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PostsBlue-collar workers are rapidly infiltrating the job market, while large companies are slowing down their layoffs. (Summary of BOSS Zhipin's 2Q23 conference call)
The following is the summary of the conference call for 2Q23 of Kanzhun.US, for earnings analysis, please refer to "**BOSS 直聘: 业绩平稳，重点还是看政策预期 **" (link).
1. Management Remarks
Adjusted net profit for this quarter reached 570 million yuan, a YoY growth of 135%, setting a new record for quarterly profit since the establishment of the company. In terms of user growth, the number of new registered users in the third quarter reached 14 million, with an average monthly active user (MAU) of 43.6 million on the app.
The growth rate of blue-collar users and users from second-tier cities and below has been rapid, driving the average monthly active users for recruiters to reach an all-time high in the past quarter. Among them, recruitment in industries such as catering, hotels, tourism, beauty and healthcare, transportation, and warehousing and logistics, which are mainly focused on blue-collar and supply chain logistics blue-collar workers, has shown significant growth.
As of the end of the second quarter, the number of paid enterprise customers in the past 12 months has returned to a stage of rapid growth, reaching a historical high of 4.5 million, a YoY increase of 18% and a MoM increase of 13%.
The service industry, represented by blue-collar workers, is still the best-performing industry, and various white-collar positions have also begun to stabilize and recover, improving the supply-demand relationship between recruiters and job seekers.
2. Analyst Q&A
Q: Are there any external factors that would lead to a better recovery of white-collar positions? In the short or medium term, will there be an imbalance in the supply and demand of white-collar positions in China? If this situation occurs, what impact will it have on the online recruitment landscape?
A: I believe that the biggest external condition needed for the recovery of white-collar recruitment demand is time, and there are two mechanisms of influence. First, the industries that recover first will gradually spread and influence other industries, gradually driving their recovery. Second, as time goes on, more evidence will prove that the market is recovering, which will give more people the confidence to engage in recruitment activities.
At the beginning of the first quarter, large enterprises were more affected by confidence recovery and forecasts, and white-collar recruitment was actually not as good as that of small and medium-sized enterprises. It can indeed be seen that there has been an increase in white-collar recruitment, but this is not enough to constitute a structural change in the supply-demand relationship.
Q: Regarding the record high number of paid users in the first half of the year, where do the new users come from? Are they new users who have not used any online recruitment platforms, or are they users who have switched from other recruitment platforms?
A: I believe that some users will also cooperate with our competitors. There is evidence that the trend of offline signing cooperation clients from other platforms also becoming our cooperation clients is strengthening. From a business perspective, Q: Currently, there is a relatively high supply of job seekers. What strategies can the company employ to increase the B-side conversion rate and ARPU? Apart from the existing business, are there any considerations for user monetization?
A: Indeed, there have been many job seekers in Q1 and Q2 this year, making it easier for recruiters to find candidates. However, when it comes to initiating B-side payments, it means charging the side that already faces more difficulties. We approach this cautiously and have not taken any action in this regard. In terms of the B-side, the proportion of paying enterprises is very low in terms of quantity. We believe that efforts should be made to encourage more customers to pay. As for new monetization products, we are working hard to provide valuable products on a large scale, which will bring about some changes in our paid products.
Regarding the number of paying users, their contribution to online recruitment revenue has increased our overall revenue, thereby affecting the overall ARPU.
In the industry, particularly in blue-collar jobs and urban services from lower-tier cities, paying customers have made a greater contribution, and the number of paying enterprise customers has rebounded quickly.
Q: Does the recent recovery trend follow the general seasonal pattern? How is the recovery trend for KA accounts? Given the current macro environment, what is the company's strategic prioritization?
A: As for seasonal factors, "Golden September and Silver October" usually start in August, and many large enterprises conduct campus recruitment to attract students from top universities. In addition, the recovery factor of the Chinese economy in terms of recruiters has contributed to the data we are seeing.
Regarding KA customers,
Strategically, the first point is to adhere to NPS (a metric for measuring customer satisfaction and loyalty) as the basis and continuously improve our market share through better service. The second point is to continue investing in the field of professional science. We have seen rapid growth in blue-collar and lower-tier city services despite the challenging conditions in the second quarter. This can be attributed to years of technological investment, which allows us to seize opportunities when they arise in the larger environment.
Q: In terms of the pace of enterprise recruitment recovery, in the face of macro uncertainties, there may be a greater tendency to reduce costs and increase efficiency. When the macro environment begins to stabilize and improve, will companies need more time to restart personnel expansion and increase recruitment budgets?
A: For small businesses, recruitment will happen when there is demand. It is currently difficult to determine when we will see a situation where companies of all sizes in various industries start actively hiring.
Q: Progress on share repurchases? Plans for shareholder returns?
A: We conducted the first round of share repurchases last year, with a scale of 150 million, and we utilized this fund by the end of the year. This year, in the first quarter, we announced a new round of share repurchases, also with a total scale of 150 million. We have already started executing this plan and will continue to do so. The company is conducting research and making efforts to find appropriate ways to increase shareholder returns. Please give us some time.
Q: We have seen that the service industry and warehousing logistics have been stable growth points this year, compared to peers. Has our performance been outstanding enough? What are our competitive advantages? A: In the service industry, there are over one million active positions on a daily basis, reflecting strong bilateral network effects. The development of lower-tier cities is also a process of extending network effects, which brings us competitive advantages.
In addition, some recruiters can only offer a monthly salary of 5,000 yuan, but those who are willing to offer 8,000 yuan are more likely to receive resume submissions. From the platform's perspective, what we need to do is to give more exposure to those who speak the truth. By persisting in this, more blue-collar workers will be willing to find jobs on the platform. This is what we have implemented as the "Dolphin Research Preferred" program, which provides support and guidance for blue-collar job seekers.
