Renrui HR Tech Announces 2023 Annual Results
[Hong Kong－27March2024] Renrui Human Resources Technology Holdings Limited $RENRUI HR (06919.HK)$ ("Renrui HR Tech" or "the Company" together with its subsidiaries, the "Group", Hong Kong Stock Code: 6919.HK) is pleased to announceitsannualresults for the year ended 31December 2023 (the "Year").
2023 Annual Results Summary
- Revenue amounted to RMB4,472.2 million, increased by 22.9% year-on-year ("yoy").
- Gross profit was RMB422.5 million, increased by 128.7% yoy.Gross profit margin was 9.4%, representing a significant increase of 4.3 p.p. yoy (2022: 5.1%).
- Operating profit was RMB82.8 million, increased by 623.4% yoy
- Profit for the Year was RMB67.8 million (2022: RMB6.9 million).Profit attributable to equity holders of the Company wasRMB41.0 million (2022: Loss of RMB7.3 million)
- Adjusted profit for the Year* amounted to RMB105.1 million (2022: RMB24.0 million). Adjusted profit attributable to the equity holders of the Company* was RMB68.2 million (2022: RMB5.7 million)
* Adjusted profit for the Year and Adjusted profit attributable to the equity holders of the Company exclude items which do not relate to the ordinary course of business of the Group and are non-recurring in nature, including amortisation of intangible assets resulting from acquisition, impairment of goodwill, net fair value gain or loss in relation to equity investments and share-based payment expenses.
Revenue Breakdown by Segment
- The Group's revenue comprises contributions from its comprehensive flexible staffing business, professional recruitment, and other HR solutions.
- Revenue of the comprehensive flexible staffing segment amounted to approximately RMB 4,427.5 million, increased by approximately 23.9% yoy, mainly due to the strong demand for digital and IT talents at higher service premium, along with the recovery in demand for general service outsourcing.
- Comprehensive flexible staffing segment consists of general service outsourcing, digital technology and cloud services, and digital operation and customer services, each accounting for 54.0%, 39.2% and 5.8% of total revenue, respectively (2022: 76.2%, 14.8%, and 7.2%). Of which, digital technology and cloud services recorded a revenue of approximately RMB1,752.5 million, increased by 225.2% yoy.
- Revenue of professional recruitment and other HR solutions segment was approximately RMB44.7 million, decreased by 30.4% yoy. Yet, there was asignificantincrease in the average professional recruitment fee per placement, supported by the growing demand for digital and IT talents at higher service premium. In the second half of the Year, revenue of professional recruitment also increased by25.1% when compared to the first half, showcasing a gradual recovery in demand.
Business Highlights
- Successful Business Transformation with Growing Contributions from Digital and IT Talents
The Group was able to resume its revenue and net profit growth during the Year, supported by the rapid expansion of its high-service-premium, high-margin digital talent business. In particular, revenue from digital technology and cloud services business increased 225.2% yoy to RMB1,752.5 million, with its revenue contribution also rising from 14.8% to 39.2% of total revenue.
The Group was able to resume its revenue and net profit growth during the Year, supported by the rapid expansion of its high-service-premium, high-margin digital talent business. In particular, revenue from digital technology and cloud services business increased 225.2% yoy to RMB1,752.5 million, with its revenue contribution also rising from 14.8% to 39.2% of total revenue.
- New Vertical Ventures to Diversify Business Composition
Besides the general trend of digitalization, there were also significant transformations in several key industry sectors, such as new energy and electric vehicles(“EV”). The paradigm shift within the industry has created new talent requirements, from EV technologies and autonomous driving, to network communication development and component design etc. The Group’s extensive reach was able to source skilled digital talents across industries, quickly assisting companies with access to specific talent pools. With over 300 new clients acquired during the Year, robust sales growth was observed from clients in the smart manufacturing and automotive industry, the telecommunications sector, the finance sector, and the internet and tech sector.
