51job, Inc. Reports Second Quarter 2021 Financial Results

Rhea-AI Summary

51job, Inc. (Nasdaq: JOBS) reported second quarter 2021 net revenues of RMB1,098.7 million (US$170.2 million), a 32.6% increase from the previous year. Online recruitment services revenues rose 17.4% to RMB590.6 million (US$91.5 million), driven by improved market conditions. Other HR-related revenues surged 56.2% to RMB508.1 million (US$78.7 million). However, income from operations decreased to RMB109.3 million (US$16.9 million), with a notable drop in operating margin from 20.0% to 9.9%. Net income declined to RMB181.7 million (US$28.1 million) from RMB376.7 million in Q2 2020.

Positive

• Net revenues up 32.6% YoY to RMB1,098.7 million (US$170.2 million).
• Online recruitment services revenue increased 17.4% to RMB590.6 million (US$91.5 million).
• Other HR-related revenues grew 56.2% to RMB508.1 million (US$78.7 million).

Negative

• Income from operations declined to RMB109.3 million (US$16.9 million) from RMB165.5 million in Q2 2020.
• Operating margin dropped from 20.0% in Q2 2020 to 9.9% in Q2 2021.
• Net income fell to RMB181.7 million (US$28.1 million) from RMB376.7 million in Q2 2020.

SHANGHAI, Sept. 24, 2021 /PRNewswire/ -- 51job, Inc. (Nasdaq: JOBS) ("51job" or the "Company"), a leading provider of integrated human resource services in China, announced today its unaudited financial results for the second quarter of 2021 ended June 30, 2021.

Second Quarter 2021 Financial Highlights:

• Net revenues increased 32.6% over Q2 2020 to RMB1,098.7 million (US$170.2 million)
• Online recruitment services revenues increased 17.4%
• Other human resource related revenues increased 56.2%
• Income from operations was RMB109.3 million (US$16.9 million)
• Fully diluted earnings per share was RMB2.66 (US$0.41)
• Excluding share-based compensation expense, loss from foreign currency translation, and change in fair value of listed equity securities investment, as well as the related tax effect of these items, non-GAAP adjusted fully diluted earnings per share was RMB3.64 (US$0.56)

Second Quarter 2021 Unaudited Financial Results

Net revenues for the second quarter ended June 30, 2021 were RMB1,098.7 million (US$170.2 million), an increase of 32.6% from RMB828.6 million for the same quarter in 2020.

Online recruitment services revenues for the second quarter of 2021 increased 17.4% to RMB590.6 million (US$91.5 million) compared with RMB503.3 million for the same quarter in 2020 primarily due to improved market conditions and more hiring activity from employers this year. While the Company believes there will be continued recovery in its online recruitment business in 2021, the recruitment outlook may be affected by uncertainty in the ongoing global pandemic and occasional restrictions instituted by authorities to contain outbreaks in China.

Other human resource related revenues for the second quarter of 2021 increased 56.2% to RMB508.1 million (US$78.7 million) from RMB325.4 million for the same quarter in 2020. The growth was primarily driven by strong demand for training services, campus recruitment campaigns, placement projects and business process outsourcing services this year.

Gross profit for the second quarter of 2021 increased 21.8% to RMB678.9 million (US$105.1 million) from RMB557.5 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, was 61.8% in the second quarter of 2021 compared with 67.3% for the same quarter in 2020. The increase in cost of services was primarily due to higher employee compensation expenses, staff additions and greater direct costs, such as venue rentals and media production services, incurred in providing training, campus recruitment and placement services to employers.

Operating expenses for the second quarter of 2021 increased 45.3% to RMB569.5 million (US$88.2 million) from RMB391.9 million for the same quarter in 2020. Sales and marketing expenses for the second quarter of 2021 increased 55.7% to RMB455.6 million (US$70.6 million) from RMB292.7 million for the same quarter of the prior year, primarily due to greater spending on brand advertising as well as more headcount and higher employee compensation expenses. Advertising and promotion expenses increased 86.9% to RMB127.4 million (US$19.7 million) in the second quarter of 2021 from RMB68.2 million in the same quarter of the prior year. The Company has plans to significantly increase sales and marketing investments this year to strengthen its brands and promote its wide range of service offerings.

