HRnetGroup Limited, a leading recruitment and staffing firm in Asia, is leveraging its robust cash reserves to expand its flexible staffing operations, even as the hiring market faces challenges. The company, headquartered in Singapore, reported a net cash position of S$258 million, which constitutes approximately 40% of its market capitalisation. This financial strength allows HRnetGroup to grow without compromising profitability, unlike its less capitalised competitors.
The firm’s flexible staffing segment, which provides temporary manpower solutions, accounted for 90% of its FY24 revenue and 52% of its gross profit. Despite a lower gross margin of around 13%, this segment remains a key driver of growth. Meanwhile, the professional recruitment segment, focusing on permanent placements, contributed 10% of revenue but delivered 45% of gross profit, highlighting its high-margin nature.
HRnetGroup’s financial resilience is further underscored by its ability to maintain dividend yields of 5-6% for FY25-27, supported by S$50-60 million in free cash flow and no debt. The company expects to announce its 1H25 results on 13 August, with anticipated net profit of S$26 million, bolstered by delayed government grants.
Despite a cautious hiring outlook in Singapore and North Asia, HRnetGroup remains optimistic about its flexible staffing model. The company has resumed coverage with a Hold call and a target price of S$0.65, reflecting ongoing recruitment industry headwinds. Future growth may hinge on a rebound in executive hiring and strategic mergers and acquisitions.
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