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China – 51Jobs reports improved results for Q3

07 November 2013

Chinese job board and HR provider 51job Inc. (JOBS: NSQ) reported revenue of RMB 419.6 million (USD 65.6 million) for the third quarter ending 30 September 2013, an increase of +12.3% compared with revenue of RMB 373.7 million (USD 60.9 million) last year.

Gross profit for the period was RMB 291.5 million (USD 47.5 million), up by +12.5% from RMB 259.2 million (USD 42.2 million) a year ago. Net income for the year also reported a rise, increasing by +4% to RMB 117.3 million (USD 19.1 million) from RMB 112.9 million (USD 18.4 million) in 2012.

Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said: "We continued to observe solid market demand for our recruitment services in the third quarter as employers stayed active in their hiring activities. Our increased investments in sales and marketing are generating meaningful returns with the pace of customer acquisition accelerating, which not only strengthens our online market leadership but also positions us for greater cross-selling opportunities in our other HR services.”

“We remain focused on the ongoing execution of our strategic initiatives to realize and monetize the large potential of the HR services industry in China for our shareholders," he concluded.

Online recruitment services revenues for Q3 2013 were RMB 277.6 million (USD 45.4 million), a rise of +15.4% from RMB 240.6 million (USD 39.2 million) for the same quarter of the prior year. The growth was principally due to an increase in the number of unique employers using the company's online recruitment services, which was partially offset by a decrease in average revenue per unique employer.

Unique employers increased by +26.3% to 237,526 in Q3 2013 compared with 188,073 in the same quarter last year; driven by strengthened customer acquisition efforts and increased usage of online recruitment services by employers. However, average revenue per unique employer decreased by -8.6% during Q3 2013, compared to the same quarter in 2012 primarily due to the addition of new customers who generally purchase introductory, lower priced services.

Print advertising revenues for the quarter decreased by -58.8% to RMB 9.4 million (USD 1.5 million) compared with RMB 22.7 million (USD 3.7 million) for the same quarter in 2012 primarily due to the ongoing business shift away from print advertising services. The estimated number of print advertising pages generated during Q3 2013 declined by -45.4% to 298 from 546 pages last year. Additionally, due to the company's strategic decision to discontinue certain newspaper editions, the number of cities where 51job Weekly is published decreased to four as of 30 September 2013 compared with nine cities as of 30 September 2012.

Other human resource related revenues for the third quarter of 2013 increased by +20.2% to RMB 132.6 million (USD 21.7 million) from RMB 110.3 million (USD 18 million) in the same quarter of 2012; primarily due to greater customer adoption and usage of business process outsourcing and training services.

In September 2013, the Company entered into an agreement to acquire approximately 6,120 square meters of office space in Beijing to house its local sales, customer service and operations staff for a total purchase price of RMB 164.9 million (USD 26.9 million). An instalment payment of RMB 16 million (USD 2.6 million) was made to the seller in the third quarter, and the remaining balance of RMB 148.9 million (USD 24.3 million) was paid in October 2013. The transaction was funded from the Company's existing cash resources and is expected to be completed in the fourth quarter of 2013.

Looking forward, based on current market conditions and a year-on-year decrease in print advertising revenues, the company’s revenue target for the fourth quarter of 2013 is in the estimated range of RMB 445 million (USD 72.7 million) and RMB 460 million (USD 75.2 million).

In trading yesterday, following the release of their latest results, the company’s share price closed up by +2.58% at USD 78.01, an increase of +66.8% compared with a year ago. Based on its current share price, the company has a market value of USD 2.25 billion. 

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