51job, Inc. Reports Third Quarter 2018 Financial Results

SHANGHAI,Nov. 9,2018 -- 51job,Inc. (Nasdaq: JOBS) ("51job" or the "Company"),a leading provider of integrated human resource services in China,announced today its unaudited financial results for the third quarter ended September 30,2018.

Third Quarter 2018 Financial Highlights:

Total revenues increased 31.1% over Q3 2017 to RMB954.6 million (US$139.0 million),exceeding the Company's guidance range

Online recruitment services revenues increased 33.0% over Q3 2017 to RMB649.3 million (US$94.5 million)

Other human resource related revenues increased 27.2% over Q3 2017 to RMB305.4 million (US$44.5 million)

Gross margin was 72.5% compared with 72.8% in Q3 2017

Income from operations increased 34.6% over Q3 2017 to RMB270.5 million (US$39.4 million)

Fully diluted earnings per share was RMB5.16 (US$0.75)

Excluding share-based compensation expense,loss from foreign currency translation and change in fair value of convertible senior notes,as well as the related tax effect of these items,non-GAAP adjusted fully diluted earnings per share were RMB5.09 (US$0.74),exceeding the Company's guidance range

Commenting on the results,Rick Yan,President and Chief Executive Officer of 51job,said,"Deploying a high-quality growth strategy by delivering the best to employers and job seekers,we are pleased to report another quarter of solid financial results. In the third quarter,our online business again saw further improvement in average revenue per employer as we successfully drove greater spending by customers. In the other HR services area,demand and usage continued to see good growth as employers sought more assistance and solutions to address talent management challenges. With a broad portfolio of products and services,robust business fundamentals,and a long,proven track record of healthy,profitable operations,51job remains confident and excited about the tremendous HR market opportunity in China."

Third Quarter 2018 Unaudited Financial Results

Total revenues for the third quarter ended September 30,2018 were RMB954.6 million (US$139.0 million),an increase of 31.1% from RMB728.2 million for the same quarter in 2017.

Online recruitment services revenues for the third quarter of 2018 were RMB649.3 million (US$94.5 million),representing a 33.0% increase from RMB488.2 million for the same quarter of the prior year. This growth was driven by higher average revenue per unique employer,which was partially offset by a decrease in the number of unique employers. Average revenue per employer increased 38.6% in the third quarter of 2018 due to successful up-selling efforts that resulted in the purchase of multiple and/or higher value online products and services by customers,as well as price increases for select like-for-like products when compared with the same quarter in 2017. In line with the strategic priority to focus more attention on higher potential employers,the Company has chosen to moderate new user additions and to terminate coverage of certain customer accounts in 2018,and therefore,the estimated number of unique employers decreased 4.1% to 365,386 in the third quarter of 2018 compared with 380,866 in the same quarter of the prior year. The estimated number of unique employers in the third quarter of 2018 reflects those employers currently assigned a unique identification number in the Company's management information systems and does not include employers utilizing Lagou.com.

Other human resource related revenues for the third quarter of 2018 increased 27.2% to RMB305.4 million (US$44.5 million) from RMB240.0 million for the same quarter in 2017. This increase was mainly due to greater usage and growth of business process outsourcing,training,assessment and placement services.

Gross profit for the third quarter of 2018 increased 30.6% to RMB684.7 million (US$99.7 million) from RMB524.2 million for the same quarter of the prior year. Gross margin,which is gross profit as a percentage of net revenues,was 72.5% in the third quarter of 2018 compared with 72.8% for the same quarter in 2017.

Operating expenses for the third quarter of 2018 increased 28.1% to RMB414.1 million (US$60.3 million) from RMB323.3 million for the same quarter in 2017. Sales and marketing expenses for the third quarter of 2018 increased 32.0% to RMB323.4 million (US$47.1 million) from RMB245.0 million for the same quarter of the prior year primarily due to higher employee compensation expenses,headcount additions,and greater advertising and promotion expenses. General and administrative expenses for the third quarter of 2018 increased 16.0% to RMB90.8 million (US$13.2 million) from RMB78.2 million for the same quarter of the prior year primarily due to higher employee compensation,rent and office expenses.

Income from operations for the third quarter of 2018 increased 34.6% to RMB270.5 million (US$39.4 million) from RMB200.9 million for the third quarter of 2017. Operating margin,which is income from operations as a percentage of net revenues,was 28.7% in the third quarter of 2018 compared with 27.9% for the same quarter in 2017. Excluding share-based compensation expense,operating margin would have been 31.7% in the third quarter of 2018 compared with 31.1% for the same quarter in 2017.

