KANZHUN LIMITED repurchased RMB74 million ordinary shares under its repurchase plan

Rhea-AI Summary

KANZHUN , known as BOSS Zhipin, has repurchased nearly 1 million ordinary shares valued at over RMB74 million.

The company reported record-high revenues for Q1 2024, amounting to RMB1,703.8 million (US$236.0 million), a 33.4% increase from the same quarter in 2023. Adjusted net income rose by 116.6% to RMB530.7 million (US$73.5 million).

Significant growth was noted in blue-collar and lower-tier urban markets, with verified monthly active users reaching 55 million in March 2024, a 24% year-on-year increase. The cumulative verified users exceeded 190 million, while verified enterprises surpassed 14 million.

Notably, blue-collar users contributed over 35% of new user revenue in Q1 2024.

R&D expenses increased by 40%, reaching RMB468 million, driven by investments in generative AI development.

Positive

• Repurchased nearly 1 million ordinary shares valued at over RMB74 million.
• Q1 2024 revenues reached RMB1,703.8 million (US$236.0 million), up 33.4% year-on-year.
• Adjusted net income for Q1 2024 was RMB530.7 million (US$73.5 million), an increase of 116.6%.
• Verified monthly active users reached 55 million in March 2024, a year-on-year increase of 24%.
• Cumulative verified users surpassed 190 million; verified enterprises exceeded 14 million.
• Blue-collar users' revenue contribution in Q1 2024 climbed to over 35%.
• R&D expenses increased by 40% to RMB468 million, driven by investment in generative AI development.

Negative

• Increased R&D expenses by 40%, reaching RMB468 million, which could impact short-term profitability.

Financial Analyst

KANZHUN LIMITED, also known as BOSS Zhipin, recently announced that it implemented a share repurchase plan, buying back nearly RMB 74 million worth of its ordinary shares. This move usually indicates that the company believes its shares are undervalued, aiming to return value to shareholders and often leading to a rise in share price. The company's latest unaudited financial results for the first quarter ended March 31, 2024, were also very promising. Revenues increased 33.4 year-over-year to RMB 1,703.8 million, while adjusted net income soared 116.6 to RMB 530.7 million.

This financial performance, combined with the share repurchase, paints a positive picture for investors. Record highs in key metrics like revenues, total paid enterprise customers and monthly active users showcase robust growth. The increased penetration into China's blue-collar and lower-tier urban markets could significantly expand the user base and revenue streams.

However, the company's substantial investment in R&D, particularly in generative AI, must be monitored. While it shows a commitment to innovation, these expenses increased by 40 compared to the previous year, amounting to RMB 468 million. This could impact profit margins if not managed well. In summary, the combination of share repurchase and strong financial results suggests a positive outlook but requires careful watch over investment strategies.

Market Research Analyst

BOSS Zhipin’s recent efforts to penetrate blue-collar and lower-tier urban markets are noteworthy. The increase in the number of verified monthly active users to 55 million in March 2024 and the impressive growth of verified users and enterprises, reveals a growing adoption of online recruitment services. Traditionally, these markets have been slower to transition online, but the company’s innovation in product models has evidently paid off.

The DAU to MAU ratio remaining stable is a positive indicator of user engagement. Furthermore, the growth in blue-collar users surpassing that of white-collar users and their revenue contribution rising to over 35% is significant. It diversifies the company's revenue streams and reduces dependence on white-collar job markets, which can be more volatile.

Additionally, the CEO's comments regarding the potential growth in paying enterprises are insightful. With only around 10 of China's enterprises currently using their services, there is substantial room for expansion. Increasing ARPU (Average Revenue Per User) as more enterprises recognize the value of their services will be crucial. Investors should view this as a long-term growth opportunity, backed by a solid product offering and significant market potential.

BEIJING, May 28, 2024 (GLOBE NEWSWIRE) -- KANZHUN LIMITED (“BOSS Zhipin” or the “Company”), a leading online recruitment platform in China, recently announced that the Company has implemented a repurchase plan and repurchased nearly 1 million ordinary shares with a total value of more than RMB74 million.

Earlier last week, the Company announced its unaudited financial results for the quarter ended March 31, 2024.

