51job : Reports Second Quarter 2021 Financial Results (Form 6-K)

51job, Inc. Reports Second Quarter 2021 Financial Results

SHANGHAI, September 24, 2021 - 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 second quarter of 2021 ended June 30, 2021.

Second Quarter 2021 Financial Highlights:

·	Net revenues increased 32.6% over Q2 2020 to RMB1,098.7 million (US$170.2 million)

·	Online recruitment services revenues increased 17.4%

·	Other human resource related revenues increased 56.2%

·	Income from operations was RMB109.3 million (US$16.9 million)

·	Fully diluted earnings per share was RMB2.66 (US$0.41)

·	Excluding share-based compensation expense, loss from foreign currency translation, and change in fair value of listed equity securities investment, as well as the related tax effect of these items, non-GAAP adjusted fully diluted earnings per share was RMB3.64 (US$0.56)

Second Quarter 2021 Unaudited Financial Results

Net revenues for the second quarter ended June 30, 2021 were RMB1,098.7 million (US$170.2 million), an increase of 32.6% from RMB828.6 million for the same quarter in 2020.

Online recruitment services revenues for the second quarter of 2021 increased 17.4% to RMB590.6 million (US$91.5 million) compared with RMB503.3 million for the same quarter in 2020 primarily due to improved market conditions and more hiring activity from employers this year. While the Company believes there will be continued recovery in its online recruitment business in 2021, the recruitment outlook may be affected by uncertainty in the ongoing global pandemic and occasional restrictions instituted by authorities to contain outbreaks in China.

Other human resource related revenues for the second quarter of 2021 increased 56.2% to RMB508.1 million (US$78.7 million) from RMB325.4 million for the same quarter in 2020. The growth was primarily driven by strong demand for training services, campus recruitment campaigns, placement projects and business process outsourcing services this year.

Gross profit for the second quarter of 2021 increased 21.8% to RMB678.9 million (US$105.1 million) from RMB557.5 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, was 61.8% in the second quarter of 2021 compared with 67.3% for the same quarter in 2020. The increase in cost of services was primarily due to higher employee compensation expenses, staff additions and greater direct costs, such as venue rentals and media production services, incurred in providing training, campus recruitment and placement services to employers.

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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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Operating expenses for the second quarter of 2021 increased 45.3% to RMB569.5 million (US$88.2 million) from RMB391.9 million for the same quarter in 2020. Sales and marketing expenses for the second quarter of 2021 increased 55.7% to RMB455.6 million (US$70.6 million) from RMB292.7 million for the same quarter of the prior year, primarily due to greater spending on brand advertising as well as more headcount and higher employee compensation expenses. Advertising and promotion expenses increased 86.9% to RMB127.4 million (US$19.7 million) in the second quarter of 2021 from RMB68.2 million in the same quarter of the prior year. The Company has plans to significantly increase sales and marketing investments this year to strengthen its brands and promote its wide range of service offerings.

General and administrative expenses for the second quarter of 2021 increased 14.8% to RMB113.9 million (US$17.6 million) from RMB99.2 million for the same quarter of the prior year, primarily due to higher employee compensation, share-based compensation, and professional services fees.

Income from operations for the second quarter of 2021 was RMB109.3 million (US$16.9 million) compared with RMB165.5 million for the second quarter of 2020. Operating margin, which is income from operations as a percentage of net revenues, was 9.9% in the second quarter of 2021 compared with 20.0% for the same quarter in 2020. Excluding share-based compensation expense, operating margin would have been 14.4% in the second quarter of 2021 compared with 24.6% for the same quarter in 2020.

The Company recognized a loss from foreign currency translation of RMB12.5 million (US$1.9 million) in the second quarter of 2021 compared with RMB0.5 million in the second quarter of 2020, 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.

Interest and investment income for the second quarter of 2021 was RMB31.9 million (US$4.9 million) compared with RMB66.4 million in the second quarter of 2020, primarily due to the reallocation of cash resources from time deposits to lower interest-bearing demand accounts.

The Company recognized a mark-to-market, non-cash loss of RMB5.2 million (US$0.8 million) in the second quarter of 2021 compared with a gain of RMB56.8 million in the second quarter of 2020 associated with a change in fair value of listed equity securities investment in Huali University Group Limited, which is traded on the Hong Kong Stock Exchange.