The Company recognized a loss from foreign currency translation of RMB67.1 million (US$9.8 million) in the third quarter of 2018 compared with RMB2.2 million in the third quarter of 2017 primarily due to the impact of the change in exchange rate between the Renminbi and the U.S. dollar on the Company's U.S. dollar cash deposits and U.S. dollar-denominated convertible senior notes issued in 2014.

In the third quarter of 2018,the Company recognized a mark-to-market,non-cash gain of RMB548.6 million (US$79.9 million) associated with a change in fair value of convertible senior notes compared with a loss of RMB351.5 million in the third quarter of 2017. The large non-cash gain was a result of the significant change in the price of the Company's American Depositary Shares traded on the Nasdaq Global Select Market during the third quarter of 2018 and its corresponding effect on the fair value of the convertible senior notes.

During the third quarter of 2018,the Company recognized a gain of RMB61.1 million (US$8.9 million) from the sale of shares in Shanghai Gaodun Education & Training Co.,Ltd. ("Golden Finance"). The Company reduced its stake in Golden Finance from 15.0% to 12.7% as of September 30,2018.

Net income attributable to 51job for the third quarter of 2018 was RMB785.4 million (US$114.4 million) compared with net loss of RMB(167.0) million for the same quarter in 2017. Fully diluted earnings per share for the third quarter of 2018 was RMB5.16 (US$0.75) compared with loss per share of RMB(2.76) for the same quarter in 2017.

In the third quarter of 2018,total share-based compensation expense was RMB29.2 million (US$4.2 million) compared with RMB22.9 million in the third quarter of 2017.

Excluding share-based compensation expense,non-GAAP adjusted net income attributable to 51job for the third quarter of 2018 increased 58.8% to RMB333.1 million (US$48.5 million) compared with RMB209.8 million for the third quarter of 2017. Non-GAAP adjusted fully diluted earnings per share were RMB5.09 (US$0.74) in the third quarter of 2018 compared with RMB3.32 in the third quarter of 2017.

As of September 30,2018,cash and short-term investments totaled RMB8,695.3 million (US$1,266.1 million) compared with RMB7,132.0 million as of December 31,2017.

Business Outlook

Based on current market and operating conditions,the Company's total revenues target for the fourth quarter of 2018 is in the estimated range of RMB1,090 million to RMB1,120 million (US$158.7 million to US$163.1 million). Guidance for earnings per share is provided on a non-GAAP basis due to the inherent difficulty in forecasting the future impact of certain items,such as gain/loss from foreign currency translation and change in fair value of convertible senior notes. The Company is not able to provide a reconciliation of these non-GAAP items to expected reported GAAP earnings per share,without unreasonable efforts,due to the unknown effect and potential significance of such future impact and changes.Excluding share-based compensation expense,any gain or loss from foreign currency translation,and any mark-to-market gain or loss associated with a change in fair value of convertible senior notes,the Company's non-GAAP fully diluted earnings target for the fourth quarter of 2018 is in the estimated range of RMB4.45 to RMB4.75 (US$0.65 to US$0.69) per share.The Company expects total share-based compensation expense in the fourth quarter of 2018 to be in the estimated range of RMB30 million to RMB31 million (US$4.4 million to US$4.5 million).

Currency Convenience Translation

For the convenience of readers,certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.8680 to US$1.00,the noon buying rate on September 28,2018 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

Conference Call Information

The Company's management will hold a conference call at 8:00 p.m. Eastern Time on November 8,2018 (9:00 a.m. Beijing / Hong Kong time zone on November 9,2018) to discuss its third quarter 2018 financial results,operating performance and business outlook.To dial in to the call,please use the following telephone numbers:

US:

+1-888-346-8982

International:

+1-412-902-4272

Hong Kong:

+852-800-905-945

China:

+86-400-120-1203

Conference ID:

51job

The call will also be available live and on replay through 51job's investor relations website,http://ir.51job.com.

Use of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"),51job uses non-GAAP financial measures of income before income tax expense,income tax expense,adjusted net income,adjusted net income attributable to 51job and adjusted earnings per share,which are adjusted from results based on GAAP to exclude share-based compensation expense,as well as the related tax effect of these items.The Company believes excluding share-based compensation expense and its related tax effect from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings.The Company believes excluding loss from foreign currency translation and change in fair value of convertible senior notes,as well as the related tax effect,from its non-GAAP financial measures is useful for its management and investors as such translation or mark-to-market gain/loss is not indicative of the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings.51job also believes these non-GAAP financial measures excluding share-based compensation expense,are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis.The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies.The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.

