Core Insights - KANZHUN LIMITED, operating the BOSS Zhipin platform, reported strong financial results for the fourth quarter and full year of 2024, highlighting significant growth in user engagement and revenue generation [1][2][3]. Financial Performance - Average Monthly Active Users (MAU) for 2024 reached 53.0 million, a 25.3% increase from 42.3 million in 2023 [2]. - Fourth quarter revenues were RMB 1,823.6 million (US$ 249.8 million), up 15.4% from RMB 1,580.2 million in Q4 2023 [2][6]. - Full year revenues totaled RMB 7,355.7 million (US$ 1,007.7 million), reflecting a 23.6% increase from RMB 5,952.0 million in 2023 [2][17]. - Income from operations for Q4 2024 was RMB 380.6 million (US$ 52.1 million), a 71.2% increase from RMB 222.3 million in Q4 2023 [2][8]. - Adjusted income from operations for Q4 2024 was RMB 658.8 million (US$ 90.3 million), up 26.8% from RMB 519.7 million in Q4 2023 [2][8]. - Net income for Q4 2024 was RMB 444.2 million (US$ 60.9 million), a 34.1% increase from RMB 331.2 million in Q4 2023 [2][9]. - Full year net income was RMB 1,567.0 million (US$ 214.7 million), a 42.6% increase from RMB 1,099.2 million in 2023 [2][22]. Customer Growth - Total paid enterprise customers increased to 6.1 million in 2024, a 17.3% rise from 5.2 million in 2023 [4]. - Average MAU for Q4 2024 was 52.7 million, a 27.9% increase from 41.2 million in Q4 2023 [4]. Operational Efficiency - The adjusted operating margin for 2024 reached a record high of 31.5%, driven by effective business models and improved operational efficiencies [3]. - Total operating costs for Q4 2024 were RMB 1,456.3 million (US$ 199.5 million), a 6.8% increase from RMB 1,363.3 million in Q4 2023 [7][18]. Revenue Breakdown - Revenues from online recruitment services to enterprise customers for Q4 2024 were RMB 1,804.1 million (US$ 247.2 million), a 15.2% increase from RMB 1,566.7 million in Q4 2023 [10]. - Revenues from other services, mainly paid value-added services for job seekers, were RMB 19.5 million (US$ 2.7 million) for Q4 2024, a 44.4% increase from RMB 13.5 million in Q4 2023 [10][19]. Cash Position - As of December 31, 2024, the company had cash and cash equivalents totaling RMB 14,681.1 million (US$ 2,011.3 million) [16]. Share Repurchase Program - The company authorized a new share repurchase program in August 2024, allowing for the repurchase of up to US$ 150 million of its shares, in addition to a previous program for US$ 200 million [26][27]. Outlook - For Q1 2025, the company expects total revenues to be between RMB 1.90 billion and RMB 1.92 billion, representing a year-on-year increase of 11.5% to 12.7% [28].

Investment Rating - The report maintains an "Outperform" rating for the human resources service industry [1][5]. Core Insights - The human resources service industry is experiencing a robust growth momentum, with the market size expected to increase from approximately 27.6 trillion yuan in 2023 to 50.3 trillion yuan by 2028, reflecting a CAGR of about 12.7% [1][14]. - The industry is characterized by a steady increase in concentration, with the top three players holding a market share of 20.7% and the top five players at 21.3% in 2023, up from 19.4% and 19.0% respectively in 2019 [1][15]. - The report highlights three main segments within the industry: recruitment services, outsourcing services, and software and consulting training, with outsourcing services showing the highest growth potential [2][18]. Summary by Sections Market Overview - The human resources service market is projected to grow significantly, driven by favorable policies and the increasing demand for services from expanding enterprises [14][15]. - The market is becoming more concentrated as leading firms leverage brand effects, economies of scale, and technological innovations to enhance competitive barriers [15][16]. Segment Analysis - Recruitment services are expected to grow at a CAGR of 10.2%, with online recruitment and recruitment process outsourcing (RPO) leading the growth [21][22]. - Outsourcing services are the fastest-growing segment, with a projected CAGR of 13.9%, driven by the demand for flexible labor and business process outsourcing [24][25]. - Software and consulting training services are expected to grow at a more modest CAGR of 5.8%, with HR SaaS solutions showing significant growth potential [27][28]. Growth Drivers - The report identifies three key growth drivers: the increasing penetration of flexible employment, the cyclical nature of recruitment services, and the efficiency gains from AI technology [29][30]. - The rise of new employment forms, such as gig workers, is expected to contribute to the growth of outsourcing services as compliance and labor relations improve [32][33]. - The recruitment business is anticipated to rebound as economic conditions stabilize, with government targets for GDP growth and job creation supporting this recovery [36][34]. Company Insights - Key players such as 科锐国际 (Career International), 北京人力 (FESCO), and BOSS 直聘 (BOSS Zhipin) are highlighted for their strong market positions and growth prospects [41][47]. - 科锐国际 is focusing on AI technology to enhance recruitment efficiency and reduce costs, with a projected revenue growth of 20.6% in 2024 [44][46]. - 北京人力 is leveraging AI to improve operational efficiency and has a strong client base, including major companies like Huawei and Alibaba [47][53].

