BOSS Zhipin: While the business side recovers, continue to spend wisely and prioritize efficiency (2Q22 Conference Call Summary)
Below is the BOSS Zhipin 2Q22 telephone meeting summary, for the interpretation of financial reports, please refer to "[BOSS Zhipin returns to growth countdown after double pressure] (https://longbridgeapp.com/topics/3365683)"
1. Management Report
1. Job seeker situation post registration recovery: strong demand from job seekers
(1) After registering again on June 29th, the cumulative number of new registered users exceeded 10 million as of August 15th.
(2) July saw a new high in monthly active users (MAU) and daily active users (DAU), with a 16% MoM growth in MAU compared to June.
(3) The majority of new users are recent graduates or students, while blue-collar workers gradually increased in the late July. White-collar users are consistently growing.
(4) First and second-tier cities still contribute the majority of growth.
2. Recruiter situation post registration recovery: commercial performance improves
(1) The number of SMEs has rebounded rapidly after the pandemic.
(2) In July, manufacturing blue-collar middlemen and headhunters for high-end services saw a DAU growth of more than double compared to June.
(3) The number of enterprise users has continued to grow steadily, with newly added job positions in July rising by 15% MoM. The overall recruitment environment has further resumed in August.
(4) In terms of industries, new energy production and manufacturing, real estate, media, medical and health, as well as sales and marketing positions representing the expansion of enterprises, have shown good growth.
(5) The service industry has shown signs of recovery, with newly added positions rising by more than 20% in the first two weeks of August compared to the latter two weeks of July for blue-collar workers.
3. Explanation of changes in financial indicators
(1) Cash income has decreased by 32%, mainly due to the impact of the pandemic on first-tier cities, which are the major sources of the company's revenue. We believe that this decrease is only temporary and expect it to rebound in the second half of the year.
The third-quarter guidance shows that cash income reached 1.3 billion yuan, subtracting business tax of 1.22 billion yuan, YoY growth is 25%, consistent with Q3 revenue last year.
(2) Costs have increased, mainly due to the increase in relevant costs for security maintenance and server bandwidth since the second half of last year.
(3) The increase in management and R&D expenses is due to the company's confidence in future business growth, and the increase in algorithmists, engineers, and product managers. The company will also constantly pay attention to human resource efficiency.
2. Analyst Q&A
Q: Customer acquisition strategy in the second half of the year? Prospects for changes in sales expenses?
A: We will not spend excessively on customer acquisition. Since the user registration recovery at the end of June, we expect 25 million new users to register in the second half of the year.
New customers will gradually show their value in revenue in July and August.
There were more new users in July, mainly due to the recovery of registration. The company did not spend too much on marketing expenses. Still prioritize efficiency, and will spend money rationally in the second half of the year without overspending.
Q: What is the prospect for live recruitment in the junior white-collar and blue-collar markets? What is the difference between the company's live recruitment functionality and short video platforms' live recruitment? What is the monetization strategy for live recruitment?
A: Live recruitment is a step forward that further optimizes the "one-to-many" model in the primary white-collar and blue-collar recruitment markets, where "one" represents the recruiters and "many" represents the job seekers. This has been the case since the web era, and live recruitment is a technological improvement.
It can display more aspects of the recruiters' characteristics and support some interaction between both parties, but it is still ultimately a "one-to-many" model.
However, we believe that the inadequate effective supply of job seekers is a long-term trend, and "one-to-one" communication is more in line with the long-term market demand. Using algorithmic recommendations to promote communication between both parties is also more in line with both parties' equal understanding of each other's needs and desires.
Therefore, we boldly predict that the "one-to-one" recruitment communication model will remain mainstream in the next few years.
Q: In the current economic environment, the growth rate of job seekers may be higher than that of enterprise recruiters during the recovery and registration period. Will this situation continue after entering August? If the macroeconomic continues to weaken later, how will the company promote the growth of enterprise recruiters and improve their conversion rates for payment?
A: Indeed, during the registration and recovery period, C-end users returned faster, and recruiters are recruiting fewer people than before.
However, from the situation in July and August, the recovery of recruiters is still possible, with 15% new positions added in July, and a 23% increase in the number of recruiter accounts that published new positions. HR is active on the platform and then publishes a small number of positions.
