Daily News

View All News

China – Revenue and profits up as 51job pursues acquisitions

06 March 2015

Chinese job board and HR provider 51job.Inc. (JOBS: NSDQ) reported total revenue for the fourth quarter ending 31 December 2014 of RMB 528.6 million (USD 85.8 million), an increase of 11.9% compared with RMB 472.4 million (USD 76.6 million) during the same period last year. 

  Q4 2014 Q4 2013 Change
Revenue RMB 528.6 million RMB 472.4 million +11.9%
USD 85.8 million USD 76.6 million
Gross Profit RMB 363.9 million RMB 323.3 million +12.6%
USD 59.0 million USD 52.5 million
Operating Income RMB 153.6 million RMB 133.3 million +15.2%
USD 24.9 million USD 21.6 million

On an annual basis, the company achieved revenue growth of 13.2% to RMB 1.9 billion (USD 307.8 million), up from RMB 1.7 billion (USD 272.0 million) in 2013.

  FY 2014 FY 2013 Change
Revenue RMB 1,897.3 million RMB 1,676.7 million +13.2%
USD 307.8 million USD 272.0 million
Gross Profit RMB 1,336.5 million RMB 1,166.2 million +14.6%
USD 216.8 million USD 189.2 million
Operating Income RMB 523.6 million RMB 488.6 million +7.2%
USD 85.0 million USD 79.3 million

Rick Yan, President and CEO of 51job, commented: “Despite a slower economic growth environment in China in 2014, employers have stayed active in recruitment, and we have continued to execute our strategic plan. While we have been investing in our brand, sales infrastructure and product development efforts, we have also maintained solid financial discipline to deliver consistent profitable returns to our shareholders.

“We remain excited about the wide spectrum of opportunities ahead of us, and we are positioning 51job to expand and deepen its presence across all facets and segments of the HR space in China,” Mr Yan added.

The company operates three primary business segment; Online Recruitment Services, Print Advertising, and Other HR. The revenue breakdown by segment during Q4 2014 was as follows:

  Q4 2014 Q4 2013 Change
Online Recruitment Services RMB 319.1 million RMB 289.2 million +10.3%
USD 51.8 million USD 46.9 million
Print Advertising RMB 1.5 million RMB 5.8 million -75.0%
USD 0.2 million USD 0.9 million
Other HR RMB 208.0 million RMB 177.3 million +17.3%
USD 33.7 million USD 28.8 million
Total RMB 528.6 million RMB 472.4 million +11.9%
USD 85.8 million USD 76.6 million

The growth in Online Recruitment Services was attributed to an increase in the number of unique employers using online recruitment services, although it was partially offset by a decrease in average revenue per unique employer and the implementation of a 6% VAT policy change effective from 1 June 2014. 

Unique employers increased 18.2% in the fourth quarter of 2014, compared with last year, driven by new customer acquisition and greater acceptance of online recruitment services by employers.

However, average revenue per unique employer decreased during the period by 6.7% primarily due to the effect of the VAT policy change on online recruitment services revenues and the addition of new customers who generally purchase introductory, lower priced services.

The sharp decrease in Print Advertising revenue was as a result of the company printing only 16 pages in Q4 2014, down from 244 pages in Q4 2013.

Other HR reported revenue growth as a result of greater usage of business process outsourcing, training, and seasonal campus recruitment services.

On an annual basis, revenue breakdown by segment was as follows:

  FY 2014 FY 2013 Change
Online Recruitment Services RMB 1,248.1 million RMB 1,084.4 million +15.1%
USD 202.5 million USD 175.9 million
Print Advertising RMB 14.2 million RMB 51.0 million -72.2%
USD 2.3 million USD 8.3 million
Other HR RMB 634.9 million RMB 541.3 million +17.3%
USD 103.0 million USD 87.8 million
Total RMB 1,897.3 million RMB 1,676.7 million +13.2%
USD 307.8 million USD 272.0 million

In February 2015, the Company launched the beta version of a new website called 51JingYing, which targets the higher end of the recruitment spectrum and provides a platform to connect headhunters and more experienced workers. 

51Jjob has also been actively pursuing a number of acquisition and investment opportunities and has recently entered into definitive agreements with some target companies. These companies include an established recruitment site focused on new college graduates and students in China, and providers of professional assessment, training and HR consulting services in China.  

The investments will be funded from existing cash resources, and total consideration is expected to be up to RMB270 million (USD 43.5 million), subject to closing conditions and adjustments, if any.  The deals are expected to close during the second quarter of 2015.

Based on current market conditions, the seasonality effect of the later calendar date for the Chinese New Year holiday in 2015 versus 2014, and factoring in the VAT policy change, the company’s total revenues target for the first quarter of 2015 is estimated to be in the range of RMB 460 million (USD 74.1 million) to RMB 480 million (USD 77.4 million). 

In trading yesterday, the company’s share price closed up 1.3% at USD 36.40, a decrease of 6.4% compared with last year. Based on its current share price, the company has a market value of USD 2.16 billion.