The Company's main operating indicators, such as revenues, total paid enterprise customers and average monthly active users, all reached record highs in the first quarter.

Revenues for the first quarter of 2024 were RMB1,703.8 million (US$236.0 million), an increase of 33.4% from RMB1,277.5 million for the same quarter of 2023. This exceeded the Company’s previous expectations.

Adjusted net income remained healthy. For the first quarter of 2024, adjusted net income totaled RMB530.7 million (US$73.5 million), an increase of 116.6% from RMB 245.0 million for the same quarter of 2023.

The Company has gradually penetrated China's blue-collar and lower-tier urban markets through product model innovation over the past few years. Entering the peak job recruitment season in 2024, BOSS Zhipin continues to enthusiastically explore blue-collar and lower-tier urban markets, attracting companies and job seekers who have never used online recruitment services to the platform.

In March, the number of verified MAU on the BOSS Zhipin app exceeded 50 million for the first time, reaching 55 million, up 24% year on year. Meanwhile, the ratio of DAU to MAU remained stable.

As of the end of April, the cumulative number of verified users served by the BOSS Zhipin platform exceeded 190 million, with the cumulative number of verified enterprises surpassing 14 million. From January through April 2024, the Company attracted more than 17 million newly added verified users.

The number of blue-collar users and the revenue from this segment continued to grow rapidly. Among new users in the first quarter, both the absolute number and the growth rate of blue-collar users surpassed that of white-collar users, with blue-collar users’ revenue contribution climbing to over 35%.

User growth and revenue contribution from second-tier and lower-tier cities continue to increase. Meanwhile, recruitment demand from first-tier cities has also recovered to some degree this year compared to the same period last year.

As of March 31, 2024, approximately 5.7 million enterprise customers across more than 3.5 million enterprises had conducted paid recruitment activities on BOSS Zhipin over the previous 12 months.

Mr. Jonathan Peng Zhao, Founder, Chairman and Chief Executive Officer of the Company, remarked, “3.5 million enterprises seems like a large number in terms of the global enterprise service market. It even exceeds the total population of some countries. However, it represents less than 10% of China's over 40 million enterprises. This means there is enormous potential for growth in the number of paying companies for China's online recruitment service going forward.”

As the Company's management emphasized in the conference call, “We have calculated that the average annual payment per enterprise is currently less than RMB2,000. As the vast pool of Chinese enterprises gradually becomes more willing to pay for valuable, must-have to-B services, the situation will continue to improve, which means ARPU will continue to rise."

Unlike traditional online recruitment platforms, BOSS Zhipin is committed to improving efficiency and experience for both parties in the job search and recruitment process through investment in technology and products. Job seekers and recruiters can communicate directly on the platform and select their favorite positions/candidates with the support of matching algorithms.

As such, BOSS Zhipin remains dedicated to investing in technology. BOSS Zhipin‘s R&D expenses increased by 40% year on year to RMB468 million in the first quarter of 2024, primarily due to the Company’s increased investment in generative AI development.

Source: Kanzhun Limited

FAQ

What did Kanzhun repurchase under its repurchase plan?

Kanzhun repurchased nearly 1 million ordinary shares valued at over RMB74 million.

What were Kanzhun 's revenues for Q1 2024?

Kanzhun reported Q1 2024 revenues of RMB1,703.8 million (US$236.0 million), a 33.4% increase from the same quarter in 2023.

How much did Kanzhun 's adjusted net income increase in Q1 2024?

Adjusted net income for Q1 2024 was RMB530.7 million (US$73.5 million), an increase of 116.6% from the same quarter in 2023.

What was the growth in verified monthly active users for BOSS Zhipin in March 2024?

Verified monthly active users for BOSS Zhipin reached 55 million in March 2024, a 24% year-on-year increase.

How many cumulative verified users did BOSS Zhipin have by the end of April 2024?

By the end of April 2024, BOSS Zhipin had over 190 million cumulative verified users.

What was the contribution of blue-collar users to new user revenue in Q1 2024?

In Q1 2024, blue-collar users' revenue contribution climbed to over 35%.

How much did Kanzhun spend on R&D in Q1 2024?

Kanzhun 's R&D expenses increased by 40% to RMB468 million in Q1 2024.