人力资源尽职调查工具.ppt

Investment Due Diligence Assessment,23 December 1999,2,Z5112OSF,Disclaimer,The investment opportunity described below has not been recommended or approved by Bain & Company, Inc. or any of its subsidiaries. No representation or warranty is made as to the accuracy or completeness of the information contained in this memorandum. Oliver Stratton and Jim Hildebrandt are distributing this memorandum in their individual capacities and not as representatives of Bain & Company, Inc. or any of its subsidiaries. Any investment in 51 will not be guaranteed by Bain & Company, Inc. or any of its subsidiaries.,3,Z5112OSF,Agenda,Executive Summary Detailed Business Assessment US Market Benchmarks China Market Dynamics 51 Financials,4,Z5112OSF,Attractive online recruitment market space in China with high growth potential Differentiated click-and-mortar business model (online and newspaper) with a 16 month operating history and US$1M in 1999 revenue Current #1 or #2 position in 3 key city markets (0.7 RMS in Beijing, 5.5 RMS in Shanghai and 0.3 RMS in Guangzhou) No competitor has locked up exclusive relationships with key portals - maintaining #1 or #2 position appears to be a realistic goal Capable management including head of Bains China practice and 3 former Bain consultants Realistic business plan targets (in Private Placement Memorandum) with additional upside if timing of adjacent business roll-out (eBay, B business models for China) is accelerated (business plan financials are 99% driven by core recruiting business),Exposure to potentially significant sovereign risk given Chinas unclear regulations on foreign ownership and operation of internet businesses Expected investment returns based on business plan forecasts and comparable US online recruitment valuation multiples are attractive (base case: 3.8X return on money, 57% IRR), but not blockbuster (high case: 7.9X return on money, 99% IRR),Pros,Cons,Summary Investment Evaluation,Executive Summary,5,Z5112OSF,Executive Summary,Source: OneSource; SG Cowen Securities; Analyst Reports; Company Websites,51 is a China-based start-up company established in 1998 focused on the online recruitment market Its key partner team includes 1 Bain partner (Rick Yan) and 3 former Bain consultants 51 is seeking to raise US$3M in exchange for a 5% equity stake in the business,Underlying China online recruiting market growth and penetration (included in business plan targets) Adjacent e-business opportunities (not included in business plan targets),51 has a click-and-mortar business model for job placements, consisting of a newspaper, Career Post Weekly, launched in Oct 1998 a website, 51, launched in Jan 1999 It is currently one of the leading players in each of the high-end multinational recruitment advertising markets of Beijing, Shanghai and Guangzhou 500,000 readership relationship with 5,000 HR managers resume bank has 50,000 subscribers (highly educated professionals and middle managers: relatively affluent, highly paid customer base) 51 is targeting growth through a combination of initiatives: growth of core online recruiting business in existing and new city markets embarking on adjacent e-business opportunities to serve its core affluent customer base (ebay, business models for China) developing 51 into an umbrella brand with a strong portfolio of vertical applications establishing an e-commerce business incubator,China-specific legal and regulatory risk Intrinsically low entry barriers Speed in reaching scale,Investment Overview,6,Z5112OSF,Bain role Business Plan Development Accounting Advisory Board Recruiting Support Creative Seed Funding Temporary Management Technical Fundraising Support Legal Facilities/Space Strategic Partner Introductions,Criteria,Market potential,Business concept,Leadership opportunity,Team,Bain value added,Bain learning,Bain compensation,Company: 51,Proposed Terms: To invest US$0.5M in exchange for 0.83% equity stake in company,Required resources:,Overview See attached,Recommendation See attached,Current investors:,Contact/principals: Rick Yan,X,X,Comments,Chinas internet growth potential is very high given its current embryonic stage (internet penetration from 4% in 1998 to 16.5% in 2002) In the US, the online recruiting market is one of the most successful