HRnet Group

FY 2018 NPAT increase 12.9% from 46.4m to 52.4m.

EPS of 4.77 cents .
PE is about 16.8x.
I think fair value is about 86 cents that would be able to achieve an average earnings yield of 5.5% base on EPS of 4.77 cents .
The estimated
earnings yield that is EPS/86 cents = 5.5%.

ROE seems quite good at 14.9%.

FCF seems ok(33m).
FCF is able to cover the dividend payout of 2.8 cents which is about 27.1m.

Cash on hands of 281m with zero debts. The Net cash per share is about 27.7 cents ( 281m / 1,013m share).


Dividend yield is about 3.5% base on current price of 80 cents.
I think is quite a decent dividend yield . Cannot compare to SingTel or APAC that is giving more than 5.5% yield.

Not a call to buy or sell.

Pls dyodd.



13rd Nov 2018 : share buy back at 80.5 to 83 cents for 179,000 share .
https://links.sgx.com/1.0.0/corporate-announcements/9KGFMWCT4V6YWTL4/3757bc4fb130c88e7c37aad414ac926683bf873630916e49b346d228b35ab2a0

9th May 2018
HrNetGroup - just released its 1Q 2018 result, Net profit increase 45.5% from 11.2m to 16.3m. This is rather outstanding. Total Revenue increase 12.3% from 95.3m to 107m. Gross profit increase 11.3% from 32.7m to 36.4m. The Net profit was boosted by an increased of 43.5% of 6m from other income. 

REVIEW OF GROUP’S PERFORMANCE

 Net profit after tax (“NPAT”) increased by 33.5% (S$4.3m) arising from growth in:

 a. Revenue by 12.2% (S$11.6m) and gross profit by 11.3% (S$3.7m):

 i. Flexible staffing: Continued business momentum, particularly in Singapore. Revenue grew by 12.8% (S$9.5m) and gross profit by 15.1% (S$1.7m).





 ii. Professional recruitment: Stellar performance in North Asia, particularly Hong Kong and Mainland China. Revenue grew by 9.9% (S$2.1m) and gross profit by 9.8% (S$2.0m).

b. Other income by S$2.0m mainly due to S$0.8m gain on revaluation of marketable securities, S$0.6m increase in interest income and S$0.5m increase in Singapore government subsidies received.



Offset by other employee benefit expenses that rose by 11.7% (S$2.0m) mainly due to S$1.2m increase in profit-sharing incentives and bonuses that was in tandem with the increase in pre-tax profits, and S$0.6m in share-based payment expenses arising from the 123GROW Plan implemented in June 2017.


 REVIEW OF GROUP’S FINANCIAL POSITION



 The Group’s current assets increased S$15.7m from S$373.2m to S$388.9m, mainly due to:

 a. a net increase in cash and cash equivalents amounting to S$3.0m which was a consequence of S$12.9m cash generated from operating activities, S$8.1m deployed in investing activities (mainly in the purchase of quoted marketable securities), and S$1.4m dividends paid out mainly to non-controlling shareholders;

 b. increase in trade receivables amounting to S$3.4m;

 c. increase in other receivable and prepayments amounting to S$0.9m; and

 d. increase in marketable securities amounting to S$8.4m. The Group’s liabilities decreased by S$1.3m from S$54.7m to S$53.4m mainly due to:



 a. the reduction of other payables and accruals by S$2.9m mainly due to the return of restricted cash to a client for outsourced payroll services; offset by

 b. the increase in income tax payable by S$1.6m.



This is a Net Net Position company whereby its total current assets of 388.9m is greater than its total liabilities of 53.4m..

NAV of 32.9 cents.
EPS of 1.6 cents for 1 Q .
Assuming a full year EPS of 6 cents . PE of 11 x is seems quite under value for the current price of 76 cents.



I think average PE of 16 x should be achievable at 96 cents.

Not a call to buy or sell.
Please do your own due diligence.