Chinese JOBS Still Impressive

On May 13, 51job (JOBS - Snapshot Report) announced first quarter results. Its net profit margin declined due to higher sales & marketing expenses and a higher tax rate. Its EPS missed the market consensus, while revenue exceeded expectations.

51job continues to have the highest brand recognition both in the online and offline recruiting market in China. Moreover, China's prosperous economy will continue to boost the recruiting market. Overall, we believe 51job is well positioned to leverage this market opportunity in China. Therefore, we are maintaining the Buy rating for the stock.

Moreover, China's prosperous economy will boost the recruiting market. Based on our estimate for fiscal year 2008 earnings per ADS, the stock is trading at 33.4x, which is lower than the industry mean. Based on our estimate for fiscal year 2009 earnings per ADS, the stock is trading at 20.0x, which is much lower than the industry mean. Using a P/E multiple of 25.0x our fiscal year 2009 earnings per ADS estimate of $0.90 yields a target price of $22.50, which can reflect company's great growth prospects, in our view.

Read the full analyst report on JOBS.