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UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 20-F
 
  o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from

to
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date
of event requiring this shell company report
 Commission
file number: 0-50841
 
 51job, Inc.
 (Exact name of Registrant as specified in its charter)
 N/A
(Translation of Registrants name into English)
 
 Cayman Islands
 (Jurisdiction of incorporation or organization)
 Building 3
No. 1387, Zhang Dong Road
Shanghai 201203
Peoples Republic of China
(Address of principal executive offices)
 Rick Yan, Chief Executive Officer
Telephone: +(86-21) 6160-1888
Facsimile: +(86-21) 6879-6233
Building 3
No. 1387, Zhang Dong Road
Shanghai 201203
Peoples Republic of China
(Name, telephone, e-mail and/or facsimile number and address of company contact person)
 
 Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredAmerican Depositary Shares, each representing two 
common shares,
par value US$0.0001 per share
    
    The NASDAQ Stock Market LLC
(The NASDAQ Global Select Market)
 Securities registered or to be registered pursuant to Section 12(g) of the Act:
 None.
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 None.
 
  o þ
 o þ
 þ o
 þ o
  o Large accelerated filer
    
    þ Accelerated filer
    
    o Non-accelerated filer
  þ U.S. GAAP
    
    o International Financial Reporting Standards as issued by the International Accounting Standards Board
    
    o Other
 o o
 o þ




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##### 



TABLE OF CONTENTS
 PageINTRODUCTION


    
    
    iiFORWARD-LOOKING STATEMENTS
    
    
    iiiPART IItem 1. Identity of Directors, Senior Management and Advisers
    
    
    1Item 2. Offer Statistics and Expected Timetable
    
    
    1Item 3. Key Information
    
    
    1Item 4. Information on the Company
    
    
    24Item 4A. Unresolved Staff Comments
    
    
    39Item 5. Operating and Financial Review and Prospects
    
    
    39Item 6. Directors, Senior Management and Employees
    
    
    57Item 7. Major Shareholders and Related Party Transactions
    
    
    64Item 8. Financial Information
    
    
    69Item 9. The Offer and Listing
    
    
    69Item 10. Additional Information
    
    
    70Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    76Item 12. Description of Securities Other than Equity Securities
    
    
    77PART IIItem 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    78Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    78Item 15. Controls and Procedures
    
    
    78Item 16A. Audit Committee Financial Expert
    
    
    79Item 16B. Code of Ethics
    
    
    79Item 16C. Principal Accountant Fees and Services
    
    
    79Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    79Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    79Item 16F. Change in Registrants Certifying Accountant
    
    
    80Item 16G. Corporate Governance
    
    
    80PART IIIItem 17. Financial Statements
    
    
    81Item 18. Financial Statements
    
    
    81Item 19. Exhibits
    
    
    81Exhibit 4.17Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2Exhibit 15.1Exhibit 15.2Exhibit 15.3
   i




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INTRODUCTION
  
    
    ADRs are to the American depositary receipts that evidence our ADSs;
    
    ADSs are to our American depositary shares, each of which represents two common shares;
    
    China or the PRC are to the Peoples Republic of China, excluding for the purpose
of this annual report Hong Kong, Macau and Taiwan;
    
    Nasdaq are to the Nasdaq Global Select Market;
    
    RMB are to Renminbi, the legal currency of the PRC;
    
    shares or common shares are to our common shares, with par value US$0.0001 per share;
    
    U.S. GAAP are to the generally accepted accounting principles in the United States of America; and
    
    US$ are to U.S. dollars, the legal currency of the United States of America.
   
    
    51net are to 51net.com Inc.;
    
    AdCo are to Shanghai Qianjin Advertising Co., Ltd.;
    
    AdCo Subsidiaries are to the subsidiaries of AdCo that conduct advertising businesses;
    
    Qian Cheng are to Beijing Qian Cheng Si Jin Advertising Co., Ltd.;
    
    RAL are to Shanghai Run An Lian Information Consultancy Co., Ltd.;
    
    Run An are to Beijing Run An Information Consultancy Co., Ltd.;
    
    Tech JV are to Qianjin Network Information Technology (Shanghai) Co., Ltd.;
    
    Wang Cai AdCo are to Shanghai Wang Cai Advertising Co., Ltd.;
    
    Wang Ju are to Shanghai Wang Ju Human Resource Consulting Co., Ltd.;
    
    WFOE are to Qian Cheng Wu You Network Information Technology (Beijing) Co., Ltd.; and
    
    Wuhan AdCo are to Wuhan Mei Hao Qian Cheng Advertising Co., Ltd.
     ii




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FORWARD-LOOKING STATEMENTS
  
    
    market acceptance of our services;
    
    our ability to expand into other recruitment and human resource services such as
business process outsourcing;
    
    our ability to control our operating costs and expenses;
    
    our potential need for additional capital and the availability of such capital;
    
    behavioral and operational changes of our customers in meeting their human resource
needs as they respond to evolving social, economic and political changes in China as well
as stock market volatilities;
    
    changes in our management team and other key personnel;
    
    introduction by our competitors of new or enhanced products and services;
    
    price competition in the market for the various human resource services that we provide in China;
    
    seasonality of our business;
    
    fluctuations in the value of the Renminbi against the U.S. dollar and other currencies;
    
    our ability to develop or introduce new products and services outside of the human resources industry;
    
    fluctuations in general economic conditions; and
    
    other risks outlined in our filings with the Securities and Exchange Commission,
including this annual report on Form 20-F and any amendments thereto.
   iii




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PART I
 
 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  
 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
  
 ITEM 3. KEY INFORMATION
 A. Selected Financial Data
  For the year ended December 31,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2008(in thousands, except per share data)
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$Selected Consolidated Statement of
Operations Data:Revenues:Print advertising
    
    
    300,652
    
    
    
    356,285
    
    
    
    389,535
    
    
    
    430,621
    
    
    
    359,234
    
    
    
    52,654Online recruitment services
    
    
    111,509
    
    
    
    159,495
    
    
    
    219,794
    
    
    
    282,688
    
    
    
    312,121
    
    
    
    45,749Executive search
    
    
    24,908
    
    
    
    26,307
    
    
    
    19,938
    
    
    
    16,086
    
    
    
    13,979
    
    
    
    2,049Other human resource related
revenues
    
    
    42,875
    
    
    
    53,507
    
    
    
    68,586
    
    
    
    114,871
    
    
    
    175,083
    
    
    
    25,663Total revenues
    
    
    479,944
    
    
    
    595,594
    
    
    
    697,853
    
    
    
    844,266
    
    
    
    860,417
    
    
    
    126,115Net revenues
    
    
    456,120
    
    
    
    562,026
    
    
    
    659,843
    
    
    
    799,284
    
    
    
    815,478
    
    
    
    119,528Cost of services(1)
    
    
    (224,607
    )
    
    
    (269,328
    )
    
    
    (294,068
    )
    
    
    (349,022
    )
    
    
    (377,487
    )
    
    
    (55,330
    )Gross profit
    
    
    231,513
    
    
    
    292,698
    
    
    
    365,775
    
    
    
    450,262
    
    
    
    437,991
    
    
    
    64,198Operating expenses(1):Sales and marketing
    
    
    (69,029
    )
    
    
    (115,095
    )
    
    
    (136,770
    )
    
    
    (181,230
    )
    
    
    (215,228
    )
    
    
    (31,547
    )General and administrative
    
    
    (72,096
    )
    
    
    (100,614
    )
    
    
    (114,322
    )
    
    
    (128,347
    )
    
    
    (125,981
    )
    
    
    (18,465
    )Total operating expenses
    
    
    (141,125
    )
    
    
    (215,709
    )
    
    
    (251,092
    )
    
    
    (309,577
    )
    
    
    (341,209
    )
    
    
    (50,012
    )Income from operations
    
    
    90,388
    
    
    
    76,989
    
    
    
    114,683
    
    
    
    140,685
    
    
    
    96,782
    
    
    
    14,186Income before income tax provision
    
    
    95,201
    
    
    
    91,367
    
    
    
    127,901
    
    
    
    148,979
    
    
    
    107,777
    
    
    
    15,797Income tax expense
    
    
    (34,058
    )
    
    
    (29,945
    )
    
    
    (28,560
    )
    
    
    (45,402
    )
    
    
    (31,176
    )
    
    
    (4,570
    )Net income
    
    
    61,143
    
    
    
    61,422
    
    
    
    99,341
    
    
    
    103,577
    
    
    
    76,601
    
    
    
    11,227Earnings per share:Basic
    
    
    1.32
    
    
    
    1.10
    
    
    
    1.79
    
    
    
    1.84
    
    
    
    1.35
    
    
    
    0.20Diluted
    
    
    1.26
    
    
    
    1.07
    
    
    
    1.76
    
    
    
    1.83
    
    
    
    1.35
    
    
    
    0.20Earnings per ADS(2):Basic
    
    
    2.65
    
    
    
    2.21
    
    
    
    3.58
    
    
    
    3.68
    
    
    
    2.71
    
    
    
    0.40Diluted
    
    
    2.52
    
    
    
    2.15
    
    
    
    3.52
    
    
    
    3.66
    
    
    
    2.70
    
    
    
    0.40
  1




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As of December 31,(in thousands)
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$Selected Consolidated Balance Sheet Data:Assets:Cash
    
    
    848,293
    
    
    
    830,634
    
    
    
    868,698
    
    
    
    1,007,520
    
    
    
    1,058,310
    
    
    
    155,121Total current assets
    
    
    893,647
    
    
    
    892,544
    
    
    
    919,576
    
    
    
    1,075,288
    
    
    
    1,141,252
    
    
    
    167,278Total non-current assets
    
    
    43,735
    
    
    
    70,875
    
    
    
    208,039
    
    
    
    227,878
    
    
    
    233,117
    
    
    
    34,169Total assets
    
    
    937,382
    
    
    
    963,420
    
    
    
    1,127,615
    
    
    
    1,303,166
    
    
    
    1,374,369
    
    
    
    201,447Liabilities:Total current liabilities
    
    
    85,564
    
    
    
    109,540
    
    
    
    139,075
    
    
    
    176,115
    
    
    
    146,796
    
    
    
    21,517Total non-current liabilities
    
    
    
    
    
    
    
    
    
    
    122
    
    
    
    516
    
    
    
    730
    
    
    
    107Total liabilities
    
    
    85,564
    
    
    
    109,540
    
    
    
    139,197
    
    
    
    176,631
    
    
    
    147,527
    
    
    
    21,624Total shareholders equity
    
    
    851,818
    
    
    
    853,880
    
    
    
    988,418
    
    
    
    1,126,535
    
    
    
    1,226,843
    
    
    
    179,823Total liabilities and
shareholders equity
    
    
    937,382
    
    
    
    963,420
    
    
    
    1,127,615
    
    
    
    1,303,166
    
    
    
    1,374,369
    
    
    
    201,447
 
 (1)
    
    Share-based compensation was included in the consolidated statement of operations data as
follows: For the year ended December 31,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2008(in thousands)
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$Cost of services
    
    
    (1,811
    )
    
    
    (1,480
    )
    
    
    (4,621
    )
    
    
    (4,931
    )
    
    
    (4,564
    )
    
    
    (669
    )Operating expenses:Sales and marketing
    
    
    (1,758
    )
    
    
    (1,438
    )
    
    
    (3,972
    )
    
    
    (4,241
    )
    
    
    (3,923
    )
    
    
    (575
    )General and administrative
    
    
    (16,921
    )
    
    
    (11,635
    )
    
    
    (19,926
    )
    
    
    (20,479
    )
    
    
    (18,947
    )
    
    
    (2,777
    )
 (2)
    
    Each ADS represents two common shares. Exchange Rate Information
   2




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Noon buying rate of Renminbi per U.S. dollarPeriod
    
    
    Period-end
    
    
    Average(1)
    
    Low
    

    
    High2004
    
    
    8.2765
    
    
    
    8.2768
    
    
    
    8.2771
    
    
    
    8.27652005
    
    
    8.0702
    
    
    
    8.1826
    
    
    
    8.2765
    
    
    
    8.07022006
    
    
    7.8041
    
    
    
    7.9579
    
    
    
    8.0702
    
    
    
    7.80412007
    
    
    7.2946
    
    
    
    7.5806
    
    
    
    7.8127
    
    
    
    7.29462008
    
    
    6.8225
    
    
    
    6.9193
    
    
    
    7.2946
    
    
    
    6.7800October
    
    
    6.8388
    
    
    
    6.8358
    
    
    
    6.8521
    
    
    
    6.8171November
    
    
    6.8254
    
    
    
    6.8281
    
    
    
    6.8373
    
    
    
    6.8220December
    
    
    6.8225
    
    
    
    6.8539
    
    
    
    6.8842
    
    
    
    6.82252009January
    
    
    6.8392
    
    
    
    6.8360
    
    
    
    6.8403
    
    
    
    6.8225February
    
    
    6.8395
    
    
    
    6.8363
    
    
    
    6.8470
    
    
    
    6.8241March
    
    
    6.8329
    
    
    
    6.8360
    
    
    
    6.8438
    
    
    
    6.8240April (through April 24)
    
    
    6.8250
    
    
    
    6.8318
    
    
    
    6.8361
    
    
    
    6.8250
 
 (1)
    
