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51job, Inc. Reports Second Quarter 2021 Financial Results

  • Friday, September 24, 2021, 6:00 pm
  • ACROFAN=PRNasia
  • hkcs@prnasia.com

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 (https://www.51job.com, https://www.yingjiesheng.com, https://www.51jingying.com, https://www.lagou.com, and https://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








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