Andy Sim of DBS Group Research has downgraded his call on HRnetGroup from "buy" to "hold", citing concerns that a slowing economy will dampen the recruitment firm's business in its key markets of Singapore and China.

"Easing labour market in Singapore and sputtering growth in China a double whammy," writes Sim in his June 28 note.

The Singapore labour market continues to lose steam as reflected in job vacancies and changes in total employment.

China’s economic recovery was also below market expectations and the growth reflected in the recent figures is largely a result of base effects, he adds.

HRnet, as a leading recruitment agency in the region, will see its businesses affected, amid  macroeconomic uncertainties, continued inflationary pressures and rising risks of a recession.

Sim has reduced his revenue and earnings estimates for the current FY2023 by 14% and 11% respectively, and for the coming FY2024 by 18% each.

<span class='see_also_inread'><b>See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='/capital/brokers-calls/boustead-singapore-big-bold-and-beautiful-says-ocbc?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>Boustead Singapore is 'big, bold and beautiful', says OCBC</a></b></span>

Sim's revised target price of 86 cents, from $1.07 previously, is based on estimated ex-cash 10x FY2023 and FY2024 earnings, a lower valuation from 11.5x given earlier.

Sim's downgrade follows a similar June 23 report by CGS-CIMB's Kenneth Tan and Lim Siew Khee, who now deem the stock "hold", from "add", and with a new target price of 80 cents, from $1 previously.

DBS downgrades HRnetGroup, sharing similar concerns as CGS-CIMB's earlier call

DPM Lawrence Wong appointed as GIC’s deputy chairman

Will the Rising Sun keep rising?

Fed signals higher-for-longer rates with hikes almost finished

EQT Impact Challenge offers platform for impact entrepreneurs to attain 'patient capital'

Singtel to sell 20% stake in regional data centre business valued at $5.5 bil

Singapore investment banking fees down 20% y-o-y so far this year, DBS leading: Refinitiv

Boustead Singapore is 'big, bold and beautiful', says OCBC

DBS downgrades HRnetGroup, sharing similar concerns as CGS-CIMB's earlier call

Related News

Highlights

DPM Lawrence Wong appointed as GIC’s deputy chairman

Related News

RHB keeps 'buy' call and 91 cents price target on HRnetGroup

Maybank, PhillipCap and RHB lower TPs on HRnetGroup as recruitment disappointed in 1HFY2023

Substantial shareholder and CEO of Huationg raise stakes; HRnetGroup keeps up pace of buybacks