Core Viewpoint - KANZHUN LIMITED, operating the BOSS Zhipin platform, will report its unaudited consolidated results for Q4 and the full year of 2024 on March 11, 2025, before the U.S. market opens [1] Company Overview - KANZHUN LIMITED operates BOSS Zhipin, a leading online recruitment platform in China, facilitating efficient connections between job seekers and enterprises through a highly interactive mobile app [4] - The platform promotes two-way communication, focuses on intelligent recommendations, and creates new scenarios in the online recruiting process, benefiting from a large and diverse user base [4] - BOSS Zhipin has developed powerful network effects that enhance recruitment efficiency and drive rapid expansion [4]

Group 1 - KANZHUN LIMITED Sponsored ADR (BZ) is a notable stock in the Computer and Technology sector, currently outperforming its peers with a year-to-date gain of approximately 10.5% compared to the sector average of 1.9% [4] - The Zacks Rank for KANZHUN LIMITED is 1 (Strong Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings prospects [3] - The Zacks Consensus Estimate for BZ's full-year earnings has increased by 0.7% in the past quarter, reflecting improved analyst sentiment [4] Group 2 - KANZHUN LIMITED is part of the Internet - Software industry, which has seen an average gain of 15.8% this year, indicating that BZ is slightly underperforming its industry [6] - Another stock in the Computer and Technology sector, Celestica (CLS), has outperformed with a year-to-date increase of 43% and a Zacks Rank of 1 (Strong Buy) [5] - The Electronics - Manufacturing Services industry, to which Celestica belongs, is ranked 3 and has gained 18.2% this year [6]

Core Viewpoint - Kanzhun Limited has been upgraded to a Zacks Rank 2 (Buy), indicating a positive shift in earnings estimates which is expected to influence its stock price favorably [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system highlights the importance of changing earnings estimates in determining stock price movements, as institutional investors often base their valuations on these estimates [3]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, which in turn affects stock prices [3]. Kanzhun's Earnings Outlook - Kanzhun's rising earnings estimates and the recent rating upgrade suggest an improvement in the company's underlying business, which is likely to drive the stock price higher [4]. - For the fiscal year ending December 2024, Kanzhun is expected to earn $0.80 per share, reflecting a 19.4% increase from the previous year [7]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimates and has a strong track record, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [6]. - Kanzhun's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Investment Strategy - The individual investor employs a diversified investment approach, incorporating fundamental investing (e.g., bottoms-up analysis), technical investing (e.g., historical chart analysis), and momentum investing (e.g., share price reaction post-earnings) to refine their investment process [1] - The investor uses Seeking Alpha as a platform to track the performance of their investment ideas and connect with like-minded investors who share similar investment interests [1] Kanzhun Ltd (BZ) Analysis - The investor previously issued a buy rating for Kanzhun Ltd (NASDAQ: BZ) in September, citing strong fundamentals despite a drop in share price [3] - The investor reiterates the buy rating for BZ, maintaining confidence in the company's fundamentals [3]