About 51job

Founded in 1998,51job is a leading provider of integrated human resource services in China. With a comprehensive suite of HR solutions,51job meets the needs of enterprises and job seekers through the entire talent management cycle,from initial recruitment to employee retention and career development.The Company's main online recruitment platforms (http://www.51job.com,http://www.yingjiesheng.com,http://www.51jingying.com,and http://www.lagou.com),as well as mobile applications,connect millions of people with employment opportunities every day. 51job also provides a number of other value-added HR services,including business process outsourcing,professional assessment,placement,executive search and compensation analysis. 51job has a call center in Wuhan and a nationwide sales office network spanning 25 cities across China.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "targets,"confident" and similar statements. Among other things,statements that are not historical facts,including statements about 51job's beliefs and expectations,the business outlook and quotations from management in this announcement,as well as 51job's strategic and operational plans,are or contain forward-looking statements. 51job may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. All forward-looking statements are based upon management's expectations at the time of the statements and involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: execution of 51job's strategies and business plans; behavioral and operational changes of enterprises in meeting their human resource needs as they respond to evolving social,political,regulatory and financial conditions in China; introduction by competitors of new or enhanced products or services; price competition in the market for the various human resource services that 51job provides in China; acceptance of new products and services developed or introduced by 51job outside of the human resources industry; risks related to acquisitions or investments 51job has made or will make in the future; accounting adjustments that may occur during the quarterly or annual close or auditing process; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; and fluctuations in general economic and business conditions in China. Further information regarding these and other risks are included in 51job's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release and based on assumptions that 51job believes to be reasonable as of this date,and 51job undertakes no obligation to update any forward-looking statement,except as required under applicable law.

Contact:

Linda Chien

Investor Relations

51job,Inc.

+86-21-6879-6250

ir@51job.com

51job,Inc.

Consolidated Statements of Operations and Comprehensive Income

For the Three Months Ended

September 30,

2017

September 30,

2018

September 30,

2018

(In thousands,except share and per share data)

(unaudited)

(unaudited)

(unaudited)

RMB

RMB

US$ (Note 1)

Revenues:

Online recruitment services

488,224

649,275

94,536

Other human resource related revenues

240,005

305,370

44,463

Total revenues

728,229

954,645

138,999

Less: Government surcharges

(7,891)

(10,642)

(1,550)

Net revenues

720,338

944,003

137,449

Cost of services (Note 2)

(196,155)

(259,327)

(37,759)

Gross profit

524,183

684,676

99,690

Operating expenses:

Sales and marketing (Note 3)

(245,033)

(323,373)

(47,084)

General and administrative (Note 4)

(78,218)

(90,758)

(13,215)

Total operating expenses

(323,251)

(414,131)

(60,299)

Income from operations

200,932

270,545

39,391

Loss from foreign currency translation

(2,183)

(67,089)

(9,768)

Interest and investment income,net

21,230

29,654

4,318

Change in fair value of convertible senior notes

(351,500)

548,626

79,881

Gain from sale of long-term investments

—

61,070

8,892

Other income,net

6,043

3,330

485

Income (Loss) before income tax expense

(125,478)

846,136

123,199

Income tax expense

(41,010)

(61,228)

(8,915)

Net income (loss)

(166,488)

784,908

114,284

Net (income) loss attributable to non-controlling interests

(494)

515

75

Net income (loss) attributable to 51job,Inc.

(166,982)

785,423

114,359

Net income (loss)

(166,284

Other comprehensive loss

(316)

(20,795)

(3,028)

Total comprehensive income (loss)

(166,804)

764,113

111,256

Earnings (Loss) per share:

Basic

(2.76)

12.78

1.86

Diluted (Note 5)

(2.76)

5.16

0.75

Weighted average number of common shares outstanding:

Basic

60,566,713

61,465,682

61,682

Diluted

60,713

67,304,326

67,326

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.8680

to US$1.00 on September 28,2018 in New York for cable transfers of Renminbi as set forth in the H.10 weekly

statistical release of the Federal Reserve Board.

(2) Includes share-based compensation expense of RMB3,674 and RMB4,654 (US$678) for the three months ended

September 30,2017 and 2018,respectively.

(3) Includes share-based compensation expense of RMB3,159 and RMB4,001 (US$583) for the three months ended

September 30,respectively.

(4) Includes share-based compensation expense of RMB16,103 and RMB20,518 (US$2,987) for the three months ended

September 30,respectively.

