51job, Inc. Reports Fourth Quarter and Fiscal Year 2021 Financial Results

SHANGHAI, March 31, 2022  /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 fourth quarter and fiscal year of 2021 ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights:

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  • Net revenues increased 15.7% over Q4 2020 to RMB1,345.2 million (US$211.1 million)
  • Online recruitment services revenues increased 12.0%
  • Other human resource related revenues increased 19.0%
  • Income from operations was RMB304.6 million (US$47.8 million)
  • Fully diluted earnings per share was RMB5.23 (US$0.82)
  • Non-GAAP adjusted fully diluted earnings per share[1] was RMB5.99 (US$0.94)

Fiscal Year 2021 Financial Highlights:

  • Net revenues increased 19.8% from 2020 to RMB4,420.4 million (US$693.7 million)
  • Online recruitment services revenues increased 11.6%
  • Other human resource related revenues increased 31.3%
  • Income from operations was RMB551.3 million (US$86.5 million)
  • Fully diluted earnings per share was RMB9.40 (US$1.47)
  • Non-GAAP adjusted fully diluted earnings per share was RMB13.12 (US$2.06)

[1] Adjusted fully diluted earnings per share is a non-GAAP financial measure, which excludes share-based compensation expense, loss from foreign currency translation, and changes in fair value of listed equity securities investment and long-term 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.

Fourth Quarter 2021 Unaudited Financial Results

Net revenues for the fourth quarter ended December 31, 2021 were RMB1,345.2 million (US$211.1 million), an increase of 15.7% from RMB1,163.1 million for the same quarter in 2020.

Online recruitment services revenues for the fourth quarter of 2021 increased 12.0% to RMB617.7 million (US$96.9 million) compared with RMB551.6 million for the same quarter in 2020, primarily due to an improvement in hiring sentiment, demand and activity from employers in 2021.

Other human resource related revenues for the fourth quarter of 2021 increased 19.0% to RMB727.5 million (US$114.2 million) from RMB611.5 million for the same quarter in 2020. The growth was primarily driven by robust employer demand for seasonal campus recruitment, business process outsourcing and training services in 2021.

Cost of services for the fourth quarter of 2021 increased 29.1% to RMB535.2 million (US$84.0 million) from RMB414.5 million for the same quarter in 2020, primarily due to higher employee compensation expenses, headcount additions and greater direct costs, such as venue rental, media production and technology support, incurred in providing campus recruitment services to employers. Gross profit for the fourth quarter of 2021 increased 8.2% to RMB810.0 million (US$127.1 million) from RMB748.6 million for the same quarter in 2020. Gross margin, which is gross profit as a percentage of net revenues, was 60.2% in the fourth quarter of 2021 compared with 64.4% for the same quarter in 2020.

Operating expenses for the fourth quarter of 2021 increased 28.9% to RMB505.4 million (US$79.3 million) from RMB392.0 million for the same quarter in 2020. Sales and marketing expenses for the fourth quarter of 2021 increased 34.3% to RMB403.6 million (US$63.3 million) from RMB300.6 million for the same quarter in 2020, primarily due to higher employee compensation expenses, staff additions and greater spending on advertising and brand awareness campaigns. Advertising and promotion expenses increased 27.7% to RMB90.0 million (US$14.1 million) for the fourth quarter of 2021 from RMB70.5 million for the same quarter in 2020.

General and administrative expenses for the fourth quarter of 2021 increased 11.3% to RMB101.8 million (US$16.0 million) from RMB91.4 million for the same quarter in 2020, primarily due to higher employee compensation expenses

Income from operations for the fourth quarter of 2021 was RMB304.6 million (US$47.8 million) compared with RMB356.6 million for the fourth quarter of 2020. Operating margin, which is income from operations as a percentage of net revenues, was 22.6% for the fourth quarter of 2021 compared with 30.7% for the same quarter in 2020. Excluding share-based compensation expense, operating margin would have been 24.9% for the fourth quarter of 2021 compared with 33.7% for the same quarter in 2020.

The Company recognized a loss from foreign currency translation of RMB10.9 million (US$1.7 million) in the fourth quarter of 2021 compared with RMB33.9 million in the fourth 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.

The Company recognized a mark-to-market, non-cash loss of RMB10.7 million (US$1.7 million) in the fourth quarter of 2021 compared with RMB9.4 million in the fourth 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 RMB3.4 million (US$0.5 million) in professional services fees and administrative expenses related to the proposed going-private transaction in the fourth quarter of 2021.

Other income in the fourth quarter of 2021 included local government financial subsidies of RMB98.6 million (US$15.5 million) compared with RMB14.9 million in the fourth quarter of 2020.