B2C business models (US$265M market revenue in 1999) In China, the online recruiting market is in early stages but the underlying potential is high (opportunity to improve currently inefficient recruiting processes/channels),Unique click-and-mortar business model with newspaper and online media Opportunity to leverage employer and job seeker customer base into adjacent business opportunities,51 is currently #1 or #2 in Beijing (0.7 RMS), Shanghai (5.5 RMS) and Guangzhou (0.3 RMS) No competitor has locked up exclusive relationships with leading China portals,The senior management team has had several years work experience in China with Bain & Company and have worked together for more than 3 years,Some potential for Bain case team involvement Relatively low ownership stake (0.83%) yields limited influence on management direction,Potential to explore multiple e-business opportunities in China,Compared with US and China benchmarks, 51s pre-money valuation is relatively high Potential to unlock higher valuation multiple long term by spinning off online business in the future However, investment is exposed to considerable China-specific regulatory risk on top of standard operating risk No indication of potential participation in subsequent financing rounds,Opportunity Screen,Executive Summary,7,Z5112OSF,Executive Summary,Screening Criteria,8,Z5112OSF,Executive Summary,Hybrid vs. Pure Online Play,The hybrid click-and-mortar business model has several advantages over the pure online plays.,Description:,Increased certainty of earnings,More stable and certain earnings stream from newspaper business dampens the more volatile and uncertain earnings from the online business barriers to entry higher for newspaper business,Greater customer penetration,Increased access to customers complementary distribution channels joint branding strategy improves customer recall,Higher overall profitability,Unlike pure online models, the newspaper business is profitable 48% operating margin for Career Post (driven by 5% marketing/sales spend) negative operating margins for 51 (driven by 203% marketing/sales spend),9,Z5112OSF,Business Plan Targets,Total costs: US$4.4M US$7.4M US$11.1M Operating profit: (US$0.2M) US$2.0M US$1.8M Operating margin: (3.8%) 21.7% 13.7% EBITDA: (US$0.3M) US$2.0M US$1.8M,Non- recruitment*,51,Career Post,CAGR (00-02),150%,50%,Source: 51 Private Placement Memorandum,Revenue (US$M),2000F (Bain Forecast),2000F (Business Plan),2001F (Bain Forecast),2001F (Business Plan),2002F (Bain Forecast),2002F (Business Plan),Executive Summary,51s revenue targets are realistic, based on an evaluation of US benchmark comparables and an assessment of business plan targets - new adjacent business opportunities are not forecasted to contribute materially to 2000-2002 financials.,$4.1M,$4.2M,$8.8M,$9.4M,$11.6M,$12.8M,*Includes all adjacent business opportunities (51, 51, incubator),10,Z5112OSF,US and China Valuation Benchmarks,51s overall valuation multiple is roughly in line with US online only recruitment benchmarks, although a standalone 51 valuation multiple (more apples to apples) is relatively high. However, 51s valuation multiple is considerably lower than that of C, the only NASDAQ listed China internet benchmark.,Executive Summary,Note: Price-to-sales multiple for Career Post, 51 and 51 based on year 2000 projections (price is pre-money valuation); All other price-to-sales multiples based on December 10, 1999 market capitalization and 1999 forecast revenue (Q1-3 actual, Q4 forecast) Source: Company Financials; 51 Private Placement Memorandum,Online Recruitment Price-to-Sales Multiples,Internet Portal Multiple (China vs. US),Price-to- Sales Multiple,Price-to- Sales Multiple,Market capitalisation: $1,141M $146M $150M Revenue: $16M $7M $14M,11,Z5112OSF,Investment Risks,Executive Summary,China internet regulatory risk,Currently, regulations on foreign internet participation in China are unclear officially, up to 49% foreign ownership is allowed but active foreign operating involvement is prohibited unofficially, significant foreign operating involvement is already in place in many e-business ventures Impact of WTO should be positive, but initial MII reactions have not been positive under WTO, up to 49% foreign ownership and active foreign operating