Investment Rating - The report maintains a "Buy" rating for BOSS Zhipin (BZ) [1] Core Views - BOSS Zhipin's Q3 2024 performance met expectations, with revenue growth of 19% YoY to RMB 1.912 billion and adjusted net profit of RMB 739 million, up 4% YoY, exceeding Bloomberg consensus estimates [2] - The company expects Q4 2024 revenue to be between RMB 1.795-1.810 billion, representing a YoY increase of 13.6%-14.6% [2] - BOSS Zhipin repurchased USD 220 million worth of shares in 2024 [2] User Metrics and Market Trends - Q3 2024 MAU reached 58 million, up 30% YoY and 6% QoQ, hitting a record high [2] - Paid enterprise customers totaled 6 million in the 12 months ending September 30, 2024, up 22% YoY and 2% QoQ [2] - The ratio of job seekers to enterprise users improved QoQ, potentially shortening recruitment cycles and temporarily slowing enterprise customer payment growth [2] Blue-Collar Business Performance - Blue-collar recruitment revenue exceeded 38% of total revenue in Q3 2024, with manufacturing revenue up 45% YoY [3] - The "Hailuo Preferred" project saw a 45% QoQ increase in attracted enterprises and a 40% QoQ rise in contract value [3] - Large enterprise revenue grew over 30% YoY, with ARPU up 5% YoY and flat QoQ [3] Financial Performance and Projections - Q3 2024 adjusted operating profit was RMB 605 million, representing 31.7% of revenue [3] - Adjusted net profit margin was 38.7%, down 5.8% YoY due to higher tax rates [3] - 2024-2026 Non-GAAP net profit forecasts are RMB 2.6/3.2/4.1 billion, with corresponding Non-GAAP P/E ratios of 18/15/11x [4] Financial Ratios and Valuation - 2024-2026 ROE projections are 10.4%/12.8%/15.9% [10] - 2024-2026 gross margin forecasts are 83.3%/84.4%/84.9% [10] - 2024-2026 net profit margin estimates are 20.5%/25.5%/31.3% [10] - The stock closed at USD 14.58 with a market cap of USD 6.373 billion [4] Cash Flow and Balance Sheet - 2024-2026 operating cash flow projections are RMB 2.974/4.352/4.548 billion [8] - 2024-2026 net cash increase forecasts are RMB 337 million/1.634 billion/1.711 billion [8] - Total assets are projected to grow from RMB 19.096 billion in 2024E to RMB 24.175 billion in 2026E [9]

Investment Rating - The investment rating for BOSS Zhipin (BZ.O) is "Outperform the Market" [4][15][16] Core Views - The company reported stable growth in Q3 2024, with revenue reaching 1.91 billion yuan, a year-on-year increase of 19%, aligning with prior guidance [2][8] - The B-end revenue was 1.89 billion yuan, up 18.7%, while C-end revenue surged by 49% to 22.5 million yuan, indicating strong performance in blue-collar recruitment, particularly in manufacturing and logistics sectors [2][8] - The company anticipates Q4 2024 revenue growth of 13.6%-14.6%, reflecting a moderate economic recovery [3][15] - The management has initiated a share repurchase plan, demonstrating confidence in long-term growth [3][15] Summary by Sections Financial Performance - In Q3 2024, adjusted operating profit was 610 million yuan, a 9% increase, while adjusted net profit was 740 million yuan, up 4.1% [2][8] - The adjusted net profit margin decreased to 38.7%, down 6 percentage points year-on-year, primarily due to a higher tax rate [2][10] - The average monthly active users reached 58 million, a 30% year-on-year increase, with a steady rise in ARPPU to 1,172 yuan, reflecting strong customer retention [2][9] Business Segmentation - The blue-collar recruitment sector outperformed the white-collar sector, with manufacturing revenue growing over 45% year-on-year [2][8] - The number of paid enterprise clients reached 6 million, a 22% increase year-on-year, although the growth rate of paid users has slowed due to a mismatch in job demand and talent supply [2][9] Future Outlook - Revenue forecasts for 2024-2026 are set at 7.24 billion, 8.05 billion, and 9.56 billion yuan, with adjusted net profits of 2.67 billion, 3.52 billion, and 4.31 billion yuan respectively [3][15] - The company is expected to maintain a strong position in the blue-collar recruitment market, supported by favorable domestic economic policies [3][15]

Investment Rating - The report maintains a "Buy" rating for BOSS Zhipin (BZ) with a target price of $19.11 per ADS, based on a 20X PE multiple for 2025 [5] Core Views - BOSS Zhipin's 24Q3 revenue grew 18.98% YoY to RMB 19.12 billion, with recruitment services contributing RMB 18.89 billion (up 18.7% YoY) [2] - The company's adjusted net profit reached RMB 739 million in 24Q3, up 3.5% YoY and 2.8% QoQ [2] - BOSS Zhipin's MAU grew 30% YoY to 58 million in 24Q3, with 40 million new users added in the first nine months [3] - The company's blue-collar recruitment business now accounts for 38% of total revenue, showing significant growth potential [3] Financial Performance - Revenue is expected to grow 23.3% to RMB 7.34 billion in 2024 and 10.1% to RMB 8.08 billion in 2025 [4] - Non-GAAP net profit is projected to reach RMB 2.72 billion in 2024 and RMB 3.10 billion in 2025 [4] - The company's P/E ratio is expected to decrease from 22 in 2023 to 15 in 2025, indicating improving valuation metrics [4] Operational Highlights - Paid enterprise users reached 6 million in the past 12 months, up 22.4% YoY [3] - New job postings increased 18% YoY in 24Q3, driven by efficient business models and market share gains [3] - The company has been actively repurchasing shares, with $220 million repurchased this year and an additional $150 million authorized [3] Industry Position - BOSS Zhipin is recognized as a leading online recruitment platform in China, benefiting from strong network effects [3] - The company's focus on blue-collar recruitment is expected to drive further growth and market expansion [3]