General and administrative expenses for the second quarter of 2021 increased 14.8% to RMB113.9 million (US$17.6 million) from RMB99.2 million for the same quarter of the prior year, primarily due to higher employee compensation, share-based compensation, and professional services fees.

Income from operations for the second quarter of 2021 was RMB109.3 million (US$16.9 million) compared with RMB165.5 million for the second quarter of 2020. Operating margin, which is income from operations as a percentage of net revenues, was 9.9% in the second quarter of 2021 compared with 20.0% for the same quarter in 2020. Excluding share-based compensation expense, operating margin would have been 14.4% in the second quarter of 2021 compared with 24.6% for the same quarter in 2020.

The Company recognized a loss from foreign currency translation of RMB12.5 million (US$1.9 million) in the second quarter of 2021 compared with RMB0.5 million in the second quarter of 2020, primarily due to the impact of the change in exchange rate between the Renminbi and the U.S. dollar on the Company's U.S. dollar cash deposits.

Interest and investment income for the second quarter of 2021 was RMB31.9 million (US$4.9 million) compared with RMB66.4 million in the second quarter of 2020, primarily due to the reallocation of cash resources from time deposits to lower interest-bearing demand accounts.

The Company recognized a mark-to-market, non-cash loss of RMB5.2 million (US$0.8 million) in the second quarter of 2021 compared with a gain of RMB56.8 million in the second quarter of 2020 associated with a change in fair value of listed equity securities investment in Huali University Group Limited, which is traded on the Hong Kong Stock Exchange.

Other income in the second quarter of 2021 included local government financial subsidies of RMB85.2 million (US$13.2 million) compared with RMB144.9 million in the second quarter of 2020.

Net income attributable to 51job for the second quarter of 2021 was RMB181.7 million (US$28.1 million) compared with RMB376.7 million for the same quarter in 2020. Fully diluted earnings per share for the second quarter of 2021 was RMB2.66 (US$0.41) compared with RMB5.55 for the same quarter in 2020.

In the second quarter of 2021, total share-based compensation expense was RMB49.3 million (US$7.6 million) compared with RMB38.1 million in the second quarter of 2020.

Excluding share-based compensation expense, loss from foreign currency translation, and change in fair value of listed equity securities investment, as well as the related tax effect of these items, non-GAAP adjusted net income attributable to 51job for the second quarter of 2021 was RMB248.7 million (US$38.5 million) compared with RMB358.5 million for the second quarter of 2020. Non-GAAP adjusted fully diluted earnings per share was RMB3.64 (US$0.56) in the second quarter of 2021 compared with RMB5.28 in the second quarter of 2020.

As of June 30, 2021, cash and short-term investments totaled RMB10,812.9 million (US$1,674.7 million) compared with RMB10,761.9 million as of December 31, 2020.

Currency Convenience Translation

For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB6.4566 to US$1.00, the noon buying rate on June 30, 2021 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

Use of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), 51job uses non-GAAP financial measures of income before income tax expense, income tax expense, adjusted net income, adjusted net income attributable to 51job and adjusted earnings per share, which are adjusted from results based on GAAP to exclude share-based compensation expense, gain/loss from foreign currency translation and change in fair value of listed equity securities investment, as well as the related tax effect of these items. The Company believes excluding share-based compensation expense and its related tax effect from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company believes excluding gain/loss from foreign currency translation and change in fair value of listed equity securities investment, as well as the related tax effect, from its non-GAAP financial measures is useful for its management and investors as such translation, mark-to-market gain or loss is not indicative of the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings. 51job also believes these non-GAAP financial measures excluding share-based compensation expense, gain from foreign currency translation and change in fair value of listed equity securities investment, as well as the related tax effect of these items, are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.