    Annual averages are calculated from month-end rates. Monthly averages are calculated using
the average of the daily rates during the relevant period. B. Capitalization and Indebtedness
  C. Reasons for the Offer and Use of Proceeds
  D. Risk Factors
 Risks Related to Our Business
 A slowdown in the PRC economy has had, and may continue to have, a material and adverse impact
on our customers, demand for our services and our business.
   Because we face significant competition, including intense competition in several of our
markets, we may lose market share and our results of operations may be materially and adversely
affected.
 51job Weekly 51job Weekly 51job
Weekly
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www.51job.com ChinaHR.com Cjol.com Zhaopin.com ChinaHR.com Zhaopin.com
   New competitors face low entry barriers to our industries, and successful entry by new
competitors may cause us to lose market share and materially and adversely affect our results
of operations.
  If we are unable to achieve or maintain economies of scale with respect to our recruitment
advertising businesses, our results of operations from these businesses may be materially and
adversely affected.
 51job Weekly www.51job.com
 51job Weekly
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If the use of advertising to conduct recruitment does not achieve broader acceptance in China,
we may be unable to expand our recruitment advertising businesses.
  If the Internet, and online advertising in particular, does not achieve broad acceptance in
China as a medium for recruitment, our online recruitment services business may be adversely
affected.
  The market for other human resource related services, including business process outsourcing,
remains in the development stage in China and we may be unable to expand such existing services
or successfully develop new services in this area.
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We are dependent on local newspaper contractors in each of our geographic markets to publish
and distribute 51job Weekly.
 51job Weekly 51job Weekly
  
    
    our local newspaper contractors will fulfill their obligations under our agreements;
    
    the agreements will be renewed on terms acceptable to us or at all;
    
    our current contractors will not, upon termination of our agreements, seek to compete
directly against us or establish relationships with one or more of our competitors; or
    
    in the event that we wish to do so or it is necessary to do so, we will be able to
locate and enter into an agreement with a suitable alternative local newspaper on a timely
basis or at all.
 51job Weekly 51job Weekly
 We are dependent on our Internet service providers, and we are vulnerable to failures of the
Internet, fixed line telecommunications networks in China and our technology platform.
   If we are unable to protect or promote our brand names and reputation, our business may be
materially and adversely affected.
 www.51job.com
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If we are unable to prevent others from using our intellectual property, our business may be
materially and adversely affected.
 www.51job.com 51job Weekly
 We rely heavily on our senior management team and key personnel, and the loss of any of their
services could severely disrupt our business.
   Our business may suffer if we do not successfully manage our current and potential future
growth.
  If we are unable to successfully detect and prevent criminal actions or fraud perpetrated on
us, we may be subject to liability and financial loss.
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Our operating history may not serve as an adequate basis to judge our future prospects and
results of operations.
  
    
    implement our business model and strategy and adapt and modify them as needed;
    
    increase awareness of our brands, protect our reputation and develop customer loyalty;
    
    anticipate with any degree of certainty the behavioral and operational changes of our
customers that have a significant impact on our business from time to time as they respond
to evolving social, economic and political changes in China;
    
    manage our expanding operations and service offerings, including the integration of any
future acquisitions;
    
    maintain adequate control of our expenses;
    
    adequately and efficiently operate, maintain, upgrade and develop our website and the
other systems and equipment we utilize in providing our services;
    
    attract, retain and motivate qualified personnel;
    
    maintain our current, and develop new, contractual arrangements with local newspapers
and other important operational relationships; and
    
    anticipate and adapt to changing conditions in the print, online and other markets in
which we operate as well as the impact of any changes in government regulation, mergers
and acquisitions involving our competitors, technological developments and other
significant competitive and market dynamics.
  We rely on our print advertising business to provide a large portion of our revenues and any
adverse development in this business could materially and adversely affect our overall results
of operations.
 51job Weekly
 Our print advertising business is subject to weekly fluctuations which hamper our ability to
predict when revenue will ultimately be recognized, if at all.
 51job Weekly
  8




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Due to seasonal variations in demand for human resource services, we experience significant
fluctuations in our revenue streams which affect our ability to predict our quarterly results
and which may also cause quarterly results to vary from period to period.
  We may not be able to successfully execute future acquisitions or efficiently manage any
acquired business.
  
    
    our ability to identify and acquire businesses on a cost-effective basis;
    
    our ability to integrate acquired personnel, operations, products and technologies into
our organization effectively; and
    
    our ability to retain and motivate key personnel and to retain the clients of acquired
firms.
  If we are unable to attract and retain qualified personnel, our executive search, training and
business process outsourcing businesses may be materially and adversely affected.
  The implementation of the PRC Labor Contract Law may significantly increase the number of labor
disputes, which may result in higher operating costs for our business process outsourcing
business.
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If we choose to develop or introduce new products and services outside of the human resource
services industry in China, these efforts may not be successful, which could materially and
adversely affect our financial condition and results of operations.
  We may be subject to liability for placing advertisements with content that is deemed
inappropriate.
  We are subject to potential legal liability from both employers and job seekers with respect to
our executive search businesses and other human resource related services.
  We may be exposed to infringement or misappropriation claims by third parties, which, if
successful, could cause us to pay significant damage awards.
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We rely heavily on our information systems, and if our access to technology supporting our
information systems is impaired or interrupted, or if we fail to further develop our
technology, our operations may be seriously disrupted.
  If we are not able to respond successfully to technological or industry developments, our
business may be materially and adversely affected.
  Computer viruses and hacking may cause delays or interruptions on our systems and may reduce
use of our services and damage our reputation and brand names.
  Our business could be adversely affected if our software contains bugs.
 www.51job.com
 We are controlled by a small number of our existing shareholders, whose interests may differ
from other shareholders, and our board of directors has the power to discourage a change of
control.
  
    
    Recruit, which beneficially owned approximately 22.3 million common shares, or 39.8% of
our outstanding common shares, and which is affiliated with Hiroyuki Honda, one of our
directors; and
 
    
    Rick Yan, our chief executive officer and a director, who beneficially owned
approximately 15.4 million, or 27.4% of our outstanding common shares.
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There are significant uncertainties under the new tax law in China. In addition, dividends we
receive from our subsidiaries located in the PRC may be subject to PRC withholding tax.
   We may be deemed a PRC resident enterprise under the EIT Law, which could subject us to PRC
taxation on our global income, and which may have a material adverse effect on our results of
operations.
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Under the EIT Law, dividends payable by us to our foreign investors and gains on the sale of
our ADSs or common shares may become subject to PRC taxation.
  Our earnings have been and will continue to be adversely affected by changes in our accounting
policies, including those related to the expensing of stock options.
  If we do not appropriately maintain effective internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act of 2002, our business, results of
operations and the market price of our ADSs may be materially and adversely affected.
   We have no business insurance coverage.
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We face risks related to health epidemics and other natural disasters.
  www.51job.com
 We believe that we were not a passive foreign investment company, or a PFIC, for our taxable
year ending on December 31, 2008, although there can be no assurance in this regard. However,
we believe that we may be a PFIC for our current taxable year or that we may become one in the
future, which could result in adverse U.S. federal income tax consequences to U.S. investors.
     14




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Our subsidiaries face limitations on paying dividends or making other distributions to us.
  
    
    Qian Cheng Wu You Network Information Technology (Beijing) Co., Ltd., or WFOE, a wholly
foreign owned enterprise in China;
    
    Qianjin Network Information Technology (Shanghai) Co., Ltd., or Tech JV;
    
    Shanghai Qianjin Advertising Co., Ltd., or AdCo, and its subsidiaries; and
    
    Shanghai Wang Ju Human Resource Consulting Co., Ltd., or Wang Ju.
  Risks Related to Our Corporate Structure
 If the PRC authorities determine that our past ownership structure was inconsistent with the
requirements for operating certain of our businesses, we could be subject to sanctions.
      15




---



##### Table of Contents




    
    levying fines;
    
    revoking business licenses;
    
    restricting or prohibiting our use of proceeds from our initial public offering and any
future offerings to finance our business and operations in China;
    
    requiring us to restructure the ownership structure or operations of our subsidiaries
or affiliated entities; and/or
    
    requiring us to discontinue all or a portion of our business.
  We rely on our agreements with an affiliated entity to provide human resource related services
and to act as an Internet content provider, and we rely on agreements with an affiliated entity
and its shareholders to receive all of the beneficial interest of this entity.
    If our affiliated entity RAL is found to be operating in jurisdictions outside of Shanghai
without a business license, we could be subject to sanctions and our revenues could be
adversely affected.
   16




---



##### Table of Contents



Our contractual arrangements with RAL and Qian Cheng may not be as effective in providing
operational control as direct ownership of these businesses.
   
    
    levying fines;
    
    revoking business licenses;
    
    restricting or prohibiting our use of proceeds from our initial public offering and any
future offerings to finance our business and operations in China;
    
    requiring us to restructure the ownership structure or operations of our subsidiaries
or affiliated entities; and/or
    
    requiring us to discontinue all or a portion of our business.
  The PRC laws and regulations governing our current business operations and contractual
arrangements are uncertain, and if we are found to be in violation, we could be subject to
sanctions. In addition, any changes in such PRC laws and regulations may have a material and
adverse effect on our business.
   17




---



##### Table of Contents




    
    levying fines;
    
    revoking business licenses;
    
    restricting or prohibiting our use of proceeds from our initial public offering and any
future offerings to finance our business and operations in China;
    
    requiring us to restructure the ownership structure or operations of our subsidiaries
or affiliated entities; and/or
    
    requiring us to discontinue all or a portion our business.
   Risks Related to the Peoples Republic of China
 Our business could be affected by changes in Chinas economic, political or social conditions
or government policies.
   18




---



##### Table of Contents



PRC laws and regulations governing operators of Internet websites are unclear and the
regulation of the telecommunications and Internet industries may become more burdensome, and if
we are found to be in violation of PRC laws and regulations, we could be subject to sanctions.
   The continued growth of the Chinese Internet market depends on the establishment of an adequate
telecommunications infrastructure.
   19




---



##### Table of Contents



The PRC legal system has inherent uncertainties that could materially and adversely affect us.
  You may experience difficulties in effecting service of legal process, enforcing foreign
judgments or bringing original actions in China based on United States or other foreign laws
against us or our management.
  Governmental control of currency conversion may affect the value of your investment.
  The fluctuation of the Renminbi may materially and adversely affect your investment.
   20




---



##### Table of Contents



Recent PRC regulations relating to offshore investment activities by PRC residents and employee
stock options granted by overseas-listed companies may increase our administrative burden and
adversely impact our business and prospects. If our shareholders who are PRC residents fail to
make any required registrations or filings under such regulations, we may be unable to
distribute profits and may become subject to liability under PRC laws.
     21




---



##### Table of Contents



Risks Related to Our ADSs
 The market price for our ADSs may be volatile.
  
    
    actual or anticipated fluctuations in our quarterly operating results;
    
    changes or revisions by us to previously released operating and financial targets;
    
    announcements of new services by us or our competitors;
    
    changes in financial estimates or recommendations by securities analysts;
    
    conditions in our industry, which is the market for recruitment advertising services
and other human resource related services in China;
    
    announcements by us or our competitors of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
    
    additions or departures of key personnel;
    
    release of transfer restrictions on our outstanding common shares or ADSs or sales of
additional common shares or ADSs; and
    
    pending or potential litigation or regulatory investigations.
  The future sales, or perceived future sales, by our existing shareholders of a substantial
number of our ADSs in the public market or through private transactions could adversely affect
the price of our ADSs.
  Your right to participate in any future rights offerings may be limited, which may cause
dilution of your holdings.
   22




---



##### Table of Contents



You may not be able to exercise your right to vote.
  You may not receive distributions on common shares or any value for them if it is illegal or
impractical to make them available to you.
  You may be subject to limitations on transfer of your ADSs.
  You may face difficulties in protecting your interests, and your ability to protect your rights
through the U.S. federal courts may be limited, because we are incorporated under Cayman
Islands law.
    23




---



##### Table of Contents




    
    to recognize or enforce against us judgments of courts of the United States based on
certain civil liability provisions of U.S. securities laws; and
    
    to impose liabilities against us, in original actions brought in the Cayman Islands,
based on certain civil liability provisions of U.S. securities laws that are penal in
nature.
   
 ITEM 4. INFORMATION ON THE COMPANY
 A. History and Development of the Company
  
    
    Shanghai Qianjin Advertising Co., Ltd., or AdCo, and AdCos seven branch offices, seven
majority owned subsidiaries and one jointly owned subsidiary with Tech JV, or,
collectively, the AdCo Subsidiaries. AdCo and the AdCo Subsidiaries hold licenses and
permits to conduct advertising businesses;
    
    Shanghai Run An Lian Information Consultancy Co., Ltd., or RAL, which holds human
resource related services and Internet content provision licenses and is wholly owned by
Run An;
    
    Qianjin Network Information Technology (Shanghai) Co., Ltd., or Tech JV, which is
allowed to conduct online advertising and holds a human resource related services license;
    
    Qian Cheng Wu You Network Information Technology (Beijing) Co., Ltd., or WFOE, which is
wholly owned by 51net Beijing and owns certain of our trademarks and registered
copyrights;
    
    Beijing Qian Cheng Si Jin Advertising Co., Ltd., or Qian Cheng, which is our joint
venture partner in Tech JV and is wholly owned by Run An;
    
    Beijing Run An Information Consultancy Co., Ltd., or Run An, which is jointly owned by
David Weimin Jin and Tao Wang, two executive officers of our company;
    
    Shanghai Wang Cai Advertising Co., Ltd., or Wang Cai AdCo, which is an AdCo Subsidiary
jointly owned by AdCo and TechJV and holds licenses to conduct advertising businesses;
    
    Shanghai Wang Ju Human Resource Consulting Co., Ltd., or Wang Ju, which is owned by
51net HR and Run An and holds a license to provide human resource related services; and
    
    Wuhan Mei Hao Qian Cheng Advertising Co., Ltd., or Wuhan AdCo, which holds a minority
interest in Tech JV and our AdCo Subsidiary in the city of Wuhan that conducts advertising
businesses.
    24




---



##### Table of Contents



B. Business Overview
  51job Weekly www.51job.com www.51job.com eHire eSearch
 Our Product and Services
  
    
    recruitment related services, including print advertising, online recruitment and
executive search services; and
    
    other human resource related services, such as training and business process
outsourcing.
   25




---



##### Table of Contents



Recruitment Related Services
 Print Advertising  51job Weekly. 51job Weekly 51job Weekly
 51job Weekly
 City
    
    Newspaper contractor(1)
    
    City
    
    Newspaper contractor(1)Beijing
    
    China Trade News
    
    Kunming
    
    Chuncheng Evening NewsChangsha
    
    Human Resource News
    
    Nanjing
    
    Modern ExpressChengdu
    
    Hua Xi Metropolitan News
    
    Ningbo
    
    Modern Golden NewsChongqing
    
    Human Resource News
    
    Qingdao
    
    Qingdao Financial TimesDalian(2)
    
    Northern Times
    
    Shanghai
    
    China Trade NewsFuzhou
    
    Straits Talent News
    
    Shenyang
    
    Friendly TimesGuangzhou
    
    Guangzhou Youth Daily
    
    Shenzhen
    
    Nan Fang Metropolitan NewsHangzhou
    
    News Information Daily
    
    Tianjin(3)
    
    Tianjin Education NewsHarbin
    
    Harbin Lifestyle Daily
    
    Wuhan
    
    News Information DailyHefei
    
    Hefei Evening News
    
    Xian
    
    China Merchant NewsJinan
    
    Jinan Times
    
    Zhengzhou
    
    Youth Herald
 
 (1)
    
