人力资源+-+尽职调查报告

1、Investment Due Diligence Assessment,23 December 1999,2,Z5112OSF,Disclaimer,The investment opportunity described below has not been recommended or approved byBain SG Cowen Securities; Analyst Reports; Company Websites, is a China-based start-up company established in 1998 focused on the online recrui

2、tment market Its key partner team includes 1 Bain partner (Rick Yan) and 3 former Bain consultants 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 oppo

3、rtunities (not included in business plan targets), has a click-and-mortar business model for job placements, consisting of a newspaper, Career Post Weekly, launched in Oct 1998 a website, , launched in Jan 1999 It is currently one of the leading players in each of the high-end multinational recruitm

4、ent 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) is targeting growth through a combination of initia

5、tives: 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 into an umbrella brand with a strong portfolio of vertical applications establishing

6、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 DevelopmentAccountingAdvisory Board Recruiting SupportCreativeSeed Funding Temporary Management TechnicalFundraisi

7、ng Support LegalFacilities/SpaceStrategic Partner Introductions,Criteria,Market potential,Business concept,Leadership opportunity,Team,Bain value added,Bain learning,Bain compensation,Company: ,Proposed Terms: To invest US$0.5M in exchange for 0.83% equity stake in company,Required resources:,Overvi

8、ew 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

9、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

10、 media Opportunity to leverage employer and job seeker customer base into adjacent business opportunities, 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

11、has had several years work experience in China with Bain 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; Private Placement Memorandum,Online Recruitment Price-to-Sales Multiples,Inter

12、net Portal Multiple (China vs. US),Price-to-SalesMultiple,Price-to-SalesMultiple,Marketcapitalisation:$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 offi

13、cially, 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,

14、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) emergi

15、ng as the leading regulator 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 is not without risks.,Standard operating risks,12,Z5112OSF

16、,Pre and Post-Money Valuation,$36M,$57M, 2000 Sales: $4.25M $4.1M $4.1M blended Price-to-sales multiple*: 13.4x 9.5x 8.5x price-to-sales multiple:38x16x11x,Source: Private Placement Memorandum; Bain Analysis Note: price-to-sales blended multiple based on varying price-to-sales multiples of ,Pre-Mone

17、y: 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,s valuation is on the high end, driven by the high price-to-sales multiple of its online recruitment b

18、usiness.,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 Price-to-sales multiple 4x for Career Post 20 x for ,3 Year Return,2.2x,Assumptions,Valuation,Return on Money,IRR,29%,US$130M,The expected returns are attr

19、active but not blockbuster.,Executive Summary,14,Z5112OSF,Agenda,Executive Summary Detailed Business Assessment US Market Benchmarks China Market Dynamics Financials,15,Z5112OSF,US Internet Penetration and Online Recruitment Forecast(1998-2002F),US Market Benchmarks,The US online recruiting market i

20、s 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 sit

21、es 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,Subscrip

22、tion,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 prici

23、ng:,$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 c

24、ustomers 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

25、 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

26、% 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

27、 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 relati

28、onships 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 jo

29、b 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 Bench

30、marks,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 cu

31、stomer 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 hunter

32、s,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 He

33、adH,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 succes

34、s factors.,20,Z5112OSF,Agenda,Executive Summary Detailed Business Assessment US Market Benchmarks China Market Dynamics Financials,21,Z5112OSF,Source: IDC; Goldman Sachs Research; Euromonitor; Forrester Research; Bain Estimates,InternetPenetration(%),OnlineRecruitingSpend(US$ M),InternetPenetration(

35、%),OnlineRecruitingSpend(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 onl

36、ine 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 ,22,Z5112OSF,Internet User Segmentation,Source: CNNIC Report,China Market Dynamics,s online recruiting business model is targeting the ma

37、jority 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

38、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 labo

39、r market,Internet content provider Recruiting is minor portion of their content Business website, local city website and industry website are included, Z,www.Work-job.Com (Xian Talent Market) job.iii- (Wuxi Talent Market) (Northern China Talent Market),48,58,68, ,China Market Dynamics,24,Z5112OSF,Ch

