HONG KONGAug. 27, 2020 /PRNewswire/ — Renrui Human Resources Technology Holdings Limited (“Renrui” or “the Company” and its subsidiaries (collectively, the “Group”), stock code: 6919.HK), the largest flexible staffing services provider in China, today announced its interim results for the six months ended 30 June 2020 (the “Reporting Period”).
Summary of Key Financial Performances for the Six Months in 2020
- The revenue of the Group was approximately RMB1.2 billion, representing an increase of approximately 11.0% year-on-year (“yoy”). Including the one-off social insurance reduction and exemption during the outbreak of COVID-19, ‘comparable income’ increased by 21.1%
- The gross profit reached approximately RMB99.71 million, gross profit margin was 8.3%
- Achieved turnaround of net profit of approximately RMB53.02 million (First half of 2019: Loss of approximately RMB229 million)
- Adjusted net profit* amounted to approximately RMB53.02 million, adjusted net margin was 4.4%
- As at 30 June 2020, cash and cash equivalents was approximately RMB960 million
- As at 30 June 2020, the total balance of cash and cash equivalents and financial assets and idle funds arising from the purchase of the financial products amounted to approximately RMB1,106.7 million
Breakdown Business Segment Revenue
- During the Reporting Period, the Group’s revenue mainly generated from flexible staffing, professional recruitment and other human resources solutions, accounting for a 93.0%, 1.6% and 5.4% of total revenue respectively
- The revenue from flexible staffing was approximately RMB1.11 billion, an increase of 8.7% yoy
- Revenue generated from professional recruitment amounted to approximately RMB19.08 million, representing a decrease of approximately 36.8% yoy
- The total revenue generated from business process outsourcing (“BPO”) amounted to approximately RMB52.94 million, representing a significant increase of approximately 207.6% yoy
- The total revenue generated from corporate training amounted to approximately RMB0.61 million, representing an increase of approximately 74.9% yoy
- The total revenue generated from labour dispatch decreased 34.2% yoy to approximately RMB2.46 million
Business Highlights for the Six Months in 2020
- As at 30 June 2020, number of flexible staffing employees employed increased from 20,156 as at 30 June 2019 to 28,257 as at 30 June 2020, up 40.2% yoy
- During the Reporting Period, number of flexible staffing clients for new economy* company clients was over 23,938, accounting for 84.7% of the total number of clients
- As at 30 June 2020, revenue of flexible staffing clients for new economy* company clients accounted for approximately 87.3% of the total revenue
- Established the second business department of BPO services in January 2020 and set up new service centers in Chengdu to accommodate the needs of clients
In the interview with CCTV, Mr. Zhang Jianguo, Co-founder, Chairman and CEO to the board of Renrui Human Resources Technology Holdings Limited, said, “Renrui Human Resources is facing both challenges and opportunities in the first half of 2020. China’s economy has been heavily hit by the outbreak of the epidemic, which also lead to a delay of our employees recruited. But on the other hand, the epidemic has risen the recognition of flexible staffing services among the government, companies, job seekers and employees, and flexible staffing therefore to usher in opportunities for development. Looking forward, Renrui Human Resources will help the country to support the employment of young people, accelerate the recruitment of new needs of customers and provide the best flexible staffing services for China’s new economic unicorns through technology-driven professional service capabilities. We will do our best to tackle the challenges and grasp the rapid development trend of flexible staffing, in order to maintain the rapid growth of various businesses of the Group.”
Business Review and Outlook
Looking back on 2020, despite the impact of the epidemic, the recruitment service outsourcing market was affected to a certain extent in the first quarter. In the second half of the year, the recovery of economic development and the continuous growth of the demand for flexible staffing continues to grow, there is still much room for improvement in the future. In the post-epidemic era, whether in terms of industry penetration and industry concentration, the development momentum will be benefiting from the long-term growth opportunities of the entire industry and is expected to remain strong.
Flexible Staffing
During the Reporting Period, the turnover rate of flexible staffing employees dropped by 3.2 percentage points to 7.1%, mainly attributable to the Group’s senior consultation team for flexible staffing formulates solutions to reduce turnover rates based on the specific features of every key project, and these solutions will then be implemented by onsite team, which greatly improved the customer’s satisfaction with the outsourcing of flexible staffing services.
Professional Recruitment
Professional recruitment business mainly consists of professional recruitment and paid membership. During the Reporting Period, revenue generated from professional recruitment decreased, mainly due to the impact of the outbreak of COVID-19 which had led to a stagnant recruitment business from February 2020 to March 2020. The demand for recruitment from clients gradually recovered since April 2020, but it was still unable to recover to the level of the same period last year. However, the Company conducted recruitment activities in more than 20 cities in China seven days a week since March 2020, with an average of nearly 1,000 potential candidates participating in the recruitment activities per day.
Other HR Solutions
Business Process Outsourcing Services
Revenue generated from BPO represented a significant increase as compared to 2019. The growth in BPO was mainly attributable to the remarkable increase in the number of BPO seats for the provision of BPO services, the establishment of the second business department of BPO services and the setting up of new service centers to accommodate the needs of client.
Corporate Training
The Group provides training and development courses which are tailored to the specific situations and needs of clients. As of 30 June 2020, the total revenue generated from corporate training increased by 74.9% yoy.
Labour Dispatch
Comparing to flexible staffing, labour dispatch services are of low value and are not the principal business for future development. As of 30 June 2020, the total revenue generated from labour dispatch decreased by 34.2% yoy.
Other Miscellaneous Services
Other miscellaneous services include HR services consultation, talent assessment and tailor-made employee management solutions, all of which were initially offered to clients during the Reporting Period. As of 30 June 2020, revenue generated from other miscellaneous services amounted to RMB8.23 million.
Research and Development (R&D)
The Group adheres developing in technology-driven HR services and therefore maintained investments in R&D for the information system. During the Reporting Period, the Group launched an online interview function on the Xiang Recruitment Platform to help recruitment teams and clients to complete interviews during the outbreak of COVID-19. The Group also completed the development of Rui Home Platform (瑞家園) to include the functions of contract employee health registration, office hour registration under work-from-home arrangement, and online application for work resumption certificate. Meanwhile, the customized development of Rui Cloud Management System (瑞雲) is completed for the Group’s key clients, including the customized development of contract employee’s daily management, electronic filing and remuneration file modules.
The outbreak of the COVID-19 in the first half of 2020 has had a certain impact on the growth rate of the Group’s recruitment business and flexible staffing services. However, in the medium and long term, customers’ understanding and recognition of the strategic value of flexible staffing will be greatly improved.
Renrui Human Resources Technology Holdings Limited
Renrui Human Resources Technology (stock code: 6919) is a fast-growing pioneer in HR solutions in China, operating on the largest scale in terms of number of flexible staffing employees hired by the end of 2019 and revenue generated from flexible staffing services in 2019.
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