SHANGHAI, Dec. 15, 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 third quarter of 2021 ended September 30, 2021.
Third Quarter 2021 Financial Highlights:
- Net revenues increased 19.3% over Q3 2020 to RMB1,081.4 million (US$167.8 million)
- Online recruitment services revenues increased 17.8%
- Other human resource related revenues increased 21.7%
- Income from operations was RMB129.7 million (US$20.1 million)
- Fully diluted earnings per share was RMB0.68 (US$0.11)
- Non-GAAP adjusted fully diluted earnings per share[1] was RMB1.97 (US$0.31)
[1] Adjusted fully diluted earnings per share is a non-GAAP financial measure, which excludes 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. Please refer to the “Use of Non-GAAP Financial Measures” section and “Reconciliation of GAAP and Non-GAAP Results” tables contained in this press release.
Third Quarter 2021 Unaudited Financial Results
Net revenues for the third quarter ended September 30, 2021 were RMB1,081.4 million (US$167.8 million), an increase of 19.3% from RMB906.1 million for the same quarter in 2020.
Online recruitment services revenues for the third quarter of 2021 increased 17.8% to RMB642.6 million (US$99.7 million) compared with RMB545.5 million for the same quarter in 2020 primarily due to the improvement in hiring demand and activity from employers this year. The Company believes current operating conditions for its recruitment business remain positive, but developments surrounding the COVID-19 pandemic, occasional restrictions instituted by authorities to contain outbreaks in China, and global economic uncertainty may affect employer hiring plans and behaviors.
Other human resource related revenues for the third quarter of 2021 increased 21.7% to RMB438.8 million (US$68.1 million) from RMB360.6 million for the same quarter in 2020. The growth was primarily driven by solid customer demand for training, placement and business process outsourcing services this year.
Cost of services for the third quarter of 2021 increased 24.3% to RMB399.9 million (US$62.1 million) from RMB321.7 million for the same quarter in 2020 primarily due to higher employee compensation expenses and staff additions this year. Gross profit for the third quarter of 2021 increased 16.6% to RMB681.5 million (US$105.8 million) from RMB584.4 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, was 63.0% in the third quarter of 2021 compared with 64.5% for the same quarter in 2020.
Operating expenses for the third quarter of 2021 increased 34.8% to RMB551.8 million (US$85.6 million) from RMB409.3 million for the same quarter in 2020. Sales and marketing expenses for the third quarter of 2021 increased 46.0% to RMB457.4 million (US$71.0 million) from RMB313.2 million for the same quarter of the prior year, primarily due to greater spending on brand advertising, headcount additions and higher employee compensation expenses. Advertising and promotion expenses increased 123.2% to RMB130.8 million (US$20.3 million) for the third quarter of 2021 from RMB58.6 million for the same quarter of the prior year. The Company intends to maintain significant sales and marketing investments to strengthen its brands and promote its wide range of service offerings to employers and job seekers.
General and administrative expenses for the third quarter of 2021 decreased 1.8% to RMB94.4 million (US$14.7 million) from RMB96.2 million for the same quarter of the prior year, primarily due to a smaller provision for credit losses and less share-based compensation expense, which was partially offset by an increase in staff salaries and social insurance payments.
Income from operations for the third quarter of 2021 was RMB129.7 million (US$20.1 million) compared with RMB175.0 million for the third quarter of 2020. Operating margin, which is income from operations as a percentage of net revenues, was 12.0% for the third quarter of 2021 compared with 19.3% for the same quarter in 2020. Excluding share-based compensation expense, operating margin would have been 14.9% for the third quarter of 2021 compared with 23.0% for the same quarter in 2020.
The Company recognized a gain from foreign currency translation of RMB2.3 million (US$0.4 million) in the third quarter of 2021 compared with a loss of RMB29.2 million in the third 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 third quarter of 2021 was RMB64.6 million (US$10.0 million) compared with RMB58.3 million for the third quarter of 2020, primarily due to a larger amount of cash allocated to higher interest-bearing bank deposit products.
The Company recognized a mark-to-market, non-cash loss of RMB59.2 million (US$9.2 million) in the third quarter of 2021 compared with RMB46.5 million in the third 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. The Company also recognized RMB80.4 million (US$12.5 million) in professional services fees and administrative expenses related to the proposed going-private transaction in the third quarter of 2021.
Other income in the third quarter of 2021 included local government financial subsidies of RMB4.6 million (US$0.7 million) compared with RMB5.6 million in the third quarter of 2020.