    English translations of the Chinese names.(2)
    
    In January 2009, we completed the change of our newspaper contractor in Dalian from Dalian
Evening News.(3)
    
    In July 2008, we completed the change of our newspaper contractor in Tianjin from Metro
Express. 51job Weekly
 51job Weekly 51job Weekly www.51job.com 51job Weekly www.51job.com 51job Weekly 51job Weekly
 51job Weekly 51job
Weekly 51job Weekly 51job Weekly
 51job Weekly 51job Weekly 51job Weekly 51job Weekly 51job Weekly 51job Weekly
  26




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##### Table of Contents



51job Weekly
   51job Weekly 51job Weekly
 For the year ended December 31,2006
    
    
    2007
    
    
    2008Estimated number of print advertising pages
    
    
    12,609
    
    
    
    16,568
    
    
    
    16,512
 Online Recruitment Services  www.51job.com www.51job.com www.51job.com www.51job.com
 www.51job.com www.51job.com www.51job.com
 www.51job.com www.51job.com 51job Weekly
  27




---



##### Table of Contents



eHire eHire www.51job.com
  For the year ended December 31,2006
    
    
    2007
    
    
    2008Estimated unique employers using online recruitment services
    
    
    74,950
    
    
    
    94,125
    
    
    
    102,562
 www.51job.com
 
    
    search and review all current recruitment advertisements;
    
    receive e-mails of advertisements matching the job seekers profile and preferences;
    
    submit resumés directly to prospective employers to apply for a desired position;
    
    organize and track job related information and applications; and
    
    obtain information about upcoming job fairs and career development and other job related information.
 www.51job.com
 51job Weekly www.51job.com 51job Weekly www.51job.com 51job Weekly
 Executive Search  eSearch eSearch
 Other Human Resource Related Services
   28




---



##### Table of Contents



Future Future Human
Capital
   Technology
  51job Weekly www.51job.com
   29




---



##### Table of Contents



Competition
  Print Advertising
 51job Weekly Beijing Evening News Guangzhou Daily Shanghai Talent Market Shenzhen Special Zone Daily.
 Online Recruitment Services
 Zhaopin.com ChinaHR.com Cjol.com Zhaopin.com
 NetEase.com QQ.com Sina.com Sohu.com Tom.com ChinaHR.com Zhaopin.com ,
 Other Services
  Customers
  Sales and Marketing
  
    
    job seekers;
    
    employers with hiring and/or training needs; and
    
    human resource departments with actual or potential outsourcing needs.
 Direct Marketing
  30




---



##### Table of Contents



Event Marketing 51job
Weekly 51job Weekly www.51job.com
 Mass Media Advertising
 Online Marketing
 Cross-Marketing 51job Weekly www.51job.com Future 51job Weekly www.51job.com
 Media Promotions
 Intellectual Property and Proprietary Rights
 www.51job.com
 51job.com  eHire  eSearch  51job.com   51job.com
 www.51job.com www.51job.com
   31




---



##### Table of Contents



Regulation
   Limitations on Foreign Ownership of Our Businesses
 Advertising
  
    
    Foreign Investment Industrial Guidance Catalogue (2004); and
    
    Regulations on Administration of Foreign Investment in Advertising Enterprises (2004).
  Human Resource Services Companies
  Internet Content Providers
   
    
    Administrative Rules for Foreign Investments in Telecommunications Enterprises (2001); and
    
    Foreign Investment Industry Guidance Catalogue (2007).
   32




---



##### Table of Contents



General Regulation of Our Businesses
 Advertising
  
    
    Advertising Law (1994);
    
    Administration of Advertising Regulations (1987);
    
    Implementation Rules on Administration of Advertising Regulations (2004); and
    
    Measures for the Administration of Advertising Business Licenses (2005).
  Human Resource
  Internet Content Services and Online Commerce
  
    
    Telecommunications Regulations (2000);
    
    The Administrative Measures for Telecommunications Business Operating Licenses (2009); and
    
    The Internet Information Services Administrative Measures (2000).
   Regulations Relating to Our Intellectual Property Rights
      33




---



##### Table of Contents



Regulations Relating to Internet Privacy
   Regulation of Foreign Currency Exchange and Dividend Distribution
 Foreign Currency Exchange
   Foreign Exchange Registration of Offshore Investment by PRC Residents
    34




---



##### Table of Contents



Dividend Distribution
  
    
    Wholly Foreign Owned Enterprise Law (1986), as amended;
    
    Wholly Foreign Owned Enterprise Law Implementing Rules (1990), as amended;
    
    Sino-foreign Equity Joint Venture Enterprise Law (1979), as amended;
    
    Sino-foreign Equity Joint Venture Enterprise Law Implementing Rules (1983), as amended; and
    
    PRC Enterprise Income Tax Law and its Implementation Rules (2007).
  C. Organizational Structure
   35




---



##### Table of Contents



(1)
    
    Does not include Wang Jin Information Technology (Shanghai) Co., Ltd. and Shanghai Wang Ju
Advertising Co., Ltd., both of which are wholly owned subsidiaries of 51net established in the
PRC with no current operations.(2)
    
    Includes the subsidiaries and branches of AdCo that conduct advertising businesses as well as
Shanghai Cheng An Human Resources Co., Ltd., which is 90% owned by AdCo and 10% owned by Run
An. Hefei Wu You Culture Communication Co., Ltd., an AdCo subsidiary, is 80% owned by AdCo and
20% owned by Qian Cheng.(3)
    
    Excludes Wuhan AdCo and Wang Cai AdCo, which are set out separately in the chart.  36




---



##### Table of Contents




    
    online recruitment services are provided by Tech JV, which however does not act as an
Internet content provider or a human resource related services provider;
    
    print advertising services are provided by AdCo and the AdCo Subsidiaries, which are
all direct and indirect majority owned PRC subsidiaries of Tech JV;
    
    human resource related services are provided by RAL and Shanghai Wang Ju Human Resource
Consulting Co., Ltd., or Wang Ju, which hold licenses to provide human resource related
services; and
    
    Internet content provider services are provided by RAL, which holds a license to act as
an Internet content provider and operates our www.51job.comwebsite.
   
    
    our current ownership structure is in compliance with existing PRC laws and
regulations;
    
    the agreements among our subsidiaries, affiliated entities and their respective
shareholders are valid and binding, and are enforceable under, and will not result in any
violation of, existing PRC laws or regulations, with exception to the effectiveness of the
pledges under the equity pledge agreements, which are subject to registration with the
relevant administrations of industry and commerce, and the trademark license agreement,
which may not be enforceable against bona fide third parties until registration with the
relevant trademark administration authorities; and
    
    except as otherwise disclosed herein, our current business operations as described in
this annual report are not in violation of existing PRC laws, rules and regulations in all
material aspects.
     37




---



##### Table of Contents



Description of the Material Group Entities
 51net
 51job.com  www.51job.com
 Tech JV
  Qian Cheng
  RAL
 www.51job.com
 AdCo and the AdCo Subsidiaries
  WFOE
   38




---



##### Table of Contents



Wang Ju
  D. Property, Plants and Equipment
    
 ITEM 4A. UNRESOLVED STAFF COMMENTS
  
 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 The following discussion of our financial condition and results of operations is based upon
and should be read in conjunction with our consolidated financial statements and their related
notes included elsewhere in this annual report on Form 20-F . This discussion may contain
forward-looking statements based upon current expectations that involve risks and uncertainties.
Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of various factors, including those set forth under Item 3. Key Information  Risk
Factors or in other parts of this annual report.
 A. Operating Results
 Overview
    39




---



##### Table of Contents



Factors Affecting Our Results of Operations
  
    
    Growth of the Chinese Economy and Demand for Human Resource Services in China.Chinas
rapid economic growth over the past decade has served as an important catalyst for the
development of the human resource services industry. In addition, Chinas entry into the
World Trade Organization and the proliferation of new enterprises has led to increased
market liberalization and competition. As a result, companies in China are increasingly
recognizing the need for improved human resource recruitment processes and management,
which has driven the demand for human resource services.We expect that our financial results will continue to be affected by the overall growth of
the Chinese economy and market demand for human resource services, in particular
recruitment services. However, the Chinese economy experienced a GDP growth rate of 9% in
2008, down from 12% in 2007 and 11% in 2006. This slower economic growth in China has been
exacerbated by the current global economic and financial market crisis, and GDP growth
moderated to 6.8% and 6.1% in the fourth quarter of 2008 and the first quarter of 2009,
respectively. As a result of the slowdown in economic activity, we believe that employer
demand for recruitment services in China has been reduced, which has led to a lower rate
of overall revenue growth and a material decline in sales of our print advertising
services in 2008 as compared to 2007. If the slowdown in China continues or worsens, we
may experience a further reduction in demand and sales.
    
    Changes in the Composition of the Chinese Labor Market.As the Chinese economy grows,
we believe that China is developing a large skilled and educated labor force. This growing
skilled and educated work force is a key segment targeted by employers who use our human
resource services as they seek to attract and retain talent to build a competitive
advantage. In addition, Chinas large labor force is increasingly migrating toward urban
centers due to continuing economic development and employer demand. As a result, major
metropolitan areas have become the foundation for the growing human resource services
industry in China. For this reason, we have established sales offices in 26 major cities
across China and Hong Kong. We believe these changes in the composition of the Chinese
labor market toward a larger, better skilled and urbanized work force will increase the
number of job seekers and employers who utilize our human resource services.
    
    Seasonality in the Human Resource Services Market.The human resource services industry
is characterized by seasonal fluctuations. Accordingly, these fluctuations, particularly
during the seasonal peak hiring periods around the Chinese New Year holidays and the
beginning of May and October, may cause our results to vary from quarter to quarter.
During seasonal peak periods, demand for recruitment advertising and other human resource
related services may or may not rise significantly depending on the needs of employers as
well as their perceptions of the job market. The Chinese government also instituted
changes to the schedule of public holidays in 2008 which may result in new seasonality
patterns for our business. In addition, the dates of the Chinese New Year holidays and new
observances are based on the lunar calendar, which varies from year to year and affects
our quarter results and the comparability of financial results to corresponding periods in
prior years. In addition, we have experienced a trend of lower fourth quarter revenues as
compared to revenues from the immediately preceding third quarter in recent years.
    
    Increasing Acceptance of New Recruitment Channels and Human Resource Services.Many
employers in China have traditionally relied on job fairs and/or referrals to recruit
employees. While we have experienced growth in our print advertising and online
recruitment services businesses, the use of advertising services to recruit employees has
a limited history in China. In addition, we believe that the concept and use of business
process outsourcing services is relatively new in China. Therefore, our ability to
successfully increase employer acceptance and adoption of our services materially affects
our results of operations.
    
    Growing Use of the Internet as a Platform for Providing Human Resource Services.Our
results of operations from our online recruitment services in particular will depend
substantially upon an increase in Internet penetration and usage. According to the China
Internet Network Information Center, the number of Internet users in China has increased
from approximately 79 million in 2003 to 298 million in 2008, ranking China as the largest
market of Internet users in the world. We believe that continued development of the
Chinas technology infrastructure, more affordable and diversified means of Internet
access, and expanding personal computer ownership will connect an increasingly larger
group of job seekers and employers across a wider geographical area as well as facilitate
the use of a web-based platform for the delivery of human resource services.
  40




---



##### Table of Contents



Revenues
   For the year ended December 31,2006
    
    
    2007
    
    
    2008Revenues:Print advertising
    
    
    55.8
    %
    
    
    51.0
    %
    
    
    41.8
    %Online recruitment services
    
    
    31.5
    
    
    
    33.5
    
    
    
    36.3Executive search
    
    
    2.9
    
    
    
    1.9
    
    
    
    1.6Other human resource related revenues
    
    
    9.8
    
    
    
    13.6
    
    
    
    20.3Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  2006
    
    
    2007
    
    
    2008compared to
    
    
    compared to
    
    
    compared to2005
    
    
    2006
    
    
    2007Print advertising
    
    
    9.3
    %
    
    
    10.5
    %
    
    
    (16.6
    %)Online recruitment services
    
    
    37.8
    
    
    
    28.6
    
    
    
    10.4Executive search
    
    
    (24.2
    )
    
    
    (19.3
    )
    
    
    (13.1
    )Other human resource related revenues
    
    
    28.2
    
    
    
    67.5
    
    
    
    52.4Total revenues
    
    
    17.2
    %
    
    
    21.0
    %
    
    
    1.9
    %
 Recruitment Related Revenues
 51job
Weekly www.51job.com eSearch
 Print Advertising Revenues. 51job
Weekly 51job Weekly 51job Weekly
    41




---



##### Table of Contents



51job Weekly
 51job Weekly
  Online Recruitment Services Revenues. www.51job.com eHire www.51job.com www.51job.com
     42




---



##### Table of Contents



51job Weekly
 Executive Search Revenues. eSearch
 Other Human Resource Related Revenues
   Net Revenues and Business Taxes
  Costs
   For the year ended December 31,2006
    
    
    2007
    
    
    2008Cost of services
    
    
    (44.6
    %)
    
    
    (43.7
    %)
    
    
    (46.3
    %)Total operating expenses
    
    
    (38.0
    %)
    
    
    (38.7
    %)
    
    
    (41.8
    %)
  43




---



##### Table of Contents



Cost of Services
  Operating Expenses
   For the year ended December 31,2006
    
    
    2007
    
    
    2008Operating expenses:Sales and marketing
    
    
    (20.7
    %)
    
    
    (22.7
    %)
    
    
    (26.4
    %)General and administrative
    
    
    (17.3
    )
    
    
    (16.0
    )
    
    
    (15.4
    )Total operating expenses
    
    
    (38.0
    %)
    
    
    (38.7
    %)
    
    
    (41.8
    %)
 51job Weekly
   44




---



##### Table of Contents



Income Taxation
         45




---



##### Table of Contents



Critical Accounting Policies
   Income Taxes
     Share-Based Compensation
   46




---



##### Table of Contents



Basis for Consolidation and Our Relationships with Our Affiliated Variable Interest Entities
      Allowances for Doubtful Accounts
  Long-Lived Assets
   47




---



##### Table of Contents



Recent Accounting Pronouncements
       48




---



##### Table of Contents



49




---



##### Table of Contents



Results of Operations
  For the year ended December 31,2006
    
    
    2007
    
    
    2008(in thousands, except percentages)
    
    RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    %Revenues:Print advertising
    
    
    389,535
    
    
    
    59.0
    
    
    
    430,621
    
    
    
