Khairani Afifi Noordin Tue, Sep 20, 2022
RHB Group Research analyst Jarick Seet maintains his “buy” call on HRnetGroup with target price of $1.01 on the back of continued resilient hiring.
Seet notes that HRnet’s 1HFY2022 ended June 30 results came in line with RHB’s estimates. Its flexible and professional recruitment segments grew 13.2% and 18.6% y-o-y respectively, with Singapore remaining its largest market share.
“Going forward, hiring is expected to remain strong from the technology, healthcare and consumer sectors. There is potential for a slowdown in hiring, especially if a recession hits, but signs continue to indicate hiring is healthy,” he adds.
HRnet has previously announced that it intends to purchase up to $30 million of its shares via the market. The maximum number of shares which may be purchased by the company under the programme is 100.38 million, equivalent to 10% of its issued shares.
As at August 16, the company has purchased 0.21% of its total shares outstanding. Seet expects the share buyback programme to continue and that it is likely to be a boon to its share price.
HRnet has also declared its first ever interim dividend per share of 2.13 cents. With the positive performance likely to continue, the company should keep rewarding shareholders with attractive dividends, says Seet. “As a result, we expect a 5.5% dividend yield for FY2022 using a 60% payout ratio.”
The company remains bullish for both its recruitment segments across all geographical areas as there is continued strong demand for its services year-to-date. Due to this, Seet believes the positive performance will continue and the company should benefit from higher margins as well.
HRnet is trading at 11x FY2022 P/E, lower than its global peer average. RHB’s target price of $1.01 is pegged to 14x FY2022 P/E.