麦格理-中国-互联网服务业-中国在线招聘：高级人才市场更具吸引力-2019.3.26-54页.pdf

Please refer to page 52 for important disclosures and analyst certification,or on our website March 2019 China EQUITIES Inside Senior talent acquisition:a larger market 2 Resilient demand for senior talent 7 Still low online penetration in senior talent acquisition market 10 Detailed analysis of the competitive landscape 12 Wise Talent Information Tech(6100 HK)20 51job(JOBS US)50 Senior talent only represented 18%of total urban employees in China(2017)Source:CIC,Macquarie Research,March 2019 but enterprises in China are spending 85%of their talent acquisition budget on them Source:CIC,Macquarie Research,March 2019 Analysts Macquarie Capital Limited Frank Chen +852 3922 1433 Wendy Huang,CFA +852 3922 3378 John Wang +852 3922 3578 Ellie Jiang +852 3922 4110 China online recruitment Senior talent market is more attractive Key points We are optimistic about Chinas recruitment market in the long run,given the continued decline in the countrys working-age population.We prefer the senior talent market as it is a larger,faster-growing and more resilient market with large potential in improving online penetration.We prefer Liepin for its unique positioning in our favourite market segment.Senior talent acquisition:a larger and faster growing market 2B(to business):Enterprises in China,on average,are spending 85%of their talent acquisition budget on acquiring the senior talent(with annual salary Rmb100k)and the market size for senior talent acquisition is 6x larger than junior talent(Rmb97bn vs Rmb17bn in 2017).China Insights Consultancy(CIC)expects the senior talent acquisition market to clock a 20%CAGR 2017-22E to Rmb243bn,driven by the talent upgrade and increasing demand.2C(to consumer):Rising demand for professional career services from job seekers is another driver.Liepins survey shows that 35%of workers are not satisfied with their current jobs,and 63%intend to spend more on self-development and career advancement.CIC expects this market to register 34%CAGR 2017-22E to Rmb201bn in 2022.Resilient demand for senior talent Zhaopin,51Job,and have seen weak demand for junior white-collar and blue-collar jobs after the Chinese New Year(CNY).Job openings declined 4%YoY in the two weeks after CNY,according to Zhaopin,while the number of job-seekers grew 4%YoY.However,demand for highly-skilled and experienced talent remained resilient from established companies.Job postings on Liepin grew 54%YoY in 2018.Liepin also sees strong job posting growth after CNY 2019,with most of its major categories growing 20+%YoY.Still-low online penetration Online penetration for the senior segment is still low at 1%in 2017 vs 9%for the overall recruitment market and 56%for the junior segment.Traditional head-hunting firms are major players in this market,but they are highly fragmented,with low efficiency.Online platforms like Liepin are redefining the market by providing more efficient connections between head-hunters and enterprises,which lower the cost of head-hunting services to 8-12%of offered annual salary compared with 20-30%in the traditional offline model.As such,we see great potential in improving online penetration for the senior talent segment.Prefer Liepin for its unique positioning in the more resilient market We are initiating coverage of Liepin(Wise Talent 6100 HK)with an Outperform rating and HK$31 target price,based on 1x PEG or 36x 2020E PER.We like Liepin for its unique positioning in Chinas senior talent acquisition market and its strong revenue growth outlook with margin expansion potential.Liepin is the only Outperform-rated stock in our global recruitment coverage.Macquarie Research China online recruitment 26 March 2019 2 Senior talent acquisition:a larger market Declining working age population in China China witnessed a continued decline in the working population from 941m in 2011 to 897m in 2018 and the working age population only accounted for 64%of the total population in China in 2018,down from 70%in 2011.The number of births in China was largely flat at 16-17m per year from 2000 to 2017 and further declined to 15.2m in 2018.We expect the working age population will continue to decline which may worsen the labour shortage issue in China.As such,we are optimistic about the China human resources market in the long run and believe the senior talent market is the most preferred sub-segment with a larger market size,lower online penetration rate and is more resilient to macro changes.Fig 1 Declining working age population in China (aged 16-59)Fig 2 Working age population as%of total(China)Source:NBS,Macquarie Research,March 2019 Source:NBS,Macquarie Research,March 2019 Fig 3 Number of births and birth rate in China Source:NBS,Macquarie Research,March 2019 Rmb1tr HR market in China in 2022 The total addressable market size should exceed Rmb1tn in 2022 for recruitment players in China,according to China Insights Consultancy(CIC).2B market:Rmb842bn human resource services market in