Net revenue of 963.6 billion yuan in the second quarter of the year-on-year growth of 7.6%.

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Sina Technologies News Beijing time, August 6, morning news, the future of worry-free (Nasdaq: JOBS) today released the second quarter of 2019 unaudited financial reports. According to the report, the company’s net revenue in the second quarter was 963.6 billion yuan ($140.4 billion), an increase of 7.6% compared with the same period last year; according to non-GAAP, the company’s net profit was 401.1 billion yuan ($58.3 million), an increase of 11.5% compared with the same period last year. The profit was 358.7 million yuan.
Main achievements:
– Net revenue of the company was 963.6 billion yuan ($140.4 billion), an increase of 7.6% over the previous year. Among them, the revenue of online recruitment service increased by 3.8% compared with the same period last year, and other human resources related revenue increased by 14.8% compared with the same period last year.
– The company’s gross profit rate is 70.1%, compared with 71.6% in the same period last year.
– The operating profit of the company was 270.2 billion yuan (about 39.4 million US dollars), an increase of 23.9% over the same period last year.
– The operating profit margin of the company is 28%, compared with 24.4% in the same period last year.
– According to non-GAAP, the company’s net profit was RMB 400.1 billion yuan (about 58.3 million US dollars), up 11.5% year-on-year, compared with RMB 358.7 million yuan in the same period last year.
– The earnings per share of the company is RMB 1 yuan (about US$0.15).
– Excluding equity incentive payments, exchange earnings, changes in the fair value of convertible bonds and tax implications associated with these items, the adjusted earnings per share (not in accordance with the U.S. General Accounting Standards) are 5.9 yuan (about $0.86).
Financial analysis:
Net income in the second quarter as at 30 June 2019 was 963.6 billion yuan ($140.4 billion), up 7.6% from 895.5 billion yuan in the same period in 2018.
In the second quarter of 2019, online recruitment revenue was 611 million yuan ($89 million), up 3.8% from 588.4 million yuan in the same period last year. This growth was driven by an increase in the income of each independent employer, partially offset by a decrease in the number of independent employers using corporate online services. Compared with the same period in 2018, the average income of each independent employer increased by 20.0% in the second quarter of 2019, due to upward sales measures leading to the purchase of multiple and/or higher value online products and services, and the company continues to redistribute sales resources from smaller customer accounts. With the company’s strategic focus on more potential employers and moderate new users, estimates of independent employers fell 13.5% to 326,996 in the second quarter of 2019, compared with 377,831 in the same period last year. Estimates for independent employers in the second quarter of 2019 refer to employers currently assigned unique identification numbers in the company’s management information system, excluding employers using a pull-off network.
Other income related to human resources increased by 14.8% in the second quarter of 2019 to 352.6 billion yuan ($51.4 million) and to 307.1 billion yuan in the same period of 2018. The increase is mainly due to the increased use and growth of business process outsourcing, training and evaluation services.
Gross profit increased by 5.4% in the second quarter of 2018 to 675.9 billion yuan ($98.5 million), compared with 641 million yuan in the same period last year. Gross interest rate (gross profit as a percentage of net income) was 70.1% in the second quarter of 2019, compared with 71.6% in the same period of 2018, due to the increase in employee salary expenditure.
Operating expenditure fell by 4.1% in the second quarter of 2019 to 405.6 billion yuan ($59.1 million), compared with 422.9 billion yuan in the same period in 2018. Sales and marketing expenditure in the second quarter of 2019 decreased by 6.1% from 334.2 million yuan in the same period last year to 313.7 million yuan (45.7 million US dollars), mainly due to reduced advertising expenditure, reduced performance bonuses and sales expenditure, partially offset by increases in employee wages and social insurance payments. General and administrative expenditure increased by 3.7% to 92 million yuan ($13.4 million) in the second quarter of 2019, an increase of 3.7% compared with 88.7 million yuan in the same period of last year, mainly due to the increase in staff salary expenditure, but partly offset by the decrease in office expenditure.
Operating profit increased by 23.9% in the second quarter of 2019, from 218.1 billion yuan in the second quarter of 2018 to 270.2 billion yuan ($39.4 million). In the second quarter of 2019, the operating profit margin (i.e., the percentage of future operating profit as a percentage of net income) was 28.0%, compared with 24.4% in the same period of 2018. Excluding share-based compensation, the operating profit margin will be 30.9% in the second quarter of 2019, compared with 27.2% in the same period of 2018.
In the second quarter of 2019, the company confirmed that its earnings from foreign currency conversion were RMB 28.6 million yuan ($4.2 million), while its losses in the second quarter of 2018 were RMB 8.8 million yuan, mainly due to the impact of exchange rate changes between RMB and US dollar on its US dollar cash deposits and US dollar-denominated convertible senior notes.
In the second quarter of 2019, the company confirmed a market-valued non-cash loss of RMB 333.3 billion (US$48.5 million) related to changes in fair value of convertible preferred notes, compared with RMB 309.3 billion in the second quarter of 2018. On April 15, 2019, convertible preferred notes matured, with principal of $172.5 million converted to 4,035,664 shares.

Other earnings in the second quarter of 2019 included local government financial subsidies of RMB 123.1 billion (US$17.9 million), compared with RMB 154 million in the second quarter of 2018.
In the second quarter of 2019, the net profit should be 67.4 million yuan ($9.8 million), while in the same period of 2018, the net loss should be 56.6 million yuan. The fully diluted earnings per share in the second quarter of 2019 were RMB 1.00 yuan ($0.15), while the losses per share in the same period of 2018 were RMB 0.92 yuan.
In the second quarter of 2019, the total share-based salary expenditure was RMB 28 million yuan ($4.1 million), compared with RMB 25.1 million yuan in the second quarter of 2018.
Excluding equity compensation fees, foreign currency convertible gains and losses, fair value changes of convertible preferred notes, and the tax impact of these items, the future of non-GAAP adjustment should account for 11.5% of net profit growth in the second quarter of 2019, reaching 401 million yuan (58.3 million US dollars), compared with 358.7 million yuan in the second quarter of 2018. In the second quarter of 2019, non-GAAP adjusted fully diluted earnings per share was RMB 5.90 yuan ($0.86), compared with RMB 5.43 yuan in the second quarter of 2018.
As of 30 June 2019, total cash and short-term investments amounted to 9.756 billion yuan ($1.421.2 billion), while as of 31 December 2018, total cash and short-term investments amounted to 8.834.2 billion yuan.
Business outlook:
Based on the current market and operating conditions, the company’s net income target for the third quarter of 2019 is estimated to be between 915 million yuan and 955 million yuan (133.3 million to 139.1 million dollars).
Excluding share-based compensation fees and any gains or losses from foreign currency conversion, as well as the tax impact of these items, the company’s non-GAAP fully diluted earnings target for the third quarter of 2019 is estimated to range from RMB 4.00 to RMB 4.30 per share (US$0.58 to US$0.63).
The company expects total share-based compensation expenditure in the third quarter of 2019 to be between 32 million yuan and 33 million yuan ($4.7 million to $4.8 million).
Teleconferencing:
The company’s management will hold a conference call at 9 p.m. Eastern time on August 5, 2019 (9 a.m. Beijing time on August 6, 2019) to discuss its financial performance, operating performance and business prospects for the second quarter of 2019.
Please use the following telephone number to attend the conference:
USA: +1-888-346-8982.
International: +1-412-902-4272.
Hong Kong: +852-3018-4992.
Conference ID: 5Job
The conference call will also be broadcast and replayed live through the carefree Investor Relations website at http://ir.51job.com. (Yiqun Dinghong)