average monthly active users (MAU) was 30.9 million, which was lower than the market expectation of 34.82 million, and YoY+26.6%. The year-on-year growth rate continued to increase compared with the previous quarter, and the quarter-on-quarter user loss was 1.5 million. As of the end of 2022, the number of corporate paying users will be 3.6 million, a year-on-year decrease of 10%, but it is still far ahead of competitors such as Liepin. From the current point of view, whether it is the lower than expected monthly active users or the decline in corporate paying users, it should be related to the downturn in the macro environment such as the 22Q4 epidemic.

At the beginning of 2023, the end of the epidemic blockade and the traditional recruitment peak season, the recovery of market demand drove the company's user data to usher in growth. From January to February 2023, KANZHUN will add about 9 million new and complete users, and the ratio of average DAU to MAU has hit a new high. In February, the number of monthly active enterprises on the platform also exceeded the historical high.

The company focuses on the blue-collar market and the sinking market. Among the new users in the first quarter, blue-collar users were faster than white-collar users both in terms of absolute number and growth rate. The growth rate of second-tier cities and below is significantly faster than that of first-tier cities.

Benefiting from the increase in the penetration rate of online recruitment, the company's future growth point may be in the service of small and medium-sized enterprises. The company's business model is to continuously attract high-speed growth of users through recruitment direct chat and algorithm optimization, and then attract corporate payment and personal value-added payment through the number of users. At present, the company's registration penetration rate among all enterprises is close to 25%, and the penetration rate among core enterprise users whose recruitment has been implemented online is close to 75%. As of the end of 2021, more than 99% of the 48.42 million enterprises in the country are small and medium-sized enterprises, so small and medium-sized enterprises are the main growth space in the future. At present, as of the first half of 2022, white-collar and gold-collar users, blue-collar users and student users accounted for 54.5%, 29.3% and 16.2% of the platform's job-hunting user base, respectively. Compared with the same platform, it has certain advantages in the blue-collar and student markets.

At present, the company has launched Conch Recruitment for the blue-collar market, but the problem is that the competition in the blue-collar recruitment market is very fierce, including the traditional recruitment website "Go to Market Direct Recruitment", the live broadcast recruitment "Kuaishou Zhaokuaigong" and the addition of other traditional recruitment websites. From the point of view, all of them may have a negative impact on the company's profit growth, and may not threaten the company's competitive market position, and peer data must be tracked.

In addition, the company announced that it may repurchase up to $150 million in stock (including in the form of ADSs) within the next 12 months.