PE-backed Manpower unit files for Hong Kong IPO
Manpowergroup Greater China, the China branch of American staffing giant Manpower Group, has filed for a listing on the Hong Kong Stock Exchange.
Manpower first entered Hong Kong and Taiwan in 1997, and expanded to mainland China and Macau in 2003 and 2007, respectively. As of 2017, it was the largest human resources solutions provider in the region by revenue.
CITIC Private Equity announced the formation of a joint venture with Manpower Group in 2015 to consolidate and localize the company's operations in Greater China. The firm owns 49% of Manpowergroup Greater China, while Manpower Group owns the rest, according to the prospectus.
The company’s major revenues come from flexible staffing, which refers to the practice of companies hiring workers provided by third-party HR agencies on a flexible basis and paying them through the agencies in order to reduce the staffing budget. This segment contributed RMB1.7 billion ($250.5 million) in revenue for 2017, up 21.4% from RMB1.4 billion in 2016. It served over 22,000 clients, of which 250 are Fortune 500 companies, as of September last year.
Other services include headhunting, recruitment process outsourcing, and HR consultancy. Overall revenue came to RMB2 billion for 2017, up from RMB1.6 billion the prior year. Net profit reached RMB89.5 million in 2017, up 28.5% from RMB69.7 million in 2016.
Proceeds from the offering will primarily be used to expand the company's operations in existing cities and grow into new cities, particularly in central and western China. The company will also invest in strengthening technological capabilities and seek strategic acquisition opportunities.
China’s HR services industry has been growing rapidly in the past five years, mainly pushed by multinational and domestic companies. The market size of the segment increased from RMB158.2 billion in 2013 to RMB343.4 billion in 2017, according to China Insights Consultancy. The industry is expected to further grow to RMB842.2 billion by 2022, driven by favorable government support and strong demand from emerging industries including new retail and finance.
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