About 51job

Founded in 1998, 51job is a leading provider of integrated human resource services in China. With a comprehensive suite of HR solutions, 51job meets the needs of enterprises and job seekers through the entire talent management cycle, from initial recruitment to employee retention and career development. The Company's main online recruitment platforms (http://www.51job.com, http://www.yingjiesheng.com, http://www.51jingying.com, http://www.lagou.com, and http://www.51mdd.com), as well as mobile applications, connect millions of people with employment opportunities every day. 51job also provides a number of other value-added HR services, including business process outsourcing, training, professional assessment, campus recruitment, executive search and compensation analysis. 51job has a call center in Wuhan and a nationwide network of sales and service locations spanning more than 30 cities across China.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "targets," "confident" and similar statements. Among other things, statements that are not historical facts, including statements about 51job's beliefs and expectations, as well as 51job's strategic and operational plans, are or contain forward-looking statements. 51job may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. All forward-looking statements are based upon management's expectations at the time of the statements and involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: execution of 51job's strategies and business plans; growth and trends of the human resource services industry in China; market acceptance of 51job's products and services; competition in the industry; 51job's ability to control costs and expenses; 51job's ability to retain key personnel and attract new talent; relevant government policies and regulations relating to 51job's industry, corporate structure and business operations; seasonality in the business; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; risks related to acquisitions or investments 51job has made or will make in the future; accounting adjustments that may occur during the quarterly or annual close or auditing process; and fluctuations in general economic and business conditions in China and globally, including the impact of the coronavirus or other pandemic. Further information regarding these and other risks are included in 51job's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release and based on assumptions that 51job believes to be reasonable as of this date, and 51job undertakes no obligation to update any forward-looking statement, except as required under applicable law.

 

 

 

51job, Inc.
Consolidated Statements of Operations and Comprehensive Income
	For the Three Months Ended
	June 30, 2020		June 30, 2021		June 30, 2021
(In thousands, except share and per share data)	(unaudited)		(unaudited)		(unaudited)
	RMB		RMB		US$ (Note 1)
Revenues:
Online recruitment services	503,254		590,594		91,471
Other human resource related revenues	325,374		508,147		78,702
Net revenues	828,628		1,098,741		170,173
Cost of services (Note 2)	(271,176)		(419,884)		(65,032)
Gross profit	557,452		678,857		105,141
Operating expenses:
Sales and marketing (Note 3)	(292,732)		(455,648)		(70,571)
General and administrative (Note 4)	(99,192)		(113,888)		(17,639)
Total operating expenses	(391,924)		(569,536)		(88,210)
Income from operations	165,528		109,321		16,931
Loss from foreign currency translation	(547)		(12,523)		(1,940)
Interest and investment income, net	66,419		31,938		4,947
Change in fair value of listed equity securities investment	56,806		(5,158)		(799)
Other income, net	144,590		85,015		13,167
Income before income tax expense	432,796		208,593		32,306
Income tax expense	(59,621)		(37,517)		(5,811)
Net income	373,175		171,076		26,495
Net loss attributable to non-controlling interests	3,485		10,600		1,642
Net income attributable to 51job, Inc.	376,660		181,676		28,137
Net income	373,175		171,076		26,495
Other comprehensive loss	(5)		(225)		(35)
Total comprehensive income	373,170		170,851		26,460
Earnings per share:
Basic	5.62		2.69		0.42
Diluted	5.55		2.66		0.41
Weighted average number of common shares outstanding:
Basic	67,009,015		67,434,856		67,434,856
Diluted	67,878,333		68,247,200		68,247,200
Notes:
(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566
to US$1.00 on June 30, 2021 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical
release of the Federal Reserve Board.
(2) Includes share-based compensation expense of RMB6,079 and RMB7,875 (US$1,220) for the three months ended
June 30, 2020 and 2021, respectively.
(3) Includes share-based compensation expense of RMB5,225 and RMB6,770 (US$1,048) for the three months ended
June 30, 2020 and 2021, respectively.
(4) Includes share-based compensation expense of RMB26,826 and RMB34,684 (US$5,372) for the three months ended
June 30, 2020 and 2021, respectively.

 

 

 

