A Blip on an Attractive Stock (14th May 2019)
DBS Group research recently downgraded HRnet group to “hold”, after cutting its FY2019 and FY2020 earning forecast.
My long-term view for the company is that its valuation continues to be attractive. HRnet’s strong cash position also allows ample buffer to be a choice paymaster, enabling it to pay the temp/flexible staff, which it hires on behalf of its clients first, before collecting receivables from the client. This is a service that many companies may not be able to undertake.
To add to that, the barrier to entry for this industry is extremely high and not many companies can do it. Having the biggest market share in Asia-Pacific (excluding Japan) is an advantage for HRnet.