NAV of $0.309.
Rolling EPS of 4.1 cents.
PE 18.22 times.
Dir has been recently buying back some of the share . You may refer to sgx/announcement.
Total revenue has been generally increasing for the past 3 years from $324m in 2014 to $391m in 2017. This is quite positive.
Strong Balance sheet with Net Net position as can be seen from the financial nos, Total Current Assets of $373m is more than 6 times of the Total Liabilities of $54.69m.
The cash flow has been generally quite healthy.
Similarly, Net Income margin has been constantly achieving above 10% which is rather positive.
I have attached below a write-up from HRnetGroup's corporate website about Heliconia's investment in it. Heliconia is a wholly owned subsidiary of Temasek Holdings. I also took a look at their corporate information on HRnetGroup's website about them. It seems that they have grown much over the past 25 years to become a leading player in the Asian regional recruitment industry.
As EDMW_Capital pointed out, there were the various plans under the 123GROW plan where new shares were issued upon IPO listing. I looked up the IPO prospectus that the aggregate total amount of all the shares that will be issued under the 123GROW plan represents about 1.99% of the enlarged issued share capital immediately following the IPO Offering and the issue of the Cornerstone Shares, assuming that the Over-allotment Option is exercised and maximum number of shares issued under the various plans. Thus, whatever dilution effect from these plans would have already been completed by now after the IPO since this exercise was undertaken upon IPO.
However, there is another plan under 123GROW plan which is HRnet GROW Plan which will be ongoing always which is a share reward scheme to reward good performance and encourage loyalty of employees of HRnetGroup. This may from time to time create minor dilution of shares for shareholders of HRnetGroup. The idea of this is to sort of make employees like a co-owner of the company whereby they can receive shares of the company to reward them for their performance and encourage their loyalty towards the company. Many companies also award such share reward or performance scheme. As long it is not too aggressively done without good basis, I feel such share reward scheme can be virtuous for the company to spur more ownership and performance in the employees of a company. For example, Raffles Medical Group, ST Engineering and Nestle Malaysia Berhad also offer similar share option or share reward scheme to their employees.
Therefore, I think the dilution effect to shareholdings of shareholders for most part of the 123GROW plan has already been factored into the trading of the shares after 9 months since they have been public listed around middle of last year without much unpleasant surprises going ahead.
I did a rough calculation of the diluted earnings yield (inverse of P/E ratio) an investor would be getting from HRnetGroup based on investing at current share price of $0.74. The current earnings yield an investor would be getting is about 5.5%. This is better than parking money in special account of CPF which only gives 4.5% interest yield. The P/B ratio at current share price is about 2.4. At such traded P/B ratios of above 2, investors are expecting the company should be a moderate to high growth company. Based on their IPO prospectus, HRnetGroup has grown at impressive CAGRs over past decades but their CAGR has slowed down in recent few years. If I assume they may still grow conservatively at their recent CAGR of 10% in their diluted EPS attributable to shareholders over the next 7 years, using my method of estimation, their fair share price would be around $1.16.
I also looked at the cashflows of HRnetGroup, their capex requirement is very small as compared to net cash generated from operations. This results in abundance of free cashflows that can be generated every year from their business model which does not require high capex to maintain and grow. As always, if I am keen to invest in any new businesses I discovered, I prefer to invest slowly in stages as I continue to monitor their progress especially for such new IPOs even if it may seem to be a good investment. This is because I may not have a lot of information about newly IPOed companies available to know them very well unlike companies which already have been public listed for a good number of years which I can dig out so much information about them from their long history of being public listed.
HRnetGroup: Announcement of Heliconia Investment : https://www.hrnetgroup.com/newsroom.php?id=announcement-of-heliconia-investment
quote : You may want to look carefully at their IPO prospectus, such as their 123GROW plan, which will result in dilution over the next few years from multiple arrows such as the Opp 1 Investment Shares, Opp 1 Loyalty Shares, Opp 1 Bonus Shares, GLOW Initial Shares, Opp 1 Investment Shares, Opp 2 Investment Shares, the Opp 2 Buy-in Shares, Top-up Issuance Shares and more Bonus Shares, etc...
I think the company is on the hunt of for acquisitions to grow recruitment business regionally.
Fundamentally I think it’s good but market doesn’t agree.
Fundamentally I think it’s good but market doesn’t agree.
From TA point of view, it is now on a downtrend mode and may likely move down to revisit the all time low of 72 cents.
Looks rather bearish! I think IPO price is about 90 cents. Seems like a interesting price level to take a second look.
I think it may bounce-off from 72 cents and rise up again in time to come.
Not a call to buy or sell.
dyodd.
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