involvement is allowed however, Minister Wu of MII has advocated a clampdown of foreign participation without specific details Several ministries aiming to control internet regulations with the Ministry of Information and Industry (MII) emerging as the leading regulator 51 partners are comfortable with China risks based on multiple discussions with senior government officials Chinese title law not well developed physical and intellectual property not well protected,The investment in 51 is not without risks.,Standard operating risks,12,Z5112OSF,Pre and Post-Money Valuation,$36M,$57M,51 2000 Sales: $4.25M $4.1M $4.1M 51 blended Price-to-sales multiple*: 13.4x 9.5x 8.5x 51 price-to-sales multiple: 38x 16x 11x,Source: 51 Private Placement Memorandum; Bain Analysis Note: 51 price-to-sales blended multiple based on varying price-to-sales multiples of 51,Pre-Money: 8.3% Post Money: 7.7%,Pre-Money: 5.3% Post Money: 5.0%,$3M investment being raised,Executive Summary,Pre-Money: 7.5% Post Money: 6.9%,*Price-to-sales multiple based on year 2000 projections,$40M,51s valuation is on the high end, driven by the high price-to-sales multiple of its online recruitment business.,13,Z5112OSF,Potential Returns,Low Case:,Post-money Valuation,US$60M,Year 2002 Valuation,Revenue US$7.85M from Career Post US$4.82M from 51 Price-to-sales multiple 4x for Career Post 20x for 51,3 Year Return,2.2x,Assumptions,Valuation,Return on Money,IRR,29%,US$130M,The expected returns are attractive but not blockbuster.,Executive Summary,14,Z5112OSF,Agenda,Executive Summary Detailed Business Assessment US Market Benchmarks China Market Dynamics 51 Financials,15,Z5112OSF,US Internet Penetration and Online Recruitment Forecast (1998-2002F),US Market Benchmarks,The US online recruiting market is projected to be US$1B in 2002.,Source: IDC; Goldman Sachs Research; Euromonitor; Forrester Research; Bain Estimates,16,Z5112OSF,Pricing Models: US Markets,Source: Competitor Websites; Industry Analyst Reports; Interbiznet; Forrester Research; Bain Analysis,Most of the leading online job search sites in the US offer high margin Job Board services, accounting for the bulk of online recruitment revenues.,US Market Benchmarks,Description:,Estimated market size (1998):,Key players:,Job Board,Recruiters are charged for each job posted on recruiting site/ network,US$85M,M CareerB C H D C W,Subscription,Recruiters are charged a flat fee per time period for posting jobs on recruiting site/network,US$16M,H R,Upgrade,Recruiters are charged an upgrade premium so that they can increase the exposure of their jobs (listed at the front of any search),US$5M,HeadH,*Based on 1998 financials,Typical pricing:,$20-200 per job per month (average of $100 per job per month),$1,000 per year for unlimited job postings,$25-$75 premium per job per month,Typical gross margin*:,75%,85%,98%,Basic Charges,Additional Charges,17,Z5112OSF,US Online Recruitment Examples,*As of 10 December 1999,Targeting profitable customers and having a strong market position are key to the success of online recruitment businesses in the US.,US Market Benchmarks,Target Market:,Market position:,H,#1 choice for corporate recruiters,100,000 job postings 2,520 clients,HeadH,#1 site among individuals in the $75K-$100K annual income bracket #3 player in mass market online recruitment,175,000 job postings 1,104 clients,CareerB,Mass market recruiting #5 player in mass market online recruitment,100,000 job postings 870 clients,Gross margin 1999 Revenue/client Sales and marketing spend/revenue,85% US$4,800 88%,98% US$4,800 245%,75% US$13,908 182%,Financial Measures (1999):,Valuation: (Price-to-sales multiple*),71x,21x,11x,Partnerships:,None,Provides content to strategic partners such as PeopleWeb Communications and ,Partnership with Microsoft to launch career channel on MSN; agreement with several Lycos Network members,Gross margin 1999 Revenue/client Sales and marketing spend/revenue,Source: Competitor Websites; Industry Analyst Reports; Company Financials,18,Z5112OSF,Recruitment Business Value Chain,For Corporate customer:,For Job seeker:,Customer acquisition,Develop network of corporate customers Build strong relationships with HR managers,Build resume database,Matchmaking,Advertise quality of resume database,Advertise quality of corporate