Humanica's clients include not only local firms but also several international groups, including Chinese giant Tencent and America's Seagate (hard drives), covering over 700,000 employees. The company was set up in 2003 and is still led by its founder, who still owns a 38% interest. It is aiming to generate € 21m of revenues in 2020 and has a market capitalisation of € 150m and a net cash position in excess of € 20m.
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Humanica's flagship software, Humatrix, accounts for 80% of its sales.

Humatrix is a cloud-based solution that the company has developed in-house since 2005. Its quality is on a par with those developed by Humanica's US and European peers whereas its usage costs are up to 10 times lower.

It is the only major software suite fully adapted to Thailand's complex labour laws and also offers full outsourcing services, which further reinforce its competitive edge. Humanica is currently the most reliable provider of human resources and outsourcing software, and the company is increasing its share of the large accounts market as big firms prefer Humanica's solutions to those offered by SAP or Oracle.

Humanica is helping Thai businesses to embark upon their digital transformation by distributing and implementing enterprise resource planning (ERP) software. ERP is considered to be core software for any company and Humanica's ERP software enables businesses to then link up easily to its other solutions. This division accounts for most of the remaining 20% of Humanica's revenues and is an effective means of winning over new clients.

Although Humanica is a fast-growing SaaS company, it already delivers an enviable operating margin of close to 30%. It achieves this thanks to Thailand's low labour costs and Humanica's local reputation. It boasts such a solid reputation that its sales have increased three-fold in the past five years thanks to the efforts of just five sales reps.

Its clients are very loyal and its customer retention exceeds 98% every year; the company is able to claim that it has so far not lost a single major client. Even though the public health crisis took a heavy toll on Thailand's economy and affected certain of its clients operating in the hotel industry, its clients opted to continue using and paying for Humanica's solutions. Humanica's sales therefore continued to grow in 2020 as businesses became aware of how crucial it is to digitise their activities. Revenues thus grew by 26% in the first half of 2020, overtaking the already healthy 17% growth reported in 2019.

Longer term ,we believe Humanica could benefit from numerous growth opportunities.

First of all, HR and outsourcing software still has a low market penetration rate in Thailand, so the company's core business could continue to enjoy structural growth. Secondly, Humanica has established strong positions in the SME market, where the penetration rate is even lower than among large groups. Last of all, Humanica is beginning to capitalise on its access to the 700,000 employees working for its clients to cross-sell related services, such as 'flexible' employee benefits and online personal loans. For this purpose, it has joined forces with a number of Thailand's leading financial institutions as well as a thriving Singapore-based start-up called CXA. Management reckons these new opportunities will become a source of considerable growth over the coming years.

Amiral Gestion has been monitoring the company for more than a year now, has met the CEO on several occasions, and has visited the company's head office. We ended up investing in the company in March 2020 after the public health crisis took a heavy toll on Thailand's stock market, particularly its small caps. Although Humanica continued to thrive in these conditions, it was not spared altogether. The uncertainty gave us an opportunity to buy shares at around THB 5-6, which is close to the IPO price of THB 4 and almost 60% below the stock's historical high. The market at the time gave Humanica no credit for its rapid growth, recurring revenues or lasting profitability. The share price has recovered sharply since then. We still appreciate Humanica as it will benefit in the short term from efforts made by businesses to digitise their processes and services and in the long term from various promising growth opportunities."