Net income attributable to 51job for the fourth quarter of 2021 was RMB355.2 million (US$55.7 million) compared with RMB342.0 million for the same quarter in 2020. Fully diluted earnings per share for the fourth quarter of 2021 was RMB5.23 (US$0.82) compared with RMB5.01 for the same quarter in 2020.

In the fourth quarter of 2021, total share-based compensation expense was RMB29.9 million (US$4.7 million) compared with RMB35.0 million in the fourth 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 fourth quarter of 2021 was RMB406.7 million (US$63.8 million) compared with RMB420.1 million for the fourth quarter of 2020. Non-GAAP adjusted fully diluted earnings per share was RMB5.99 (US$0.94) in the fourth quarter of 2021 compared with RMB6.16 in the fourth quarter of 2020.

Fiscal Year 2021 Unaudited Financial Results

Net revenues in 2021 were RMB4,420.4 million (US$693.7 million), an increase of 19.8% from RMB3,689.0 million in 2020

Online recruitment services revenues in 2021 increased 11.6% to RMB2,396.2 million (US$376.0 million) from RMB2,147.3 million in 2020. The increase was primarily due to the improvement in business activity and more recruitment needs of employers in China in 2021.

Other human resource related revenues in 2021 increased 31.3% to RMB2,024.2 million (US$317.6 million) from RMB1,541.6 million in 2020, primarily due to resilient customer demand and usage of the Company’s training, campus recruitment, placement and business process outsourcing services.

Cost of services in 2021 increased 32.9% to RMB1,676.7 million (US$263.1 million) from RMB1,261.7 million in 2020, primarily due to higher employee compensation expenses and headcount additions. Gross profit in 2021 increased 13.0% to RMB2,743.7 million (US$430.5 million) from RMB2,427.2 million in 2020. Gross margin was 62.1% in 2021 compared with 65.8% in 2020.

Income from operations in 2021 decreased 36.4% to RMB551.3 million (US$86.5 million) from RMB867.1 million in 2020, primarily due to the significant increase in sales and marketing expenses in 2021. Operating margin was 12.5% in 2021 compared with 23.5% in 2020. Excluding share-based compensation expense, operating margin would have been 15.9% in 2021 compared with 27.4% in 2020.

Net income attributable to 51job in 2021 was RMB640.7 million (US$100.5 million) compared with RMB1,097.3 million in 2020. Fully diluted earnings per share in 2021 was RMB9.40 (US$1.47) compared with RMB16.12 in 2020.

Excluding share-based compensation expense, loss from foreign currency translation, and changes in fair value of listed equity securities investment and long-term investment, as well as the related tax effect of these items, non-GAAP adjusted net income attributable to 51job in 2021 was RMB894.4 million (US$140.4 million) compared with RMB1,243.9 million in 2020. Non-GAAP adjusted fully diluted earnings per share was RMB13.12 (US$2.06) in 2021 compared with RMB18.28 in 2020.

As of December 31, 2021, cash and short-term investments totaled RMB10,587.0 million (US$1,661.3 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 RMB6.3726 to US$1.00, the noon buying rate on December 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, loss from foreign currency translation and changes in fair value of listed equity securities investment and long-term 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 loss from foreign currency translation and changes in fair value of listed equity securities investment and long-term 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, loss from foreign currency translation and changes in fair value of listed equity securities investment and long-term 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.

Contact

Investor Relations, 51job, Inc.

Tel: +86-21-6879-6250

Email: [email protected]

 

 

51job, Inc.

Consolidated Statements of Operations and Comprehensive Income








For the Three Months Ended


December 31,

2020


December 31,

2021


December 31,

2021

(In thousands, except share and per share data)

(unaudited)


(unaudited)


(unaudited)


RMB


RMB


US$ (Note 1)







Revenues:






   Online recruitment services

551,562


617,703


96,931

   Other human resource related revenues

611,545


727,480


114,157







Net revenues

1,163,107


1,345,183


211,088

Cost of services (Note 2)

(414,504)


(535,189)


(83,983)







Gross profit

748,603


809,994


127,105







Operating expenses:






   Sales and marketing (Note 3)

(300,583)


(403,604)


(63,334)

   General and administrative (Note 4)

(91,439)


(101,786)


(15,972)







Total operating expenses

(392,022)


(505,390)


(79,306)







Income from operations

356,581


304,604


47,799







Loss from foreign currency translation

(33,851)


(10,917)


(1,713)

Interest and investment income, net

59,482


56,142


8,810

Change in fair value of listed equity securities investment

(9,404)


(10,715)


(1,681)

Fees and expenses related to proposed going-private

     transaction


(3,357)


(527)

Other income, net

11,691


98,335


15,431







Income before income tax expense

384,499


434,092


68,119

Income tax expense

(52,695)


(83,210)


(13,057)







Net income

331,804


350,882


55,062

Net loss attributable to non-controlling interests

10,244


4,273


671







Net income attributable to 51job, Inc.

