51job, Inc. Reports Third Quarter 2019 Financial Results

SHANGHAI,Nov. 15,2019 -- 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 thethirdquarterof 2019 ended September 30,2019.

Third Quarter 2019 Financial Highlights:

Net revenues increased 3.6% over Q3 2018 to RMB989.0 million (US$138.4 million)

Online recruitment services revenues decreased 2.4%

Other human resource related revenues increased 16.4%

Gross margin was 69.0% compared with 71.7% in Q3 2018

Income from operations was RMB256.7 million (US$35.9 million)

Fully diluted earnings per share was RMB4.44 (US$0.62)

Excluding share-based compensation expense and gain from foreign currency translation,as well as the related tax effect of these items,non-GAAP adjusted fully diluted earnings per share was RMB4.49 (US$0.63)

Commenting on the results,Rick Yan,President and Chief Executive Officer of 51job,said,"The diverse nature and strength of our proven,integrated HR solutions model enabled us to maintain solid profitability in the third quarter.Although near-term hiring sentiment remains weak and has negatively affected our online recruitment business,the resiliency of our other HR services area has seen consistent progress in employer engagement in these challenging market conditions of 2019. As we wrap up the year,we will continue to lay the groundwork for 51job's long-term successful development with a disciplined focus on executing our strategic plan: to deepen customer relationships across the entire talent management value chain,to improve user experience and effectiveness,and to expand our HR ecosystem with new innovative products,technology and partners."

Third Quarter 2019 Unaudited Financial Results

Net revenues for the third quarter ended September 30,2019 were RMB989.0 million (US$138.4 million),an increase of 3.6% from RMB954.6 million for the same quarter in 2018.

Online recruitment services revenues for the third quarter of 2019 were RMB633.4 million (US$88.6 million),representing a 2.4% decrease from RMB649.3 million for the same quarter of the prior year. The decline was due to weak macroeconomic conditions and soft hiring demand by employers in China in 2019.The estimated number of unique employers utilizing the Company's online services decreased 14.1% to 313,687 in the third quarter of 2019 compared with 365,386 for the same quarter of the prior year,primarily due to reduced recruitment need or inactivity expressed by smaller-sized customer accounts. However,average revenue per unique employer increased 13.6% in the third quarter of 2019 as compared with the same quarter in 2018,driven by the Company's up-selling efforts and focus on sales opportunities with larger-sized customer accounts. The estimated number of unique employers in the third quarter of 2019 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 2019 increased 16.4% to RMB355.6 million (US$49.7 million) from RMB305.4 million for the same quarter in 2018.The increase was primarily due to greater usage and growth of training,assessment and business process outsourcing services.

Gross profit for the third quarter of 2019 was RMB682.3 million (US$95.5 million) compared with RMB684.7 million for the same quarter of the prior year.Gross margin,which is gross profit as a percentage of net revenues,was 69.0% in the third quarter of 2019 compared with 71.7% for the samequarterin 2018.The increase in cost of services was primarily due to higher employee compensation expenses as well as seasonal staff additions in preparation for the upcoming peak campus recruitment period in the fourth quarter.

Operating expenses for the third quarter of 2019 increased 2.7% to RMB425.5 million (US$59.5 million) from RMB414.1 million for the same quarter in 2018.Sales and marketing expenses for the third quarter of 2019 increased 0.7% to RMB325.8 million (US$45.6 million) from RMB323.4 million for the same quarter of the prior year. General and administrative expenses for the third quarter of 2019 increased 9.9% to RMB99.7 million (US$14.0 million) from RMB90.8 million for the same quarter of the prior year primarily due to higher employee compensation expenses,in particular share-based compensation,as well as a larger provision for doubtful accounts.

Income from operations for the third quarter of 2019 decreased 5.1% to RMB256.7 million (US$35.9 million) from RMB270.5 million for the third quarter of 2018.Operating margin,which is income from operations as a percentage of net revenues,was 26.0% in the third quarter of 2019 compared with 28.3% for the same quarter in 2018.Excluding share-based compensation expense,operating margin would have been 29.5% in the third quarter of 2019 compared with 31.4% for the same quarter in 2018.

The Company recognized a gain from foreign currency translationof RMB31.4 million (US$4.4 million) in the third quarter of 2019 compared with a loss of RMB67.1 million in the third quarter of 2018 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.

Other income in the third quarter of 2019 included local government financial subsidies of RMB9.3 million (US$1.3 million) compared with RMB1.2 million in the third quarter of 2018.

Net income attributable to 51job for the third quarter of 2019 was RMB300.2 million (US$42.0 million) compared with RMB785.4 million for the same quarter in 2018.Fully diluted earnings per share for the third quarter of 2019 was RMB4.44 (US$0.62) compared with RMB5.16 for the same quarter in 2018.

