Career International(SZ:300662)2024-06-03 10:30Investment Rating - The report maintains an "Outperform" rating for the company with a target price of RMB 28.00 based on a 20 times PE ratio for 2024 [29][36]. Core Insights - The company emphasizes technology empowerment and lean operations, having trained an industry-level pre-trained language model, CRE, which has shown strong performance in recruitment evaluations [22][40]. - The company has expanded its client base to over 36,800, representing a 43.4% year-on-year increase, and has operated over 222,900 recruitment positions, a 56.9% increase year-on-year [22][40]. - The flexible staffing segment has shown growth, with a 10.3% year-on-year increase in revenue in 1Q24, and domestic business recovering faster than overseas [28][34]. Financial Summary - For 2023, the company reported total revenue of RMB 9.78 billion, a 7.6% increase year-on-year, with a net profit attributable to shareholders of RMB 200 million, down 31.1% year-on-year [28][34]. - The gross profit margin (GPM) for 2023 was 7.3%, a decrease of 2.4 percentage points compared to the previous year [28][34]. - Revenue projections for 2024-2026 are RMB 12.05 billion, RMB 15.01 billion, and RMB 18.32 billion, with corresponding net profits of RMB 275 million, RMB 337 million, and RMB 442 million, reflecting growth rates of 37.0%, 22.6%, and 31.2% respectively [23][29][36]. Valuation Metrics - The report provides a comparison of valuation metrics, with a PE ratio for 2024 estimated at 21.49, and a P/B ratio of 2.40 [26][25]. - The average PE for comparable companies is noted at 13.15, indicating a premium valuation for the company [25]. Business Segments - The flexible staffing segment generated RMB 8.98 billion in revenue, up 11.7% year-on-year, while the mid-to-high-end talent search and recruitment process outsourcing segments saw declines of 37.8% and 38.4% respectively [28][34]. - The technical services segment reported revenue of RMB 44 million, reflecting a 9.2% year-on-year increase [22][40]. Growth Drivers - The company has successfully placed 14,600 mid-to-high-end managers and professionals, with a focus on technical R&D positions, which now account for 62.9% of current employees, marking a significant increase [61][35]. - The strategic expansion of target positions in the flexible staffing business is expected to drive revenue growth in the outsourcing segment [61][36].