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51job CEO Discusses Q4 2010 Results - Earnings Call Transcript

Operating income increased 86% year-over-year to RMB78 million and operating margin reached over 27%. Non-GAAP earnings per common share came in at RMB1.27 or $0.38 per ADS. Again well ahead of our forecast. For the full-year 2010, revenues grew more than 33% to RMB1.09 billion or $165 million. We have most profitable year with operating income of RMB272 million and operating margin of 26%. Non-GAAP fully diluted earnings per common share in 2010 increased 86% to RMB4.67 or $1.42 per ADS.

This strong performance in the fourth quarter and the full-year 2010 was driven by the online business and growing contribution of our other HR services area. Our online business continued to experience a high growth to tax rate with the number of unique employers growing by nearly 47% year-over-year in the fourth quarter and 49% in 2010. During the past year, we have observed a significant increase in the usage of our online services as the acceptance of the internet as a recruitment channel by employers has improved.

Spending per customer has also trended upwards with employers purchasing more services to differentiate themselves and attract candidates to meet their hiring targets. In 2010, we also resumed geographical expansion utilizing our new online sales and operations center in Wuhan to cover five new cities. We have the largest sales footprint in China to serve employers and further penetrate this rapidly growing market. At the same time that we are capturing the online opportunity we are identifying and developing future revenues and streams.

From inception, our goal has been to become the largest integrated HR services provider in China, not just a leading job board. As the market evolve and HR departments become more sophisticated, we believe that the service components of our value proposition for the employers is becoming increasingly important. Our outsourcing business saw significant customer traction and our training services make solid progress in 2010. Other services such as campus recruitment, compensation benchmark and reports and placement services are also seeing stronger demand.

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