Renrui Human Resources Technology (6919: HKG), a mainland China-based flexible staffing provider issued an update today for the financial year ended 31 December 2020.

Based on the management’s estimate of information currently available to the Board, the group expects to record an increase in revenue of approximately 20% to 30% for FY 2020 as compared to the revenue for the corresponding period in 2019.

Renrui HR also expects net profit for FY 2020 of approximately RMB 160 million (UDS 24.7 million) to RMB 175 million (USD 27.0 million), as compared to the net loss of approximately RMB 779.8 million (USD 120.5 million) for the corresponding period in 2019.

The company said this forecast was mainly due to the fact that no fair value loss on hybrid financial instruments were incurred in FY 2020 following the conversion of preferred shares held by certain pre-IPO investors into ordinary shares upon the listing of the company’s shares on the stock exchange in December 2019. Furthermore, the group said that it had leveraged on the gradual cessation of Covid-19 in the second half of FY 202 and its business has been improved.

In the second half of FY2020, revenue generated from flexible staffing services increased due to the continuous increase in the number of the group’s flexible staffing employees deployed to clients, and revenue generated from professional recruitment also increased due to the greater recruitment demand from clients.

The group’s gross profit margin for the second half of FY 2020 has also increased as compared to that for the first half of FY 2020.

The estimated net profit for FY 2020 also represented an increase of approximately 20% to 30%, as compared to the adjusted net profit of approximately RMB 134.3 million (USD 20.7 million) for the corresponding period in 2019, which was mainly due to the increase in revenue as a result of the group’s improved business.

The financial information in this announcement has neither been audited or reviewed by the Company’s auditors.

The Board also announced that the number of the group’s flexible staffing employees has increased from 34,034 as at 30 November 2020 to 35,762 as at 31 December 2020, representing an increase of 1,728 or a growth rate of approximately 5.1%.

Such number of flexible staffing employees as of 31 December 2020 also represents an increase of 10,644 or a growth rate of approximately 42.4% as compared to 25,118 flexible staffing employees as of 31 December 2019.

In October 2020, the group announced that it has entered into a conditional investment agreement and an exclusive strategic cooperation agreement with Xunteng Group Co., Ltd.

The group’s consolidated annual results for FY 2020 is expected to be released by the end of March 2020.