Executive Summary:
Kanzhun Ltd. is a Chinese online recruitment company primarily known for its mobile application, BOSS Zhipin. This platform facilitates direct communication between job seekers and employers, streamlining the hiring process. The company has grown to become a major player in China’s online recruitment market. The company utilizes AI algorithms to enhance job matching and user experience.
Kanzhun Ltd. has reported revenues of RMB 1.91 billion, representing a 19% year-over-year increase. In the third quarter of 2024, the EPS was 0.23, beating the forecast of 0.20. The company expects revenues between RMB 1.795 billion and RMB 1.81 billion, indicating continued year-on-year growth.
Stock Overview:
| Ticker | $BZ | Price | $17.06 | Market Cap | $7.71B |
| 52 Week High | $22.74 | 52 Week Low | $10.57 | Shares outstanding | 366.79M |
Company background:
Kanzhun Ltd. is a prominent Chinese online recruitment platform that has altered the landscape of job searching and hiring in China. At its core is the mobile application, BOSS Zhipin, which facilitates direct communication between job seekers and potential employers. Founded in 2014 by Peng Zhao, the company’s headquarters are located in Beijing, China. The company’s innovative approach has garnered substantial attention and support, attracting funding from notable investors, including major technology players.
A key differentiator of Kanzhun’s product, BOSS Zhipin, is its emphasis on a “direct recruitment” model. This mobile-first strategy enables users to engage in real-time conversations, streamlining the traditional recruitment process. Utilizing sophisticated AI algorithms, the platform enhances job matching accuracy, contributing to a more efficient and personalized user experience. Beyond the BOSS Zhipin app, Kanzhun also operates other recruitment information service platforms.
In the competitive online recruitment market, Kanzhun faces competition from established players and emerging platforms. Key competitors include other online recruitment platforms that are well known within the Chinese market. Kanzhun has been able to establish itself as a leader by focusing on mobile technology and the ability to connect job seekers directly with hiring managers.
Kanzhun’s journey has included periods of rapid growth and also navigating regulatory environments. They have shown resilience and continued to grow. The company’s focus on technological innovation and user experience positions it to remain a significant force in the online recruitment sector.
Recent Earnings:
Kanzhun Ltd. reported revenues of RMB 1.91 billion for the third quarter of 2024, representing a 19.0% year-over-year increase. Specifically, revenues from online recruitment services to enterprise customers saw an 18.7% increase. Additionally, revenues from other services, including value-added services for job seekers, experienced a significant 49.0% growth, reflecting the company’s expanding user base.
The company’s net income for the third quarter of 2024 was RMB 463.8 million, an 8.9% increase from the same period in 2023. Adjusted net income also demonstrated growth. Basic and diluted net income per ADS also showed increases from the prior year. Kanzhun has shown a pattern of beating analyst expectations in prior quarters.
Which reached 58.0 million in the third quarter of 2024, a substantial 30.0% increase year-over-year. Total paid enterprise customers also increased by 22.4% year over year. For the fourth quarter of 2024, Kanzhun provided revenue guidance, expecting total revenues to be between RMB 1.795 billion and RMB 1.81 billion, indicating continued year-on-year growth. The company has expressed a focus on sustainable cost controls, which they believe will enhance profitability in the coming quarters. The company’s focus on expanding its paid enterprise user base and enhancing user experience appears to be yielding positive results.
The Market, Industry, and Competitors:
Kanzhun Ltd operates primarily in the online recruitment sector in China, leveraging its BOSS Zhipin mobile application to connect job seekers with enterprise users. The company’s services are designed to enhance user experience throughout the recruitment cycle, offering a comprehensive network that includes other mobile applications and mini-programs. The Chinese online recruitment market is dynamic, driven by technological advancements and changing workforce dynamics. Trends such as the digitalization of hiring processes, emphasis on data-driven hiring, and the growth of the gig economy are expected to continue shaping the sector.
The Chinese recruitment industry is projected to grow, with estimates suggesting a compound annual growth rate (CAGR) of around 21% by 2025. This growth trajectory is expected to continue beyond 2025, driven by increasing demand for digital recruitment solutions and the expanding gig economy. The company’s ability to leverage its large user base and technological capabilities, such as advanced recommendation algorithms, positions it well to capture a significant share of the growing market. Kanzhun is likely to continue benefiting from these trends, potentially expanding into adjacent services or new market segments to drive revenue growth and diversification.
Kanzhun’s growth prospects are promising due to its dominant position in the Chinese online recruitment market. The company’s focus on technological innovation, such as investments in artificial intelligence and data analytics, will be crucial for maintaining its competitive edge. Kanzhun’s strong financial execution and brand recognition serve as barriers to entry for new competitors, helping to maintain its market share. While macroeconomic challenges and regulatory changes may pose risks, the overall outlook for Kanzhun remains positive, with analysts maintaining a strong buy consensus rating and expecting continued growth in the sector.
Unique differentiation:
- Traditional Online Recruitment Platforms: Companies like 51job and Zhilian Zhaopin have been long-standing players in the Chinese recruitment market. These platforms have established a strong presence and offer a wide range of recruitment services. They represent traditional competition that has established relationships with many companies.
