Fallout from COVID-19 has squeezed the company’s short-term outlook, but it should prove to be a long-term booster. HUMAN’s story has multiple aspects to sustaining strong top-line growth. While new customer wins (volume growth) continue to fuel a strong HCM business, a multi-product theme (value) has emerged as another durable growth engine. With the solutions in full release, we expect good adoption rates, 2H20-2021. BUY!
Core profit was 6% above our expectation
HUMAN posted net earnings of Bt34m for 2Q20, up 17% YoY but down 31% QoQ. Excluding extra items—a Bt4m FX loss, Bt3.6m in losses on investments (required under TFRS9), a Bt2m grant received from the govt of Singapore, and a Bt2m allowance for doubtful debts—core profit would be Bt41m, up 13% YoY but down 17% QoQ. The bottom-line was 6% above our estimate, due to a fatter GM than we had assumed. There were other one-off operational costs—Bt2m in professional fees (ISO), a Bt0.1m donation, and a Bt0.3m asset write-off.