HeadHunter is attractive on the back of rising cash flow

HeadHunter released its 1Q23 results, with revenues up 24.7% compared to 1Q22.

Importantly, in 1Q23, investors could see a significant recovery in customer activity across all segments - combined with pricing initiatives, this contributed to revenue growth.

Net income increased by RUB 1,646 million, or 293.1% - mainly due to

• higher revenues;

• foreign exchange gains on cash deposits in foreign currencies;

• an impairment charge of ₽530m, which occurred in the first quarter of last year.

AMarkets

mportantly, trading of ADRs on the Mosbirch is unaffected and continues as normal. The company is also considering several strategic alternatives that could be implemented after delisting, including providing liquidity to the company's shareholders and its redomiciliation or restructuring by moving its corporate governance to Russia (with Mosbirch remaining the main trading market for the company's shares).

We see a 15-20% probability of growth in HeadHunter securities over the 1-2 quarter horizon, as cash flow growth is evident. For 1Q23 net cash generated from operating activities amounted to RUB 2,595 mln compared to RUB 1,918 mln for 1Q22. The increase was mainly due to higher sales and was partially offset by higher operating expenses and income tax payments.