Renrui HR Tech Announces 2024 Interim Results

- Revenue amounted to RMB2,482.3million, increased by 20.0% year-on-year ("yoy").

- Gross profit was RMB230.4 million, increased by 37.6% yoy. Gross profit margin was 9.3%, representing an increase of 1.2 percentage points yoy (1H2023: 8.1%).

- Operating profit was RMB31.5 million, increased by 34.5% yoy.

- Profit for the Period was RMB20.4 million, increased by 8.2% yoy. Profit attributable to equity holders of the Company was RMB21.9 million, significantly increased by 117.3% yoy.

- Adjusted profit for the Period* amounted to RMB34.6 million (1H2023: RMB36.3 million). Adjusted profit attributable to the equity holders of the Company* was RMB31.2 million (1H2023: RMB22.4 million).

- The Group's revenue comprises contributions from its comprehensive flexible staffing business, professional recruitment, and other HR solutions. With all segments delivering satisfying results, the Group achieved a steady growth in revenue during the Period.

- Revenue from comprehensive flexible staffing amounted to approximately RMB2,456.4 million, increasing by approximately 19.8% yoy. As of 30 June 2024, the number of comprehensive flexible staffing employees increased to 38,300 (1H2023: 33,864). On the other hand, the demand for digital and IT talents remained strong, with the number of digital talents reaching 10,230 as of 30 June 2024 (1H2023: 7,830). The two together have laid a solid foundation for revenue growth of the segment during the Period.

- Revenue from general service outsourcing was approximately RMB1,376.0 million, representing an increase of 15.3% yoy. The positive result was mainly due to the growing business demand from its strategic and large-scale clients. Compounded by the contributions from its new clients, segment gross profit margin was able to maintain at 5.3% (1H2023: 5.1%).

- As a result of the expanding demand of existing clients and the satisfactory performance in new client acquisition, revenue from digital technology and cloud services reached RMB948.2 million, representing an increase of 28.8% yoy. Due to increasing economies of scale, segment gross profit margin increased by 1.8 percentage points, from 11.8% last year to 13.6% this year.

- Revenue from digital operation and customer services was maintained at a stable level of RMB132.3 million for the Period. Due to rising efficiency, segment gross profit margin increased from 10.7% last year to 11.9% during the Period.

- Revenue of the professional recruitment and other HR solutions segment was approximately RMB25.9 million, representing an increase of 51.7% yoy. The increase was mainly due to the increase in revenue of other HR solutions, which include training and development courses, labour dispatch services, and consultation services.

During the Period, the Group's digital technology and cloud services continued to gain traction. Supported by the Group’s differentiated services, there was an increase in customer satisfaction, which in turn, translated to higher customer stickiness, expanding business scale, and rising market share. In particular, the Group achieved strong growth among the intelligent manufacturing and automotive, communications, energy, finance and technology and internet industries, with key clients already exceeding the 500 mark in terms of staffing employees engaged. The Group has also established a rich customer pool, with around 20 clients each engaging over 100 staffing employees. As of 30 June 2024, the Group provided approximately 10,230 digital talents to its clients, representing a yoy increase of 30.7%.

In addition to customer acquisition, the Group also strengthened its employee management capability during the Period, covering contract employee lifecycle management, employee service enhancement, and training, etc., in an attempt to boost employee satisfaction and reduce employee turnover rate. Building upon the foundation of its digital talent recruitment center, the Group also built a mid-end office system, providing efficient services across all business processes including business support, quality control, labor relations management, project management, and talent cultivation services.

Embracing its large-scale customer strategy, the Group offered customized services to its notable clients, achieving higher client satisfaction and retention rate in the process. Specifically targeting the internet and technology industry, the Group also extended its reach to retail, new energy, logistics, and automotive sectors. In terms of position, the Group also extended its coverage to higher-value and longer-term roles such as finance, legal, HR and administration, with such positions seeing strong growth in demand and service fee during the Period. As of 30 June 2024, the Group has around 24,000 staffing employees engaged by its clients for general service outsourcing.

Due to the rapidly changing external market environment, there was also a growing demand for HR services in overseas markets. In view of the market opportunities, the Group established a new strategy for itsinternational business. Through mergers, joint ventures, and the establishment of overseas entities, the Group is planning to create an international, professional, and energetic team to swiftly replicate its business model and competitive advantages abroad, allowing it to fulfill the overseas demand of its existing major clients. Specifically, the Group is planning to offer efficient and comprehensive human resources services, including overseas recruitment services, outsourcing services, employer of record services, payroll outsourcing services,and cross-regional employment management solutions.

The Group continued to invest in innovation and technology, and has pursued digital transformation at the group level since 2023. As a result of its continuous investment in R&D, the Group's per capita service efficiency also ranked top in the industry. Despite the expanding candidate database, its robust infrastructure has enabled the Group to effectively match suitable talents with the right job openings in a secure and timely manner, thereby enhancing the recruitment efficiency of its clients.

Mr. Zhang Jianguo, Chairman and Chief Executive Office of Renrui Human Resources Technology Holdings Limited, commented, "In the first half of 2024, the Group continued to focus on the digital market, and was able to capture the relevant opportunities, delivering steady financial growth during the Period. As businesses accelerate their digital transformation with the help of strong governmental support, we believe the demand for digital talents will only get higher in the future. Therefore, we are positioning ourselves to seize the market opportunities, driven by the increasing adoption of digital intelligence, and the movement of professional and international business expansion. On the one hand, we are targeting the expanding structural gap in digital talents, as businesses continue to pursue digital transformation and productivity enhancement. We believe our efficient and cost-effective HR services would be a useful solution for a lot of enterprises. On the other hand, we are also offering our efficientHR resources management services to clients who are looking forcost reduction and efficiency improvement, as operational leverage and profitability become increasingly crucial for a business's success. Additionally, by leveraging our accumulated resources and experience from serving large-scale clients, we are also planning to assist our clients in penetrating overseas markets, jointly seeking growth opportunities in the face of domestic fluctuations and downward economic cycles. With these three driving forces, we believe the Group will reach new heights, and will be able to create more values for its customers and shareholders with its improving services and financial performances."

AboutRenrui 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 services, digital technology and cloud services, digital operation and customer services, professional recruitment,overseas human resources services,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 in a result-oriented manner, effectively tackling large-scale talent recruitment and management problems in the PRC. Currently, Renrui HR Tech operates nearly 100 branches and subsidiaries across China, with business coverage in over 300 cities.