342,048


355,155


55,733







Net income

331,804


350,882


55,062

Other comprehensive income (loss)

22,745


(269)


(42)







Total comprehensive income

354,549


350,613


55,020







Earnings per share:






   Basic

5.07


5.27


0.83

   Diluted

5.01


5.23


0.82







Weighted average number of common shares outstanding:






   Basic

67,402,582


67,437,209


67,437,209

   Diluted

68,245,670


67,941,118


67,941,118













Notes:






(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.3726

to US$1.00 on December 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 RMB6,307 and RMB4,933 (US$774) for the three months ended 

December 31, 2020 and 2021, respectively.

(3) Includes share-based compensation expense of RMB5,422 and RMB4,241 (US$666) for the three months ended

December 31, 2020 and 2021, respectively.

(4) Includes share-based compensation expense of RMB23,280 and RMB20,717 (US$3,251) for the three months ended

December 31, 2020 and 2021, respectively.

 

 

51job, Inc.

Consolidated Statements of Operations and Comprehensive Income








For the Year Ended


December 31,

2020


December 31,

2021


December 31,

2021

(In thousands, except share and per share data)

(unaudited)


(unaudited)


(unaudited)


RMB


RMB


US$ (Note 1)







Revenues:






   Online recruitment services

2,147,334


2,396,209


376,017

   Other human resource related revenues

1,541,617


2,024,219


317,644







Net revenues

3,688,951


4,420,428


693,661

Cost of services (Note 2)

(1,261,731)


(1,676,727)


(263,115)







Gross profit

2,427,220


2,743,701


430,546







Operating expenses:






   Sales and marketing (Note 3)

(1,182,677)


(1,790,535)


(280,974)

   General and administrative (Note 4)

(377,438)


(401,827)


(63,055)







Total operating expenses

(1,560,115)


(2,192,362)


(344,029)







Income from operations

867,105


551,339


86,517







Loss from foreign currency translation

(53,442)


(15,793)


(2,478)

Interest and investment income, net

228,500


212,690


33,376

Change in fair value of listed equity securities investment

10,760


(88,296)


(13,856)

Fees and expenses related to proposed going-private

     transaction


(87,544)


(13,738)

Change in fair value of long-term investment

39,614



Other income, net

167,308


192,233


30,166







Income before income tax expense

1,259,845


764,629


119,987

Income tax expense

(188,417)


(155,721)


(24,436)







Net income

1,071,428


608,908


95,551

Net loss attributable to non-controlling interests

25,848


31,775


4,986







Net income attributable to 51job, Inc.

1,097,276


640,683


100,537







Net income

1,071,428


608,908


95,551

Other comprehensive income (loss)

22,451


(415)


(65)







Total comprehensive income

1,093,879


608,493


95,486







Earnings per share:






   Basic

16.35


9.50


1.49

   Diluted

16.12


9.40


1.47







Weighted average number of common shares outstanding:






   Basic

67,101,601


67,429,296


67,429,296

   Diluted

68,056,724


68,185,891


68,185,891













Notes:






(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.3726

to US$1.00 on December 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 RMB23,648 and RMB24,019 (US$3,769) for the year ended

December 31, 2020 and 2021, respectively.

(3) Includes share-based compensation expense of RMB20,329 and RMB20,648 (US$3,240) for the year ended

December 31, 2020 and 2021, respectively.

(4) Includes share-based compensation expense of RMB99,829 and RMB104,889 (US$16,460) for the year ended

December 31, 2020 and 2021, respectively.

 

 

51job, Inc.

Reconciliation of GAAP and Non-GAAP Results








For the Three Months Ended


December 31,

2020


December 31,

2021


December 31,

2021

(In thousands, except share and per share data)

(unaudited)


(unaudited)


(unaudited)


RMB


RMB


US$ (Note 1)







GAAP income before income tax expense

384,499


434,092


68,119

Add: Share-based compensation

35,009


29,891


4,691

Add: Loss from foreign currency translation

33,851


10,917


1,713

Add: Change in fair value of listed equity securities investment

9,404


10,715


1,681

Non-GAAP income before income tax expense

462,763


485,615


76,204







GAAP income tax expense

(52,695)


(83,210)


(13,057)

Tax effect of non-GAAP line items

(208)


(7)


(1)

Non-GAAP income tax expense

(52,903)


(83,217)


(13,058)







Non-GAAP adjusted net income

409,860


402,398


63,146







Non-GAAP adjusted net income attributable to 51job, Inc.

