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51job Declines on Slower Sales Growth as Phoenix Tumbles

51job Inc. (JOBS), a Chinese online employment listing provider, fell the most in nine months in U.S. trading after saying sales growth slowed last quarter.

American depositary receipts of 51job sank 8.8 percent in New York yesterday as trading volume surged. Phoenix New Media Ltd. (FENG) plunged 8.2 percent after second-quarter revenue at the television and Internet news outlet fell short of analyst estimates. The Bloomberg China-US Equity Index (HSCEI) was little changed at 114.78. Forty-seven stocks declined while 32 advanced.

Shanghai-based 51job, which helps businesses post hiring listings on its website, said revenue increased 13.1 percent in the April-June period, weaker than the growth rate in the prior two quarters. China’s economic expansion slowed between October and March before picking up in the second quarter. 51job’s lower sales growth will constrain profits as the company spends more on marketing, according to Juan Lin at 86Research Ltd.

“The slowdown in the macro economy earlier this year has limited growth in manufacturing jobs, reflected in 51job’s deceleration in sales,” Tian X. Hou, the founder of T.H. Capital LLC, a research firm focusing on the Chinese Internet sector, said in a telephone interview from Beijing. “At the same time, rising competition from other job websites and its expansion into smaller cities is cutting pricing power and imposing pressure on margins.”

Sales Forecast

51job ADRs sank to $34.89, the biggest decline since November. Volume was more than four times the 90-day average compiled by Bloomberg.

The company forecast sales of between $73.3 million and $75.8 million for the third quarter, compared with $73.8 million for the April-June period. The projection would represent growth of as low as 6.9 percent from a year earlier, according to the company’s earnings reports.

Daily job postings on 51job.com increased 15.1 percent in July from a year earlier, lower than the second quarter’s 18.6 percent growth, according to a T.H. Capital note dated Aug. 6, citing data it tracked.

Phoenix New Media, based in Beijing, tumbled to $10.28 in the biggest decline in four months.

The company said yesterday revenue rose 13 percent to 410.9 million yuan ($66.73 million) in the last quarter, compared with the 417.3 million yuan average estimate of two analysts compiled by Bloomberg.

The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slipped 0.2 percent to $40.97, falling for the first time in three days. The Standard & Poor’s 500 Index also fell 0.2 percent as investors watched geopolitical developments while Brent crude slumped.

The Hang Seng China Enterprises Index gained 0.2 percent to 11,064.35, the highest in a week. The Shanghai Composite Index (SHCOMP) retreated 0.1 percent to 2,221.60.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Marie-France Han, Boris Korby

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