- Other Digital Platforms: It’s important to recognize that in the digital age, competition can also come from other platforms that may incorporate recruitment functionalities. For example, large internet companies may have their own job boards or recruitment features. Also sites like 58.com.
Kanzhun’s distinctive “direct recruitment” model, facilitated by its BOSS Zhipin app, has helped it carve out a significant market share. It must continually innovate to maintain its competitive edge. Factors such as technological advancements, evolving user preferences, and regulatory changes can impact the competitive landscape. Therefore, Kanzhun must remain adaptable and responsive to these dynamics.
Kanzhun Ltd. navigates a fiercely competitive landscape within China’s online recruitment sector. Its primary competition stems from established players who have built significant brand recognition and user bases over time. These competitors can generally be categorized into traditional online recruitment platforms and increasingly, broader digital platforms that incorporate recruitment functionalities.
Among the traditional online recruitment platforms, companies like 51job and Zhilian Zhaopin stand out. These entities have been long-standing fixtures in the Chinese job market, offering comprehensive recruitment services, including job postings, resume databases, and headhunting services. Their established presence and extensive networks provide them with a competitive advantage, particularly in attracting larger enterprises and established professionals. They have also been working to improve their mobile offerings, and therefore providing more direct competition to Kanzhun.
Beyond these traditional players, Kanzhun also faces competition from broader digital platforms that are expanding their recruitment capabilities. Tech giants and social media platforms are increasingly integrating job search and networking features, leveraging their vast user bases and data analytics capabilities. These platforms can offer targeted recruitment solutions and connect job seekers with employers through social connections, posing a growing challenge to specialized recruitment platforms like BOSS Zhipin. The ability for these larger companies to integrate recruitment into their existing platforms, provides a strong competitive edge.
Management & Employees:
Peng Zhao: He is the founder, Chairman, and Chief Executive Officer. He has been with the company since its inception, guiding its development and growth. He has extensive experience in the internet and human resources services industries.
Xu Chen: He is the Chief Marketing Officer and an executive Director. He oversees the company’s marketing, platform operations, and public relations. He brings extensive marketing experience from the Greater China region.
Tao Zhang: He holds the position of Chief Technology Officer and an executive Director. He is in charge of the company’s research and development and information technology infrastructure. He has a strong background in software engineering and the internet industry.
Financials:
Kanzhun Ltd has an innovative model, which includes its BOSS Zhipin mobile app, that has enabled it to attract and retain a large and diverse user base. Kanzhun’s revenue reached 5.95 billion CNY, marking a 31.94% increase from the previous year’s 4.51 billion CNY.
Kanzhun Ltd has a three-year revenue growth rate of approximately 41.7%. This indicates a strong compound annual growth rate (CAGR), positioning the company as a leader in the online recruitment sector. The company’s ability to leverage its technology and expand its services has contributed to this growth trajectory. As the Chinese recruitment market continues to evolve, Kanzhun’s strategic investments in digital solutions are expected to further enhance its revenue growth.
The company’s earnings increased, reaching 1.10 billion CNY, which represents a substantial increase from previous years. This growth reflects the company’s efficiency in converting revenue into profits. The earnings CAGR has been robust, driven by effective cost management and operational efficiency.
Kanzhun Ltd has a cash-to-debt ratio of 40.72 and an equity-to-asset ratio of 0.78. These metrics suggest that the company maintains a solid financial foundation, with ample liquidity to support its operations and strategic initiatives. The debt-to-equity ratio is low at 0.03, indicating minimal leverage and a preference for equity financing.
Technical Analysis:
The stock is in a reversal stage 2 (bullish) on the monthly chart, but on a stage 1 consolidation on the weekly chart. The daily chart is stage 2 bullish markup as well. The resistance is strong in the $19.5 zone and support exists in $15.4 and $14.4 areas. The stock should consolidate again and continue its way up to $19s.
Bull Case:
Growth Potential in the Chinese Market: The online recruitment market in China is expected to continue its expansion, driven by increasing digitalization and the demand for skilled labor. Kanzhun is well-positioned to capitalize on this growth, particularly as the Chinese economy continues to develop.
Technological Advantages: The company’s investment in AI and data analytics enhances its job matching capabilities, improving user experience and efficiency. Further advancements in technology could lead to increased platform stickiness and user acquisition.
Expansion and Diversification: There is potential for the company to expand into other related markets, and also to increase the amount of value added services they offer. This could provide new revenue streams.
Bear Case:
Data Security and Privacy Concerns: As an online platform handling sensitive user data, Kanzhun faces risks related to data breaches and privacy violations. Any such incidents could damage the company’s reputation and lead to regulatory penalties.
Reliance on the Chinese Market: Kanzhun’s reliance on the Chinese market exposes it to the risks associated with that specific economy and political environment.
User Growth Saturation: There is a risk that the user base may reach saturation, and that future growth may be limited. If the growth of new users slows, then the companies projected growth may not be met.
