He expects near-term growth for the company to be driven by more permanent and flexible staffing placements on firm GDP growth regionally.
Yeo is seeing more job placements supporting growth, especially from regional markets. Citing RHB's economists, China, where HRnetGroup has extensive businesses, will firm economic growth for China of 4.5% this year. Elsewhere, Indonesia and Malaysia’s 2026 GDP growth rates are expected to be 4.7% and 5%.
Singapore, meanwhile, should see a "stable" job outlook. According to the government, overall unemployment rate remained stable at 2% for January, largely unchanged from Nov 2025’s numbers.
From Yeo's perspective, Vietnam, which is targeting 10% GDP growth this year, is HRnetGroup's key growth driver ahead.
As described by the analyst, the company is building its new complementary revenue stream via its human resources technology brand, Octomate, which will penetrate further with new and existing clients.
"We see Octomate adding to growth over the longer term, having announced the securing of two contracts with Outward Bound Singapore and Sentosa Development Corp," he adds.
For FY2025, the company reported earnings of $49 million, up 8% y-o-y, on the back of a 3% gain in revenue to $584 million.
While revenue from the flexible staffing segment was up 3% y-o-y to $524 million from Taiwan, Indonesia, and China, there was a dip in Singapore.
Permanent placement, another key segment, saw revenue up 2% y-o-y to $56 million with volume up 5% y-o-y to 4,766.
The company's gross profit margin expanded by 0.9 percentage points to 21.9% from higher-margin senior executive search services in Taiwan, China, South Korea, Thailand, and Malaysia.
HRnetGroup has declared a final dividend of 2.2 cents per share, which will bring its total payout for FY2025 to 4.2 cents, which is equivalent to a payout ratio of 81%.
Yeo has kept his earnings projections for the current FY2026 and coming FY2027, but because of slightly bigger share base, trimmed his target price to 83 cents. Valuation is undemanding at -0.5 sd of its 13x mean forward P/E.
HRnetGroup shares, as at 9.37 am, trades at 73 cents.