    53.9
    
    
    
    359,234
    
    
    
    44.0Online recruitment services
    
    
    219,794
    
    
    
    33.3
    
    
    
    282,688
    
    
    
    35.4
    
    
    
    312,121
    
    
    
    38.3Executive search
    
    
    19,938
    
    
    
    3.0
    
    
    
    16,086
    
    
    
    2.0
    
    
    
    13,979
    
    
    
    1.7Other human resource related revenues
    
    
    68,586
    
    
    
    10.4
    
    
    
    114,871
    
    
    
    14.3
    
    
    
    175,083
    
    
    
    21.5Total revenues
    
    
    697,853
    
    
    
    105.8
    
    
    
    844,266
    
    
    
    105.6
    
    
    
    860,417
    
    
    
    105.5Less: Business and related tax
    
    
    (38,010
    )
    
    
    (5.8
    )
    
    
    (44,982
    )
    
    
    (5.6
    )
    
    
    (44,939
    )
    
    
    (5.5
    )Net revenues
    
    
    659,843
    
    
    
    100.0
    
    
    
    799,284
    
    
    
    100.0
    
    
    
    815,478
    
    
    
    100.0Cost of services(1)
    
    
    (294,068
    )
    
    
    (44.6
    )
    
    
    (349,022
    )
    
    
    (43.7
    )
    
    
    (377,487
    )
    
    
    (46.3
    )Gross profit
    
    
    365,775
    
    
    
    55.4
    
    
    
    450,262
    
    
    
    56.3
    
    
    
    437,991
    
    
    
    53.7Operating expenses(1):Sales and marketing
    
    
    (136,770
    )
    
    
    (20.7
    )
    
    
    (181,230
    )
    
    
    (22.7
    )
    
    
    (215,228
    )
    
    
    (26.4
    )General and administrative
    
    
    (114,322
    )
    
    
    (17.3
    )
    
    
    (128,347
    )
    
    
    (16.0
    )
    
    
    (125,981
    )
    
    
    (15.4
    )Total operating expenses
    
    
    (251,092
    )
    
    
    (38.0
    )
    
    
    (309,577
    )
    
    
    (38.7
    )
    
    
    (341,209
    )
    
    
    (41.8
    )Income from operations
    
    
    114,683
    
    
    
    17.4
    
    
    
    140,685
    
    
    
    17.6
    
    
    
    96,782
    
    
    
    11.9Loss from foreign currency translation
    
    
    (9,440
    )
    
    
    (1.4
    )
    
    
    (18,134
    )
    
    
    (2.3
    )
    
    
    (17,732
    )
    
    
    (2.2
    )Interest and investment income
    
    
    20,744
    
    
    
    3.1
    
    
    
    24,635
    
    
    
    3.1
    
    
    
    26,400
    
    
    
    3.2Other income
    
    
    1,914
    
    
    
    0.3
    
    
    
    1,793
    
    
    
    0.2
    
    
    
    2,327
    
    
    
    0.3Income before income tax provision
    
    
    127,901
    
    
    
    19.4
    
    
    
    148,979
    
    
    
    18.6
    
    
    
    107,777
    
    
    
    13.2Income tax expense
    
    
    (28,560
    )
    
    
    (4.3
    )
    
    
    (45,402
    )
    
    
    (5.7
    )
    
    
    (31,176
    )
    
    
    (3.8
    )Net income
    
    
    99,341
    
    
    
    15.1
    
    
    
    103,577
    
    
    
    12.9
    
    
    
    76,601
    
    
    
    9.4(1) Share-based compensation expense:Included in cost of services
    
    
    (4,621
    )
    
    
    (0.7
    )
    
    
    (4,931
    )
    
    
    (0.6
    )
    
    
    (4,564
    )
    
    
    (0.6
    )Included in operating expenses:Sales and marketing
    
    
    (3,972
    )
    
    
    (0.6
    )
    
    
    (4,241
    )
    
    
    (0.5
    )
    
    
    (3,923
    )
    
    
    (0.5
    )General and administrative
    
    
    (19,926
    )
    
    
    (3.0
    )
    
    
    (20,479
    )
    
    
    (2.6
    )
    
    
    (18,947
    )
    
    
    (2.3
    )
 2008 Compared to 2007
 Total Revenues.
 
    
    Print Advertising.Our print advertising revenues decreased 16.6% to RMB359.2 million
(US$52.7 million) in 2008 from RMB430.6 million in 2007. This decrease was primarily due
to lower overall average revenue per page and less advertising page volume in 2008, which
was impacted by a decrease in market demand that became increasingly pronounced in the
second half of 2008 due primarily to the recent global economic and financial market
crisis and a slowdown in the Chinese economy. Print advertising prices charged in each
city were relatively unchanged compared to 2007 levels, but overall average revenue per
page decreased 16.3% as lower priced cities comprised a larger portion of print
advertising volume. We estimate that the number of print advertising pages decreased 0.3%
to 16,512 in 2008 from 16,568 in 2007.
 
    
    Online Recruitment Services.Our online recruitment services revenues increased 10.4%
to RMB312.1 million (US$45.7 million) in 2008 from RMB282.7 million in 2007. This increase
was primarily the result of growth in the number of unique employers using online
recruitment services and higher average revenue per unique employer, but customer growth
slowed in the latter part of 2008 due to weaker economic conditions in China. We estimate
that the number of unique employers using online services increased 9.0% to 102,562 in
2008 from 94,125 in 2007. Although the prices we charge were generally unchanged from
2007 to 2008, our average revenue per unique employer in 2008 increased 1.3% as employers
who purchased multiple or higher priced services more than offset customers who purchased
lower priced or introductory products.
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
    
    Executive Search.Our executive search revenues decreased 13.1% to RMB14.0 million
(US$2.0 million) in 2008 from RMB16.1 million in 2007 due to fewer candidate assignments
and placements.
 
    
    Other Human Resource Related Revenues. Our revenues from other human resource related
services increased 52.4% to RMB175.1 million (US$25.7 million) in 2008 from RMB114.9
million in 2007. This increase was primarily driven by growth in market demand and
adoption of our business process outsourcing services. We believe this growth is also
partly attributable to the implementation of a new labor contract law in China in 2008,
which strengthened enforcement of worker rights and instituted greater penalties on
employers for non-compliance resulting in greater acceptance of outsourced human resource
administrative services provided by professional third party providers like ourselves.
 Net Revenues.
 Cost of Services.
 Gross Profit.
 Operating Expenses.
 
    
    Sales and Marketing Expenses.Our sales and marketing expenses increased 18.8% to
RMB215.2 million (US$31.5 million) in 2008 from RMB181.2 million in 2007. This increase
was primarily due to increased labor costs from staff additions and higher wage levels
compared to the prior year as well as greater advertising and promotion expenses. Our
advertising and promotion expenses in 2008 grew 32.0% to RMB45.0 million (US$6.6 million)
from RMB34.1 million in 2007 as we increased spending on brand advertising activities and
conducted a greater number of promotional events. Our sales and marketing expenses in 2008
also included share-based compensation expense of RMB3.9 million (US$0.6 million) compared
with RMB4.2 million in 2007.
 
    
    General and Administrative Expenses.Our general and administrative expenses decreased
1.8% to RMB126.0 million (US$18.5 million) in 2008 from RMB128.3 million in 2007. This
decrease was primarily due to a loss provision of RMB9.7 million recorded in 2007 relating
to the non-compliance to contract terms by a third party which provided services to us in
connection with our human resource outsourcing operations in Beijing. Partially offsetting
the impact of this loss provision were increases in labor costs resulting from staff
additions and higher wage levels in 2008 as compared to 2007 as well as higher rental,
property management and office expenses. Our general and administrative expenses in 2008
included share-based compensation expense of RMB18.9 million (US$2.8 million) compared
with RMB20.5 million in 2007.
 Loss from Foreign Currency Translation.
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Interest and Investment Income.
 Income Tax Expense.
 Net Income.
 2007 Compared to 2006
 Total Revenues.
 
    
    Print Advertising.Our print advertising revenues increased 10.5% to RMB430.6 million
in 2007 from RMB389.5 million in 2006. This increase was primarily due to a higher number
of recruitment advertisements placed in our editions of 51job Weeklyas we increased
customer penetration in our existing markets. We estimate that the number of print
advertising pages increased 31.4% to 16,568 in 2007 from 12,609 in 2006. The increase in
revenues from greater advertisement volumes was partially offset by a 15.9% decrease in
our overall average revenue per page due to higher growth rates in lower priced markets.
We did not materially change the prices we charge for print advertising in each local
market in 2007.
 
    
    Online Recruitment Services.Our online recruitment services revenues increased 28.6%
to RMB282.7 million in 2007 from RMB219.8 million in 2006. This increase was mainly
attributable to growth in the number of unique employers placing recruitment and related
advertisements on www.51job.comas well as greater use of our eHireweb-based online
resumé and recruitment management platform. We estimate that the number of unique
employers increased 25.6% to 94,125 in 2007 from 74,950 in 2006. The prices we charge for
our online recruitment services were generally unchanged in 2007. However, our average
revenue per unique employer in 2007 increased 2.4% over 2006 as a result of the greater
number of customers purchasing multiple online recruitment services and the migration of
customers to higher priced products, both factors which increase our average revenue per
unique employer, more than offset the increase in new online customers, who generally
purchase basic, lower priced recruitment advertisements and decrease our average revenue
per unique employer.
 
    
    Executive Search.Our executive search revenues decreased 19.3% to RMB16.1 million in
2007 from RMB19.9 million in 2006, primarily as a result of fewer candidate assignments.
 
    
    Other Human Resource Related Revenues. Our revenues from other human resource related
services increased 67.5% to RMB114.9 million in 2007 from RMB68.6 million in 2006. This
increase was primarily attributable to an increase in training revenues as we conducted a
greater number of seminars and added new course content as well as an increase in business
process outsourcing revenues from the growing number of corporate customers and their
employees we served.
 Net Revenues.
 Cost of Services. 51job Weekly
 Gross Profit.
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Operating Expenses.
 
    
    Sales and Marketing Expenses.Our sales and marketing expenses increased 32.5% to
RMB181.2 million in 2007 from RMB136.8 million in 2006. This increase was due to the
expansion of our sales and marketing staff, higher employee salaries and commissions, and
greater spending on advertising and promotional activities. Our advertising and promotion
expenses in 2007 increased 79.6% to RMB34.1 million from RMB19.0 million in 2006 due to a
greater number of customer events and activities as well as increased spending on brand
advertising campaigns. Our sales and marketing expenses in 2007 also included share-based
compensation expense of RMB4.2 million compared with RMB4.0 million in 2006.
 
    
    General and Administrative Expenses.Our general and administrative expenses increased
12.3% to RMB128.3 million in 2007 from RMB114.3 million in 2006. This increase was
primarily due to a loss provision of RMB9.7 million recorded in the fourth quarter of 2007
relating to the non-compliance to contract terms by a third party which provided services
to us in connection with our human resource outsourcing operations in Beijing. We have
terminated our relationship with the third party contractor and have been involved in an
ongoing investigation of this contractor with the assistance of local authorities. Due to
the contractors non-compliance, we have assessed that we face probable liability and have
estimated a loss of RMB9.7 million related to this matter. We are exploring all legal
options available to recover funds from the third party contractor. However, the outcome
of the investigation and our ability to recover funds is unclear.
  Loss from Foreign Currency Translation.
 Interest and Investment Income.
 Income Tax Expense.
 Net Income.
 Inflation
  Unaudited Quarterly Results of Operations
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For the three months ended,March 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2008
    
    
    2008
    
    
    2008
    
    
    2008(in thousands)
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBRevenues:Print advertising
    
    
    122,426
    
    
    
    93,946
    
    
    
    83,163
    
    
    
    59,699Online recruitment services
    
    
    78,430
    
    
    
    83,287
    
    
    
    77,663
    
    
    
    72,741Executive search
    
    
    5,497
    
    
    
    3,158
    
    
    
    2,945
    
    
    
    2,379Other human resource related revenues
    
    
    30,085
    
    
    
    38,354
    
    
    
    45,252
    
    
    
    61,392Total revenues
    
    
    236,438
    
    
    
    218,745
    
    
    
    209,023
    
    
    
    196,211Net revenues
    
    
    224,098
    
    
    
    208,269
    
    
    
    197,766
    
    
    
    185,345Cost of services(1)
    
    
    (99,296
    )
    
    
    (93,867
    )
    
    
    (93,445
    )
    
    
    (90,879
    )Gross profit
    
    
    124,802
    
    
    
    114,402
    
    
    
    104,321
    
    
    
    94,466Operating expenses(1):Sales and marketing
    
    
    (55,391
    )
    
    
    (52,208
    )
    
    
    (49,437
    )
    
    
    (58,192
    )General and administrative
    
    
    (30,839
    )
    
    
    (31,927
    )
    
    
    (32,817
    )
    
    
    (30,398
    )Total operating expenses
    
    
    (86,230
    )
    
    
    (84,135
    )
    
    
    (82,254
    )
    
    
    (88,590
    )Income from operations
    
    
    38,572
    
    
    
    30,267
    
    
    
    22,067
    
    
    
    5,876Income before income tax provision
    
    
    34,716
    
    
    
    30,294
    
    
    
    30,548
    
    
    
    12,219Income tax expense
    
    
    (12,467
    )
    
    
    (10,984
    )
    
    
    (2,262
    )
    
    
    (5,463
    )Net income
    
    
    22,249
    
    
    
    19,310
    
    
    
    28,286
    
    
    
    6,756(1) Share-based compensation expense:Included in cost of services
    
    
    (1,009
    )
    
    
    (1,153
    )
    
    
    (1,192
    )
    
    
    (1,210
    )Included in operating expenses:Sales and marketing
    
    
    (868
    )
    
    
    (992
    )
    
    
    (1,023
    )
    
    
    (1,040
    )General and administrative
    
    
    (4,422
    )
    
    
    (5,053
    )
    
    
    (4,252
    )
    
    
    (5,220
    )
 B. Liquidity and Capital Resources
 Liquidity
   For the year ended December 31,2006
    
    
    2007
    
    
    2008
    
    
    2008(in thousands)
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$Net cash provided by operating activities
    
    
    185,229
    
    
    
    193,315
    
    
    
    119,867
    
    
    
    17,569Net cash used in investing activities
    
    
    (144,402
    )
    
    
    (41,248
    )
    
    
    (48,451
    )
    
