Investment Rating - The report assigns an "Invest" rating with a "Buy" recommendation for the company [1] Core Views - The company is a leader in China's cloud-based HCM (Human Capital Management) solutions market, offering a comprehensive suite of HR SaaS products through its iTalentX platform [2] - The company has experienced rapid revenue growth, with a CAGR of 18.4% from FY2019 to FY2023, reaching RMB 751 million in FY2023 [2] - The cloud-based HCM solutions market in China is expected to grow significantly, with the market size projected to reach RMB 304 billion by 2027, up from RMB 55 billion in 2021 [2] - The company has a strong customer base, with over 1,600 Core HCM integrated solution clients as of the 2024 interim report [2] - The company is actively embracing AI, collaborating with major AI model providers to develop the SenGPT human resources model, which enhances HR scenarios such as intelligent recruitment and talent management [2] Financial Performance and Valuation - Revenue is forecasted to grow from RMB 854 million in FY2024E to RMB 1,146 billion in FY2026E, with year-over-year growth rates of 13.7%, 15.1%, and 16.5% respectively [1] - Net losses are expected to narrow significantly, from RMB -3,216 million in FY2024E to RMB -112 million in FY2026E [1] - The company's P/S ratio is projected to be 4x, 3x, and 3x for FY2024E, FY2025E, and FY2026E respectively [1] - The company's gross margin is expected to improve from 55.34% in FY2023 to 65.3% in FY2026E, driven by the high-margin cloud-based HCM solutions [38] Market and Industry Analysis - China's HCM market is expected to grow from RMB 6,608 billion in 2021 to RMB 16,259 billion by 2027, with a CAGR of 16.2% [22] - The cloud-based HCM solutions market in China is growing rapidly, with the market size increasing from RMB 55 billion in 2021 to an estimated RMB 304 billion by 2027 [23] - The company holds a leading position in the HCM SaaS market, with a 15.3% market share in 2023, and is the top player in Core HR, recruitment management, and performance management SaaS segments [29] Product and Technology - The company's Core HCM integrated solution has shown strong growth, with annual recurring revenue increasing by 35.1% from RMB 251.0 million in September 2022 to RMB 339.2 million in September 2023 [33] - The company's SenGPT human resources model, developed in collaboration with AI model providers, offers intelligent services across various HR scenarios, including recruitment, talent management, and employee services [35] Customer and Business Strategy - The company has a diversified customer base across various industries, with a focus on "business-human integration" to provide seamless HR solutions [2] - The company's Core HCM integrated solution has a high customer retention rate of around 95%, with clients increasingly adopting additional HR modules for cross-selling opportunities [32]
北森控股：国内领先的HCMSaaS公司，聚焦“业务人力一体化”