Other income in the second quarter of 2021 included local government financial subsidies of RMB85.2 million (US$13.2 million) compared with RMB144.9 million in the second quarter of 2020.

Net income attributable to 51job for the second quarter of 2021 was RMB181.7 million (US$28.1 million) compared with RMB376.7 million for the same quarter in 2020. Fully diluted earnings per share for the second quarter of 2021 was RMB2.66 (US$0.41) compared with RMB5.55 for the same quarter in 2020.

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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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In the second quarter of 2021, total share-based compensation expense was RMB49.3 million (US$7.6 million) compared with RMB38.1 million in the second quarter of 2020.

Excluding share-based compensation expense, loss from foreign currency translation, and change in fair value of listed equity securities investment, as well as the related tax effect of these items, non-GAAP adjusted net income attributable to 51job for the second quarter of 2021 was RMB248.7 million (US$38.5 million) compared with RMB358.5 million for the second quarter of 2020. Non-GAAP adjusted fully diluted earnings per share was RMB3.64 (US$0.56) in the second quarter of 2021 compared with RMB5.28 in the second quarter of 2020.

As of June 30, 2021, cash and short-term investments totaled RMB10,812.9 million (US$1,674.7 million) compared with RMB10,761.9 million as of December 31, 2020.

Currency Convenience Translation

For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB6.4566 to US$1.00, the noon buying rate on June 30, 2021 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

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, gain/loss from foreign currency translation and change in fair value of listed equity securities investment, 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 listed equity securities investment, as well as the related tax effect, from its non-GAAP financial measures is useful for its management and investors as such translation, mark-to-market gain or 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, gain from foreign currency translation and change in fair value of listed equity securities investment, as well as the related tax effect of these items, 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.

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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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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 with employment 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 more than 30 cities across China.

Contact

Investor Relations, 51job, Inc.

Tel: [phone]

Email: [e-mail]

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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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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, 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; growth and trends of the human resource services industry in China; market acceptance of 51job's products and services; competition in the industry; 51job's ability to control costs and expenses; 51job's ability to retain key personnel and attract new talent; relevant government policies and regulations relating to 51job's industry, corporate structure and business operations; seasonality in the business; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; 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; and fluctuations in general economic and business conditions in China and globally, including the impact of the coronavirus or other pandemic. 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.

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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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51job, Inc.
Consolidated Statements of Operations and Comprehensive Income
		For the Three Months Ended
		June 30, 2020			June 30, 2021			June 30, 2021
(In thousands, except share and per share data)		(unaudited)			(unaudited)			(unaudited)
		RMB			RMB			US$ (Note 1)
Revenues:
Online recruitment services			503,254				590,594				91,471
Other human resource related revenues			325,374				508,147				78,702
Net revenues			828,628				1,098,741				170,173
Cost of services (Note 2)			(271,176	)			(419,884	)			(65,032	)
Gross profit			557,452				678,857				105,141
Operating expenses:
Sales and marketing (Note 3)			(292,732	)			(455,648	)			(70,571	)
General and administrative (Note 4)			(99,192	)			(113,888	)			(17,639	)
Total operating expenses			(391,924	)			(569,536	)			(88,210	)
Income from operations			165,528				109,321				16,931
Loss from foreign currency translation			(547	)			(12,523	)			(1,940	)
Interest and investment income, net			66,419				31,938				4,947
Change in fair value of listed equity securities investment			56,806				(5,158	)			(799	)
Other income, net			144,590				85,015				13,167
Income before income tax expense			432,796				208,593				32,306
Income tax expense			(59,621	)			(37,517	)			(5,811	)
Net income			373,175				171,076				26,495
Net loss attributable to non-controlling interests			3,485				10,600				1,642
Net income attributable to 51job, Inc.			376,660				181,676				28,137
Net income			373,175				171,076				26,495
Other comprehensive loss			(5	)			(225	)			(35	)
Total comprehensive income			373,170				170,851				26,460
Earnings per share:
Basic			5.62				2.69				0.42
Diluted			5.55				2.66				0.41
Weighted average number of common shares outstanding:
Basic			67,009,015				67,434,856				67,434,856
Diluted			67,878,333				68,247,200				68,247,200

Notes:
(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566 to US$1.00 on June 30, 2021 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 RMB6,079 and RMB7,875 (US$1,220) for the three months ended June 30, 2020 and 2021, respectively.
(3) Includes share-based compensation expense of RMB5,225 and RMB6,770 (US$1,048) for the three months ended June 30, 2020 and 2021, respectively.
(4) Includes share-based compensation expense of RMB26,826 and RMB34,684 (US$5,372) for the three months ended June 30, 2020 and 2021, respectively.

