Beisen Holding (9669) H2 2023 earnings summary

Executive summary

• FY24 revenue reached RMB854.7m, up 13.8% YoY; cloud HCM subscriptions grew 17.7% and reached 74.0% of revenue.

• Cloud HCM customers totaled 5,532 at 31 March 2024; subscription revenue retention was 106%, rising to 114% for Core HCM integration customers.

• Core HCM integration ARR grew 30.7% to RMB386.9m and represented 51% of total ARR; cumulative customers approached 1,900.

• IDC ranked the HCM SaaS offering first in China for the eighth consecutive year; 1H23 market share was 15.3%.

Financial highlights

• Gross profit rose 23.9% to RMB514.9m; reported gross margin expanded to 60.2% from 55.3% in FY23.

• Operating loss widened to RMB389.7m from RMB368.1m; reported net loss increased to RMB3,208.6m from RMB2,599.0m.

• Adjusted net loss, adding back share-based payments and preferred-share fair-value changes, narrowed 64.9% to RMB105.4m.

• Net cash used in operating activities improved 44.6% to RMB82.5m; cash and cash equivalents were RMB234.1m at year-end.

Outlook and guidance

• FY25 strategy prioritizes continued R&D, investment in customers with 1,000+ employees, AI-first product development and expansion support for Chinese businesses operating overseas.

• Product plans include multilingual, multi-time-zone, multi-currency and overseas-compliance capabilities by end-September 2024.

• More than 100 organizations with 10,000+ employees used Core HCM or performance products; expected digitization investment by large enterprises is viewed as a growth opportunity.

• Management cited five-year CAGRs above 12% for average revenue per client and 23% for ARR; Core HCM integration ARR CAGR exceeded 50%.