51job, Inc.
Consolidated Statements of Operations and Comprehensive Income
	For the Six Months Ended
	June 30, 2020		June 30, 2021		June 30, 2021
(In thousands, except share and per share data)	(unaudited)		(unaudited)		(unaudited)
	RMB		RMB		US$ (Note 1)
Revenues:
Online recruitment services	1,050,271		1,135,956		175,937
Other human resource related revenues	569,468		857,938		132,878
Net revenues	1,619,739		1,993,894		308,815
Cost of services (Note 2)	(525,479)		(741,650)		(114,867)
Gross profit	1,094,260		1,252,244		193,948
Operating expenses:
Sales and marketing (Note 3)	(568,924)		(929,566)		(143,971)
General and administrative (Note 4)	(189,834)		(209,428)		(32,436)
Total operating expenses	(758,758)		(1,138,994)		(176,407)
Income from operations	335,502		113,250		17,541
Gain (Loss) from foreign currency translation	9,624		(7,178)		(1,112)
Interest and investment income, net	110,734		91,955		14,242
Change in fair value of equity securities investment	66,697		(18,413)		(2,852)
Other income, net	148,925		89,744		13,900
Income before income tax expense	671,482		269,358		41,719
Income tax expense	(96,392)		(52,164)		(8,079)
Net income	575,090		217,194		33,640
Net loss attributable to non-controlling interests	6,816		21,707		3,362
Net income attributable to 51job, Inc.	581,906		238,901		37,002
Net income	575,090		217,194		33,640
Other comprehensive income (loss)	303		(163)		(25)
Total comprehensive income	575,393		217,031		33,615
Earnings per share:
Basic	8.70		3.54		0.55
Diluted	8.56		3.50		0.54
Weighted average number of common shares outstanding:
Basic	66,906,106		67,421,251		67,421,251
Diluted	67,942,579		68,202,198		68,202,198
Notes:
(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566
to US$1.00 on June 30, 2021 in New York for cable transfers of Renminbi as set forth in the H.10 weekly
statistical release of the Federal Reserve Board.
(2) Includes share-based compensation expense of RMB11,996 and RMB14,077 (US$2,181) for the six months ended
June 30, 2020 and 2021, respectively.
(3) Includes share-based compensation expense of RMB10,312 and RMB12,102 (U$1,874) for the six months ended
June 30, 2020 and 2021, respectively.
(4) Includes share-based compensation expense of RMB52,946 and RMB62,068 (US$9,613) for the six months ended
June 30, 2020 and 2021, respectively.

 

 

 

51job, Inc.
Reconciliation of GAAP and Non-GAAP Results
	For the Three Months Ended
	June 30, 2020		June 30, 2021		June 30, 2021
(In thousands, except share and per share data)	(unaudited)		(unaudited)		(unaudited)
	RMB		RMB		US$ (Note 1)
GAAP income before income tax expense	432,796		208,593		32,306
Add: Share-based compensation	38,130		49,329		7,640
Add: Loss from foreign currency translation	547		12,523		1,940
Add (Less): Change in fair value of listed equity securities      investment	(56,806)		5,158		799
Non-GAAP income before income tax expense	414,667		275,603		42,685
GAAP income tax expense	(59,621)		(37,517)		(5,811)
Tax effect of non-GAAP line items	(8)		(9)		(1)
Non-GAAP income tax expense	(59,629)		(37,526)		(5,812)
Non-GAAP adjusted net income	355,038		238,077		36,873
Non-GAAP adjusted net income attributable to 51job, Inc.	358,523		248,677		38,515
Non-GAAP adjusted earnings per share:
Basic	5.35		3.69		0.57
Diluted	5.28		3.64		0.56
Weighted average number of common shares outstanding:
Basic	67,009,015		67,434,856		67,434,856
Diluted	67,878,333		68,247,200		68,247,200
	For the Six Months Ended
	June 30, 2020		June 30, 2021		June 30, 2021
(In thousands, except share and per share data)	(unaudited)		(unaudited)		(unaudited)
	RMB		RMB		US$ (Note 1)
GAAP income before income tax expense	671,482		269,358		41,719
Add: Share-based compensation	75,254		88,247		13,668
Add (Less): (Gain) Loss from foreign currency translation	(9,624)		7,178		1,112
Add (Less): Change in fair value of listed equity securities      investment	(66,697)		18,413		2,852
Non-GAAP income before income tax expense	670,415		383,196		59,351
GAAP income tax expense	(96,392)		(52,164)		(8,079)
Tax effect of non-GAAP line items	(39)		84		13
Non-GAAP income tax expense	(96,431)		(52,080)		(8,066)
Non-GAAP adjusted net income	573,984		331,116		51,285
Non-GAAP adjusted net income attributable to 51job, Inc.	580,800		352,823		54,647
Non-GAAP adjusted earnings per share:
Basic	8.68		5.23		0.81
Diluted	8.55		5.17		0.80
Weighted average number of common shares outstanding:
Basic	66,906,106		67,421,251		67,421,251
Diluted	67,942,579		68,202,198		68,202,198
Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566
to US$1.00 on June 30, 2021 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical
release of the Federal Reserve Board.