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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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51job, Inc.

Consolidated Statements of Operations and Comprehensive Income

		For the Six Months Ended
		June 30, 2020			June 30, 2021			June 30, 2021
(In thousands, except share and per share data)		(unaudited)			(unaudited)			(unaudited)
		RMB			RMB			US$ (Note 1)
Revenues:
Online recruitment services			1,050,271				1,135,956				175,937
Other human resource related revenues			569,468				857,938				132,878
Net revenues			1,619,739				1,993,894				308,815
Cost of services (Note 2)			(525,479	)			(741,650	)			(114,867	)
Gross profit			1,094,260				1,252,244				193,948
Operating expenses:
Sales and marketing (Note 3)			(568,924	)			(929,566	)			(143,971	)
General and administrative (Note 4)			(189,834	)			(209,428	)			(32,436	)
Total operating expenses			(758,758	)			(1,138,994	)			(176,407	)
Income from operations			335,502				113,250				17,541
Gain (Loss) from foreign currency translation			9,624				(7,178	)			(1,112	)
Interest and investment income, net			110,734				91,955				14,242
Change in fair value of equity securities investment			66,697				(18,413	)			(2,852	)
Other income, net			148,925				89,744				13,900
Income before income tax expense			671,482				269,358				41,719
Income tax expense			(96,392	)			(52,164	)			(8,079	)
Net income			575,090				217,194				33,640
Net loss attributable to non-controlling interests			6,816				21,707				3,362
Net income attributable to 51job, Inc.			581,906				238,901				37,002
Net income			575,090				217,194				33,640
Other comprehensive income (loss)			303				(163	)			(25	)
Total comprehensive income			575,393				217,031				33,615
Earnings per share:
Basic			8.70				3.54				0.55
Diluted			8.56				3.50				0.54
Weighted average number of common shares outstanding:
Basic			66,906,106				67,421,251				67,421,251
Diluted			67,942,579				68,202,198				68,202,198

Notes:

(1) The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566 to US$1.00 on June 30, 2021 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 RMB11,996 and RMB14,077 (US$2,181) for the six months ended June 30, 2020 and 2021, respectively.

(3) Includes share-based compensation expense of RMB10,312 and RMB12,102 (U$1,874) for the six months ended June 30, 2020 and 2021, respectively.

(4) Includes share-based compensation expense of RMB52,946 and RMB62,068 (US$9,613) for the six months ended June 30, 2020 and 2021, respectively.

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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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51job, Inc.

Reconciliation of GAAP and Non-GAAP Results

		For the Three Months Ended
		June 30, 2020			June 30, 2021			June 30, 2021
(In thousands, except share and per share data)		(unaudited)			(unaudited)			(unaudited)
		RMB			RMB			US$ (Note 1)
GAAP income before income tax expense			432,796				208,593				32,306
Add: Share-based compensation			38,130				49,329				7,640
Add: Loss from foreign currency translation			547				12,523				1,940
Add (Less): Change in fair value of listed equity securities investment			(56,806	)			5,158				799
Non-GAAP income before income tax expense			414,667				275,603				42,685
GAAP income tax expense			(59,621	)			(37,517	)			(5,811	)
Tax effect of non-GAAP line items			(8	)			(9	)			(1	)
Non-GAAP income tax expense			(59,629	)			(37,526	)			(5,812	)
Non-GAAP adjusted net income			355,038				238,077				36,873
Non-GAAP adjusted net income attributable to 51job, Inc.			358,523				248,677				38,515
Non-GAAP adjusted earnings per share:
Basic			5.35				3.69				0.57
Diluted			5.28				3.64				0.56
Weighted average number of common shares outstanding:
Basic			67,009,015				67,434,856				67,434,856
Diluted			67,878,333				68,247,200				68,247,200