In the third quarter of 2019,total share-based compensation expense was RMB34.8 million (US$4.9 million) compared with RMB29.2 million in the third quarter of 2018.

Excluding share-based compensation expense,gain/loss from foreign currency translation and change in fair value of convertible senior notes,non-GAAP adjusted net income attributable to 51job for the third quarter of 2019 was RMB303.7 million (US$42.5 million) compared with RMB333.1 million for the third quarter of 2018.Non-GAAP adjusted fully diluted earnings per share was RMB4.49 (US$0.63) in the third quarter of 2019 compared with RMB5.09 in the third quarter of 2018.

As of September 30,2019,cash and short-term investments totaled RMB10,177.9 million (US$1,423.9 million) compared with RMB8,834.2 million as of December 31,2018.

Business Outlook

Based on current market and operating conditions,the Company's net revenues target for the fourth quarter of 2019 is in the estimated range of RMB1,080 million to RMB1,120 million (US$151.1 million to US$156.7 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. 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. Excluding share-based compensation expense and any gain or loss from foreign currency translation,the Company's non-GAAP fully diluted earnings target for the fourth quarter of 2019 is in the estimated range of RMB4.45 to RMB4.75 (US$0.62 to US$0.66) per share. The Company expects total share-based compensation expense in the fourth quarter of 2019 to be in the estimated range of RMB34 million to RMB35 million (US$4.8 million to US$4.9 million).

Recent Investments and Transactions

The Company has recently completed transactions to acquire minority equity interests in companies which will enhance and expand 51job's HR services ecosystem with new products and technology to employers and job seekers. These investments include approximately US$80 million for a 17.5% equity interest in CDP Holdings,Ltd.,a leading provider of human capital management services delivered through a cloud-based technology platform in China,and approximately US$3 million in Fountain,a leading recruiting platform that focuses on gig and hourly service workers within the on-demand labor market in the United States.

The Company has also entered into an agreement to be a cornerstone investor in the initial public offering of Huali University Group Limited ("Huali"),a leading large-scale private higher education and vocational education group in South China. The Company will make a RMB200 million investment in Huali upon its completed listing on the Hong Kong Stock Exchange,which is expected to occur before the end of 2019.

These transactions have been or will be funded from the Company's existing cash resources.

Presentation and Reclassification of Government Surcharges

Beginning January 1,the Company's presentation of government surcharges has changed,and government surcharges have been included in cost of services.The prior year's amount of government surcharges has been reclassified to conform with the current year's presentation.This reclassification had no effect on the reported results in the consolidated statements of operations and comprehensive income.

Currency Convenience Translation

For the convenience of readers,certain Renminbiamounts have been translatedinto U.S. dollar amounts at the rate of RMB7.1477to US$1.00,the noon buying rate on September 30,2019 in New York for cable transfers of Renminbias set forth in the H.10 weekly statistical release of theFederal Reserve Board.

Conference Call Information

The Company's management will hold a conference call at 8:00 p.m. Eastern Time on November 14,2019 (9:00 a.m. Beijing / Hong Kong time zone on November 15,2019) to discuss its third quarter 2019 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:

+852-3018-4992

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 gain/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 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,http://www.lagou.com,and http://www.51mdd.com),as well as mobile applications,connect millions of people withemployment opportunities every day.51job also provides a number of other value-added HR services,including business process outsourcing,training,professional assessment,campus recruitment,executive search and compensation analysis. 51job has a call center in Wuhan and a nationwide network of sales and service locations spanning 37 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 theU.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,regulatoryand 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,

2018

September 30,

2019

September 30,

2019

(In thousands,except share and per share data)

(unaudited)

(unaudited)

(unaudited)

RMB

RMB

US$ (Note 1)

Revenues:

Online recruitment services

649,275

633,393

88,615

Other human resource related revenues

305,370

355,560

49,745

Net revenues (Note 2)

954,645

988,953

138,360

Cost of services (Note 3)

(269,969)

(306,690)

(42,908)

Gross profit

684,676

682,263

95,452

Operating expenses:

Sales and marketing (Note 4)

(323,373)

(325,779)

(45,578)

General and administrative (Note 5)

(90,758)

(99,738)

(13,954)

Total operating expenses

(414,131)

(425,517)

(59,532)

Income from operations

270,545

256,746

35,920

Gain (Loss) from foreign currency translation

(67,089)

31,366

4,388

Interest and investment income,net

29,654

48,390

6,770

Change in fair value of convertible senior notes

548,626

—

—

Gain from sale of long-term investments

61,070

—

—

Other income,net

3,330

12,729

1,781

Income before income tax expense

846,136

349,231

48,859

Income tax expense

(61,228)

(50,784)

(7,105)

Net income

784,908

298,447

41,754

Net loss attributable to non-controlling interests

515

1,714

240

Net income attributable to 51job,Inc.

