GTHT has published a research report maintaining its Buy rating on BOSS ZHIPIN-W (02076). While the company's revenue growth has decelerated due to macroeconomic volatility and mean reversion in its own growth rate, management demonstrated excellent cost control, sustaining positive growth in core operational metrics while continuing to improve profit margins.
Considering macroeconomic fluctuations, GTHT maintains its forecast for adjusted net profit attributable to shareholders at RMB 32.75/39.64/46.7 billion for fiscal years 2025/26/27 respectively. The firm assigns a 30x PE valuation for 2025, above the industry average, resulting in a target market cap of RMB 95 billion. Using an exchange rate of 1 HKD = 0.9109 CNY, this corresponds to HK$104.3 billion and a target price of HK$109.66.
**Q2 Performance Exceeds Expectations Despite Revenue Deceleration**
The company delivered strong Q2 results with revenue of RMB 2.102 billion (+9.7% YoY), GAAP net profit of RMB 711 million (+70.4% YoY), and adjusted net profit of RMB 941 million (+30.9% YoY). Management announced an $80 million dividend plus a $250 million share repurchase program.
GTHT believes Q2 represents the seasonal low point due to Chinese New Year factors, with revenue and cash collection growth expected to improve sequentially in subsequent quarters. The company continued to benefit from scale effects driven by revenue growth, with broad-based improvement in expense ratios: sales expense ratio declined 8.47 percentage points YoY, R&D expense ratio decreased 3.36 percentage points, while administrative expense ratio increased 1.16 percentage points. Stock-based compensation expenses decreased significantly, with the SBC rate at 10.93% (-4.80 percentage points YoY).
BOSS ZHIPIN-W has demonstrated excellent profit margin performance for multiple consecutive quarters, driven by two key factors: abundant job seekers resulting in extremely low customer acquisition costs and highly efficient marketing ROI improvement potential, combined with fixed R&D investments benefiting from scale economies as revenue levels increase.
**Revenue Growth Expected to Accelerate, AI Implementation Plans Advancing**
According to company guidance, Q3 revenue is projected at RMB 2.13-2.16 billion, representing 11.4-13% YoY growth and sequential acceleration from Q2. The company has established clear and rational plans for AI commercialization in human resources services, including product roadmaps for B2B, B2C, and management applications with well-defined use cases. These products began gray-scale testing in Q2-Q3 and are expected to contribute to revenue in the future.
GTHT believes recruitment demand, cash collections, and revenue growth are all trending toward sequential improvement. The company's brand recognition and matching efficiency advantages remain clear, with a stable industry position requiring no concerns about competition. Future AI development and revenue growth inflection points will serve as important catalysts.
**Risk Factors**: Economic volatility impacting recruitment demand and intensified competition among recruitment platforms.