This +15% outlook is a sharp swing from the –2% outlook registered in 4Q2020 and marks the strongest the metric has been in the last six years. “Recruiters in Singapore we talked to generally believe that hiring activities in 2021 will be stronger than pre-Covid-19 levels in 2019,” write CGS-CIMB Research analysts Darren Ong and Lim Siew Khee in a Jan 19 note.
Singapore is not the only market seeing better employment sentiment. According to ManpowerGroup, Taiwan is seeing +23% and Japan +6%. China, as a whole, is seeing +5% but the sentiment in the Tier 1 cities of Beijing, Shanghai, Guangzhou and Shenzhen is more upbeat than the national average.
These figures spell good news for HRnetGroup, which is present in 30 markets including the above-mentioned countries, say Ong and Khee. Across these markets, the company helps employers with recruitment for professional services and flexible staffing, operating different brands such as HRnetOne, Recruit Express, PeopleSearch and RecruitFirst for different markets and different segments.
“The strengthening hiring outlook across HRnetGroup’s key markets reflects employers’ increasing business confidence,” reasons Ong and Khee. ‘“We understand that the technology, finance, healthcare and retail sectors are seeing strong hiring prospects in Singapore and Tier 1 cities in China; this should drive recruitment volume for HRnetGroup which has a large concentration in those sectors”.
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HRnetGroup is well poised to capture these opportunities in 2021, says Adeline Sim, its executive director and chief legal officer. And to facilitate this, the company is looking to expand further. This comes as “in periods of crisis, clients flock to safety. They know that we will be around tomorrow, they know that our systems will run, our contractors will get paid,” Sim tells The Edge Singapore.
As part of the plans, Sim is looking to add more clients and contractors onto HRnetGroup’s digital staffing platform which provides easy access to one’s employment experience. She is also working with clients to offer varied employment models for mid to senior functional roles across the different markets HRnetGroup operates in.
Meanwhile, the company is also looking to strengthen its position in China so as to capture a “greater piece of the domestic pie [as well as] high growth sectors including consumer, IT, semiconductors and electric vehicles,” says Sim. Aside from these, the company is also exploring possible M&A projects that may be a compelling buy, she adds.
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In 1HFY2020 ended June 30, 2020, the company reported earnings of $21 million, down 31.9% from $30.8 million a year earlier. For the full FY2020, Ong and Khee expect earnings of $37.69 million, down 16.1%. Nevertheless, with the broader recovery, they expect HRnetGroup to be on track to grow its FY2021 earnings to $45.62 million. At this level, HRnetGroup, at 56 cents, will trade at just over 12 times forward earnings. The analysts expect FY2022 earnings to grow a bit more to hit $48.66 million.
RHB Bank analyst Jarick Seet agrees that the counter, which has the largest market share in the recruitment space, is likely to do better this year, after “the labour market hit rock bottom in 2020”. However, he cautions this is largely dependent on how the economy picks up and the labour market responds.
