Career International(SZ:300662) Southwest Securities·2024-10-31 14:45Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [1]. Core Insights - The company reported a revenue of 8.52 billion yuan for the first three quarters of 2024, representing an 18.8% year-on-year increase. However, the net profit attributable to shareholders decreased by 11.0% year-on-year to 1.4 billion yuan [1]. - The company is expected to benefit from a recovery in overseas business, particularly with the anticipated interest rate cuts in the UK, which could positively impact the recruitment market [3]. - The company is a leader in the human resources service industry and is projected to see a compound annual growth rate of 21.6% in net profit from 2024 to 2026 [3]. Financial Performance Summary - For Q3 2024, the company achieved a revenue of 2.97 billion yuan, a 23.1% increase year-on-year, while the net profit attributable to shareholders was 0.49 billion yuan, down 9.6% year-on-year [1]. - The gross margin for the first three quarters of 2024 was 6.8%, a decrease of 1.0 percentage points year-on-year, and the net profit margin was 1.6%, down 0.8 percentage points year-on-year [2]. - The company’s operating efficiency continues to improve, with a decrease in the expense ratio to 4.6%, down 0.3 percentage points year-on-year [2]. Business Segment Performance - The flexible employment and high-end talent search business segments showed significant recovery, with a 20.6% year-on-year increase in revenue for the flexible employment business in the first three quarters [2]. - The number of outsourced employees in the flexible employment business reached over 42,400, with a net increase of 3,700 employees, marking the highest quarterly growth in nearly three years [2]. Profit Forecast and Valuation - The company is projected to achieve net profits of 200.5 million yuan, 195.3 million yuan, 292.3 million yuan, and 360.4 million yuan for the years 2024 to 2026, respectively [4]. - The expected price-to-earnings (P/E) ratio for the company is forecasted to decrease from 20 in 2024 to 11 in 2026, indicating an improving valuation over time [4].