		For the Six Months Ended
		June 30, 2020			June 30, 2021			June 30, 2021
(In thousands, except share and per share data)		(unaudited)			(unaudited)			(unaudited)
		RMB			RMB			US$ (Note 1)
GAAP income before income tax expense			671,482				269,358				41,719
Add: Share-based compensation			75,254				88,247				13,668
Add (Less): (Gain) Loss from foreign currency translation			(9,624	)			7,178				1,112
Add (Less): Change in fair value of listed equity securities investment			(66,697	)			18,413				2,852
Non-GAAP income before income tax expense			670,415				383,196				59,351
GAAP income tax expense			(96,392	)			(52,164	)			(8,079	)
Tax effect of non-GAAP line items			(39	)			84				13
Non-GAAP income tax expense			(96,431	)			(52,080	)			(8,066	)
Non-GAAP adjusted net income			573,984				331,116				51,285
Non-GAAP adjusted net income attributable to 51job, Inc.			580,800				352,823				54,647
Non-GAAP adjusted earnings per share:
Basic			8.68				5.23				0.81
Diluted			8.55				5.17				0.80
Weighted average number of common shares outstanding:
Basic			66,906,106				67,421,251				67,421,251
Diluted			67,942,579				68,202,198				68,202,198

Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566 to US$1.00 on June 30, 2021 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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51job, Inc. Reports Second Quarter 2021 Financial Results

September 24, 2021

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51job, Inc.

Consolidated Balance Sheets

		As of
		December 31, 2020			June 30, 2021			June 30, 2021
(In thousands, except share and per share data)		(unaudited)			(unaudited)			(unaudited)
		RMB			RMB			US$ (Note 1)
ASSETS
Current assets:
Cash			3,292,698				9,036,457				1,399,569
Restricted cash			2,258				-				-
Short-term investments			7,469,213				1,776,482				275,142
Accounts receivable (net of allowance of RMB26,798 and RMB24,240 as of December 31, 2020 and June 30, 2021, respectively)			290,480				329,184				50,984
Prepayments and other current assets			492,980				562,226				87,078
Total current assets			11,547,629				11,704,349				1,812,773
Non-current assets:
Time deposits			719,189				732,212				113,405
Long-term investments			1,576,250				1,556,171				241,020
Property and equipment, net			273,157				269,892				41,801
Goodwill			1,036,124				1,036,124				160,475
Intangible assets, net			163,503				145,628				22,555
Right-of-use assets			307,869				314,536				48,715
Other long-term assets			13,946				424,144				65,692
Deferred tax assets			38,013				44,102				6,831
Total non-current assets			4,128,051				4,522,809				700,494
Total assets			15,675,680				16,227,158				2,513,267
LIABILITIES, MEZZANINE EQUITY AND EQUITY
Current liabilities:
Accounts payable			83,087				136,943				21,210
Salary and employee related accrual			182,565				134,771				20,873
Taxes payable			172,254				122,720				19,007
Advances from customers			1,158,604				1,310,715				203,004
Lease liabilities, current			34,952				42,406				6,568
Other payables and accruals			1,178,955				1,305,834				202,248
Total current liabilities			2,810,417				3,053,389				472,910
Non-current liabilities:
Lease liabilities, non-current			44,949				47,719				7,391
Deferred tax liabilities			232,087				225,891				34,986
Total non-current liabilities			277,036				273,610				42,377
Total liabilities			3,087,453				3,326,999				515,287
Mezzanine equity:
Redeemable non-controlling interests			189,811				167,434				25,932
Shareholders' equity:
Common shares (US$0.0001 par value: 500,000,000 shares authorized, 67,406,657 and 67,437,209 shares issued and outstanding as of December 31, 2020 and June 30, 2021, respectively)			54				54				8
Additional paid-in capital			5,206,154				5,301,874				821,156
Statutory reserves			18,474				18,474				2,861
Accumulated other comprehensive income			276,975				276,812				42,873
Retained earnings			6,871,090				7,109,991				1,101,197
Total 51job, Inc. shareholders' equity			12,372,747				12,707,205				1,968,095
Non-controlling interests			25,669				25,520				3,953
Total equity			12,398,416				12,732,725				1,972,048
Total liabilities, mezzanine equity and equity			15,675,680				16,227,158				2,513,267

Note (1): The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.4566 to US$1.00 on June 30, 2021 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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