On November 10, Beijing time, 51job Inc. announced its unaudited financial report for the third quarter of the 2011 fiscal year ended September 30, showing that the company's total revenue for the third quarter reached RMB 343.3 million, an increase of 26.4% compared to RMB 271.6 million in the same period last year; net profit was RMB 97.5 million, up 54.9% from RMB 62.9 million in the same period last year.
With the development of the Internet, online recruitment has increasingly become the mainstream method for job hunting. According to iResearch Consulting data, the revenue scale of China's online recruitment market maintained a high growth momentum in the third quarter of 2011. As the industry leader, although 51job Inc. performed well, there are also underlying concerns. Future specialized and segmented services will be its development direction.
On November 10, 51job Inc. announced its financial report for the third quarter of 2011. The results showed that the company's total revenue for the third quarter was RMB 343.3 million, with a year-on-year increase of 26.4%, and net profit was RMB 97.5 million, with a year-on-year increase of 54.9%.
The U.S. investment research company ValuEngine gave 51job Inc.'s stock a "strong buy" rating in its latest report. ValuEngine gave 51job Inc.'s American Depositary Receipt (ADR) a "strong buy" rating. Based on the information we obtained and subsequent research, we believe that 51job Inc.'s ADR is likely to outperform the market over the next year. The company's five-year annualized return, risk situation, and potential for development are attractive. This indicates that 51job Inc.'s long-term prospects are positive.
Based on the data as of September 21, 2011, we believe that the value of 51job Inc.'s stock is $72.61, meaning that the company's current stock price is undervalued by 27.57%. 51job Inc.'s earnings per share for the past four quarters were $1.77, and the expected earnings per share for the next four quarters are $2.38.
The continuous decline in average revenue contribution per independent employer has become a concern. 51job Inc. recently announced its financial report for the third quarter of 2011. After the data was published, at first glance, it appeared to be a "very good" financial result. However, the capital market seemed unimpressed, with 51job Inc.'s stock price falling by as much as 6% after hours, indicating that investors were not satisfied with such performance. TechWeb reviewed the operating results of 51job Inc. from the past two years and found some abnormal elements.
Through data analysis, it can be seen that the average revenue contribution per independent employer of 51job Inc. has been declining over the past two years. The average revenue contribution per independent employer can largely reflect the advertising or information placement willingness of employers and 51job Inc.'s pricing power towards employers. In the third quarter of 2009, the average revenue contribution per independent employer was approximately RMB 2408.3, which then gradually declined. By the third quarter of 2011, the average expenditure per employer was about RMB 2073.3, showing a significant decrease compared to two years ago.
In fact, in the second quarter of 2009, the average revenue contribution per independent employer of 51job Inc. experienced a year-on-year decline of 23.9%, directly leading to a year-on-year revenue drop of 11.6% in that quarter. At the time, 51job Inc.'s explanation was that "the growth in the number of independent employers to some extent affected the average revenue contribution level per employer." In recent years, whenever the number of independent employers increased, the average revenue contribution per employer in the same quarter inevitably decreased, showing a certain inverse relationship.
Additionally, reasons for the inability to achieve simultaneous increases in volume and price include: increasingly fierce competition in the recruitment industry, with 51job Inc. actively lowering prices to attract more employers; employers being unwilling to pay higher prices, resulting in a decline in 51job Inc.'s pricing power due to the large number of recruitment websites, forcing them to lower prices. Regardless of the reason, the inability to achieve simultaneous increases in volume and price has resulted in a gradual slowdown in revenue growth for 51job Inc. in recent quarters.
Specialized and segmented services will be the future direction. In China's entire online recruitment industry, the three major recruitment websites—51job Inc., Zhaopin.com, and ChinaHR.com—account for a total of 71.1%, forming a tripartite situation in China's recruitment websites. However, examining their profit reports reveals that while 51job Inc. maintains profitability, the financial reports of the other two major recruitment giants are rather lackluster.
Nevertheless, some industry insiders have stated that the online recruitment industry in 2011 has reached a turning point, with industry competition entering a stage where products and services are compared. What is needed is for websites to provide specialized services and differentiated products. Facing new forces in online recruitment like SNS and Weibo recruitment.
Nowadays, with the increasing demand from job seekers and employers, the complexity of the employment situation, and the allure of profits, competition in the recruitment market is becoming increasingly intense, with various social networking sites and portal sites also joining the recruitment trend, impacting traditional recruitment websites to a certain extent.
Utilizing today's societal resources to enhance interpersonal communication and interaction, strengthening cooperation with some social networking sites, enhancing the influence of the website, fully utilizing the "network" of social networking sites to improve recruitment effectiveness. Establishing service centers, updating information in a timely manner to ensure its timeliness, continuously refining information so that recruiters and job seekers can meet their personalized needs targetedly, fundamentally enhancing the matching degree between job position information and talent information.
Addressing fundamental issues such as the incompleteness and asymmetry of information on traditional recruitment websites, providing genuine and reliable information services to recruiters and job seekers.
It is evident that domestic talent employment demand has endless development potential, with a bright future ahead. In this vast "dye vat," innovation, uniqueness, user consideration, and interactivity will determine who leads the market and shapes society.