420,104


406,671


63,817







Non-GAAP adjusted earnings per share:






   Basic

6.23


6.03


0.95

   Diluted

6.16


5.99


0.94







Weighted average number of common shares outstanding:






   Basic

67,402,582


67,437,209


67,437,209

   Diluted

68,245,670


67,941,118


67,941,118








For the Year Ended


December 31,

2020


December 31,

2021


December 31,

2021

(In thousands, except share and per share data)

(unaudited)


(unaudited)


(unaudited)


RMB


RMB


US$ (Note 1)







GAAP income before income tax expense

1,259,845


764,629


119,987

Add: Share-based compensation

143,806


149,556


23,469

Add: Loss from foreign currency translation

53,442


15,793


2,478

Add (Less): Change in fair value of listed equity securities

     investment

(10,760)


88,296


13,856

Less: Change in fair value of long-term investment

(39,614)



Non-GAAP income before income tax expense

1,406,719


1,018,274


159,790







GAAP income tax expense

(188,417)


(155,721)


(24,436)

Tax effect of non-GAAP line items

(279)


79


12

Non-GAAP income tax expense

(188,696)


(155,642)


(24,424)







Non-GAAP adjusted net income

1,218,023


862,632


135,366







Non-GAAP adjusted net income attributable to 51job, Inc.

1,243,871


894,407


140,352







Non-GAAP adjusted earnings per share:






   Basic

18.54


13.26


2.08

   Diluted

18.28


13.12


2.06







Weighted average number of common shares outstanding:






   Basic

67,101,601


67,429,296


67,429,296

   Diluted

68,056,724


68,185,891


68,185,891













Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of

RMB6.3726 to US$1.00 on December 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


December 31,

2021


December 31,

2021

(In thousands, except share and per share data)

(unaudited)


(unaudited)


(unaudited)



RMB


RMB


US$ (Note 1)








ASSETS













Current assets:







Cash

3,292,698


10,539,923


1,653,944


Restricted cash

2,258




Short-term investments

7,469,213


47,116


7,394


Accounts receivable (net of allowance of RMB26,798 and







  RMB27,522 as of December 31, 2020 and 2021, respectively)

290,480


382,164


59,970


Prepayments and other current assets

492,980


561,677


88,139








Total current assets

11,547,629


11,530,880


1,809,447








Non-current assets:







Time deposits 

719,189


745,450


116,977


Long-term investments

1,576,250


1,474,928


231,448


Property and equipment, net

273,157


755,789


118,600


Goodwill

1,036,124


1,036,124


162,590


Intangible assets, net

163,503


126,497


19,850


Right-of-use assets

307,869


1,839,143


288,602


Other long-term assets

13,946


14,065


2,207


Deferred tax assets

38,013


52,793


8,284








Total non-current assets

4,128,051


6,044,789


948,558








Total assets

15,675,680


17,575,669


2,758,005








LIABILITIES, MEZZANINE EQUITY AND EQUITY













Current liabilities:







Current portion of long-term bank loan


52,500


8,238


Accounts payable

83,087


136,999


21,498


Salary and employee related accrual

182,565


221,890


34,819


Taxes payable

172,254


212,873


33,404


Advances from customers

1,158,604


1,163,615


182,598


Lease liabilities, current

34,952


42,093


6,605


Other payables and accruals

1,178,955


1,132,921


177,780








Total current liabilities

2,810,417


2,962,891


464,942








Non-current liabilities:







Long-term bank loan


997,500


156,530


Lease liabilities, non-current

44,949


37,776


5,928


Deferred tax liabilities

232,087


224,571


35,240








Total non-current liabilities

277,036


1,259,847


197,698








Total liabilities

3,087,453


4,222,738


662,640








Mezzanine equity:







Redeemable non-controlling interests

189,811


156,880


24,618








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 2021, respectively)

54


54


8


Additional paid-in capital

5,206,154


5,363,570


841,661


Statutory reserves

18,474


18,840


2,956


Accumulated other comprehensive income

276,975


276,560


43,398


Retained earnings

6,871,090


7,511,407


1,178,704








Total 51job, Inc. shareholders’ equity

12,372,747


13,170,431


2,066,727








Non-controlling interests

25,669


25,620


4,020








Total equity

12,398,416


13,196,051


2,070,747








Total liabilities, mezzanine equity and equity

15,675,680


17,575,669


2,758,005















Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.3726

to US$1.00 on December 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.

 

 

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SOURCE 51job

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