Net income attributable to 51job for the third quarter of 2021 was RMB46.6 million (US$7.2 million) compared with RMB173.3 million for the same quarter in 2020. Fully diluted earnings per share for the third quarter of 2021 was RMB0.68 (US$0.11) compared with RMB2.55 for the same quarter in 2020.
In the third quarter of 2021, total share-based compensation expense was RMB31.4 million (US$4.9 million) compared with RMB33.5 million in the third quarter of 2020.
Excluding 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, non-GAAP adjusted net income attributable to 51job for the third quarter of 2021 was RMB134.9 million (US$20.9 million) compared with RMB243.0 million for the third quarter of 2020. Non-GAAP adjusted fully diluted earnings per share was RMB1.97 (US$0.31) in the third quarter of 2021 compared with RMB3.57 in the third quarter of 2020.
As of September 30, 2021, cash and short-term investments totaled RMB10,169.4 million (US$1,578.3 million) compared with RMB10,761.9 million as of December 31, 2020.
Purchase of New Headquarters Office Building
In July 2021, the Company entered into an agreement to purchase an office building in the Qiantan area of Pudong District, Shanghai. The total purchase price is expected to be RMB2,051.5 million (US$318.4 million), of which RMB1,026.9 million (US$159.4 million) has been paid as of September 30, 2021. The Company will fund the purchase with existing cash resources and a long-term bank loan in the amount of RMB1,050.0 million (US$163.0 million).
Currency Convenience Translation
For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB6.4434 to US$1.00, the noon buying rate on September 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.
Contact
Investor Relations, 51job, Inc.Tel: +86-21-6879-6250Email: [email protected]
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
September 30, 2020
September 30, 2021
(In thousands, except share and per share data)
(unaudited)
RMB
US$ (Note 1)
Revenues:
Online recruitment services
545,501
642,550
99,722
Other human resource related revenues
360,604
438,801
68,101
Net revenues
906,105
1,081,351
167,823
Cost of services (Note 2)
(321,748)
(399,888)
(62,062)
Gross profit
584,357
681,463
105,761
Operating expenses:
Sales and marketing (Note 3)
(313,170)
(457,365)
(70,982)
General and administrative (Note 4)
(96,165)
(94,435)
(14,656)
Total operating expenses
(409,335)
(551,800)
(85,638)
Income from operations
175,022
129,663
20,123
Gain (Loss) from foreign currency translation
(29,215)
2,302
357
Interest and investment income, net
58,284
64,593
10,025
Change in fair value of listed equity securities investment
(46,533)
(59,168)
(9,183)
Fees and expenses related to proposed going-private transaction (Note 5)
—
(80,365)
(12,472)
Change in fair value of long-term investment
39,614
Other income, net
6,692
4,154
645
Income before income tax expense
203,864
61,179
9,495
Income tax expense
(39,330)
(20,347)
(3,158)
Net income
164,534
40,832
6,337
Net loss attributable to non-controlling interests
8,788
5,795
899
Net income attributable to 51job, Inc.
173,322
46,627
7,236
Other comprehensive income (loss)
(597)
17
3
Total comprehensive income
163,937
40,849
6,340
Earnings per share:
Basic
2.58
0.69
0.11
Diluted
2.55
0.68
Weighted average number of common shares outstanding:
67,185,235
67,437,209
68,089,693
68,397,787
Notes:
(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4434
to US$1.00 on September 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 RMB5,345 and RMB5,009 (US$777) for the three months ended
September 30, 2020 and 2021, respectively.
(3) Includes share-based compensation expense of RMB4,595 and RMB4,305 (US$668) for the three months ended
(4) Includes share-based compensation expense of RMB23,603 and RMB22,104 (US$3,431) for the three months ended
(5) Includes fees and expenses of RMB12,722 (US$1,974) incurred in the three months ended June 30, 2021.
For the Nine Months Ended
1,595,772
1,778,506
276,020
930,072
1,296,739
201,251
2,525,844
3,075,245
477,271
(847,227)
(1,141,538)
(177,164)
1,678,617
1,933,707
300,107
(882,094)
(1,386,931)
(215,248)
(285,999)
(300,041)
(46,566)
(1,168,093)
(1,686,972)
(261,814)
510,524
246,735
38,293
Loss from foreign currency translation
(19,591)
(4,876)
(757)
169,018
156,548
24,296
20,164
(77,581)
(12,040)
(84,187)
(13,066)
155,617
93,898
14,573
875,346
330,537
51,299
(135,722)
(72,511)
(11,254)
739,624
258,026
40,045
15,604
27,502
4,268
755,228
285,528
44,313
Other comprehensive loss
(294)
(146)
(23)
739,330
257,880
40,022
11.27
4.23
0.66
11.11
4.18
0.65
67,000,172
67,426,629
67,992,639
68,267,453
(2) Includes share-based compensation expense of RMB17,341 and RMB19,086 (US$2,962) for the nine months ended
(3) Includes share-based compensation expense of RMB14,907 and RMB16,407 (US$2,546) for the nine months ended
(4) Includes share-based compensation expense of RMB76,549 and RMB84,172 (US$13,064) for the nine months ended
(5) Includes fees of RMB3,822 (US$593), which were previously reflected in general and administrative expenses for the
three months ended June 30, 2021.
