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The Internet is doing wonders for 51job's (Nasdaq: JOBS ) resume. The company that got its start wedging city-specific 51job Weekly editions into local newspapers remains a dot-com beast.
Revenue climbed 24% in its latest quarter to $40.6 million, fueled entirely by a 58% surge in its online-recruitment services. Clocking in at $21.3 million in the third quarter, 51job's online endeavors now make up more than half of its business.
Over the past year, 51job has scaled back on its print business by design, going from 22 local editions to only 16. Before you grumble, note that employers are paying more to get into the publication. Still, 51job sees bigger opportunities in cyberspace, and it's hard to fault the company's reasoning.
Margins are naturally higher online. Revenue may have climbed by 24%, but net income soared 75% to $0.33 a share -- or $0.38 a share, if you back out share-based compensation expenses and foreign currency hits. Analysts would've been happy with a profit of $0.30 per ADS.
It's not as if 51job lacks competition. China Career Builder and Monster's (NYSE: MWW ) partly owned ChinaHR.com. Taobao -- the consumer auction marketplace that sent eBay (Nasdaq: EBAY ) scurrying home -- turned heads when it began offering free employment classifieds earlier this year.
However, just as folks know that you can't smoke out good jobs or potential hires through Craigslist with any kind of reliability in the United States, you need to have premium listings to matter in China.
There are now 142,098 employers listing their job openings through 51job's website, 56% more than there were a year ago.
51job remains one of my favorite plays in China, nearly doubling since I recommended it to Rule Breakers newsletter subscribers four months ago. It's one of the steadiest growth industries in China. The government can always crack down on online gaming -- sorry Perfect World (Nasdaq: PWRD ) -- or rampant marketing -- sorry Focus Media (Nasdaq: FMCN ) -- but it's in China's best interest to see that job openings are promoted and filled with qualified hires.
51job sees sequential top-line growth in the current quarter, but it sees earnings on an adjusted basis clocking in between $0.30 a share and $0.33 a share. Analysts were perched on the $0.32 a share mark, but after a blowout third quarter, this represents a sequential decline.
It bears pointing out that 51job has historically cranked out low-ball guidance that it can easily surpass, but the stock had rushed up to a new multi-year high yesterday. A little breather is natural.
It's time for 51job to shake off this otherwise positive quarterly performance review and get back to work.
What's your favorite Chinese stock these days? Share your thoughts in the comment box below.