Inline 1Q26 results; revenue growth to accelerate on resilient recruitment demand

Inline 1Q26results; revenue growth toaccelerate on resilientrecruitmentdemand Target PriceUS$22.50(Previous TPUS$24.00)Up/Downside59.9%Current PriceUS$14.07 Boss Zhipin reported 1Q26 results: total revenue was up by 8% YoY toRMB2.07bn, and non-GAAP net income increased by 12% YoY to RMB856mn,bothin line with Bloomberg consensus estimates.Looking into 2Q26E,management guidedtotal revenue to increase by 13-15% YoY to RMB2.38-2.42bn,with revenue growth accelerating thanks to the solid recruitmentdemand posttheChineseNew Year(CNY). In the long term,managementisconstructive on AI as a key driver to improve itsrecruitmentserviceefficiencyandacceleratebusiness growth, and thus will continue to invest in AI. Wemaintainour FY26-28 earnings forecast largely unchanged, but slightly trim ourtarget price to US$22.5 based on 18x FY26E non-GAAP PE (previous: US$24.0on 20x FY26E PE) amidthedecline in sector valuation. We expect the companytomaintain solid adj.operating profit growth(+16%YoY)and attractiveshareholder return in FY26. Maintain BUY. China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Ye TAO, CFA(852) 3850 5226franktao@cmbi.com.hk Solid recruitmentdemandpostCNY.Total paid enterprise customersincreased by 11% YoYto 7.1mn in 12 months ended Mar 2026. AverageMAUs grew by 6% YoY to 60.9mn in 1Q26. Healthy user growth drove solidrevenue growth from blue-collarrecruitment, which accounted for over 40%of total revenue in 1Q26 for the first time; white-collar recruitment demandalso improved afterthe CNY, andmanagementhasnotyetseen signs of AIreplacingjob positions.By vertical,manufacturing,communications,semiconductor, transportation and service sectors led in terms of revenuegrowth;by customer cohort,revenue from large enterprises(1k-10kemployees)deliveredthe fastest growth.Looking ahead,managementispositiveonrevenue accelerationforthe remainderof FY26E, supported bythe solid recruitment demandacross verticals. Shuyin GUO(852) 3916 3716guoshuyin@cmbi.com.hk Stock Data Deepening AI integration.Thecompanyhasfurtherintegrated AI into itsplatform, with over 10mn MAUs using its AI tools in 1Q26. Revenue fromAI-facilitated closed-loop recruitment services reached c.RMB50mn in1Q26.AI empowers multiple aspects of the company’s recruitmentbusiness: 1) Recruitment AI agents shorten the time from initial chat toactualrecruitmentconversion by 60%; 2) AIhasalso driventhe company’suser retention rate to a record high since 2020; 3) In a pilot program in 1Q26,therecruitmentefficiencyincreasedby 4 times by adopting AI agents, whichexceededthe average productivity level of headhuntersin the industry. Increasing margin andshareholderreturn.AdjustedOPM expanded by3.4ppt YoY to 39.4% in 1Q26, mainly attributable to the GPM expansion(+1.4ppt YoY) and operating leverage. Though the company plans toincrease AI investment and marketing expenses related to the World Cup inFY26, we still expectadjusted OPM to rise by 1ppt YoY to 42% in FY26E.The companyhasalso stepped up shareholder return, with 28mn sharesrepurchased YTD (c.3% of total sharesissued). Source: FactSet Business forecasts update and valuation Valuation We valueBoss Zhipinat US$10.6bn (US$22.5perADS) based on18x 2026E PE. Ourtarget PE multipleisat a premium tothe averageofitspeers, given Boss Zhipin’s strongleadership in China’s online recruitment market and earnings visibility. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst covered in this report: (1) all of the viewsexpressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market bench