Reconciliation of GAAP and Non-GAAP Results
GAAP income before income tax expense
Add: Share-based compensation
33,543
31,418
4,876
Add (Less): (Gain) Loss from foreign currency translation
29,215
(2,302)
(357)
Add: Change in fair value of listed equity securities investment
46,533
59,168
9,183
Less: Change in fair value of long-term investment
(39,614)
Non-GAAP income before income tax expense
273,541
149,463
23,197
GAAP income tax expense
Tax effect of non-GAAP line items
(32)
2
0
Non-GAAP income tax expense
(39,362)
(20,345)
Non-GAAP adjusted net income
234,179
129,118
20,039
Non-GAAP adjusted net income attributable to 51job, Inc.
242,967
134,913
20,938
Non-GAAP adjusted earnings per share:
3.62
2.00
0.31
3.57
1.97
108,797
119,665
18,572
Add: Loss from foreign currency translation
19,591
757
Add (Less): Change in fair value of listed equity securities investment
(20,164)
77,581
12,040
943,956
532,659
82,668
(71)
86
13
(135,793)
(72,425)
(11,241)
808,163
460,234
71,427
823,767
487,736
75,695
12.29
7.23
1.12
12.12
7.14
1.11
Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4434
Consolidated Balance Sheets
As of
December 31,2020
September 30,2021
ASSETS
Current assets:
Cash
3,292,698
9,984,321
1,549,542
Restricted cash
2,258
Short-term investments
7,469,213
185,030
28,716
Accounts receivable (net of allowance of RMB26,798 and
RMB26,513 as of December 31, 2020 and September 30, 2021,
respectively)
290,480
357,342
55,459
Prepayments and other current assets
492,980
642,786
99,759
Total current assets
11,547,629
11,169,479
1,733,476
Non-current assets:
Time deposits
719,189
738,831
114,665
Long-term investments
1,576,250
1,497,133
232,351
Property and equipment, net
273,157
270,573
41,992
Goodwill
1,036,124
160,804
Intangible assets, net
163,503
136,280
21,150
Right-of-use assets
307,869
308,682
47,907
Other long-term assets
13,946
1,056,312
Deferred tax assets
38,013
48,022
7,453
Total non-current assets
4,128,051
5,091,957
790,259
Total assets
15,675,680
16,261,436
2,523,735
LIABILITIES, MEZZANINE EQUITY AND EQUITY
Current liabilities:
Current portion of long-term bank loan
2,500
388
Accounts payable
83,087
123,073
19,101
Salary and employee related accrual
182,565
187,699
29,130
Taxes payable
172,254
148,388
23,029
Advances from customers
1,158,604
1,290,050
200,213
Lease liabilities, current
34,952
42,821
6,646
Other payables and accruals
1,178,955
1,192,137
185,016
Total current liabilities
2,810,417
2,986,668
463,523
Non-current liabilities:
Long-term bank loan
47,500
7,372
Lease liabilities, non-current
44,949
42,476
6,592
Deferred tax liabilities
232,087
212,366
32,959
Total non-current liabilities
277,036
302,342
46,923
Total liabilities
3,087,453
3,289,010
510,446
Mezzanine equity:
Redeemable non-controlling interests
189,811
161,318
25,036
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 September 30, 2021,
54
8
Additional paid-in capital
5,206,154
5,333,135
827,690
Statutory reserves
18,474
2,867
Accumulated other comprehensive income
276,975
276,829
42,963
Retained earnings
6,871,090
7,156,618
1,110,690
Total 51job, Inc. shareholders’ equity
12,372,747
12,785,110
1,984,218
Non-controlling interests
25,669
25,998
4,035
Total equity
12,398,416
12,811,108
1,988,253
Total liabilities, mezzanine equity and equity
Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4434 to US$1.00
on September 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-third-quarter-2021-financial-results-301445157.html
SOURCE 51job
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