785,423

300,161

41,994

Net income

784,754

Other comprehensive income (loss)

(20,795)

386

54

Total comprehensive income

764,113

298,833

41,808

Earnings per share:

Basic

12.78

4.52

0.63

Diluted (Note 6)

5.16

4.44

0.62

Weighted average number of common shares outstanding:

Basic

61,465,682

66,369,912

66,912

Diluted

67,304,326

67,622,677

67,677

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB7.1477

to US$1.00 on September 30,2019 in New York for cable transfers of Renminbi as set forth in the H.10 weekly

statistical release of the Federal Reserve Board.

(2) Beginning January 1,government surcharges have been included in cost of services. The prior year's amount

of government surcharges has been reclassified to conform with the current year's presentation. This reclassification

had no effect on the reported results in the consolidated statements of operations and comprehensive income.

(3) Includes share-based compensation expense of RMB4,654 and RMB5,558 (US$778) for the three months ended

September 30,2018 and 2019,respectively.

(4) Includes share-based compensation expense of RMB4,001 and RMB4,778 (US$668) for the three months ended

September 30,respectively.

(5) Includes share-based compensation expense of RMB20,518 and RMB24,498 (US$3,427) for the three months ended

September 30,respectively.

(6) Diluted earnings per share for the three months ended September 30,2018 was calculated in accordance with the

"if converted" method. This included the add-back of interest expense of RMB9,587,subtraction of change in fair value

of convertible senior notes of RMB548,626,and add-back of foreign currency translation loss of RMB100,966

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.

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

1,785,946

1,857,794

259,915

Other human resource related revenues

875,498

1,006,612

140,830

Net revenues (Note 2)

2,661,444

2,864,406

400,745

Cost of services (Note 3)

(739,376)

(843,787)

(118,050)

Gross profit

1,922,068

2,020,619

282,695

Operating expenses:

Sales and marketing (Note 4)

(932,403)

(928,194)

(129,859)

General and administrative (Note 5)

(264,943)

(281,937)

(39,444)

Total operating expenses

(1,197,346)

(1,210,131)

(169,303)

Income from operations

724,722

810,488

113,392

Gain (Loss) from foreign currency translation

(111,577)

73,717

10,313

Interest and investment income,net

79,088

126,370

17,680

Change in fair value of convertible senior notes

(349,789)

(752,073)

(105,219)

Gain from sale of long-term investments

61,net

157,514

198,116

27,717

Income before income tax expense

561,028

456,618

63,883

Income tax expense

(171,065)

(178,260)

(24,939)

Net income

389,963

278,358

38,944

Net loss attributable to non-controlling interests

6,020

4,411

617

Net income attributable to 51job,Inc.

395,983

282,769

39,561

Net income

389,944

Other comprehensive income (loss)

(20,639)

446

62

Total comprehensive income

369,324

278,804

39,006

Earnings per share:

Basic

6.46

4.38

0.61

Diluted (Note 6)

6.26

4.27

0.60

Weighted average number of common shares outstanding:

Basic

61,251,995

64,561,839

64,839

Diluted

63,288,619

66,245,961

66,961

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB7.1477

to US$1.00 on September 30,government surcharges have been included in cost of services. The prior year's amount

of government surcharges has been reclassified to conform with the current year's presentation. This reclassification

had no effect on the reported results in the consolidated statements of operations and comprehensive income.

(3) Includes share-based compensation expense of RMB11,607 and RMB14,678 (US$2,054) for the nine months ended

September 30,respectively.

(4) Includes share-based compensation expense of RMB9,978 and RMB12,618 (US$1,765) for the nine months ended

September 30,respectively.

(5) Includes share-based compensation expense of RMB55,481 and RMB64,800 (US$9,066) for the nine months ended

September 30,respectively.

(6) Diluted earnings per share for the nine months ended September 30,2018 was 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 30,2018 because the effect would be anti-dilutive.

On April 15,the convertible senior notes matured,and the note holders requested the conversion of the

senior notes into 4,664 shares.

