Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Kanzhun Ltd (NASDAQ: BZ) is a China-based holding company mainly providing online recruitment services. The Company connects job seekers and enterprise users through its interactive BOSS Zhipin mobile application, which together with its other mobile applications and mini programs create a network. The Company focuses on providing user experience by delivering experience and services to them throughout the recruitment cycle. 

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 6.55% in the last three months, on the other hand a return of 10.88% in past nine months.
• The stock is leaning towards the lower band of its 52-week range of high USD 22.74 and 52-week low price of USD 10.57, with the current price near an important support zone of USD 14.00-USD 15.00, with expectations of upward momentum, if these levels sustains.
• The price is currently above both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 44.85.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~26.602% of the total shareholding, signifying concentrated shareholding. Dragoneer Investment Group, LLC, and SC China Holding Ltd, are the biggest shareholders, holding the maximum stake in the company at ~3.93% and ~3.53%, respectively.

1.4 Key Metrics

From 2019 to 2023, the company exhibited significant growth in revenue, increasing from USD 144.6 million in 2019 to USD 840.6 million in 2023, resulting in a compound annual growth rate (CAGR) of 55.28% over the four-year period. Correspondingly, gross profit also demonstrated substantial growth, rising from USD 124.6 million in 2019 to USD 690.9 million in 2023, with a CAGR of 53.45%. Despite this growth in gross profit, the gross margin experienced a slight decline from 86.17% in 2019 to 82.19% in 2023, indicating a decrease in profitability relative to revenue.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q2FY24:

Section 3: Key Risks & Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 6.55% in the last three months, on the other hand a return of 10.88% in past nine months.
• The stock is leaning towards the lower band of its 52-week range of high USD 22.74 and 52-week low price of USD 10.57, with the current price near an important support zone of USD 14.00-USD 15.00, with expectations of upward momentum, if these levels sustains.
• The price is currently above both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 44.85.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 22, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.