There's still a lot of hiring taking place in the world's most populous nation. China's 51job (JOBS) checked in with fresh financials after Thursday's market close, and the Shanghai-based provider of online recruitment services came through with one of its strongest periods of top-line growth in more than three years.
Revenue at 51job rose 16% to $88.3 million during the first quarter, at the high end of its February guidance for the period. There's only been one other quarter over the past three years when 51job's top line grew faster, and that period's 16.4% spurt wasn't too much better than its latest showing. At the end of the day, this is 51job's second-best showing in terms of total revenue growth over the past 13 quarters.
Momentum watchers will be comforted to see that growth is accelerating. We've gone from 10.2% year-over-year growth during last year's second quarter to 13.3%, 13.6%, and now 16% in subsequent periods.
There are two major components to 51job's business, and both are moving in the right direction. Online recruitment services -- accounting for 69% of its revenue -- rose 19.4% during the quarter. Other human resource-related revenue grew 9.1% during the quarter, held back by a value-added tax or VAT policy change that went into effect in May of last year. Results on that front will be normalized halfway through the current quarter once we lap the timing of the VAT-related impact.
Image source: 51job.
The bottom line
Thursday's report extends 51job's streak of double-digit growth in revenue to eight straight quarters. The workplace matchmaker has sometimes struggled to grow its bottom line at the same clip as its revenue growth, but that wasn't the case this time. Gross margin and operating margin widened, culminating in a nearly 30% surge in income from operations.
51job's adjusted earnings of $0.50 a share exceeded its earlier guidance. Back in February, it was forecasting adjusted earnings per share to chime in between $0.37 and $0.40.
Its outlook for the current quarter calls for an adjusted profit of $0.41 to $0.44 a share on between $93 million to $95.9 million in revenue. 51job's forecast calls for a sequential dip in profits, but it has erred on the side of being conservative with its past few quarters of earnings outlooks.
Armed with a balance sheet that's flush with $955.4 million in cash and short-term securities, 51job continues to be one of the more stable performers in the typically volatile realm of Chinese growth stocks. Companies are hiring in China, and 51job continues to benefit from the online migration.