Besides the general trend of digitalization, there were also significant transformations in several key industry sectors, such as new energy and electric vehicles(“EV”). The paradigm shift within the industry has created new talent requirements, from EV technologies and autonomous driving, to network communication development and component design etc. The Group’s extensive reach was able to source skilled digital talents across industries, quickly assisting companies with access to specific talent pools. With over 300 new clients acquired during the Year, robust sales growth was observed from clients in the smart manufacturing and automotive industry, the telecommunications sector, the finance sector, and the internet and tech sector.
- Large-scale Client Strategy to Ensure Business Scalability and Profitability
The Group maintained its large-scale client strategy during the Year, as an attempt to raise customer retention efficiency, customer satisfaction and profit margins. There was a growing Top 10 clients' revenue contributions, along with extension to job positions that have higher values and longer terms, such as finance, legal, HR, and admin. The Group was also able to acquire new, foreign clients during the Year, thanks to its nation-wide service network.
The Group maintained its large-scale client strategy during the Year, as an attempt to raise customer retention efficiency, customer satisfaction and profit margins. There was a growing Top 10 clients' revenue contributions, along with extension to job positions that have higher values and longer terms, such as finance, legal, HR, and admin. The Group was also able to acquire new, foreign clients during the Year, thanks to its nation-wide service network.
- Advancement of Ruizhi System to Lay Foundation for Future Efficiency
The Group continued to invest in innovation and technology. In 2023, with the CEO-led initiatives for digital transformation, including the development and advancement of its Ruizhi System, an integrated management platform specializing in digital talent business, the Group was able to greatly enhance its competitiveness and operational efficiency during the Year. The system in place is also expected to greatly boost profit margin, laying the foundation for further financial improvements upon scale expansion.
The Group continued to invest in innovation and technology. In 2023, with the CEO-led initiatives for digital transformation, including the development and advancement of its Ruizhi System, an integrated management platform specializing in digital talent business, the Group was able to greatly enhance its competitiveness and operational efficiency during the Year. The system in place is also expected to greatly boost profit margin, laying the foundation for further financial improvements upon scale expansion.
Mr. Zhang Jianguo, Chairman and Chief Executive Office of Renrui Human Resources Technology Holdings Limited, commented, "We are delighted with the financial turnaround, supported by our successful business transformation towards a more digital and IT talent business.As the Chinese government introduced various macro policies since the start of 2024, we believe 2024 will offer an even more positive and dynamic outlook for the comprehensive flexible staffing market. We will continue to expand our digital talent pool, further streamline our operation, retain and upsell our existing customers, while expanding our presence in emerging sectorswith new customer wins, in order to further fast-track our growth. We will also stay vigilant toward the latest industry and technological developments, so that we can remain one of the first-movers in the industry, and create higher and more sustainable values for our shareholders."
About Renrui Human Resources Technology Holdings Limited
Renrui HR Tech is a fast-growing pioneer in the human resources solutions sector in China and a strategic partner for many industry leaders, primarily engaged in the provision of general service outsourcing resources outsourcing services, digital technology and cloud services, digital operation and customer services, professional recruitment, and other human resources solutions.The Group has reinvented the traditional human resources business process with digitalisation and new technology innovation. Its one-stop ecosystem allows Renrui HR Tech to serve its customers across the PRC in a result-oriented manner, effectively tackling large-scale talent recruitment and management problems in the PRC. Currently, Renrui HR Tech operates over 90 branches and subsidiaries across China, with business coverage in over 300 cities.
Renrui HR Tech is a fast-growing pioneer in the human resources solutions sector in China and a strategic partner for many industry leaders, primarily engaged in the provision of general service outsourcing resources outsourcing services, digital technology and cloud services, digital operation and customer services, professional recruitment, and other human resources solutions.The Group has reinvented the traditional human resources business process with digitalisation and new technology innovation. Its one-stop ecosystem allows Renrui HR Tech to serve its customers across the PRC in a result-oriented manner, effectively tackling large-scale talent recruitment and management problems in the PRC. Currently, Renrui HR Tech operates over 90 branches and subsidiaries across China, with business coverage in over 300 cities.
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