China in 2022 Rmb39bn junior talent acquisition services market Rmb243bn senior talent acquisition services market 94193792091691190790289787088089090091092093094095020112012201320142015201620172018(m)70%69%68%67%66%66%65%64%61%62%63%64%65%66%67%68%69%70%71%201120122013201420152016201720180.05.010.015.020.025.030.00.0%5.0%10.0%15.0%20.0%25.0%BirthsBirth rateMacquarie Research China online recruitment 26 March 2019 3 2C market:Rmb201bn professional career services market in 2022 Fig 4 Rmb1tr human resources market in China in 2022(Rmb bn)2017 2022E 2017-22E CAGR Human resource services(2B)343 842 19.7%Talent acquisition 113 282 20.0%Junior talent acquisition 17 39 18.7%Senior talent acquisition 97 243 20.3%Human resource outsourcing 151 356 18.7%Others 79 204 20.9%Professional career services(2C)47 201 33.7%Total addressable market 391 1,044 21.7%Source:CIC,Macquarie Research,March 2019 Human resources services market in China Human resources services market in China mainly includes(i)talent acquisition services,(ii)human resources outsourcing services and(iii)other human resource services.CIC report estimates a 20%2017-22E CAGR for the market,driven by increasing talent acquisition budget amid intensified competition for talent and increasing demand for high-quality customized HR services.As such,CICs report estimates that Chinas overall human resource services market could see a 19.7%2017-22E CAGR to Rmb842bn in 2022,with the talent acquisition market at a 20.0%2017-22E CAGR to Rmb282bn.Fig 5 20%2017-22 CAGR in HR services market in China Source:CIC,Macquarie Research,March 2019 The talent acquisition services market can be divided into two sub-segments based on an individuals salary and experience.The junior talent acquisition market serves young talent or fresh graduates with an average annual salary of less than Rmb100,,51JOB and Zhaopin are the major online players in this segment with focusing on blue collar jobs and the rest two focusing on junior white-collar positions.The senior talent acquisition market serves experienced talent with an average annual salary of Rmb100,000 or above.Liepin is focusing on the senior talent acquisition market.As China is transforming towards a more consumption-driven and technology-oriented economy,enterprises show increasing demand for senior talent.In 2013,18%of total job openings in China were for mid-to high-end talent and the ratio increased to 24%in 2017.48607591113135162194234282748810512415117921225129835637445464799511413816820415819123427934340948858370084201002003004005006007008009001,000201320142015201620172018E2019E2020E2021E2022ETalent acquisitionHuman resource outsourcingOthers(Rmb bn)Macquarie Research China online recruitment 26 March 2019 4 Fig 6 24%of job openings in China were looking for senior talent in 2017 Fig 7 The population of senior talent to have a 10%2017-22 CAGR Source:CIC,Macquarie Research,March 2019 Source:CIC,Macquarie Research,March 2019 Driven by the talent upgrade and increasing demand for senior talent,CICs report estimates that the total population of senior talent in urban areas to have a 10%2017-22 CAGR,from 77m in 2017 to 125m in 2022,while overall total urban employees will see only a 2.7%2017-22E CAGR.Senior talent only represented 18%of total urban employees in China in 2017 and should increase to 25%in 2022.Fig 8 Total population of senior talent to jump 1.6x from 77m in 2017 to 125m in 2022 Fig 9 Senior talent acquisition market to jump 2.5x from Rmb97bn in 2017 to Rmb243bn in 2022 Source:CIC,Macquarie Research,March 2019 Source:CIC,Macquarie Research,March 2019 Senior talent in China are typically middle-level managers and executives with several years of work experience.They are generally passive job seekers who are already employed and are not actively searching for a job because they typically enjoy a relative stable and well-paid position.However they generally do not refuse to connect to more career opportunities.Senior talent tend to rely more on professional social networks to connect to high-quality career opportunities and enrich their professional careers.As most senior talent are passive job seekers,it costs more to recruit and hire them.The market size of senior talent acquisition services is much larger than junior talent.It reached Rmb97bn in 2017,representing 85%of the total revenue of Rmb113bn for the entire talent acquisition services market in China in 2017.That means enterprises in China are spending 85%of their talent acquisition budgets on senior talent,which make up 18%of all employees.In addition,this market should continue its growth momentum,CIC forecasts a senior talent acquisition services market CAGR of 20.3%2017-22E to Rmb243bn in 2022.17.8%19.1%20.7%22.1%23.8%15%16%17%18%19%20%21%22%23%24%25%2013201420152016201710.2%0.7%2.7%0.0%2.0%4.0%6.0%8.0%10.0%12.0%Senior talents(annual income RMB100,000)Junior talentsTotal2017-22E CAGR5257636977849310211312538239340441442643744946147348605010015020025030035040045050020132014201520162017 