    
    (7,101
    )Net cash provided by (used in) financing
activities
    
    
    6,099
    
    
    
    4,470
    
    
    
    (4,101
    )
    
    
    (601
    )Net increase in cash
    
    
    38,064
    
    
    
    138,822
    
    
    
    50,790
    
    
    
    7,445
 Cash Flows from Operating Activities.
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Cash Flows from Investing Activities.
 Cash Flows from Financing Activities.
 Capital Resources
    C. Research and Development, Patents and Licenses, etc.
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D. Trend Information
  E. Off-Balance Sheet Arrangements
  F. Tabular Disclosure of Contractual Obligations
  Less than
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 years(in thousands)
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBPublication fee agreements
    
    
    55,083
    
    
    
    42,003
    
    
    
    9,672
    
    
    
    3,288
    
    
    
    120Operating lease obligations
    
    
    53,097
    
    
    
    24,978
    
    
    
    24,595
    
    
    
    3,524
    
    
    
    Purchase obligations
    
    
    65,158
    
    
    
    44,277
    
    
    
    20,881
    
    
    
    
    
    
    
    Total
    
    
    173,338
    
    
    
    111,258
    
    
    
    55,148
    
    
    
    6,812
    
    
    
    120
 51job Weekly
     G. Safe Harbor
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 A. Directors and Senior Management
  Name
    
    Age
    
    Position / TitleDonald L. Lucas(1) (2)
    
    
    79
    
    
    Chairman of the board and independent directorRick Yan
    
    
    46
    
    
    Director, chief executive officer, president and secretaryDavid K. Chao(1) (2) (3)
    
    
    42
    
    
    Independent directorDr. Xiaoyue Chen(1) (3)
    
    
    62
    
    
    Independent directorHiroyuki Honda(4)
    
    
    48
    
    
    Non-executive directorKathleen Chien
    
    
    39
    
    
    Chief operating officerPeter Lui
    
    
    47
    
    
    Chief financial officerDavid Weimin Jin
    
    
    39
    
    
    Senior vice presidentTao Wang
    
    
    46
    
    
    Vice presidentJones Haijun Yu
    
    
    36
    
    
    Vice president
 
 (1)
    
    Member of audit committee.(2)
    
    Member of compensation committee.(3)
    
    Member of nominating and corporate governance committee.(4)
    
    Pursuant to the share purchase agreement between Recruit Co., Ltd., or Recruit, and the
selling shareholders, each of the selling shareholders has agreed that it will use its
commercially reasonable best efforts in cooperating with Recruit to have a representative of
Recruit nominated to stand for election to our board of directors and that it will vote all of
its shares in favor of the election of such nominee to our board of directors at any annual or
extraordinary general meetings of our members at which such nominee may stand for election for
the duration of the agreement. Mr. Hiroyuki Honda, Recruits nominee, was elected to our board
of directors in July 2006.  Biographical Information
 Donald L. Lucas
 Rick Yan
 David K. Chao
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Dr. Xiaoyue Chen
 Hiroyuki Honda
 Kathleen Chien
 Peter Lui
 David Weimin Jin
 Tao Wang
 Jones Haijun Yu
  58




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B. Compensation
 Compensation of Directors and Executive Officers
   Directors and Officers Liability Insurance
  Employment Agreements
  Stock-Based Compensation Plans
      59




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Common sharesunderlying options
    
    
    Exercisegranted
    
    
    price
    
    
    Date of grant
    
    
    Date of expirationUS$Granted in 2006Donald L. Lucas
    
    
    40,032
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012Rick Yan
    
    
    160,800
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012David K. Chao
    
    
    40,032
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012Hiroyuki Honda
    
    
    14,976
    
    
    
    9.83
    
    
    July 28, 2006
    
    July 27, 2012Kathleen Chien
    
    
    81,600
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012David Weimin Jin
    
    
    31,200
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012Tao Wang
    
    
    31,200
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012Jones Haijun Yu
    
    
    31,200
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012Other employees
    
    
    437,952
    
    
    
    8.365
    
    
    April 3, 2006
    
    April 2, 2012868,992Granted in 2007Donald L. Lucas
    
    
    40,032
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 2013160,128
    
    
    
    8.77
    
    
    May 25, 2007
    
    May 24, 2013Rick Yan
    
    
    100,032
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 2013David K. Chao
    
    
    40,032
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 201340,032
    
    
    
    9.355
    
    
    August 8, 2007
    
    August 7, 2013Dr. Xiaoyue Chen
    
    
    60,096
    
    
    
    9.355
    
    
    August 8, 2007
    
    August 7, 2013Hiroyuki Honda
    
    
    14,976
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 201330,048
    
    
    
    8.80
    
    
    September 24, 2007
    
    September 23, 2013Kathleen Chien
    
    
    81,600
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 2013David Weimin Jin
    
    
    81,600
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 2013Tao Wang
    
    
    48,000
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 2013Jones Haijun Yu
    
    
    48,000
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 2013Other employees
    
    
    444,576
    
    
    
    8.795
    
    
    April 16, 2007
    
    April 15, 20131,189,152Granted in 2008Rick Yan
    
    
    100,032
    
    
    
    9.00
    
    
    May 1, 2008
    
    April 30, 2014Kathleen Chien
    
    
    91,200
    
    
    
    9.00
    
    
    May 1, 2008
    
    April 30, 2014David Weimin Jin
    
    
    81,600
    
    
    
    9.00
    
    
    May 1, 2008
    
    April 30, 2014Tao Wang
    
    
    64,800
    
    
    
    9.00
    
    
    May 1, 2008
    
    April 30, 2014Jones Haijun Yu
    
    
    64,800
    
    
    
    9.00
    
    
    May 1, 2008
    
    April 30, 2014Other employees
    
    
    144,000
    
    
    
    9.245
    
    
    February 27, 2008
    
    February 26, 2014608,400
    
    
    
    9.00
    
    
    May 1, 2008
    
    April 30, 2014144,000
    
    
    
    4.535
    
    
    September 30, 2008
    
    September 29, 20141,298,832
 C. Board Practices
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Board Committees
  Audit Committee
   
    
    the appointment, evaluation, compensation, oversight and termination of the work of our
independent auditor (including resolution of disagreements between management and the
independent auditor regarding financial reporting);
 
    
    ensuring that it receives from our independent auditor a formal written statement
attesting to the auditors independence and describing all relationships between the
auditor and us;
 
    
    pre-approving any audit and non-audit services, including tax services, to be provided
by our independent auditor in accordance with Nasdaq rules;
 
    
    reviewing our annual audited financial statements and quarterly financial statements
with management and our independent auditor;
 
    
    reviewing with our independent auditor all critical accounting policies and practices
to be used by us in preparing our financial statements, all alternative treatments of
financial information within U.S. GAAP, and other material communications between our
independent auditor and management;
 
    
    reviewing our policies with respect to risk assessment and risk management;
 
    
    reviewing, with management and counsel, any legal matters that may have a material
impact on us and any material reports or inquiries from regulatory or governmental
agencies; and
 
    
    establishing procedures for the receipt, retention and treatment of complaints
regarding accounting, internal accounting controls, auditing matters or potential
violations of law, and the confidential, anonymous submission by our employees of concerns
regarding questionable accounting or auditing matters or potential violations of law.
 Nominating and Corporate Governance Committee
   
    
    identifying and recommending to the board nominees for election or re-election to the
board, or for appointment to fill any vacancy;
 
    
    reviewing annually with the board the current composition of the board in light of the
characteristics of independence, age, skills, experience and availability of service to
us;
 
    
    reviewing the continued board membership of a director upon a significant change in
such directors principal occupation;
 
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
    
    identifying and recommending to the board the names of directors to serve as members of
the audit committee and the compensation committee, as well as the nominating and
corporate governance committee itself;
 
    
    advising the board periodically with respect to significant developments in the law and
practice of corporate governance as well as our compliance with applicable laws and
regulations, and making recommendations to the board on all matters of corporate
governance and on any corrective action to be taken;
 
    
    establishing criteria and processes for, and leading the board and each committee of
the board in, its annual performance self-evaluation;
 
    
    reviewing and approving policies and procedures with respect to proposed transactions
between us and our related parties, and approving in advance all such related-party
transactions; and
 
    
    monitoring compliance with our code of business conduct and ethics, including reviewing
the adequacy and effectiveness of our procedures to ensure proper compliance.
 Compensation Committee
   
    
    approving and overseeing the total compensation package for our executives;
    
    reviewing and making recommendations to the board with respect to the compensation of our directors;
 
    
    reviewing and approving corporate goals and objectives relevant to the compensation of
our chief executive officer, evaluating the performance of our chief executive officer in
light of those goals and objectives, and setting the compensation level of our chief
executive officer based on this evaluation;
 
    
    reviewing the results of, and procedures for, the evaluation of the performance of
other executive officers;
 
    
    reviewing periodically and making recommendations to the board regarding any long-term
incentive compensation or equity plans, programs or similar arrangements, and
administering these plans;
 
    
    reviewing and making recommendations to the board regarding all new employment,
consulting, retirement and severance agreements and arrangements proposed for our
executives; and
 
    
    selecting peer groups of companies to be used for purposes of determining competitive
compensation packages.
 Duties of Directors
   
    
    convening shareholders annual general meetings and reporting its work to shareholders
at such meetings;
 
    
    declaring dividends and distributions;
    
    appointing officers and determining the term of office of the officers;
    
    exercising the borrowing powers of our company and mortgaging the property of our company; and
 
    
    approving the transfer of shares in our company, including the registering of such
 shares in our share register.
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Interested Transactions
  Remuneration and Borrowing
  Qualification
  Terms of Directors and Executive Officers
  Limitation on Liability and Other Indemnification Matters
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D. Employees
  Sales and account management
    
    
    1,991Marketing and merchandising
    
    
    863Technology and online operations
    
    
    629Customer service and production
    
    
    623Search and training consultants
    
    
    185General and administrative
    
    
    378Total
    
    
    4,669
    *
 
 *
    
    Includes 824 temporary, part-time and contract employees.  
 E. Share Ownership
  ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 A. Major Shareholders
  
    
    by each of our directors and executive officers; and
    
    each person known to us to own beneficially more than 5% of our common shares.
   64




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##### Table of Contents



Common shares beneficially ownedNumber
    
    
    %Directors and executive officers:Rick Yan
    
    
    15,431,928
    
    
    
    27.4Kathleen Chien
    
    
    1,639,658
    
    
    
    2.9David K. Chao(1)
    
    
    508,622
    
    
    
    *Tao Wang
    
    
    160,250
    
    
    
    *Donald L. Lucas
    
    
    131,772
    
    
    
    *David Weimin Jin
    
    
    130,300
    
    
    
    *Jones Haijun Yu
    
    
    98,450
    
    
    
    *Hiroyuki Honda(2)
    
    
    30,928
    
    
    
    *Dr. Xiaoyue Chen
    
    
    26,292
    
    
    
    *All directors and executive officers as a group
    
    
    18,158,200
    
    
    
    31.8Principal shareholders:Recruit Co., Ltd.(2)
    
    
    22,279,528
    
    
    
    39.8Rick Yan
    
    
    15,431,928
    
    
    
    27.4
 
 (1)
    
    The address of David K. Chao is 2420 Sand Hill Road, Suite 200, Menlo Park, CA 94025.(2)
    
    The address for Hiroyuki Honda and Recruit Co., Ltd. is GranTokyo South Tower, 1-9-2
Marunouchi, Chiyoda-ku, Tokyo 100-6640, Japan.*
    
    Less than 1%.    65




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##### Table of Contents



B. Related Party Transactions
 Contractual Arrangements Among Our Group Entities
  
 Technical and Consulting Service Agreements
 Qian Cheng Technical and Consulting Service Agreement.
 RAL Technical and Consulting Service Agreement
 Run An Technical and Consulting Service Agreement
  66




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##### Table of Contents



Equity Pledge Agreements
 Qian Cheng Equity Pledge Agreement.
 RAL Equity Pledge Agreement.
 Run An Equity Pledge Agreement.
  67




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##### Table of Contents



Other Agreements
 Loan Agreements.
 Tech JV and RAL Cooperation Agreement. www.51job.com
 Domain Name License Agreement. www.51job.com
 Call Option Agreement.
  Stock Option Grants
  Business Alliance with Recruit
    68




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##### Table of Contents



Investment in Coupon Advertising Services Company with Recruit
  C. Interests of Experts and Counsel
  
 ITEM 8. FINANCIAL INFORMATION
 A. Consolidated Statements and Other Financial Information
  Legal Proceedings
 www.51job.com
 Dividend Policy
   B. Significant Changes
  
 ITEM 9. THE OFFER AND LISTING
 A. Offer and Listing Details
   69




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##### Table of Contents



Sales priceHigh
    
    
    LowUS$
    
    
    US$Annual highs and lows2004(1)
    
    
    55.55
    
    
    
    18.612005
    
    
    53.50
    
    
    
    9.712006
    
    
    31.90
    
    
    
    12.702007
    
    
    25.44
    
    
    
    14.022008
    
    
    20.50
    
    
    
    6.00Quarterly highs and lowsFirst quarter 2007
    
    
    18.39
    
    
    
    14.02Second quarter 2007
    
    
    19.44
    
    
    
    15.52Third quarter 2007
    
    
    20.98
    
    
    
    15.55Fourth quarter 2007
    
    
    25.44
    
    
    
    17.59First quarter 2008
    
    
    19.66
    
    
    
    16.01Second quarter 2008
    
    
    20.50
    
    
    
    16.27Third quarter 2008
    
    
    18.54
    
    
    
    8.69Fourth quarter 2008
    
    
    10.20
    
    
    
    6.00First quarter 2009
    
    
    7.93
    
    
    
    6.33Monthly highs and lowsOctober 2008
    
    
    10.20
    
    
    
    6.03November 2008
    
    
    8.23
    
    
    
    6.10December 2008
    
    
    6.95
    
    
    
    6.00January 2009
    
    
    6.90
    
    
    
    6.18February 2009
    
    
    7.93
    
    
    
    6.42March 2009
    
    
    7.83
    
    
    
    6.00April 2009 (through April 27, 2009)
    
    
    8.22
    
    
    
    6.51
 
 (1)
    
    Our ADSs commenced trading on September 29, 2004. B. Plan of Distribution
  C. Markets
  D. Selling Shareholders
  E. Dilution
  F. Expenses of the Issue
  
