51job, Inc (NASDAQ:JOBS) Profit Falls in the Latest Quarter

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51job, Inc.(NASDAQ:JOBS) stock rose 0.14% (As on Sep 14, 10:09:07 AM UTC-4, Source: Google Finance) though the company in the first quarter of FY 21 has reported the net income attributable to 51job of RMB57.2 million (US$8.7 million) compared with RMB205.2 million for the same quarter in 2020. Income from operations for the first quarter of 2021 has fallen to RMB3.9 million (US$0.6 million) compared with RMB170.0 million for the first quarter of 2020.  Operating margin, which is income from operations as a percentage of net revenues, has contracted to 0.4% in the first quarter of 2021 compared with 21.5% for the same quarter in 2020. As of March 31, 2021, cash and short-term investments totaled RMB10,359.3 million (US$1,581.1 million) compared with RMB10,761.9 million as of December 31, 2020.

Moreover, the company has reported net revenues for the first quarter ended March 31, 2021 of RMB895.2 million (US$136.6 million), which represents an increase of 13.2% from RMB791.1 million for the same quarter in 2020. Online recruitment services revenues for the first quarter of 2021 were RMB545.4 million (US$83.2 million) compared with RMB547.0 million for the same quarter in 2020.  While the Company has observed improvements in market conditions and hiring activity in 2021, which represents the slight year-over-year decline was primarily due to the calendar impact of the Chinese New Year holiday in mid-February, which resulted in a later start to the recruitment peak season in 2021 and affected the amount of revenues that could be recognized in the first quarter of this year.  The Company believes there will be continued recovery in its online recruitment business in 2021. Other human resource related revenues for the first quarter of 2021 grew 43.3% to RMB349.8 million (US$53.4 million) from RMB244.1 million for the same quarter in 2020.  The growth was mainly driven by solid employer demand for training, placement and business process outsourcing services this year, as compared to a challenging environment and stringent travel and social restrictions imposed due to the COVID-19 pandemic in the first quarter of 2020.

Meanwhile, subject to getting approval for sale by local government authorities, the Company plans to purchase an office building in Shanghai, which will serve as its new corporate headquarters. The building is approximately 32,400 square meters and will accommodate the Company’s continued growth and business expansion.  The total purchase price is estimated to be approximately RMB2.07 billion (US$316 million), and a deposit amount of RMB409.9 million (US$62.6 million) has been made as of March 31, 2021.

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