(5) Diluted earnings (loss) per share is calculated in accordance with the "if converted" method. This includes the

add-back of interest expense of RMB9,587 (US$1,396),subtraction of change in fair value of convertible senior notes

of RMB548,626 (US$79,881),and add-back of foreign currency translation loss of RMB100,966 (US$14,701)

related to the convertible senior notes to the numerator of net income attributable to 51job,and the addition of the

maximum number of 4,035,672 potentially converted shares related to the convertible senior notes to the denominator

of diluted common shares for the three months ended September 30,2018. The potential conversion of the

convertible senior notes and the impact of shares options was excluded in the computation of diluted loss per share

for the three months ended September 30,2017 because the effect would be anti-dilutive.

51job,Inc.

Consolidated Statements of Operations and Comprehensive Income

For the Nine Months Ended

September 30,except share and per share data)

(unaudited)

(unaudited)

(unaudited)

RMB

RMB

US$ (Note 1)

Revenues:

Online recruitment services

1,352,257

1,785,946

260,039

Other human resource related revenues

656,852

875,498

127,475

Total revenues

2,009,109

2,661,444

387,514

Less: Government surcharges

(23,569)

(30,293)

(4,411)

Net revenues

1,985,540

2,631,151

383,103

Cost of services (Note 2)

(533,364)

(709,083)

(103,244)

Gross profit

1,452,176

1,922,068

279,859

Operating expenses:

Sales and marketing (Note 3)

(678,163)

(932,403)

(135,760)

General and administrative (Note 4)

(220,515)

(264,943)

(38,576)

Total operating expenses

(898,678)

(1,197,346)

(174,336)

Income from operations

553,498

724,722

105,523

Loss from foreign currency translation

(4,045)

(111,577)

(16,246)

Interest and investment income,net

56,104

79,088

11,515

Change in fair value of convertible senior notes

(491,410)

(349,789)

(50,930)

Gain from sale of long-term investments

—

61,net

75,767

157,514

22,934

Income before income tax expense

189,914

561,028

81,688

Income tax expense

(122,616)

(171,065)

(24,908)

Net income

67,298

389,963

56,780

Net (income) loss attributable to non-controlling interests

(766)

6,020

877

Net income attributable to 51job,Inc.

66,532

395,983

57,657

Net income

67,780

Other comprehensive loss

(777)

(20,639)

(3,005)

Total comprehensive income

66,521

369,324

53,775

Earnings per share:

Basic

1.11

6.46

0.94

Diluted (Note 5)

1.09

6.26

0.91

Weighted average number of common shares outstanding:

Basic

59,855,656

61,251,995

61,995

Diluted

60,763,317

63,288,619

63,619

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.8680

to US$1.00 on September 28,2018 in New York for cable transfers of Renminbi as set forth in the H.10 weekly

statistical release of the Federal Reserve Board.

(2) Includes share-based compensation expense of RMB10,390 and RMB11,607 (US$1,690) for the nine months ended

September 30,respectively.

(3) Includes share-based compensation expense of RMB8,932 and RMB9,978 (US$1,453) for the nine months ended

September 30,respectively.

(4) Includes share-based compensation expense of RMB45,530 and RMB55,481 (US$8,078) for the nine months ended

September 30,respectively.

(5) Diluted earnings per share is calculated in accordance with the "if converted" method. The potential

conversion of the convertible senior notes was excluded in the computation of diluted earnings per share for the

nine months ended September 30,2017 and 2018 because the effect would be anti-dilutive.

51job,Inc.

Reconciliation of GAAP and Non-GAAP Results

For the Three Months Ended

September 30,except share and per share data)

(unaudited)

(unaudited)

(unaudited)

RMB

RMB

US$ (Note 1)

GAAP income (loss) before income tax expense

(125,199

Add back: Share-based compensation

22,936

29,173

4,248

Add back: Loss from foreign currency translation

2,183

67,089

9,768

Add back: Change in fair value of convertible senior notes

351,500

(548,626)

(79,881)

Non-GAAP income before income tax expense

251,141

393,772

57,334

GAAP income tax expense

(41,915)

Tax effect of non-GAAP line items

124

(5)

(1)

Non-GAAP income tax expense

(40,886)

(61,233)

(8,916)

Non-GAAP adjusted net income

210,255

332,539

48,418

Non-GAAP adjusted net income attributable to 51job,Inc.