 ITEM 10. ADDITIONAL INFORMATION
 A. Share Capital
   70




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##### Table of Contents



B. Memorandum and Articles of Association
  C. Material Contracts
   D. Exchange Controls
  E. Taxation
  Cayman Islands Taxation
  Peoples Republic of China
     71




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##### Table of Contents



Certain United States Federal Income Tax Considerations
   
    
    dealers in securities or currencies;
    
    regulated investment companies;
    
    financial institutions;
    
    real estate investment trusts;
    
    insurance companies;
    
    tax-exempt organizations;
    
    persons holding ADSs or common shares as part of a hedging, integrated or conversion
transaction, constructive sale or straddle;
    
    traders in securities that have elected the mark-to-market method of accounting;
    
    persons liable for alternative minimum tax;
    
    partnerships or other pass-through entities for U.S. federal income tax purposes;
    
    persons who own or are deemed to own 10% or more of our voting shares; or
    
    persons whose functional currency is not the U.S. dollar.
    
    
    an individual citizen or resident of the United States;
    
    a corporation (or other entity taxable as a corporation for U.S. federal income tax
purposes) created or organized in or under the laws of the United States, any state
thereof, or the District of Columbia;
    
    an estate the income of which is subject to U.S. federal income taxation, regardless of
its source; or
    
    a trust if it is subject to the primary supervision of a court within the United States
and one or more U.S. persons have the authority to control all substantial decisions of
the trust or if the trust has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a U.S. person.
    72




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##### Table of Contents



ADSs
  Distributions on ADSs or Common Shares
  
    
    a foreign corporation that is eligible for the benefits of a comprehensive income tax
treaty with the United States which the U.S. Treasury determines to be satisfactory for
these purposes and which includes an exchange of information program; and
 
    
    a foreign corporation if its shares with respect to which a dividend is paid or its
ADSs backed by such shares are readily tradable on an established securities market within
the United States,
     73




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Sale, Exchange or Other Disposition of ADSs or Common Shares
  Passive Foreign Investment Company Rules
     74




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##### Table of Contents



Information Reporting and Backup Withholding
   75




---



##### Table of Contents



F. Dividends and Paying Agents
  G. Statements by Experts
  H. Documents on Display
   www.sec.gov
   I. Subsidiary Information
  
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
    76




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Foreign Exchange Risk
   
 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
   77




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##### Table of Contents



PART II
 
 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
  
 ITEM 15. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Managements Annual Report on Internal Control over Financial Reporting
   Internal Control-Integrated Framework
  Changes in Internal Control Over Financial Reporting
   78




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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
  
 ITEM 16B. CODE OF ETHICS
 ir.51job.com
 
 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  2007
    
    
    2008
    
    
    2008(in thousands)
    
    RMB
    
    
    RMB
    
    
    US$Audit fees
    
    
    5,352
    
    
    
    4,406
    
    
    
    646
 Pre-Approved Policies and Procedures
  
 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
   79




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##### Table of Contents



Approximate dollar value ofTotal number of
    
    
    Average price paid
    
    
    ADSs that may yet bePeriod
    
    ADSs purchased
    
    
    per share
    
    
    purchased under the programUS$
    
    
    RMB(1)
    
    
    US$
    
    
    RMB(1)September 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    October 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    November 2008
    
    
    25,251
    
    
    
    6.56
    
    
    
    44.76
    
    
    
    24,834,000
    
    
    
    169,432,000December 2008
    
    
    111,576
    
    
    
    6.71
    
    
    
    45.78
    
    
    
    24,086,000
    
    
    
    164,326,000January 2009
    
    
    72,528
    
    
    
    6.50
    
    
    
    44.36
    
    
    
    23,614,000
    
    
    
    161,109,000February 2009
    
    
    108,275
    
    
    
    6.95
    
    
    
    47.40
    
    
    
    22,862,000
    
    
    
    155,976,000March 2009
    
    
    55,217
    
    
    
    6.87
    
    
    
    46.86
    
    
    
    22,483,000
    
    
    
    153,389,000April 2009 (through April 27)
    
    
    41,006
    
    
    
    7.23
    
    
    
    49.30
    
    
    
    22,186,000
    
    
    
    151,367,000
 
 (1)
    
    The translations of U.S. dollar amounts into Renminbi amounts have been made at the noon
buying rate in effect on December 31, 2008, which was US$1.00 to RMB6.8225. See Introduction
and Part I.  Item 3. Key Information  Selected Financial Data  Exchange Rate
Information. 
 ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  
 ITEM 16G. CORPORATE GOVERNANCE
   80




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PART III
 
 ITEM 17. FINANCIAL STATEMENTS
  
 ITEM 18. FINANCIAL STATEMENTS
  
 ITEM 19. EXHIBIT INDEX
 Exhibits
    
    Description1.1
    
    
    Amended and Restated Memorandum and Articles of Association.
(Incorporated by reference to Exhibit 3.1 from our Registration
Statement on Form F-1 (File No. 333-117194) filed with the
Securities and Exchange Commission on July 7, 2004)2.1
    
    
    Specimen of Share Certificate. (Incorporated by reference to
Exhibit 4.1 from our Registration Statement on Form F-1 (File No.
333-117194) filed with the Securities and Exchange Commission on
July 7, 2004)2.2
    
    
    Specimen of American Depositary Receipt. (Incorporated by
reference to Exhibit 4.2 from our Registration Statement on Form
F-1 (File No. 333-117194) filed with the Securities and Exchange
Commission on August 2, 2004)2.3
    
    
    Form of Deposit Agreement among 51job, Inc., JPMorgan Chase Bank,
as Depositary, and Holders and Beneficial Holders from time to
time of American Depositary Shares evidenced by American
Depositary Receipts issued thereunder, including the form of
American Depositary Receipt. (Incorporated by reference to the
Registration Statement on Form F-6 (File No. 333-117254) filed
with the Securities and Exchange Commission with respect to
American Depositary Shares representing common shares on July 9,
2004)4.1
    
    
    2000 Stock Option Plan. (Incorporated by reference to Exhibit
10.1 from our Registration Statement on Form F-1 (File No.
333-117194) filed with the Securities and Exchange Commission on
July 7, 2004)4.2
    
    
    Form of Employment, Confidential Information and Invention
Assignment Agreement. (Incorporated by reference to Exhibit 10.2
from our Registration Statement on Form F-1 (File No. 333-117194)
filed with the Securities and Exchange Commission on July 7,
2004)4.3
    
    
    Form of Indemnification Agreement. (Incorporated by reference to
Exhibit 10.3 from our Registration Statement on Form F-1 (File
No. 333-117194) filed with the Securities and Exchange Commission
on July 7, 2004)4.4
    
    
    Form of Investor Rights Agreement. (Incorporated by reference to
Exhibit 10.5 from our Registration Statement on Form F-1 (File
No. 333-117194) filed with the Securities and Exchange Commission
on July 7, 2004)4.5
    
    
    Loan Agreements dated as of September 11, 2007 between Qianjin
Network Information Technology (Shanghai) Co., Ltd. and the
shareholders of Beijing Run An Information Consultancy Co., Ltd.
(Incorporated by reference to Exhibit 4.5 from our Annual Report
on Form 20-F for the year ended December 31, 2007 filed with the
Securities and Exchange Commission on June 28, 2008)4.6
    
    
    Technical and Consulting Service Agreement dated as of May 3,
2004, as amended as of July 2, 2004, between Shanghai Run An Lian
Information Consultancy Co., Ltd. and Qian Cheng Wu You Network
Information Technology (Beijing) Co., Ltd. (Incorporated by
reference to Exhibit 10.7 from our Registration Statement on Form
F-1 (File No. 333-117194) filed with the Securities and Exchange
Commission on July 7, 2004)4.7
    
    
    Technical and Consulting Service Agreement dated as of May 3,
2004, as amended as of July 2, 2004, between Beijing Qian Cheng
Si Jin Advertising Co., Ltd. and Qian Cheng Wu You Network
Information Technology (Beijing) Co., Ltd. (Incorporated by
reference to Exhibit 10.8 from our Registration Statement on Form
F-1 (File No. 333-117194) filed with the Securities and Exchange
Commission on July 7, 2004)
  81




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Exhibits
    
    Description4.8
    
    
    Technical and Consulting Service Agreement dated as of September 11, 2007
between Beijing Run An Information Consultancy Co. Ltd. and Qian Cheng Wu
You Network Information Technology (Beijing) Co., Ltd. (Incorporated by
reference to Exhibit 4.8 from our Annual Report on Form 20-F for the year
ended December 31, 2007 filed with the Securities and Exchange Commission
on June 28, 2008)4.9
    
    
    Equity Pledge Agreement dated as of May 3, 2004 between Qian Cheng Wu You
Network Information Technology (Beijing) Co., Ltd. and the shareholders of
Shanghai Run An Lian Information Consultancy Co., Ltd. (Incorporated by
reference to Exhibit 10.9 from our Registration Statement on Form F-1
(File No. 333-117194) filed with the Securities and Exchange Commission on
July 7, 2004)4.10
    
    
    Equity Pledge Agreement dated as of May 3, 2004 between Qian Cheng Wu You
Network Information Technology (Beijing) Co., Ltd. and the shareholders of
Beijing Qian Cheng Si Jin Advertising Co., Ltd. (Incorporated by reference
to Exhibit 10.10 from our Registration Statement on Form F-1 (File No.
333-117194) filed with the Securities and Exchange Commission on July 7,
2004)4.11
    
    
    Equity Pledge Agreement dated as of September 11, 2007 between Qian Cheng
Wu You Network Information Technology (Beijing) Co., Ltd. and the
shareholders of Beijing Run An Information Consultancy Co., Ltd.
(Incorporated by reference to Exhibit 4.11 from our Annual Report on Form
20-F for the year ended December 31, 2007 filed with the Securities and
Exchange Commission on June 28, 2008)4.12
    
    
    Investment Capital Transfer Agreement dated as of September 11, 2007 among
the shareholders of Beijing Run An Information Consultancy Co., Ltd.
(Incorporated by reference to Exhibit 4.12 from our Annual Report on Form
20-F for the year ended December 31, 2007 filed with the Securities and
Exchange Commission on June 28, 2008)4.13
    
    
    Share Transfer Agreement dated as of November 20, 2007 among the
shareholders of Shanghai Run An Lian Information Consultancy Co. Ltd.
(Incorporated by reference to Exhibit 4.13 from our Annual Report on Form
20-F for the year ended December 31, 2007 filed with the Securities and
Exchange Commission on June 28, 2008)4.14
    
    
    Share Transfer Agreement dated as of November 12, 2007 between the
shareholders of Beijing Qian Cheng Si Jin Advertising Co., Ltd.
(Incorporated by reference to Exhibit 4.14 from our Annual Report on Form
20-F for the year ended December 31, 2007 filed with the Securities and
Exchange Commission on June 28, 2008)4.15
    
    
    Cooperation Agreement dated as of May 3, 2004 between Shanghai Run An Lian
Information Consultancy Co., Ltd. and Qianjin Network Information
Technology (Shanghai) Co., Ltd. (Incorporated by reference to Exhibit
10.11 from our Registration Statement on Form F-1 (File No. 333-117194)
filed with the Securities and Exchange Commission on July 7, 2004)4.16
    
    
    Supplemental Agreement to the Cooperation Agreement effective as of April
1, 2007 between Shanghai Run An Lian Information Consultancy Co., Ltd. and
Qianjin Network Information Technology (Shanghai) Co., Ltd. (Incorporated
by reference to Exhibit 4.10 from our Annual Report on Form 20-F for the
year ended December 31, 2006 filed with the Securities and Exchange
Commission on June 28, 2007)4.17
    *
    
    Domain Name License Agreement dated as of May 3, 2008 between Shanghai Run
An Lian Information Consultancy Co., Ltd. and 51net.com Inc.4.18
    
    
    Call Option Agreement dated as of August 1, 2002, as supplemented and
amended as of May 3, 2004, between Beijing Qian Cheng Si Jin Advertising
Co., Ltd. and 51net.com Inc. (Incorporated by reference to Exhibit 10.13
from our Registration Statement on Form F-1 (File No. 333-117194) filed
with the Securities and Exchange Commission on July 7, 2004)4.19
    
    
    Share Transfer Agreement dated as of April 5, 2004 among Wuhan Mei Hao
Qian Cheng Advertising Co., Ltd., 51net.com Inc. and Beijing Qian Cheng Si
Jin Advertising Co., Ltd. (Incorporated by reference to Exhibit 10.14 from
our Registration Statement on Form F-1 (File No. 333-117194) filed with
the Securities and Exchange Commission on July 7, 2004)4.20
    
    
    Cooperation Agreement dated as of August 9, 2007, as amended as of March
27, 2008, between 51job, Inc. and Recruit Co., Ltd. (Incorporated by
reference to Exhibit 4.21 from our Annual Report on Form 20-F for the year
ended December 31, 2007 filed with the Securities and Exchange Commission
on June 28, 2008)
  82




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Exhibits
    
    Description8.1
    
    
    List of subsidiaries of 51job, Inc. (Incorporated by reference to Exhibit
8.1 from our Annual Report on Form 20-F for the year ended December 31,
2007 filed with the Securities and Exchange Commission on June 28, 2008)11.1
    
    
    Code of Business Conduct and Ethics. (Incorporated by reference to Exhibit 10.6 from our Registration Statement on Form F-1 (File No. 333-117194)
filed with the Securities and Exchange Commission on July 7, 2004)12.1
    *
    
    CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
    *
    
    CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
    *
    
    CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2
    *
    
    CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1
    *
    
    Consent of Maples and Calder15.2
    *
    
    Consent of Jun He Law Offices15.3
    *
    
    Consent of PricewaterhouseCoopers Zhong Tian CPAs Limited Company
 
 *
    
    Filed with this annual report on Form 20-F.  83




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SIGNATURES
  51job, Inc.By:
    /s/ Rick YanName:
    Rick YanTitle:
    President and Chief Executive Officer   84




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##### Table of Contents



51JOB, INC.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Statements of Operations and Comprehensive Income for the years ended
December 31, 2006, 2007 and 2008
    
    
    F-3Consolidated Balance Sheets as of December 31, 2007 and 2008
    
    
    F-4Consolidated Statements of Shareholders Equity for the years ended December 31,
2006, 2007
and 2008
    
    
    F-5Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2007 and 2008
    
    
    F-6Notes to the Consolidated Financial Statements for the years ended December 31,
2006, 2007
and 2008
    
    
    F-7Additional Information  Financial Statement Schedule I
    
    
    F-24
  F-1




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors and Shareholders of 51job, Inc.:
 Internal Control  Integrated Framework
   