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 before income tax expense

846,859

Add back: Share-based compensation

29,173

34,834

4,873

Add back: (Gain) Loss from foreign currency translation

67,089

(31,366)

(4,388)

Add back: Change in fair value of convertible senior notes

(548,626)

—

—

Non-GAAP income before income tax expense

393,772

352,699

49,344

GAAP income tax expense

(61,105)

Tax effect of non-GAAP line items

(5)

76

11

Non-GAAP income tax expense

(61,233)

(50,708)

(7,094)

Non-GAAP adjusted net income

332,539

301,991

42,250

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

333,054

303,705

42,490

Non-GAAP adjusted earnings per share:

Basic

5.42

4.58

0.64

Diluted (Note 2)

5.09

4.49

0.63

Weighted average number of common shares outstanding:

Basic

61,677

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

561,883

Add back: Share-based compensation

77,066

92,096

12,885

Add back: (Gain) Loss from foreign currency translation

111,577

(73,717)

(10,313)

Add back: Change in fair value of convertible senior notes

349,789

752,073

105,219

Non-GAAP income before income tax expense

1,099,460

1,227,070

171,674

GAAP income tax expense

(171,939)

Tax effect of non-GAAP line items

46

20

3

Non-GAAP income tax expense

(171,019)

(178,240)

(24,936)

Non-GAAP adjusted net income

928,441

1,048,830

146,738

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

934,461

1,053,241

147,355

Non-GAAP adjusted earnings per share:

Basic

15.26

16.31

2.28

Diluted (Note 2)

14.29

15.90

2.22

Weighted average number of common shares outstanding:

Basic

61,839

Diluted

67,324,291

66,2019 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 for the three and nine months ended September 30,2018 were calculated in accordance

with the "if converted" method. This includes the add-back of interest expense of RMB9,587 and RMB27,490 related to

the convertible senior notes to the numerator of non-GAAP adjusted net income attributable to 51job for the three and

nine months ended September 30,2018,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

and nine months ended September 30,2018. On April 15,and the note

holders requested the conversion of the senior notes into 4,Inc.

Consolidated Balance Sheets

As of

December 31,except share and per share data)

(audited)

(unaudited)

(unaudited)

RMB

RMB

US$ (Note 1)

ASSETS

Current assets:

Cash

1,968,351

2,222,881

310,992

Restricted cash

5,770

5,470

765

Short-term investments

6,865,886

7,955,020

1,112,948

Accounts receivable (net of allowance of RMB11,014 and

RMB10,855 as of December 31,2018 and September 30,

2019,respectively)

230,065

257,745

36,060

Prepayments and other current assets

606,918

675,326

94,482

Total current assets

9,676,990

11,116,442

1,555,247

Non-current assets:

Long-term investments

729,095

832,195

116,428

Property and equipment,net

527,020

275,371

38,526

Goodwill

1,036,124

1,124

144,959

Intangible assets,net

244,446

213,096

29,813

Right-of-use assets (Note 2)

—

332,436

46,510

Other long-term assets

9,736

10,449

1,462

Deferred tax assets

15,005

17,878

2,501

Total non-current assets

2,426

2,717,549

380,199

Total assets

12,238,416

13,833,991

1,935,446

LIABILITIES,MEZZANINE EQUITY AND EQUITY

Current liabilities:

Accounts payable

49,881

58,980

8,252

Salary and employee related accrual

164,134

198,153

27,723

Taxes payable

191,793

149,379

20,899

Advance from customers

1,126,300

1,156,914

161,858

Convertible senior notes

1,725,182

—

—

Lease liabilities,current (Note 2)

—

37,731

5,279

Other payables and accruals

952,178

1,138,982

159,349

Total current liabilities

4,209,468

2,740,139

383,360

Non-current liabilities:

Lease liabilities,non-current (Note 2)

—

58,134

8,133

Deferred tax liabilities

210,752

229,242

32,072

Total non-current liabilities

210,752

287,376

40,205

Total liabilities

4,420,220

3,027,515

423,565

Mezzanine equity:

Redeemable non-controlling interests

225,645

219,035

30,644

Shareholders' equity:

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

authorized,61,874,716 and 66,415,613 shares issued and

outstanding as of December 31,respectively)

50

53

7

Additional paid-in capital

2,055,036

4,764,484

666,576

Statutory reserves

17,279

17,279

2,418

Accumulated other comprehensive income

254,185

254,631

35,624

Retained earnings

5,242,691

5,525,460

773,040

Total 51job,Inc. shareholders' equity

7,569,241

10,907

1,477,665

Non-controlling interests

23,310

25,534

3,572

Total equity

7,592,551

10,481,237

Total liabilities,mezzanine equity and equity

12,446

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB7.1477 to US$1.00 on

September 30,2019 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal

Reserve Board.

(2) The Company has adopted ASU No. 2016-02,"Leases," beginning January 1,2019. Under the new provisions,the Company has

recognized right-of-use assets and lease liabilities for all operating leases related to office buildings with terms more than 12 months.

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