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51job.com Says Q3 Figures Exceed Expectations

51job.com's (JOBS) just released financial results for the third quarter ended September 30, 2005 show total revenues exceeded the company's expectations.

Total revenues were CNY160.8 million, an increase of 21.0% from CNY132.8 million for the same quarter in 2004.

Excluding the revenue contribution of the stationery business, which the company ceased to actively operate in the fourth quarter of 2004, total revenues grew 26.6% in the third quarter of 2005 from CNY127.0 million in the third quarter of 2004.

Print advertising revenues for the third quarter of 2005 increased 20.2% to CNY93.1 million compared with CNY77.4 million for the same quarter in 2004 due primarily to a higher number of recruitment advertisements placed in 51job Weekly (formerly translated as "Career Post Weekly" in English), which was partially offset by lower average revenue per page as a result of increasing revenue contribution from lower priced cities. The estimated number of print advertising pages generated in the third quarter of 2005 increased to 3,115 compared with 2,399 pages in the same quarter in 2004.

Online recruitment services revenues for the third quarter of 2005 were CNY44.4 million, representing a 37.5% growth from CNY32.3 million for the same quarter last year. The increase was principally attributable to a larger number of employers using the company's online recruitment services, which increased to 34,407 in the third quarter of 2005, compared with 23,562 in the same period last year.

Executive search revenues for the third quarter of 2005 decreased 21.5% to CNY6.3 million from CNY8.1 million for the same quarter last year. For the third quarter of 2005, other human resource related revenues were CNY16.9 million, representing a 12.6% growth from CNY15.0 million for the third quarter last year. Excluding the stationery business, revenues from other human resource related services increased 83.9% from CNY9.2 million in the third quarter of 2004 due to increased demand for corporate training and business process outsourcing services.

Gross profit for the third quarter of 2005 was CNY82.9 million, representing an increase of 22.4% from CNY67.7 million for the same quarter last year.

Operating expenses for the third quarter of 2005 were CNY53.0 million compared with CNY35.2 million for the same period last year. Operating expenses as a percentage of net revenues was 35.0% for the third quarter of 2005 compared with 27.9% in the September 2004 quarter.

Sales and marketing expenses for the third quarter of 2005 grew to CNY27.6 million from CNY17.7 million for the same quarter in 2004 mainly due to additional hires into the company's salesforce and higher spending on promotional activities.

General and administrative expenses for the third quarter of 2005 increased to CNY22.2 million from CNY14.2 million for the third quarter last year primarily as a result of higher professional services fees and other public company expenses, operating several additional sales offices over the comparable period in 2004 and increased personnel.

Income from operations for the third quarter of 2005 was CNY29.8 million compared with CNY32.5 million for the same period last year. Interest and investment income increased to CNY5.6 million in the third quarter of 2005 from CNY0.2 million in the third quarter of 2004 due to increased interest income from higher interest rates and larger bank deposits, which include proceeds from the company's initial public offering completed in October 2004.

GAAP net income for the third quarter of 2005 was CNY17.0 million compared with CNY23.9 million for the same period in 2004.

For the fourth quarter of 2005, based on current market and operating conditions, 51job's revenue target is in the range of CNY140 to CNY150 million, which would represent an increase of 16% to 25% from the fourth quarter of 2004.

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