They’re still hiring in China, and 51job, Inc. (ADR) (NASDAQ:JOBS) is there to help.
Shares of the employment facilitator opened higher before turning lower Thursday morning after posting better-than-expected financial results.
51job saw its revenue climb 7% to $63.8 million, fueled by a 9% rise in its online recruitment stronghold and even headier growth in its business process outsourcing services. Investors taking on the added risk of buying into Chinese growth stocks may not be impressed by the mere 7% uptick, but 51job’s own guidance was calling for just $60.5 million to $62.9 million in revenue.
The path to profitability was even kinder as 51job posted a profit of $0.66 a share or $0.74 a share on an adjusted basis. Analysts were targeting net income to clock in flat with the prior year’s $0.61 a share showing.
Landing ahead of the prognosticators is a job interview that 51job routinely aces. This is the fifth straight quarter that the workforce enabler has raced past Wall Street’s profit projections.
Yes, 51job’s original print business continues to die, but that’s by design. The 51job Weekly inserts of local job listings that once went out every week through as many as 30 publications has been halved over the past year to just seven newspapers. Print is old school, and that’s true even in China.
This doesn’t mean that 51job has cornered the market. Zhaopin is growing in popularity, though its once notable rival — Monster Worldwide, Inc. (NYSE:MWW)‘s ChinaHR.com — announced that it was laying off more than half of its staff last month in anticipation of a fire sale that was revealed earlier this month. Monster is retaining a 10% stake in ChinaHR after the sale.
Monster is an interesting name to introduce here because a few years ago 51job was often called the Monster.com of China.
Things haven’t been going so well for Monster itself these days. Shares hit an all-time low earlier this month after it came up short in smoking out a buyer for the company itself. Analysts see revenue and earnings slipping this year. It’s not that the stateside hiring climate is deteriorating. Employers are simply turning to Linkedin Corporation (NYSE:LNKD) to drum up worthy candidates for job openings.
Can the same thing happen in China? Will social networking disrupt China’s online recruiters? SINA Corp (NASDAQ:SINA) introduced Wei Renmai — a LinkedIn-esque professional networking — three months ago. I interviewed the CEO of Ushi, a website with the early lead in being the LinkedIn of China, two years ago.
For now, 51job is having no problem rolling with the changes. 51job hasn’t skipped a beat as it transforms its business model from print-based to one that is largely Web-centric in just a few years. The dot-com darling is also no stranger to the smartphone revolution. Its app has been downloaded more than 6 million times.