This summary is based on the fourth quarter fiscal 2007 earnings call conducted by 51job Inc. (JOBS: chart) on March 3, 2008.

Chief Executive Officer and President, Co-founder: Rick Yan
Chief Financial Officer and Senior Vice President, Co-founder: Kathleen Chien
Investor Relations: Linda Chien

Key Investors Issues

- The earnings per ADS, including share based compensation and negative foreign exchange, were 10 cents.
- Quarterly revenue increased 25% over last year to RMB214 million.
- The total revenues for 2007 increased 21% to RMB844 million.
- For Q1, the firm estimates non-GAAP EPS of RMB0.42 to RMB0.52 per common share.

Fourth Quarter Fiscal 2007 Financial Highlights

Net income for the fourth quarter was RMB21 million compared with RMB20 million in the fourth quarter of 2006.

The fully diluted earnings were RMB0.37 per common share, which is equivalent to 10 cents per ADS. Excluding share-based compensation expense and foreign currency translation loss, the non-GAAP adjusted income increased approximately 18% year over year to RMB36 million in the fourth quarter of 2007. Non-GAAP adjusted fully diluted earnings per common share for the fourth quarter were RMB0.63 or 17 cents per ADS.

Revenues for the fourth quarter total RMB214 million, a 25% increase over the same quarter in 2006 and near the high end of the firm’s forecast.

The print advertising revenues increased 9% year over year, due primarily to the higher page volumes, which were partially offset by the lower average revenue per page. The number of print advertising pages in the fourth quarter increased 21% to about 4,000 pages compared with about 3,300 pages in the same quarter last year. Average revenue per page decreased approximately 10% compared to the fourth quarter of 2006, driven principally by the higher print revenue contribution from the lower priced cities. The firm has maintained similar pricing levels within each city over the past year. As a result, the company expects that growing revenue contribution from lower priced cities will continue to reduce the overall average revenue per page.

The online revenues grew 31% year over year to RMB77 million in the fourth quarter, mainly due to a greater number of unique employers using the firm’s online recruitment services. During the quarter, unique employers increased 30% to about 57,000 compared with 45,000 in the fourth quarter of 2006.

Revenues for other HR services increased 90% year over year to approximately RMB37 million in the fourth quarter. This growth was primarily driven by the greater customer demand for the firm’s training and outsourcing services.

The gross margins improved to 55.8% compared with 54.2% in the fourth quarter of 2006.

Included in the cost of services was share-based compensation expense of RMB1.3 million.

The sales and marketing expenses increased to RMB54.7 million from RMB41.2 million in the fourth quarter of 2006.

In line with its strategic plan, the company increased its advertising and brand building activities and also increased sales people in preparation for the post-Chinese New Year period. Included in sales and marketing expenses was share-based compensation expense of approximately RMB1.1 million in the fourth quarter. The firm will continue to be very active in its sales and marketing activities throughout 2008 as it celebrates its 10-year anniversary.

The G&A expenses were RMB28 million compared with RMB26 million in the fourth quarter of 2006.

This was mainly due to higher professional services fees. The share-based compensation expenses included in the G&A for the fourth quarter was RMB5 million.

The operating income for the fourth quarter increased 47% to RMB30 million from approximately RMB20 million for the same quarter last year.

Excluding share-based compensation expenses, operating margin was 18.5% compared with 17% in the fourth quarter of 2006.

The effective tax rate for the fourth quarter increased to 30.3% compared with 16.6% in the fourth quarter of 2006.

The company was subject to higher statutory rates due to the expiration of certain tax exemptions in early 2007. In addition, share-based compensation expense and foreign currency translation loss are not tax deductible in China, which then leads to higher effective tax rates for the company.