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51job's CEO Discusses 4Q2011 Results - Earnings Call Transcript

Looking at each business area, our online revenue grew 39% year over year in the fourth quarter. As expected and forecasted into our guidance, we experienced some seasonal slowdown in recruitment activity at yearend, in line with historical patterns. In general, we observed that market demand and employment behavior for the full-year 2011 was largely similar to pre-financial crisis trends, a return to normalcy after two recovery years.

The bulk of new customers were weighted towards the first half of the year. As budgets were depleted by December, many HR managers looked forward to resuming their hiring post Chinese New Year.

Although the number of unique employers using online services increased 11% year over year, this figure decreased sequentially from the third to the fourth quarter like in many past years. As a result, revenue growth in the fourth quarter was primarily driven by 25% increase in average revenue per customer, which reflected the new rates introduced in April 2011 as well as competition for quality talent that drove employers to purchase more online services.

We also continued to see large employers with formalized annual recruitment plans remained aggressive spenders, while our smaller corporate customers were less active amid low seasonal demand and the overhang of economic uncertainty.

In our Other HR Services area, we had another standout quarter with revenues growing 33%. We saw a strong demand for our seasonal campus recruitment services, which demonstrated the increasing investment in human capital by large corporate, in particular to acquire the necessary talents to drive their companies forward. We also remained very pleased with the development of our outsourcing and training businesses as we expand our service footprint to more enterprises across China.

Because our recruitment services will always be susceptible to the ups and downs of the economic cycle, we believe our growing diversification into Other HR Services is therefore more important and prudent for our longer-term development. Other HR Services contributed more than one-third of revenues in the fourth quarter, and we believe we have tremendous opportunities to cross-sell our outsourcing, training and other services into our recruitment customer base.

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