[Click eStock] "Hiring Recovery and Revenue Model Expansion... SaraminHR, High Growth Outlook"

4Q Operating Profit Expected at 10.6 Billion Won, Up 46.1% YoY
Recruitment Market Growth Despite COVID-19... New Businesses Also Accelerate

[Asia Economy Reporter Minwoo Lee] As the job market continues to recover, SaraminHR appears to have maintained strong growth in the fourth quarter of last year. The expansion of new revenue models is expected to sustain its growth momentum going forward.

On the 21st, Samsung Securities estimated that SaraminHR achieved strong results in the fourth quarter of last year, with sales of 35.1 billion KRW and operating profit of 10.6 billion KRW. These figures represent increases of 28.4% and 46.1%, respectively, compared to the same period last year.

Despite the re-spread of COVID-19 and strengthened social distancing measures, the job market grew independently, leading to an estimated 36.6% increase in matching platform sales compared to the same period last year. Public institution recruitment also resumed in the fourth quarter, resulting in recruitment agency sales rising by approximately 27% year-on-year. Although labor costs increased compared to the previous quarter due to year-end bonuses, operating profit is expected to rise significantly due to increased sales and marketing expenses.

New revenue businesses are also expanding in earnest. Last year, SaraminHR entered the online headhunting market by launching hiring-confirmed products such as 'Hapgyeokㅋㅋ' and 'Jumpit,' which pay a portion of the annual salary as a commission upon successful hiring. Although WantedLab currently dominates this market, the market itself is rapidly growing. Researcher Donghwan Oh of Samsung Securities explained, "SaraminHR will expand its market position based on its competitive non-developer talent database and corporate HR sales network," adding, "This year, they plan to aggressively secure additional revenue models by launching the HR solution for HR managers, 'The Flap.'"

Investment in Drama & Company, the operator of the business card management application 'Remember,' is also expected to generate long-term synergy effects. Last month, SaraminHR invested approximately 80 billion KRW in Drama & Company, becoming its third-largest shareholder. Researcher Oh said, "Remember operates a career search service based on the resume information of 3.5 million subscribers," and analyzed, "From a long-term perspective, SaraminHR can explore synergies with Remember in the recruitment business through this investment."

Against this backdrop, Samsung Securities maintained a 'Buy' rating and a target price of 66,000 KRW for SaraminHR. The closing price on the previous day was 41,300 KRW. Researcher Oh stated, "Applying a 26% discount considering competition to the average price-earnings ratio (PER) of overseas HR companies, we applied a target PER of 20.2 times for this year," and diagnosed, "Considering the structural growth of the online recruitment market, additional growth from market recovery, and revenue model expansion strategies, the current PER level of 12 times is excessively undervalued."