As the digital economy transforms the global business landscape with unprecedented force, the human resources services industry is undergoing a paradigm shift from "demographic dividend" to "talent dividend." RENRUI HR (06919) delivered impressive interim results for 2025: revenue reached 2.605 billion yuan, up 26.6% year-over-year; net profit attributable to shareholders hit 41.07 million yuan, surging 87.9% year-over-year; net operating cash flow increased 42.7% to 243 million yuan; the company declared an interim dividend of HK$0.09 per share, representing 31.4% of net profit attributable to shareholders in the first half.

The most striking highlight in the financial report is that digital technology and cloud services now contribute 43.1% of the company's gross profit for the first time, surpassing the traditional general service outsourcing business to become the largest source of gross profit contribution. This milestone signifies that after four years of development, digital technology and cloud services have emerged as the company's second growth curve for profit enhancement.

Behind this transformation lies RENRUI HR's metamorphosis: no longer confined to traditional human resources services, the company has penetrated deep into the core of digital transformation, providing high-value-added technical talent solutions to clients.

However, another strategic initiative revealed in the financial report may redefine RENRUI HR's valuation ceiling. In the 63-page 2025 interim report, the company extensively describes its globalization efforts in the business segment introduction and development strategy section. References to the company's globalization appear multiple times throughout the report—marking the first time in any of its financial disclosures.

"Seeking new markets overseas is a strategy for the country and an opportunity for us," stated Zhang Jianguo, Chairman and CEO of RENRUI HR, noting that international expansion is becoming the company's third growth curve.

RENRUI HR began exploring overseas markets in 2019, but progress was slow due to the pandemic. The company resumed its international layout in 2024. In just over a year, RENRUI HR's overseas expansion has achieved remarkable results.

As of June 30, 2025, the company has successfully established subsidiaries in 21 countries and regions globally, with operations spanning Europe, the Americas, and Asia. From bustling Hong Kong to vibrant Malaysia, Vietnam, Thailand, and Indonesia, and extending to the UAE in the Middle East, RENRUI HR has established offices and rapidly assembled localized recruitment and service teams by deploying "country managers." These teams function like deeply rooted "capillaries" in local markets, gaining intimate understanding of local market needs to provide precise and efficient human resources services to clients.

Simultaneously, RENRUI HR established its first overseas digital operations and customer service center in Uzbekistan. This initiative not only represents deep exploration of the local market but also lays a solid foundation for building a subsequent global service network.

As of June 30, 2025, the international business team comprised 57 internal employees, with approximately 1,460 comprehensive flexible workers in international operations as of August 28, plus about 858 employees managed jointly with global human resources partners. These figures not only demonstrate the company's overseas business development but also indicate RENRUI HR's growing influence in the global human resources services sector.

More importantly, RENRUI HR's overseas expansion is not simply about territory acquisition but follows a clear strategic plan with defined execution pathways. In the second half of 2025, the company will focus on Hong Kong, Southeast Asia, the Middle East, and Central Asia to enhance subsidiary revenue and comprehensive flexible workforce numbers. Additionally, the company is preparing for expansion into Japan, Europe, and the Americas in 2026, conducting market research, potential client development, and bidding preparations, while planning to launch site selection for the second and third global digital operations and customer service centers.

He Jing, General Manager of RENRUI HR's International Business Division, shared insights on challenges and strategies for Chinese enterprises expanding into Southeast Asia at the Go-Global 2025 forum, highlighting the company's expertise and deep insights in overseas business operations. By building global recruitment centers, overseas proprietary entities, and Southeast Asian GSP service systems, RENRUI HR provides precise solutions for Chinese enterprises' overseas expansion from stage 0 to 1 and beyond to 1+. This "three-in-one" service model combines Chinese teams' resource integration capabilities with local teams' market insight advantages, becoming RENRUI HR's core competitive weapon in overseas markets.

RENRUI HR's overseas business revenue was 20 million yuan in 2024. If it can replicate the growth trajectory of its digital technology and cloud services business, it could become a new growth engine for RENRUI HR within 3-5 years.

Globalization is not an optional choice but a mandatory requirement. RENRUI HR is leveraging the tailwinds of Chinese enterprises' overseas expansion to write its own answer in the global human resources market.

According to Zhang Jianguo, RENRUI HR spent approximately three years developing its second growth curve, and the speed of internationalization will not be slower than that of the digital talent business. "We serve over 1,000 clients domestically, and their overseas needs are diverse." Overseas services typically command higher gross margins than domestic operations, and the proportion of international business in the company's overall operations will show tangible growth over the next three years.

From a valuation perspective, overseas employment naturally commands higher gross margins than domestic operations: exchange rate differentials, visa premiums, and project-based billing allow for gross margins exceeding 20% overseas. As overseas operations mature, their high gross margin characteristics are expected to enhance the company's overall gross margin level, thereby improving profitability indicators and earning RENRUI HR higher valuations in capital markets.

Comparing with competitors, Kerrylogistics International (300662.SZ) focuses on mid-to-high-end talent search with a current price-to-book ratio of 3.07x; FESCO (600662.SH) concentrates on traditional labor dispatch with a price-to-book ratio of 2.56x. However, RENRUI HR trades at only 0.56x, presenting significant valuation recovery potential.

More importantly, RENRUI HR has essentially completed the critical transition from "traditional flexible employment" to "digital talent ecosystem." Its technological barriers, ecosystem layout, and client structure surpass similar companies listed on A-shares and Hong Kong stock exchanges. Yet the market continues to price RENRUI using a "traditional labor intermediary" model while ignoring its SaaS-based recruitment platform, data assets, and overseas leverage.

Based on first-half growth rates, once annual profits exceed 100 million yuan and valuation recovers to 15x PE, the corresponding market value would be 1.5 billion Hong Kong dollars, implying 90% upside from current prices. If the overseas growth curve succeeds, even 25x PE would not represent a ceiling.