Generally, I have a favorable opinion towards HRnetGroup Mgt but it has changed a little when they calculated that their PE "excluding our S$336m cash moat" is ~7x. A few thoughts:
(1)
What is cash moat? I suppose Sims have over-dosed a little on Buffett and Berkshire Hathaway. But since most of us also suffer from same over-dosing, it is fine.

Mgt says there is a 336mil "cash moat" but FY25 balance sheet only shows 263mil cash/equivalents. The difference is explained by the 73.7mil worth of current financial assets. These financial assets consist of a mixture of quoted and unquoted debt/equity securities, with at least half of them probably coming from some CLO products where they will earn an interest income (financial assets at amortized cost) when redeemed within 1 year.
(2)
It seems like the Sims also like to use "ex cash" for their P/E calculation. I decided to do a quick audit:
- FY25 EPS~5.21
- With P/E=13.86, the share price ~72cents
- 336mil cash on 981.7mil shares = 34cents/share
- P/E (ex-cash moat) = (72cents - 34cents)/5.21cents --> This ends up to P/E~7 and matches their statement.
The calculation is correct but something is missing, isn't it? While Mgt excludes "cash moat" from the numerator (ie. price), they have chosen to leave the denominator (ie. earnings) untouched. HRNetGroup recognizes substantial income from their "cash moat" management. Therefore to be fair, if you want to exclude the cash from the numerator, you will have to exclude your "cash moat" income too. A recalculation below:
- ~9.3mil of other income generated from its "cash moat". On 981.7mil shares, this translates to EPS of 0.95cents.
- EPS (ex cash moat earnings) --> 5.21 - 0.95 = 4.26cents
- PE (ex cash moat and ex cash moat earnings) - --> 38cents/4.26 ~ 9.
So a fair calculation for PE excluding its cash moat, would be 9 instead of 7.
Responses to Questions Pursuant to the Annual Report of 2025 Published on 6 April 2026
Q2. HRnetGroup’s PE is 13.86x. Is superior growth possible to drive share price appreciation?
Ans: The Group’s PE when excluding our S$336m cash moat is approximately 7x. Share price appreciation is driven by various factors including growth. Over time, superior growth relative to peers could come about from a combination of factors such as:
• Pivoting towards senior executive search.
• Increasing international contractor volumes.
• Adding recurring technology revenue through Octomate contract wins.
• Earnings-accretive acquisitions using part of our cash moat.
• Economic recovery of markets we operate in.
AGM Q&A:
https://links.sgx.com/FileOpen/HRnetGrou...eID=884423
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.