2018E 2019E 2020E 2021E 2022ESenior talents(annual income RMB100,000)Junior talents(million)40506377971161391672012434860759111313516219423428205010015020025030020132014201520162017 2018E 2019E 2020E 2021E 2022ESenior talents acquisition marketJunior talents acquisition market(Rmb bn)Senior talent are generally passive job seekers and require higher costs to hire them,resulting a larger market Macquarie Research China online recruitment 26 March 2019 5 Fig 10 senior talent only represented 18%of total urban employees in China(2017)Fig 11 but enterprises in China are spending of their 85%talent acquisition budget on them Source:CIC,Macquarie Research,March 2019 Source:CIC,Macquarie Research,March 2019 Professional career services market in China Professional career services help a candidate find a better job with more attractive compensation.It mainly includes career coaching,CV advisory services,professional skill training and other related career services,but does not include degree-and certificate-oriented training.The market size of professional career services to senior talent experienced rapid growth driven by the increasing demand for self-development and career advancement of high-quality talent.To secure a“dream”job,job seekers demonstrated an increasing willingness to pay for career coaching and advisory services.This market jumped 3.5x from Rmb13.6bn in 2013 to Rmb47.1bn in 2017,according to a CIC report.CIC expects a 33.7%2017-22E CAGR to Rmb201.4bn in 2022.Fig 12 The market size of professional career services to senior talent Source:CIC,Macquarie Research,March 2019 Liepins survey shows that only 18%of talent are satisfied with their current job while 35%are not satisfied.Under these circumstances,63%of talent are willing to spend more time and money on studying to improve their skill.Junior talents,82%Senior talents(annual income RMB100,000),18%Senior talents acquisition market,85%Junior talents acquisition market,15%13.647.1201.4050100150200250201320172022(Rmb bn)33.7%2017-22E CAGRMacquarie Research China online recruitment 26 March 2019 6 Fig 13 35%of talent in China are not satisfied with their current job Fig 14 Talent consumption preferences Source:Liepin,Macquarie Research,March 2019 Source:Liepin,Macquarie Research,March 2019 Very satisifed3%Somewhat satisfied15%Neutral47%Somewhat dissatisfied29%Very dissatisifed6%63%39%39%37%35%33%25%6%0%10%20%30%40%50%60%70%Macquarie Research China online recruitment 26 March 2019 7 Resilient demand for senior talent We noticed weak recruitment demand for junior white collar and blue collar talent but demand for senior talent is still resilient.Weak hiring demand for junior white collar and blue collar after Chinese New Year Zhaopin,51Job and all saw weak hiring demand after Chinese New Year this year compared with last year.Zhaopins data shows that the number of job openings declined 4%YoY for the first two weeks after Chinese New Year,indicating weak hiring demand amid macro headwinds.The pace of resumption of business was slower than last year.However,at the same time,the number of job seekers increased by 4%YoY and the total number of applications jumped by 18%YoY.Fig 15 Job openings declined 4%YoY for the first two weeks after Chinese New Year Source:Zhaopin,Macquarie Research,March 2019 In addition,NBS data also shows weak recruitment demand in 2019.According to NBS,the surveyed unemployment rate in China jumped to 5.3%in Feb 2019 compared with 5.1%in January and 5.0%in Feb 2018.Fig 16 Surveyed unemployment rate jumped to 5.3%in Feb 2019(China)Source:NBS,Macquarie Research,March 2019 51job sees positive but slower growth in hiring activity this year compared to last year based on its initial market assessment for 2019 based on post Chinese New Year data.Employers are more selective in adding staff due to the current uncertainty about economic conditions.However the company believes the market demand for highly-skilled white collar workers may be less affected.-4%4%18%-10%-5%0%5%10%15%20%Job openingsJob seekersNumber of application foremployment(YoY)5.0%5.0%5.1%4.9%4.8%4.8%5.1%5.0%4.9%4.9%4.8%4.9%5.1%5.3%4.5%4.6%4.7%4.8%4.9%5.0%5.1%5.2%5.3%5.4%Macquarie Research China online recruitment 26 March 2019 8 51job believes replacement hiring will be a major driver of the market.Enterprises are seeking restructuring by laying off poor performing staff and seeking new talent to restructure operations.51job also observed that small and medium enterprises(SMEs)have weaker hiring demand in the near term as they adapt to the slowdown in economy.For more established companies,they are relatively more active in hiring and taking advantage of their brand names to attract has also started to see the impact of a slowing macro economy to its revenue from the jobs category.The company observed that this year the pace of SMEs resuming business after Chinese New Year is slower than prior years measured by how fast they come back and how aggressive they are in term