customers Tie up with internet portals/newspapers,Servicing,Expand product and service offering HR website management executive search,Expand product and service offering job seeker virtual community career development information services,Wallet deepening,Customer loyalty programs Adjacent business opportunities,Customer loyalty programs Adjacent business opportunities,Activities:,Relationship management,Increasing differentiation and barriers to entry,US Market Benchmarks,Having access to a resume database and matchmaking job seekers with corporates are only the first steps in the online recruitment business value chain.,Benefits:,Increased number of job postings,Increased number of job postings,Increased customer loyalty Increased job seeker churn,Increased customer loyalty Increased revenue/ customer,Source: Literature Searches,19,Z5112OSF,Key Success Factors,Description:,Performance measures:,Examples:,High employer retention,High number of repeat customers (employers) using services from year to year Strong relationships with recruiters and job hunters,Percentage repeat customers Revenues/customer,H,Quality resume database,Effectively maintain and leverage high quality job-seeker resume base, providing for the best recruitment results for both employers and job-seekers,Number of reputable corporate customers Percentage successful placements,H HeadH,Exclusive partnerships,Agreement with portals and/or business sites to be the exclusive provider/advertiser of job search products and services,Number of eyeballs Number of job postings,CareerB M HeadH,US Market Benchmarks,The success of online recruitment has been attributed to three key success factors.,20,Z5112OSF,Agenda,Executive Summary Detailed Business Assessment US Market Benchmarks China Market Dynamics 51 Financials,21,Z5112OSF,Source: IDC; Goldman Sachs Research; Euromonitor; Forrester Research; Bain Estimates,Internet Penetration (%),Online Recruiting Spend (US$ M),Internet Penetration (%),Online Recruiting Spend (US$ M),Online Recruiting Spend CAGR (1998-2002E),Online Recruiting Spend CAGR (1998-2002E),79%,104%,US Market,China Major Cities (Beijing, Shanghai and Guangzhou),China Market Dynamics,US and China Internet Penetration and Online Recruiting Forecast (1998-2002F),The China online recruiting market is projected to be US$25M in 2002, a fraction of the US market size. Based on business plan projections, this implies a 20% market share for 51,22,Z5112OSF,Internet User Segmentation,Source: CNNIC Report,China Market Dynamics,51s online recruiting business model is targeting the majority of Chinas internet users.,23,Z5112OSF,Recruitment Website Characteristics,Source: Website Search,Type,Job Agency Website,There are 3 types of recruitment websites in China.,Characteristics,No. of Websites,Example,HR Website,Classified Advertisement,Recruitment is main content Privately owned company Mainly managerial, technical jobs Provide job opportunities in big cities Some are related to the head hunters,Recruitment is main content Sponsored by government Non-profit organization Low profile job recruitment service Personnel document management service included Focus on regional labor market,Internet content provider Recruiting is minor portion of their content Business website, local city website and industry website are included,51 Z,www.Work-job.Com (Xian Talent Market) (Wuxi Talent Market) (Northern China Talent Market),48,58,68,263.net ,China Market Dynamics,24,Z5112OSF,China Online Recruitment Competitor Market Share by Geography (1999),Source: 51 Private Placement Memorandum,51 is currently the #1 or #2 player in Beijing, Guangzhou and Shanghai.,China Market Dynamics,25,Z5112OSF,Online Recruitment Competitor Profiles,Source: Website Search,China-HR.com,Z,C,Investor,Job Availability*,Customer Reaction,Position Provided,Company Served,Business Model,Partners,e-channel Management Consulting Company,Shenzhen CJOL Human Resources Co, LTD,Managerial, Technical Staff,Managerial, Technical Staff,4518,1313 resumes accepted currently, 34067 accepted resumes accumulated,Managerial, Technical Staff,Alliance Consulting Ltd.,2830,4522,59687 registered individuals,Both foreign companies and local companies, mainly high profile jobs,Focus on MNC and Hi-tech companies 228 companies