Overall, this is a sign of recovery.
If the proportion of active users of BC ends on the platform is unbalanced, we will make some corresponding adjustments to the ecosystem to meet the needs of more people's use experiences. However, we have not yet found an imbalanced proportion of BC ends.
Q: What are the short-term and long-term strategic goals for the company in blue-collar recruitment? What level of users and revenue are required to achieve rapid business growth next year and the year after in blue-collar recruitment?
A: First of all, currently, the company does not rely on blue-collar recruitment to achieve high growth, and more relies on white-collar recruitment.
The company currently has more than 100 million registered users, with the majority being white-collar job seekers. There are more than 4 million paid recruiters, but the penetration rate of white-collar recruiters is not very high. Therefore, improving the penetration of white-collar recruitment in various industries is still a long-term task for the company.
Secondly, regarding serving blue-collar users, the company's strategic arrangement is to prioritize the use of platform strength to improve and optimize the ecosystem. Before that, the company will not overemphasize the growth of the number of blue-collar users because the blue-collar market has low trust in internet platforms and transaction friction costs may be relatively high. Therefore, we will first carry out the "Triton Optimization Plan" before advancing other matters. (The "Conch Preferred Plan" is a plan launched by BOSS Zhipin in May this year, targeting the blue-collar recruitment market in the manufacturing industry. It includes labor intermediary selection, factory direct recruitment and other functions. By mainly utilizing the platform's strength and conducting offline investigations, it guarantees the authenticity and safety of recruiting parties, thus building a trust scenario for traditional blue-collar online recruitment.
Q: What is the company's outlook for the number of recruiting parties in the third quarter? How deep is the impact of the pandemic on the decline in paying recruiting parties? How much is affected by macro factors? How is the current recovery? How many paying recruiting parties are there in July?
A: Although the number of paying recruitment parties in the second quarter has dropped, the employer's payment rate remains stable, with only a slight decrease, which has always remained stable in the past. The decline in the second quarter is due to the overall decrease in active users and the comprehensive impact of the pandemic.
On the one hand, the company lacks new user registrations, and on the other hand, the pandemic affects the demand of recruiting parties. The decrease in activity will naturally affect the scale of paid users.
Recovery situation: When registration was just resumed in July, the monthly activity of enterprise users was at its lowest level. After mid-July, it is clearly visible that the growth rate of enterprise users has accelerated. In the first two weeks of August, it further accelerated. Because the payment rate remains stable, when the number of active users is increased, the number of paid users will also increase. Paying recruiting parties in June, July, and August have all increased, and this trend has been quite stable recently. We also have confidence in this, and we expect to continue to see such a trend in the second half of the year.
Specifically,
(1) The Internet industry has a restorative growth, and our platform's performance is consistent with the industry's overall performance.
(2) Blue-collar industries are recovering very quickly, including urban service industry, production manufacturing, logistics, and other industries, with a focus on urban service industry.
(3) In emerging industries, new energy including automobiles, medical health, and hardware and electronics fields are growing rapidly.
(4) The real estate and consumer industries have also experienced clear recovery.
Q: In the recruitment industry, the paying side is the B-side enterprise, but the platform's services include both the B-side and C-side. Will the company seek to open up commercial space for the C-side in the future?
A: As for the C-side, our main focus now is to concentrate resources to help job seekers solve employment problems. For example, for this year's 10.76 million college graduates, they may be confused about their future career planning, and are unclear about the direction of employment. We will help them contact with recruiters based on their professional backgrounds and career aspirations.
At the same time, we will encourage recruiters to release more positions for fresh graduates, and even release more positions for fresh graduates in areas where the epidemic was severe in the second quarter, such as Beijing, Shanghai, Jilin, etc. We will also provide incentives to encourage more experienced professionals to give reasonable advice to fresh graduates.
We will continue to provide value output to C-side users, but currently there is no way to directly increase income from the C-side. This is a process that needs to be continuously explored. In the future, there may be some opportunities to create value-added services in "helping C-side users find ideal jobs more easily".
This article's risk disclosure and statement: Dolphin Research's Disclaimer and General Disclosure
