BOSS Zhipin (BZ) Financial Report Review: User growth is stable, and the urban service industry is expected to contribute new growth

BOSS Zhipin released its financial report for 2022. In 22Q4, it achieved revenue of 1.082 billion yuan (RMB, unless otherwise specified, the same below), which was flat year-on-year and fell by 8.2% month-on-month, mainly due to the impact of the epidemic. Among them, the online recruitment service business achieved revenue of 1.070 billion yuan, a year-on-year decrease of 1.1%; another service revenue was 12.64 million yuan, a year-on-year increase of 45.7%. For the whole year, BOSS Zhipin will achieve revenue of 4.511 billion yuan in 2022, a year-on-year increase of 5.9%, maintaining steady growth. In 22Q4, the net profit of BOSS's direct employment attributable to the mother was 185 million yuan, which turned from profit to loss year-on-year, mainly due to the sponsorship of the World Cup in Qatar, which incurred certain marketing expenses; after deducting equity incentive expenses, the adjusted net profit was 59.45 million yuan. For the whole year, the net profit attributable to the parent company was 107 million yuan; after deducting equity incentive expenses, the adjusted net profit was 799 million yuan, a year-on-year decrease of 6.2%.

The growth of users is stable, the bilateral network effect continues to strengthen platform barriers, and the urban service industry is expected to contribute new growth points. In 22Q4, the average MAU directly hired by BOSS reached 30.9 million, a year-on-year increase of 26.6%, and the DAU/MAU also remained stable; the average MAU for the whole year of 2022 reached 28.7 million, a year-on-year increase of 5.9%. As of 2022/12/31, the number of paying corporate users in the past 12 months was 3.6 million, a year-on-year decrease of 10%. In 22Q4, the company sponsored the World Cup in Qatar, which effectively improved the company's brand awareness and influence. It reduced the cost of customer acquisition, which is expected to help the company continue to acquire customers with lower marketing investment. In 23Q1, the demand for recruitment gradually recovered. The platform ushered in strong user growth after the rework of the Spring Festival, reflecting the competitive advantages of the BOSS direct recruitment platform's bilateral network effects and algorithm optimization and a better understanding of user needs.

Profit forecast and investment advice: We expect the company to achieve revenues of RMB 5.774 billion and RMB 8.045 billion in 23-24, with year-on-year growth rates of 28.0% and 39.3%, respectively. The company's adjusted net profit in 23-24 is estimated to be 1.531 billion yuan and 2.307 billion yuan, respectively. As China's leading online recruitment platform, the company has continuously strengthened the bilateral network effect under the "direct chat + AI matching" mode. The advancement of the layout of the blue-collar field is expected to bring about further growth drivers. We remain optimistic about the industry's development space and the company's competitiveness. We maintain the company's 23-year 45XPE, corresponding to a reasonable value of $22.49 per ADS, and maintain a "buy" rating.

Industry competition is intensifying.

Job seekers' safety and information protection are inappropriate.

Middle-level intervention is not as expected.