209,761

333,054

48,493

Non-GAAP adjusted earnings per share:

Basic

3.46

5.42

0.79

Diluted (Note 2)

3.32

5.09

0.74

Weighted average number of common shares outstanding:

Basic

60,682

Diluted

65,962,406

67,326

For the Nine Months Ended

September 30,except share and per share data)

(unaudited)

(unaudited)

(unaudited)

RMB

RMB

US$ (Note 1)

GAAP income before income tax expense

189,688

Add back: Share-based compensation

64,852

77,066

11,221

Add back: Loss from foreign currency translation

4,045

111,577

16,246

Add back: Change in fair value of convertible senior notes

491,410

349,789

50,930

Non-GAAP income before income tax expense

750,221

1,099,460

160,085

GAAP income tax expense

(122,908)

Tax effect of non-GAAP line items

68

46

7

Non-GAAP income tax expense

(122,548)

(171,019)

(24,901)

Non-GAAP adjusted net income

627,673

928,441

135,184

Non-GAAP adjusted net income attributable to 51job,Inc.

626,907

934,461

136,061

Non-GAAP adjusted earnings per share:

Basic

10.47

15.26

2.22

Diluted (Note 3)

10.12

14.29

2.08

Weighted average number of common shares outstanding:

Basic

59,995

Diluted

64,799,349

67,324,291

67,291

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.8680

to US$1.00 on September 28,2018 in New York for cable transfers of Renminbi as set forth in the H.10 weekly

statistical release of the Federal Reserve Board.

(2) Diluted earnings per share is calculated in accordance with the "if converted" method. This includes the add-back

of interest expense of RMB9,328 and RMB9,396) related to the convertible senior notes to the numerator

of non-GAAP adjusted net income attributable to 51job for the three months ended September 30,

respectively. The maximum number of 4,672 potentially converted shares related to the convertible senior notes

was added to the denominator of diluted common shares for the three months ended September 30,2017 and 2018.

(3) Diluted earnings per share is calculated in accordance with the "if converted" method. This includes the add-back

of interest expense of RMB28,559 and RMB27,490 (US$4,003) related to the convertible senior notes to the numerator

of non-GAAP adjusted net income attributable to 51job for the nine months ended September 30,672 potentially converted shares related to the convertible senior notes

was added to the denominator of diluted common shares for the nine months ended September 30,2017 and 2018.

51job,Inc.

Consolidated Balance Sheets

As of

December 31,except share and per share data)

(unaudited)

(unaudited)

(unaudited)

RMB

RMB

US$ (Note 1)

ASSETS

Current assets:

Cash

2,292,476

1,943,100

282,921

Restricted cash

249

—

—

Short-term investments

4,839,550

6,752,240

983,145

Accounts receivable (net of allowance of RMB5,384

and RMB9,447 as of December 31,2017 and

September 30,respectively)

186,861

207,546

30,219

Prepayments and other current assets

559,105

518,521

75,498

Total current assets

7,878,241

9,421,407

1,371,783

Non-current assets:

Long-term investments

433,886

517,656

75,372

Property and equipment,net

497,845

535,356

77,949

Goodwill

1,021,454

1,454

148,727

Intangible assets,net

162,024

227,832

33,173

Other long-term assets

17,370

11,020

1,605

Deferred tax assets

12,912

15,347

2,235

Total non-current assets

2,145,491

2,328,665

339,061

Total assets

10,023,732

11,750,072

1,710,844

LIABILITIES,MEZZANINE EQUITY AND EQUITY

Current liabilities:

Accounts payable

35,532

46,809

6,816

Salary and employee related accrual

134,966

192,446

28,021

Taxes payable

230,734

196,359

28,590

Advance from customers

937,981

1,219,264

177,529

Convertible senior notes,current

—

2,175,341

316,736

Other payables and accruals

703,441

1,780

149,065

Total current liabilities

2,042,853,999

706,757

Non-current liabilities:

Deferred tax liabilities

121,348

135,582

19,741

Convertible senior notes,non-current

1,667,967

—

—

Total non-current liabilities

1,789,315

135,741

Total liabilities

3,831,969

4,989,581

726,498

Mezzanine equity:

Redeemable non-controlling interests

228,230

221,111

32,194

Shareholders' equity:

Common shares (US$0.0001 par value: 500,000,000

shares authorized,61,004 and 61,780,344

shares issued and outstanding as of December 31,

2017 and September 30,respectively)

50

50

7

Additional paid-in capital

1,809,732

2,004,515

291,863

Statutory reserves

13,874

13,874

2,020

Accumulated other comprehensive income

136,947

116,308

16,935

Retained earnings

3,993,777

4,389,760

639,161

Total 51job,Inc. shareholders' equity

5,954,380

6,524,507

949,986

Non-controlling interests

9,153

14,873

2,166

Total equity

5,963,533

6,539,380

952,152

Total liabilities,mezzanine equity and equity

10,844

Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of

RMB6.8680 to US$1.00 on September 28,2018 in New York for cable transfers of Renminbi as set forth in the H.10

weekly statistical release of the Federal Reserve Board.

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