51job.com Posts Quarterly Earnings

51job.com (JOBS), one of Chinaís online recruitment services, says total revenues for the fourth quarter of 2006 increased 18.2% over the fourth quarter of 2005 to RMB171.1 million.

Total revenues for 2006 were RMB697.9 million, an increase of 17.2% from RMB595.6 million in 2005. Income from operations for 2006 increased 49.0% to RMB114.7 million from RMB77.0 million for 2005.

Rick Yan, President and Chief Executive Officer of 51job, said, ííWe are pleased with our performance in the fourth quarter and full year 2006. In each quarter of the past year, we achieved solid year-on-year earnings growth while increasing investments in our technology operations, service infrastructure, and sales and marketing activities. Through solid execution of our strategic business plan, we successfully achieved our fourth consecutive year of improved profitability.íí

Print advertising revenues for the fourth quarter of 2006 increased 10.7% to RMB87.4 million compared with RMB79.0 million for the same quarter in 2005. The increase was primarily due to a greater volume of advertisements in 51job Weekly which was partially offset by lower average revenue per page. The estimated number of print advertising pages generated in the fourth quarter of 2006 was 3,281 compared with 2,471 pages in the same quarter in 2005. Average revenue per page in the fourth quarter of 2006 decreased 16.7% over the fourth quarter of 2005 principally as a result of a higher portion of revenues coming from lower priced cities as well as certain seasonal promotions and discounting in the fourth quarter of 2006.

Online recruitment services revenues for the fourth quarter of 2006 were RMB58.6 million, representing a 32.1% growth from RMB44.4 million for the same quarter last year. The increase was principally attributable to growth in the number of employers using the Companyís online services. Unique employers using the Companyís online recruitment services increased 30.2% to 44,377 in the fourth quarter of 2006 compared with 34,081 in the same period last year.

Executive search revenues for the fourth quarter of 2006 decreased 9.0% to RMB5.5 million from RMB6.0 million for the same quarter last year due to fewer candidate search assignments. For the fourth quarter of 2006, other human resource related revenues grew 27.7% to RMB19.6 million (US$2.5 million) from RMB15.4 million in the fourth quarter last year driven primarily by greater demand for corporate training and business process outsourcing services.

Gross profit for the fourth quarter of 2006 was RMB87.9 million, representing an increase of 18.0% from RMB74.5 million for the same quarter last year. Gross margin, which is equal to gross profit divided by net revenues, was 54.2% in the fourth quarter of 2006 compared with 54.4% in the same quarter in 2005.

Operating expenses for the fourth quarter of 2006 were RMB67.4 million compared with RMB53.8 million for the same period last year. Operating expenses as a percentage of net revenues was 41.6% for the fourth quarter of 2006 compared with 39.3% for the fourth quarter of 2005. Excluding share-based compensation expense, operating expenses as a percentage of net revenues was 37.9% for the fourth quarter of 2006 compared with 37.0% for the fourth quarter of 2005.

Sales and marketing expenses for the fourth quarter of 2006 increased 48.6% to RMB41.2 million from RMB27.7 million for the same quarter in 2005 mainly due to an increase in employee salaries and bonuses, headcount additions, greater marketing and promotion expenses, and higher share-based compensation expense. General and administrative expenses for the fourth quarter of 2006 were RMB26.2 million compared with RMB26.1 million in the fourth quarter last year, as higher share-based compensation expense and depreciation expenses were principally offset by lower office rental expenses and professional services fees.

Income from operations for the fourth quarter of 2006 was RMB20.4 million compared with RMB20.7 million for the same period last year. Other income, which consisted primarily of financial subsidies, decreased to RMB1.1 million in the fourth quarter of 2006 from RMB4.7 million in the fourth quarter of 2005.

Net income for the fourth quarter of 2006 increased 2.4% to RMB19.8 million from RMB19.3 million for the same period in 2005. Fully diluted earnings per common share for the fourth quarter of 2006 were RMB0.35 compared with RMB0.34 for the same quarter in 2005. Fully diluted earnings per ADS for the fourth quarter of 2006 were RMB0.70 compared with RMB0.68 in the fourth quarter of 2005.

The estimated number of print advertising pages generated in 2006 increased 6.1% to 12,609 from 11,884 estimated pages in 2005. Unique employers using the Companyís online recruitment services grew 32.4% to 74,950 in 2006 from 56,599 in 2005. Employers who purchase online services multiple times or in multiple quarters throughout the fiscal year are counted as one unique employer for the annual total.

Net income for 2006 increased 61.7% to RMB99.3 million compared with RMB61.4 million for 2005. Fully diluted earnings per common share for 2006 increased to RMB1.76 from RMB1.07 in 2005. Fully diluted earnings per ADS for 2006 were RMB3.52 compared with RMB2.15 in 2005.

As of December 31, 2006, the companyís cash balance was RMB868.7 million compared with RMB830.6 million at December 31, 2005.

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