The company increased its interim dividend to 2 cents, up 11%, representing a payout ratio of 67%.
Chew, his Aug 19 note, points out that Singapore for HRnetGroup remains weak, with gross profit down 8% y-o-y to $33 million. FY2025 will likely mark the company's four consecutive year of decline.
There were better news from North Asia, with growth of 2.7% to $26.5 million, thanks to growing demand to fill roles in e-commerce, semiconductors, and other technology-related roles in Taiwan.
According to Chew, demand for senior executives is rising as companies adapt to disruptions in AI and supply chains.
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"As a result, more roles such as heads in strategy, digital, transformation, marketing, and countries are appearing. The volume is lower and the sales cycle longer, but revenue per recruitment is higher," he says.
Overall, Chew remains optimistic about HRnetGroup's prospects. He is keeping his FY2025 earnings forecast and target price.
"The company’s footprint across 18 Asian cities gives it access to identify and capture vertical opportunities in professional recruitment.
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"HRnetGroup is tapping into hiring opportunities in technology roles in Taiwan," he says.
To adapt because of intense competition in mid-level search and increased demand for C-suite roles, HRnet is pivoting toward senior executive opportunities.
That said, the company is keeping its eye on another key recruitment segment, flexible staffing, tapping its balance sheet and process excellence to expand geographically into China, Malaysia, and Indonesia.
Last but not least, Chew notes that the company, backed by a cash pile of $232 million, equivalent to nearly a third of its market cap, is paying an attractive dividend yield of 5.8%.
HRnetGroup shares changed hands at 72 cents as at 3.26 pm, unchanged for the day and up 3.62% year to date.