  F-2




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##### Table of Contents



51JOB, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 (in thousands, except number of shares and
    
    Note
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2008per share data)
    
    
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$ (Note 2(c))Revenues:Print advertising
    
    
    
    
    
    
    389,535
    
    
    
    430,621
    
    
    
    359,234
    
    
    
    52,654Online recruitment services
    
    
    
    
    
    
    219,794
    
    
    
    282,688
    
    
    
    312,121
    
    
    
    45,749Executive search
    
    
    
    
    
    
    19,938
    
    
    
    16,086
    
    
    
    13,979
    
    
    
    2,049Other human resource related revenues
    
    
    
    
    
    
    68,586
    
    
    
    114,871
    
    
    
    175,083
    
    
    
    25,663Total revenues
    
    
    
    
    
    
    697,853
    
    
    
    844,266
    
    
    
    860,417
    
    
    
    126,115Less: Business and related taxes
    
    
    
    
    
    
    (38,010
    )
    
    
    (44,982
    )
    
    
    (44,939
    )
    
    
    (6,587
    )Net revenues
    
    
    
    
    
    
    659,843
    
    
    
    799,284
    
    
    
    815,478
    
    
    
    119,528Cost of services(1)
    
    
    
    
    
    
    (294,068
    )
    
    
    (349,022
    )
    
    
    (377,487
    )
    
    
    (55,330
    )Gross profit
    
    
    
    
    
    
    365,775
    
    
    
    450,262
    
    
    
    437,991
    
    
    
    64,198Operating expenses(1):Sales and marketing
    
    
    
    
    
    
    (136,770
    )
    
    
    (181,230
    )
    
    
    (215,228
    )
    
    
    (31,547
    )General and administrative
    
    
    
    
    
    
    (114,322
    )
    
    
    (128,347
    )
    
    
    (125,981
    )
    
    
    (18,465
    )Total operating expenses
    
    
    
    
    
    
    (251,092
    )
    
    
    (309,577
    )
    
    
    (341,209
    )
    
    
    (50,012
    )Income from operations
    
    
    
    
    
    
    114,683
    
    
    
    140,685
    
    
    
    96,782
    
    
    
    14,186Loss from foreign currency translation
    
    
    
    
    
    
    (9,440
    )
    
    
    (18,134
    )
    
    
    (17,732
    )
    
    
    (2,599
    )Interest and investment income
    
    
    
    
    
    
    20,744
    
    
    
    24,635
    
    
    
    26,400
    
    
    
    3,869Other income
    
    
    
    
    
    
    1,914
    
    
    
    1,793
    
    
    
    2,327
    
    
    
    341Income before provision for income tax
    
    
    
    
    
    
    127,901
    
    
    
    148,979
    
    
    
    107,777
    
    
    
    15,797Income tax expense
    
    
    8
    
    
    
    (28,560
    )
    
    
    (45,402
    )
    
    
    (31,176
    )
    
    
    (4,570
    )Net income
    
    
    
    
    
    
    99,341
    
    
    
    103,577
    
    
    
    76,601
    
    
    
    11,227Other comprehensive income:Currency translation adjustments
    
    
    
    
    
    
    579
    
    
    
    419
    
    
    
    374
    
    
    
    55Comprehensive income
    
    
    
    
    
    
    99,920
    
    
    
    103,996
    
    
    
    76,975
    
    
    
    11,282Earnings per share:
    
    
    12 Basic
    
    
    
    
    
    
    1.79
    
    
    
    1.84
    
    
    
    1.35
    
    
    
    0.20 Diluted
    
    
    
    
    
    
    1.76
    
    
    
    1.83
    
    
    
    1.35
    
    
    
    0.20Earnings per ADS(2): Basic
    
    
    
    
    
    
    3.58
    
    
    
    3.68
    
    
    
    2.71
    
    
    
    0.40 Diluted
    
    
    
    
    
    
    3.52
    
    
    
    3.66
    
    
    
    2.70
    
    
    
    0.40Weighted average number of shares
outstanding: Basic
    
    
    
    
    
    
    55,422,447
    
    
    
    56,279,193
    
    
    
    56,581,719
    
    
    
    56,581,719 Diluted
    
    
    
    
    
    
    56,409,260
    
    
    
    56,631,598
    
    
    
    56,709,513
    
    
    
    56,709,513(1) Share-based compensation:Included in cost of services
    
    
    
    
    
    
    (4,621
    )
    
    
    (4,931
    )
    
    
    (4,564
    )
    
    
    (669
    )Included in operating expenses Sales and marketing
    
    
    
    
    
    
    (3,972
    )
    
    
    (4,241
    )
    
    
    (3,923
    )
    
    
    (575
    ) General and administrative
    
    
    
    
    
    
    (19,926
    )
    
    
    (20,479
    )
    
    
    (18,947
    )
    
    
    (2,777
    )
 (2)
    
    Each ADS represents two common shares.   F-3




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##### Table of Contents



51JOB, INC.
 
 CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2007 AND 2008
 Note
    
    
    2007
    
    
    2008
    
    
    2008(in thousands, except number of shares and per share data)
    
    
    
    
    
    RMB
    
    
    RMB
    
    
    US$ (Note 2(c))ASSETSCurrent assets:Cash
    
    
    
    
    
    
    1,007,520
    
    
    
    1,058,310
    
    
    
    155,121Short-term investments
    
    
    2
    (f)
    
    
    
    
    
    
    16,100
    
    
    
    2,360Accounts receivable (net of allowance for doubtful
accounts of RMB3,879 and RMB2,783 as of December 31, 2007
and 2008, respectively)
    
    
    3
    
    
    
    29,706
    
    
    
    19,524
    
    
    
    2,862Prepayments and other current assets
    
    
    4
    
    
    
    33,132
    
    
    
    44,996
    
    
    
    6,595Deferred tax assets, current
    
    
    8
    
    
    
    4,930
    
    
    
    2,322
    
    
    
    340Total current assets
    
    
    
    
    
    
    1,075,288
    
    
    
    1,141,252
    
    
    
    167,278Long-term investments
    
    
    2
    (f)
    
    
    8,788
    
    
    
    15,927
    
    
    
    2,335Property and equipment
    
    
    5
    
    
    
    205,984
    
    
    
    205,805
    
    
    
    30,166Intangible assets
    
    
    6
    
    
    
    6,869
    
    
    
    4,669
    
    
    
    684Other long-term assets
    
    
    
    
    
    
    5,031
    
    
    
    6,311
    
    
    
    925Deferred tax assets, non-current
    
    
    8
    
    
    
    1,206
    
    
    
    405
    
    
    
    59Total non-current assets
    
    
    
    
    
    
    227,878
    
    
    
    233,117
    
    
    
    34,169Total assets
    
    
    
    
    
    
    1,303,166
    
    
    
    1,374,369
    
    
    
    201,447LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    
    
    
    
    
    9,804
    
    
    
    10,511
    
    
    
    1,541Salary and employee related accrual
    
    
    
    
    
    
    29,064
    
    
    
    22,370
    
    
    
    3,279Taxes payable
    
    
    
    
    
    
    33,498
    
    
    
    13,337
    
    
    
    1,955Advance from customers
    
    
    
    
    
    
    75,535
    
    
    
    87,639
    
    
    
    12,845Other payables and accruals
    
    
    7
    
    
    
    28,214
    
    
    
    12,939
    
    
    
    1,897Total current liabilities
    
    
    
    
    
    
    176,115
    
    
    
    146,796
    
    
    
    21,517Deferred tax liabilities, non-current
    
    
    8
    
    
    
    516
    
    
    
    730
    
    
    
    107Total liabilities
    
    
    
    
    
    
    176,631
    
    
    
    147,526
    
    
    
    21,624Commitments and contingencies
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    Shareholders equity:Common shares (US$0.0001 par value per share; 500,000,000
shares authorized, 56,519,471 and 56,378,139 shares
issued and outstanding as of December 31, 2007 and 2008,
respectively)
    
    
    
    
    
    
    47
    
    
    
    47
    
    
    
    7Additional paid-in capital
    
    
    
    
    
    
    894,019
    
    
    
    917,352
    
    
    
    134,460Statutory reserves
    
    
    
    
    
    
    5,991
    
    
    
    6,947
    
    
    
    1,018Other comprehensive income
    
    
    
    
    
    
    680
    
    
    
    1,054
    
    
    
    154Retained earnings
    
    
    
    
    
    
    225,798
    
    
    
    301,443
    
    
    
    44,184Total shareholders equity
    
    
    
    
    
    
    1,126,535
    
    
    
    1,226,843
    
    
    
    179,823Total liabilities and shareholders equity
    
    
    
    
    
    
    1,303,166
    
    
    
    1,374,369
    
    
    
    201,447
   F-4




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##### Table of Contents



51JOB, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 Common shares
    
    
    
    
    
    
    Deferred
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalNumber
    
    
    
    
    
    
    Additional
    
    
    share-based
    
    
    Statutory
    
    
    comprehensive
    
    
    Retained
    
    
    shareholdersof shares
    
    
    Par value
    
    
    paid-in capital
    
    
    compensation
    
    
    reserves
    
    
    (loss) income
    
    
    earnings
    
    
    equity(in thousands, except number of shares)
    
    
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBBalance as of January 1, 2006
    
    
    54,876,079
    
    
    
    45
    
    
    
    848,423
    
    
    
    (23,141
    )
    
    
    3,681
    
    
    
    (318
    )
    
    
    25,190
    
    
    
    853,880Exercise of share options
    
    
    1,243,682
    
    
    
    1
    
    
    
    6,098
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,099Share-based compensation
    
    
    
    
    
    
    
    
    
    
    5,378
    
    
    
    23,141
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,519Appropriation of statutory reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,168
    
    
    
    
    
    
    
    (1,168
    )
    
    
    Adjustment of other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    579
    
    
    
    
    
    
    
    579Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,341
    
    
    
    99,341Balance as of December 31, 2006
    
    
    56,119,761
    
    
    
    46
    
    
    
    859,899
    
    
    
    
    
    
    
    4,849
    
    
    
    261
    
    
    
    123,363
    
    
    
    988,418Exercise of share options
    
    
    399,710
    
    
    
    1
    
    
    
    4,469
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,470Share-based compensation
    
    
    
    
    
    
    
    
    
    
    29,651
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,651Appropriation of statutory reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,142
    
    
    
    
    
    
    
    (1,142
    )
    
    
    Adjustment of other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    419
    
    
    
    
    
    
    
    419Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103,577
    
    
    
    103,577Balance as of December 31, 2007
    
    
    56,519,471
    
    
    
    47
    
    
    
    894,019
    
    
    
    
    
    
    
    5,991
    
    
    
    680
    
    
    
    225,798
    
    
    
    1,126,535Exercise of share options
    
    
    132,322
    
    
    
    
    
    
    
    2,147
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,147Share-based compensation
    
    
    
    
    
    
    
    
    
    
    27,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,434Repurchase of common shares
    
    
    (273,654
    )
    
    
    
    
    
    
    (6,248
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,248
    )Appropriation of statutory reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    956
    
    
    
    
    
    
    
    (956
    )
    
    
    Adjustment of other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    374
    
    
    
    
    
    
    
    374Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,601
    
    
    
    76,601Balance as of December 31, 2008
    
    
    56,378,139
    
    
    
    47
    
    
    
    917,352
    
    
    
    
    
    
    
    6,947
    
    
    
    1,054
    
    
    
    301,443
    
    
    
    1,226,843Balance as of December 31, 2008 (US$ Note 2(c))
    
    
    56,378,139
    
    
    
    7
    
    
    
    134,460
    
    
    
    
    
    
    
    1,018
    
    
    
    154
    
    
    
    44,184
    
    
    
    179,823
   F-5




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##### Table of Contents



51JOB, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 2006
    
    
    2007
    
    
    2008
    
    
    2008(in thousands)
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$ (Note 2(c))Cash flows from operating activities:Net income for the year
    
    
    99,341
    
    
    
    103,577
    
    
    
    76,601
    
    
    
    11,227Adjustments for:Share-based compensation
    
    
    28,519
    
    
    
    29,651
    
    
    
    27,434
    
    
    
    4,021Depreciation
    
    
    15,891
    
    
    
    18,351
    
    
    
    23,776
    
    
    
    3,485Amortization of intangible assets
    
    
    3,132
    
    
    
    2,654
    
    
    
    2,243
    
    
    
    329Loss due to disposal of fixed assets
    
    
    251
    
    
    
    244
    
    
    
    915
    
    
    
    134Loss due to impairment of fixed assets
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    Loss from foreign currency translation
    
    
    9,440
    
    
    
    18,134
    
    
    
    17,732
    
    
    
    2,599Deferred tax provision (benefit)
    
    
    1,516
    
    
    
    (855
    )
    
    
    3,623
    
    
    
    531(Increase) Decrease in accounts receivable
    
    
    (6,208
    )
    
    
    (1,275
    )
    
    
    10,182
    
    
    
    1,492(Increase) Decrease in prepayments and other current
assets
    
    
    5,202
    
    
    
    (15,068
    )
    
    
    (11,864
    )
    
    
    (1,739
    )Increase (Decrease) in accounts payable
    
    
    777
    
    
    
    1,650
    
    
    
    (63
    )
    
    
    (9
    )Decrease in due to related parties
    
    
    (1,041
    )
    
    
    (464
    )
    
    
    
    
    
    
    Increase (Decrease) in salary and employee related
accrual
    
    
    7,337
    
    
    
    2,387
    
    
    
    (6,694
    )
    
    
    (981
    )Increase (Decrease) in taxes payable
    
    
    549
    
    
    
    9,747
    
    
    
    (20,161
    )
    
    
    (2,955
    )Increase in advance from customers
    
    
    17,311
    
    
    
    17,605
    
    
    
    12,104
    
    
    
    1,774Increase (Decrease) in other payables and accruals
    
    
    3,045
    
    
    
    7,653
    
    
    
    (15,275
    )
    
    
    (2,239
    )(Increase) Decrease in other long-term assets
    
    
    118
    
    
    
    (676
    )
    
    
    (686
    )
    
    
    (100
    )Net cash provided by operating activities
    
    
    185,229
    
    
    
    193,315
    
    
    
    119,867
    
    
    
    17,569Cash flows from investing activities:Purchase of short-term investments
    
    
    
    
    
    
    
    
    
    
    (16,100
    )
    