Financial Data and Key Metrics - Revenue for Q3 2024 reached RMB1.91 billion, up 19% year-on-year [8] - Net income was RMB460 million, with adjusted operating income at RMB610 million, reflecting a 10% year-on-year growth [8] - Share-based compensation expenses declined both year-on-year and quarter-on-quarter, entering a phase of gradual reduction [11] - Net cash provided by operating activities was RMB812 million, relatively stable compared to the same period last year [34] - Cash and cash equivalents, short-term time deposits, and short-term investments totaled RMB14.6 billion as of September 30, 2024 [35] Business Line Performance - Average monthly active users on the BOSS Zhipin app reached 58 million, a 30% year-on-year increase [13] - Newly posted job positions increased by 18% year-on-year, driven by user growth and market share expansion [14] - Paid enterprise customers reached 6 million in the trailing 12 months, up 22% year-on-year [18] - Blue-collar business revenue contribution increased to over 38% of total revenue, with the Hailuo Conch-led project growing by 45% quarter-on-quarter [19] - The platform facilitated an average of nearly 200 million monthly mutual achievements, indicating successful interactions between enterprise users and job seekers [20] Market Performance - The job seeker-to-enterprise user ratio continued its upward trend, shortening recruitment cycles for enterprises [16] - Retention rates for enterprise users remained solid, with the number of paid enterprise customers experiencing decent growth [15][17] - Blue-collar sectors, particularly manufacturing, logistics, and automobile industries, showed strong performance, with manufacturing revenue growing over 45% year-on-year [52][53] Strategic Direction and Industry Competition - The company remains focused on user growth, paying ratio stability, and ARPU improvement as key revenue drivers [43][44][46] - Investments in technology and operational efficiency continue, with a focus on sustainable cost control and strong operating leverage [27][30] - The company repurchased $130 million worth of shares, bringing the total repurchase for the year to $220 million, demonstrating confidence in long-term growth [22][36] Management Commentary on Operating Environment and Future Outlook - Management noted that the recruitment market remains challenging but highlighted positive results from focusing on key growth drivers [12] - The company expects Q4 2024 revenue to be between RMB1.795 billion and RMB1.81 billion, a year-on-year increase of 13.6% to 14.6% [36] - For 2025, the company anticipates maintaining a 15% user growth rate and improving profitability through operating leverage and cost control [43][69][70] Other Important Information - The company allocated additional resources to brand promotion during the Paris 2024 Olympic Games and Euro Cup 2024, leading to increased marketing expenses [9] - R&D expenses increased by 12% year-on-year to RMB464 million, with adjusted R&D expenses up 18% year-on-year [31] - G&A expenses rose by 31% year-on-year due to higher employee-related expenses and one-off expenditures [32] Q&A Session Summary Question 1: Impact of Government Policies and Revenue Growth in 2025 - The company observed improvements in newly added enterprise users since October, indicating positive effects from government policies [40] - Key revenue drivers for 2025 include user growth, paying ratio stability, and ARPU improvement, with blue-collar business contributing significantly [43][44][46][47] Question 2: Blue-Collar vs. White-Collar Performance and User Growth Potential - Blue-collar revenue growth outpaced white-collar, with manufacturing, logistics, and automobile industries performing well [51][52] - The company estimates China's marketable employees at over 400 million, indicating significant growth potential for both individual and enterprise users [56][57] Question 3: Blue-Collar Recruitment Strategy and Profitability Outlook - The company's blue-collar strategy focuses on creating a balanced ecosystem for factories, intermediaries, workers, and platforms [63][64] - Profitability in 2025 is expected to improve through gross margin stability, sales efficiency, and disciplined spending on new business initiatives [70] Question 4: Overseas Business and AI Applications - Overseas business investments will remain limited in 2025, with a focus on small-scale experiments [74][75] - AI applications are being used to enhance user safety and operational efficiency, with no immediate plans for large-scale AI hardware investments [76][79][80]