bk329

Downgrading Monster Worldwide on Deteriorating Employment Outlook

ChinaHR revenue share is questionable as an indicator of market strength. Owner/managers deal with Monster, whereby Monster would buy remainder of company "based upon a multiple of ChinaHR’s 2007 revenue audited in accordance with U.S. GAAP. This multiple was determined when Monster made its initial investment in ChinaHR in early 2005", incented the incumbent owner-managers to "buy" revenue over the previous year. The information released by Monster is opaque on this point, which suggest that ChinaHR numbers are "puffed up", and likely distance to 51job is substantial - if Monster released its ChinaHR numbers after the deal is done, they could readily dispel this view (an unlikely outcome give Monster no longer provides guidance).