40、ina Online Recruitment Competitor Market Share by Geography(1999),Source: Private Placement Memorandum, 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 A

41、vailability*,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,Manag

42、erial, 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 served,6807 companies registered Both local companies and foreign companies,Combination headhun

43、ting website recruitment service job magazine,Combination website recruitment service headhunting e-commerce,Combination headhunting website recruitment service job magazine BBS,S,41 partners including Sohu, Netease,Sina and 263Net,12 partners including Yahoo China, Netease,263Net,China Market Dynam

44、ics,*As of 20 Dec 1999,26,Z5112OSF,Online Recruitment Relationship with Portals, and its competitors have relationships with several of the most leading portals in China - however, no competitor has been able to lock up exclusive relationships,51job,China-HR:,CJOL:,Number ofHomepages,Cooperative Rel

45、ationships,Zhaopin:,Note: CNNIC-China National Network Information Center; 9,906 web sites in survey Source: July 1999 CNNIC Survey of 52549 users; Bain Phone Interviews,China Market Dynamics,Customer Survey of Home Page Usage (N=9,906),27,Z5112OSF,Cooperative Relationship Details,Portals,R,Deal,Exc

46、lusivity,Sohu,China-HR.com 51J Z,Shares .coms recruiter database Provides banner areas Count clicks to .coms Low or no charges to .coms,No,Netease,China-HR.com 51J CJOL.com,Shares .coms recruiter database Provides banner areas to .coms Highlights significant recruiters Count clicks to .coms Low or n

47、o charges to .coms,No,Yahoo China,China-HR.com 51J CJOL.com Z,Classified advertisement,No,Source: Bain Phone Interviews,China Market Dynamics,No competitor has locked up exclusive portal relationships.,28,Z5112OSF,Profile: Key Portals,Source: Web Site Search,Portals,Business,Establishment,Page View

48、(a day),Recruitment Com. Partnership,Recruitment Service,Rankings,S,S,Netease,Global Chinese ICP,ISP/ ICP,ICP,Global Chinese ICP,December 1998,February 1997,1998,May 1997,2.8 million,2 million,450 K,N/A,China-,China- Z,S China-HR.com Z China T,China- C,No,No,Yes,No,1,2,3,5,China Market Dynamics,Curr

49、ently, only one of the major China portals offers its own online recruitment service - however, the entry barriers are low, and therefore, future participation by the portals is not inconceivable,29,Z5112OSF,Agenda,Executive Summary Detailed Business Assessment US Market Benchmarks China Market Dyna

50、mics Financials,30,Z5112OSF,s projected revenue for the first three years of growth is realistic compared with US benchmarks. Its expected profitability over the same period is also reasonable given that hybrid customer acquisition costs are lower than that of pure online plays (Career-Post has a lo

51、wer cost acquisition model)., Projections (Hybrid business model),H (Pure online play),CareerB (Pure online play),Source: Business Plan; Industry Analyst Reports; Company Financials, Financials,Revenue/Profit Trajectory Comparison,No. of Customers:3,4515,7226,9062,520870 Revenue/Customers (US$):1,21

52、71,643$1,853$4,802$13,908 Gross Margin (%):63%72%72%97%85%NA74%84%76% Operating Margin (%):-4%22%14%-238%-63%NA-1,748%-386%-172% Marketing/Sales Ratio:0.450.350.411.080.88NA9.643.351.82,CAGR,74%,CAGR,316%,CAGR,737%,($0.2M),$2.0M,$1.8M,($0.6M),($1.5M),($13.2M),($2.5M),($7.4M),($12.0M),Revenue,COGS,Marketing,Other Costs,Revenue,COGS,Marketing,Other Costs,Revenue,COGS,Marketing,Other Costs,31,Z5112OSF, Revenue Drivers,Regional:,Beijing 21% Shanghai 38% Guangzhou/Shenzhen 27% North China 3% East China (ex Shanghai) 6% South China (ex GZ/SZ) 5%,Non Recruitment,Career Post,# major