Renrui Talent's financial report for 2023 (06919) sent two explosive signals: welcoming the highest gross profit margin in the past three years, with a gross profit margin of 9.4%, almost double that of 2022; returning to the net profit trajectory, with a net profit of 41.05 million, ranking third highest in the five years with financial reports.
According to financial reports, Renrui's talent revenue in 2023 was about 4.472 billion yuan, up 22.9% year on year; profit due to company equity holders was 41.045 million yuan, loss due in 2022 was 7.303 million yuan; adjusted profit was about 105 million yuan, up 338.6% year on year; basic profit per share was 0.27 yuan, with a proposed final dividend of HK$0.09 per share.
At the financial briefing, Zhang Jianguo, Chairman of the Board of Directors and CEO of Renrui Talent, revealed this impressive financial report: benefiting from the booming development of China's new energy industry chain, the NEV industry chain's demand for talents has contributed greatly to Renrui Talent's revenue growth.
Extending to the whole year, using revenue, profit attributable to equity holders, and adjusted profit as coordinates, Renrui Talent accelerated in the second half of the year. In particular, profit attributable to equity holders increased by about 4 times, while adjusted profit increased more than 3 times during the year.
As far as revenue is concerned, revenue of 4.472 billion yuan is already the same as 2021. At that time, its revenue was the highest in history, and 2023 was the second highest since earnings were reported. In terms of growth rate, the annual growth rate of 22.9% was higher than 19.3% in the first half of the year, indicating that the company maintained a stronger growth momentum in business activities in the second half of the year.
As far as gross margin is concerned, the gross profit margin of 9.4% directly increased 5.1% in 2022 by 4.3 percentage points, and an increase of 1.3 percentage points over 8.1% in the first half of the year, setting the best record in the past three years, showing that the digital talent business has gradually become a mainstay.
The acquisition of strong financial reports stems from the outstanding performance of digital technology and cloud services, reflecting the success of Renrui talent's “second entrepreneurship” reform, management's adherence to established strategies, and outstanding execution.
As far back as 3 years ago in mid-July 2021, Renrui Talent convened a meeting of the company's middle management and above in Taishan to officially propose a “secondary entrepreneurship” strategy, which called for focusing on the digital talent business and creating a “second growth curve”.
Shortly after the “second entrepreneurship” was proposed, Renrui Talent began a close digital talent market layout, including strategic cooperation with the domestic pan-AI online education company Greedy Technology, the intelligent manufacturing enterprise robot online, and the financial digital enterprise launching Yuntian. Prior to that, they also invested in Binhai Xunteng Technology Group, which is dominated by the IT industry and intelligent technology. All of these actions are closely related to the digital talent supply chain.
At the time, Zhang Jianguo, as the founder and founder, was even more confident about the future prospects of the digital technology and cloud services business sector. He expected that in 2022, digital technology and cloud service revenue would account for more than 10% of total revenue. “This is doable.”
In the past 3 years, revenue from digital technology and cloud services from 2021 to 2023 was 100 million, 288 million yuan, and 1,752.5 billion yuan respectively; the share of revenue reached 39.2% today from 1% in 2021; it also contributed 57.5% in gross margin with a share of 39.2% of the company's total revenue; the 225.2% revenue growth rate in 2023 is 10 times the company's revenue growth rate.
Don't underestimate this 39.2% ratio. In three years, the revenue of the digital technology and cloud service business has reached Renrui Talent's revenue level for the full year of 2018, and is still accelerating — in the first half of the year, its share of revenue was 36%, and 3.2 percentage points were mentioned in the second half of the year.
The number of digital talents is also a good proof. The number of digital talents in 2021 was just over 1,000, but in 2023 it reached 9,500, nine times the number. Among these 9,500 digital talents, the fields of technology and the Internet, smart manufacturing (including automobiles), communications and finance were estimated at 53%, 17%, 10%, and 9%, respectively, in line with China's recent industrial development direction.
Precisely because of the increase in the number of digital talents, the average monthly labor cost of Renrui talents comprehensively utilizing workwear increased to about RMB 9,067 per month to about RMB 11,000 per person per month in 2022. The comprehensive service labor efficiency reached more than 1.5 times the industry level, and achieved strong growth in intelligent manufacturing and many fields such as automobiles, electronic communications, finance, the Internet and technology, adding more than 200 new customers.
As China's industry continues to upgrade, the investment of enterprises in digitalization continues to increase. According to the “Industrial Digital Talent Research and Development Report” jointly released by Renrui Talent and Deloitte, China's digital economy will reach 16 trillion US dollars by 2035, and the digital talent gap is expected to be between 25 million and 30 million people.
The Minsheng Securities Research Report also pointed out that the world's human resources giants are mainly concentrated in Europe, Japan, and the United States. Judging from the top 100 companies by market capitalization in the world, the number of companies engaged in flexible employment is the largest; in terms of revenue, out of 6 companies with revenue exceeding 100 billion yuan, 4 are flexible employment companies. The current macroeconomic environment in China meets the conditions for flexible employment and rapid growth, and the domestic market is expected to usher in rapid development in the future.
From 2021 to 2023, Renrui talents experienced a comprehensive increase in digital technology and cloud services, from strategic planning and technology research to market expansion and industry influence. Through continuous technological innovation and strategic layout, Renrui talents have successfully built a competitive advantage centered on digital technology, providing strong support for the digital transformation of enterprises.
Looking to the future, the digitalization of Renrui talents is accelerating, and the share of revenue from digital technology and cloud services will continue to increase rapidly in 2024 — possibly increasing to about 50%, and driving the company's revenue and gross profit growth, especially gross profit and net profit performance. The company has returned to a high growth trajectory, which has also brought about changes in valuation.
Another aspect of investing is the pursuit of stable growth returns. Apart from a successful business model that brings continuous free cash flow, there is also a share cost covered through continuous dividends. Considering Renrui Talent's consistent dividend tradition: it has paid 3 dividends in the 4 years since its listing, respectively, in 2021, 2022, and 2024. The only dividend that was absent was in 2022 when it lost money (dividend period is 2023), which is another plus point for investing in it. And with the successful transformation and the increase in profits, an increase in dividends in 2025 is a probable event.
Zhang Jianguo said that in the future, the company will continue to expand the Group's digital talent pool and further accelerate the Group's growth by further improving operational efficiency, focusing on customer retention and service growth, and actively expanding customers in emerging business areas. “We will also pay close attention to the latest developments in the industry and technology, thereby strengthening our position as a pioneer in the industry and creating higher and sustainable value for shareholders.”
Renrui Talent is a leading provider of integrated human resources services and digital technology solutions in China, and is a strategic partner for leading enterprises in many industries. Renrui Talent has now set up more than 90 subsidiary companies across the country, and its business covers more than 300 cities.