Maintain worry stock reduction rating

Morgan Stanley today issued an investment report to maintain the worry stock (nasdaq:jobs) "reduction" rating.

The following is a summary of the contents of the report:

First quarter results: 2014 fiscal year in the first quarterly, worry total revenue for the RMB 437 million yuan, an increase of 15%, compared to our expected low 2%, and the company's guidance expected consistent. Diluted earnings per share of 0.63 U.S. dollars, an increase of 7%, higher than our expectations of 9%, beyond the company's guidance expectations, mainly due to cost control and operating leverage.

Network Recruitment business: Network recruitment business revenue of 302 million yuan, an increase of 22%, mainly thanks to the increase in the number of customers, but also by the lower average sales price (ASP) impact.

Human Resources Service Revenue: Human Resources service revenue of 127 million yuan, an increase of 18%, compared with our expectations of 10%.

Print advertising revenue: Print advertising revenue for 8.4 million yuan, down 66% year-on-year, mainly because of the gradual abandonment of the business caused. In the first quarter, print advertising revenue accounted for only 2% of the company's total revenue, compared with 7% in the same period a year earlier.

Gross margin: First quarter gross profit margin of 75%, a record high, and last year's fourth quarter was 71%, the same period was 73%. Operating margins fell 3% per cent year-on-year and net profit fell 2% per cent year-on-year.

Second-quarter results expected: Worry expected that the second quarter net revenue will reach 440 million yuan to 455 million yuan, diluted earnings per share will reach 0.69 U.S. dollars to 0.76 U.S. dollars.

Valuation: We continue to maintain the worry stock "reduction" rating.