Shanghai-based ManpowerGroup Greater China (2180:HKG), a workforce solutions provider in China, announced today its interim financial results for the six months ended 30 June 2022. Revenue increased by 19.1% over the year to RMB 2.22 billion (USD 322.9 million).

The largest shareholder of ManpowerGroup Greater China Limited is ManpowerGroup Inc. (NYSE: MAN). ManpowerGroup reported in July 2022 that revenue rose 5.7% in constant currency to USD 5.1 billion in its second quarter.

ManpowerGroup Greater China said during the first half of 2022, Covid-19 continued to pose significant challenges for the group with a three-month lockdown in Shanghai, where the group’s headquarters is located and over one third of the employees are based. The disruption caused by the tightening of travel restrictions and quarantine requirements in major cities in Mainland China, increasing geopolitical tension, and weak economic growth have continued to negatively affect the business, it added.

The recruitment solutions segment, which had rebounded significantly in 2021 was severely impacted by the lockdowns in Shanghai and other major cities in China during the second quarter but still realised a minor revenue growth.

The gross margin decrease was primarily due to the increase in proportion of revenue generated from flexible staffing, the group stated.

During the period, profit attributable to owners of the company decreased to RMB 54.6 million (USD 7.9 million), representing a decrease of 15.1% year over year. Adjusted profit attributable to owners of the company, after taking into account of the stock option and restricted share units expenses, decreased to RMB 59.5 million (USD 8.6 million), down 10.7% on a year over year basis.

Revenue by business line

The increase in revenue generated from flexible staffing was primarily due to the increase in number of associates placed during the Period in China, Hong Kong and Taiwan. The increase in revenue generated from recruitment solutions was primarily due to the increase in billable payments of candidates during the period.

These increases were partially offset by the decrease in revenue generated from other HR services. The revenue decline was primarily due to the decrease in revenue generated from HR consultancy services of Right Management and government solution services as a result of the outbreak of Covid-19 in several major cities in China.

Revenue by geography

Looking ahead, the group said it remains cautious for the rest of 2022 mainly due to external uncertainties.

In terms of business performance in different regions, the group expects continuous stable growth momentum in flexible staffing business in Mainland China with extended product portfolios. The outlook for the Taiwan market will be neutral and could be impacted by the pace of recovery of western economies. The Hong Kong market has picked up its growth momentum and showed further signs of recovery with relaxation of Covid-19 restrictions in the region. In addition, the outdoor marketing/promotion business in Hong Kong is expected to contribute more profit to the region’s performance in the medium term.

The group’s strategic focus in the second half of 2022 will remain on flexible staffing in Mainland China driven by the extension of its product portfolio into the IT Outsourcing (ITO) business and high-volume businesses.

ManpowerGroup Greater China shares closed at HKD 9.61 (USD 1.22), down 0.10% on the day and 2.93% below its 52-week high of HKD 9.90 (USD 1.26), set on 22 June 2022. The company has a market cap of HKD 2.00 billion (USD 254.84 million).