This summary is based on the fourth quarter fiscal 2006 earnings call conducted by 51job, Inc. (JOBS) on March 1, 2007.
Management:
Chief Executive Officer: Rick Yan
Investor Relations Director: Linda Chien
Chief Financial Officer: Kathleen Chien
Key Investors Issues
- Fully earnings were RMB0.35 per common share, which is equivalent to $0.09 per ADS.
- Net income was RMB19.8 million versus RMB19.3 million for the fourth quarter of 2005.
- Revenues totaled RMB171 million, an 18.2% increase over the fourth quarter of 2005.
Fourth Quarter Highlights
Revenues were RMB171 million.
Following a similar seasonal pattern observed it the past two years, quarter four revenues were lower than the preceding quarter. The sequential decline was a smaller 5.4% compared with 10% in 2005 and 9.4% in 2004.
Although revenues were within guidance, the company exceeded profitability forecast in quarter four. Despite greater spending on marketing activities, increased headcount, and high employee salaries, non-GAAP EPS was RMB0.54, above guidance range of RMB0.40 to RMB0.50.
Online business continues to be strong with revenues growing 32% over quarter four 2005, and growing 38% for the full year 2006.
According to new Alexa statistics, which rank website traffic by country, 51job.com is the clear number one recruitment website in China.
Print advertising revenues increased approximately 11% year over year due to higher page volumes, which was partially offset by the lower average revenue per page.
- The estimated number of print advertising pages in the fourth quarter was 3,281 pages compared with 2,471 pages in the same quarter last year.
- Average revenue per page decreased approximately 17% compared to the fourth quarter of 2005, driven primarily by higher revenue contribution from some of the lower-priced cities as well as certain seasonal promotions and discounting that was offered.
Online recruitment services revenues grew 32% year over year to approximately RMB59 million.
- The increase was primarily due to growth in the number of corporate customers.
- The unique number of employers using the online recruitment services was approximately 44,000 compared with 34,000 in the fourth quarter of 2005.
Revenues for executive search business were RMB5.5 million compared with RMB6 million in the fourth quarter of 2005.
- Revenues for other HR services increased 28% year over year to approximately RMB20 million, driven by customer demand for training and outsourcing services.
- Gross margin was 54.2% and relatively unchanged compared to the fourth quarter of 2005.
- Included in the cost of services were share-based compensation expenses of approximately RMB1.2 million versus RMB330,00 in the fourth quarter of 2005.
Sales and marketing expenses were RMB41 million compared with RMB27 million in the fourth quarter of 2005.
- The company added new sales people and account staff, and increased spending on marketing and promotion activities in the fourth quarter.
- Additionally, the company incurred higher employee salaries, performance bonuses and share-based compensation expenses in the fourth quarter compared to the same quarter in 2005.
- Share-based compensation expense included in sales and marketing expenses were RMB1 million compared with RMB340,000 in the fourth quarter of 2005.
G&A expenses were RMB26 million and relatively unchanged from the fourth quarter of 2005.