 

 

 

51job, Inc.
Consolidated Balance Sheets
		As of
		December 31, 2020		June 30, 2021		June 30, 2021
(In thousands, except share and per share data)		(unaudited)		(unaudited)		(unaudited)
		RMB		RMB		US$ (Note 1)
ASSETS
Current assets:
	Cash	3,292,698		9,036,457		1,399,569
	Restricted cash	2,258		—		—
	Short-term investments	7,469,213		1,776,482		275,142
	Accounts receivable (net of allowance of RMB26,798 and
	RMB24,240 as of December 31, 2020 and  June 30, 2021,
	respectively)	290,480		329,184		50,984
	Prepayments and other current assets	492,980		562,226		87,078
Total current assets		11,547,629		11,704,349		1,812,773
Non-current assets:
	Time deposits	719,189		732,212		113,405
	Long-term investments	1,576,250		1,556,171		241,020
	Property and equipment, net	273,157		269,892		41,801
	Goodwill	1,036,124		1,036,124		160,475
	Intangible assets, net	163,503		145,628		22,555
	Right-of-use assets	307,869		314,536		48,715
	Other long-term assets	13,946		424,144		65,692
	Deferred tax assets	38,013		44,102		6,831
Total non-current assets		4,128,051		4,522,809		700,494
Total assets		15,675,680		16,227,158		2,513,267
LIABILITIES, MEZZANINE EQUITY AND EQUITY
Current liabilities:
	Accounts payable	83,087		136,943		21,210
	Salary and employee related accrual	182,565		134,771		20,873
	Taxes payable	172,254		122,720		19,007
	Advances from customers	1,158,604		1,310,715		203,004
	Lease liabilities, current	34,952		42,406		6,568
	Other payables and accruals	1,178,955		1,305,834		202,248
Total current liabilities		2,810,417		3,053,389		472,910
Non-current liabilities:
	Lease liabilities, non-current	44,949		47,719		7,391
	Deferred tax liabilities	232,087		225,891		34,986
Total non-current liabilities		277,036		273,610		42,377
Total liabilities		3,087,453		3,326,999		515,287
Mezzanine equity:
	Redeemable non-controlling interests	189,811		167,434		25,932
Shareholders' equity:
	Common shares (US$0.0001 par value: 500,000,000 shares
	authorized, 67,406,657 and 67,437,209 shares issued and
	outstanding as of December 31, 2020 and June 30, 2021,
	respectively)	54		54		8
	Additional paid-in capital	5,206,154		5,301,874		821,156
	Statutory reserves	18,474		18,474		2,861
	Accumulated other comprehensive income	276,975		276,812		42,873
	Retained earnings	6,871,090		7,109,991		1,101,197
Total 51job, Inc. shareholders' equity		12,372,747		12,707,205		1,968,095
Non-controlling interests		25,669		25,520		3,953
Total equity		12,398,416		12,732,725		1,972,048
Total liabilities, mezzanine equity and equity		15,675,680		16,227,158		2,513,267
Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566 to US$1.00
on June 30, 2021 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal
Reserve Board.

 

View original content:https://www.prnewswire.com/news-releases/51job-inc-reports-second-quarter-2021-financial-results-301384568.html

SOURCE 51job

FAQ

What were 51job's net revenues for Q2 2021?

51job's net revenues for Q2 2021 were RMB1,098.7 million (US$170.2 million), a 32.6% increase from Q2 2020.

How did 51job's online recruitment services perform in Q2 2021?

Online recruitment services revenues rose 17.4% to RMB590.6 million (US$91.5 million) in Q2 2021.

What was the decline in 51job's net income for Q2 2021?

Net income for Q2 2021 was RMB181.7 million (US$28.1 million), down from RMB376.7 million in Q2 2020.

What were the operating expenses for 51job in Q2 2021?

Operating expenses for Q2 2021 increased 45.3% to RMB569.5 million (US$88.2 million) from RMB391.9 million in the same period last year.

What is 51job's stock symbol?

The stock symbol for 51job is JOBS.