    
    (2,360
    )Purchase of property and equipment
    
    
    (153,842
    )
    
    
    (32,300
    )
    
    
    (24,336
    )
    
    
    (3,567
    )Purchase of intangible assets
    
    
    (1,115
    )
    
    
    (160
    )
    
    
    (43
    )
    
    
    (6
    )Purchase of long-term investments
    
    
    
    
    
    
    (8,788
    )
    
    
    (7,972
    )
    
    
    (1,168
    )Proceeds from the maturity of short-term investments
    
    
    10,555
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (144,402
    )
    
    
    (41,248
    )
    
    
    (48,451
    )
    
    
    (7,101
    )Cash flows from financing activities:Repurchase of common shares
    
    
    
    
    
    
    
    
    
    
    (6,248
    )
    
    
    (916
    )Proceeds from the exercise of options
    
    
    6,099
    
    
    
    4,470
    
    
    
    2,147
    
    
    
    315Net cash provided by (used in) financing activities
    
    
    6,099
    
    
    
    4,470
    
    
    
    (4,101
    )
    
    
    (601
    )Effect of foreign exchange rate changes on cash
    
    
    (8,862
    )
    
    
    (17,715
    )
    
    
    (16,525
    )
    
    
    (2,422
    )Net increase in cash
    
    
    38,064
    
    
    
    138,822
    
    
    
    50,790
    
    
    
    7,445Cash, beginning of year
    
    
    830,634
    
    
    
    868,698
    
    
    
    1,007,520
    
    
    
    147,676Cash, end of year
    
    
    868,698
    
    
    
    1,007,520
    
    
    
    1,058,310
    
    
    
    155,121Supplemental disclosure of cash flow information:Cash paid during the years for:Income taxes
    
    
    24,467
    
    
    
    39,414
    
    
    
    48,735
    
    
    
    7,143Supplemental disclosure of non-cash investing activities:Accrual related to purchase of property, equipment and
software
    
    
    (1,556
    )
    
    
    (18
    )
    
    
    (788
    )
    
    
    (116
    )
   F-6




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##### Table of Contents



51JOB, INC.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 1. ORGANIZATION AND NATURE OF OPERATIONS
   2. PRINCIPAL ACCOUNTING POLICIES
 (a) Basis of Presentation
   (b) Basis of Consolidation
      F-7




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
     Technical and Consulting Service Agreements.
 Pledge and Control Agreements.
 (c) Foreign Currencies
    F-8




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 (d) Cash
  (e) Accounts Receivable
  (f) Investments
   (g) Property and Equipment
  Estimated useful livesLand use rights
    
    48 to 50 yearsBuilding
    
    20 yearsLeasehold improvements
    
    Lesser of the lease period or the estimated useful lifeComputer equipment
    
    5 yearsFurniture and fixtures
    
    5 yearsMotor vehicles
    
    5 yearsOther assets
    
    5 years
 (h) Intangible Assets
   F-9




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 (i) Impairment of Long-Lived Assets
  (j) Revenue Recognition
 Print Advertising
  Online Recruitment Services
 www.51job.com
 Executive Search
  Other
Human Resource Related Services
  Business and Related Taxes
   F-10




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 (k) Cost of Services
  (l) Sales and Marketing Expenses
  (m) Share-Based Compensation
      2006
    
    2007
    
    2008Risk-free interest rate
    
    4.85%4.93%
    
    4.23%4.81%
    
    2.57%2.80%Expected life (years)
    
    4
    
    4
    
    4Expected dividend yield
    
    0%
    
    0%
    
    0%Volatility
    
    80%
    
    5575%
    
    50%55%Weighted average of fair value per option at grant date
    
    RMB40.39
    
    RMB36.86
    
    RMB24.40
  F-11




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 (n) Operating Leases
  (o) Taxation
   (p) Statutory Reserves
     F-12




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
   (q) Dividend
  (r) Earnings Per Share
  (s) Fair Value of Financial Instruments
  (t) Segment Reporting
  (u) Recent Accounting Pronouncements
    F-13




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
        F-14




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
     3. ACCOUNTS RECEIVABLE
 2007
    
    
    2008RMB
    
    
    RMBAccounts receivable
    
    
    33,585
    
    
    
    22,307Less: Allowance for doubtful accounts
    
    
    (3,879
    )
    
    
    (2,783
    )29,706
    
    
    
    19,524
  2007
    
    
    2008RMB
    
    
    RMBBalance at beginning of the period
    
    
    2,612
    
    
    
    3,879Additions
    
    
    2,036
    
    
    
    Collections
    
    
    
    
    
    
    (143
    )Write-offs
    
    
    (769
    )
    
    
    (953
    )Balance at end of period
    
    
    3,879
    
    
    
    2,783
  F-15




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 4. PREPAYMENTS AND OTHER CURRENT ASSETS
 2007
    
    
    2008RMB
    
    
    RMBRental and other deposits
    
    
    2,106
    
    
    
    3,046Prepayments for rental and others
    
    
    4,800
    
    
    
    5,329Employee advances
    
    
    1,349
    
    
    
    1,187Payments made on behalf of customers
    
    
    16,517
    
    
    
    16,653Prepaid insurance premium
    
    
    1,504
    
    
    
    1,766Interest income receivable
    
    
    4,498
    
    
    
    4,791Prepaid business tax
    
    
    
    
    
    
    11,094Others
    
    
    2,358
    
    
    
    1,130Total
    
    
    33,132
    
    
    
    44,996
 5. PROPERTY AND EQUIPMENT
 2007
    
    
    2008RMB
    
    
    RMBLand and building
    
    
    164,963
    
    
    
    170,274Leasehold improvements
    
    
    8,129
    
    
    
    10,693Computer equipment
    
    
    67,492
    
    
    
    68,132Furniture and fixtures
    
    
    12,342
    
    
    
    12,119Motor vehicles
    
    
    3,979
    
    
    
    5,195Other assets
    
    
    4,075
    
    
    
    3,759Less: accumulated depreciation
    
    
    (54,996
    )
    
    
    (64,367
    )Net book value
    
    
    205,984
    
    
    
    205,805
  6. INTANGIBLE ASSETS
 2007
    
    
    2008RMB
    
    
    RMBComputer equipment software
    
    
    16,835
    
    
    
    16,871Acquired training licenses
    
    
    6,571
    
    
    
    6,571Internally developed software.
    
    
    1,569
    
    
    
    1,569Less: accumulated amortization
    
    
    (18,106
    )
    
    
    (20,342
    )Net book value
    
    
    6,869
    
    
    
    4,669
    F-16




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 7. OTHER PAYABLES AND ACCRUALS
 2007
    
    
    2008RMB
    
    
    RMBProfessional service fees
    
    
    4,935
    
    
    
    4,112Office expenses
    
    
    4,192
    
    
    
    3,058Deposit from customers
    
    
    479
    
    
    
    Revenue from newspaper sales collected on behalf of newspaper
contractors
    
    
    6,040
    
    
    
    2,832Payables to employees related to proceeds from share option exercises
    
    
    1,469
    
    
    
    82Loss
provision related to a third party contractor(a)
    
    
    9,655
    
    
    
    1,491Others
    
    
    1,444
    
    
    
    1,364Total
    
    
    28,214
    
    
    
    12,939
 
 (a)
    
    The Company recorded a loss provision of RMB9,655 included in general and administrative
expenses for the year ended December 31, 2007 relating to certain irregularities and the
non-compliance to contract terms by a third party contractor which provided services to the Company
in connection with its human resource outsourcing operations in Beijing. Following the completion
of an investigation of this matter with the assistance of local authorities, the Company recorded a
reversal of RMB1,863 in this provision for the year ended December 31, 2008. 8. TAXATION
 Cayman Islands
  British Virgin Islands
  Hong Kong
  China
   F-17




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
   Composition of Income Tax Expense
  2006
    
    
    2007
    
    
    2008RMB
    
    
    RMB
    
    
    RMBCurrent income tax expense
    
    
    27,044
    
    
    
    46,257
    
    
    
    27,553Deferred tax expense (benefit)
    
    
    1,516
    
    
    
    (855
    )
    
    
    3,623Income tax expense
    
    
    28,560
    
    
    
    45,402
    
    
    
    31,176
 Reconciliation of the Differences Between Statutory Tax Rate and the Effective Tax Rate
  2006
    
    
    2007
    
    
    2008EIT statutory rate
    
    
    33
    %
    
    
    33
    %
    
    
    25
    %Effect of tax holiday for certain subsidiaries
    
    
    (21
    %)
    
    
    (7
    %)
    
    
    Difference in EIT rates of certain subsidiaries
    
    
    (4
    %)
    
    
    (8
    %)
    
    
    (6
    %)Non-deductibility of expenses incurred outside the PRC
    
    
    8
    %
    
    
    9
    %
    
    
    10
    %Other permanent differences
    
    
    4
    %
    
    
    2
    %
    
    
    2
    %Provision of valuation allowance
    
    
    3
    %
    
    
    1
    %
    
    
    Reversal of valuation allowance
    
    
    (1
    %)
    
    
    
    
    
    
    (2
    %)Effective EIT rate of the Group
    
    
    22
    %
    
    
    30
    %
    
    
    29
    %
  F-18




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
  2007
    
    
    2008RMB
    
    
    RMBDeductible temporary differences related to other payables and accruals
    
    
    3,956
    
    
    
    1,636Deductible temporary differences related to advertising expenses
    
    
    40
    
    
    
    50Deductible temporary differences related to provision for doubtful debt
    
    
    1,165
    
    
    
    740Total current deferred tax assets
    
    
    5,161
    
    
    
    2,426Less: Valuation allowance
    
    
    (231
    )
    
    
    (104
    )Net current deferred tax assets
    
    
    4,930
    
    
    
    2,322Tax loss carryforwards
    
    
    6,690
    
    
    
    2,306Deductible temporary differences related to residual value reconciliation
    
    
    518
    
    
    
    Deductible temporary differences related to amortization of intangible
assets
    
    
    272
    
    
    
    95Total non-current deferred tax assets
    
    
    7,480
    
    
    
    2,401Less: Valuation allowance
    
    
    (6,274
    )
    
    
    (1,996
    )Net non-current deferred tax assets
    
    
    1,206
    
    
    
    405Total deferred tax assets
    
    
    6,136
    
    
    
    2,727Taxable temporary differences related to depreciation period
    
    
    (516
    )
    
    
    (730
    )Total non-current deferred tax liabilities
    
    
    (516
    )
    
    
    (730
    )Total deferred tax liabilities
    
    
    (516
    )
    
    
    (730
    )
   2007
    
    
    2008RMB
    
    
    RMBBalance at beginning of the period
    
    
    7,829
    
    
    
    6,505Additions
    
    
    2,332
    
    
    
    347Reversals
    
    
    (300
    )
    
    
    (4,752
    )Reversals due to change in EIT rates
    
    
    (1,123
    )
    
    
    Write-offs due to closure of AdCo branches
    
    
    (2,233
    )
    
    
    Balance at end of period
    
    
    6,505
    
    
    
    2,100
  F-19




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 9. SHARE-BASED COMPENSATION
   WeightedWeighted
    
    
    averageaverage
    
    
    remaining
    
    
    AggregateNumber
    
    
    exercise
    
    
    contractual
    
    
    intrinsic valueof shares
    
    
    price
    
    
    life (years)
    
    
    (thousands)Outstanding
at January 1, 2008
    
    
    2,653,130
    
    
    US$
    8.06Granted
    
    
    1,298,832
    
    
    US$
    8.53Exercised
    
    
    (132,322
    )
    
    US$
    2.36Forfeited
    
    
    (215,676
    )
    
    US$
    8.65Outstanding at December 31, 2008
    
    
    3,603,964
    
    
    US$
    8.40
    
    
    
    4.13
    
    
    US$
    212Vested and expected to vest at December 31, 2008
    
    
    3,350,765
    
    
    US$
    8.37
    
    
    
    4.09
    
    
    US$
    212Exercisable at December 31, 2008
    
    
    1,435,255
    
    
    US$
    8.10
    
    
    
    3.13
    
    
    US$
    212
     WeightedaverageNumber
    
    
    grant-dateof shares
    
    
    fair valueNon-vested at January 1, 2008
    
    
    1,751,464
    
    
    US$
    5.19Granted
    
    
    1,298,832
    
    
    US$
    3.58Vested
    
    
    (665,911
    )
    
    US$
    5.25Forfeited
    
    
    (215,676
    )
    
    US$
    5.19Non-vested at December 31, 2008
    
    
    2,168,709
    
    
    US$
    4.20Expected to vest at December 31, 2008
    
    
    1,915,510
    
    
    US$
    4.18
   F-20




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 10. EMPLOYEE BENEFITS
  11. RELATED PARTY TRANSACTION
  12. EARNINGS PER SHARE
  2006
    
    
    2007
    
    
    2008(in thousands, except number of shares and per share data)
    
    RMB
    
    
    RMB
    
    
    RMBNumerator:Net income
    
    
    99,341
    
    
    
    103,577
    
    
    
    76,601Denominator:Denominator for basic earnings per share  weighted
average common shares outstanding
    
    
    55,422,447
    
    
    
    56,279,193
    
    
    
    56,581,719Effect of dilutive share options
    
    
    986,813
    
    
    
    352,405
    
    
    
    127,794Denominator for diluted earnings per share
    
    
    56,409,260
    
    
    
    56,631,598
    
    
    
    56,709,513Basic earnings per share
    
    
    1.79
    
    
    
    1.84
    
    
    
    1.35Diluted earnings per share
    
    
    1.76
    
    
    
    1.83
    
    
    
    1.35
   F-21




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 13. COMMITMENTS AND CONTINGENCIES
 Publication Fee and Operating Lease Commitments
 51job Weekly
 Publication
    
    
    Operating lease-
    
    
    Operating lease-fees
    
    
    Office premises
    
    
    Others
    
    
    TotalRMB
    
    
    RMB
    
    
    RMB
    
    
    RMB2009
    
    
    42,003
    
    
    
    22,823
    
    
    
    2,155
    
    
    
    66,9812010
    
    
    5,945
    
    
    
    17,839
    
    
    
    611
    
    
    
    24,3952011
    
    
    3,727
    
    
    
    5,958
    
    
    
    187
    
    
    
    9,8722012
    
    
    1,644
    
    
    
    3,068
    
    
    
    16
    
    
    
    4,7282013
    
    
    1,644
    
    
    
    437
    
    
    
    3
    
    
    
    2,084After 2013
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    12055,083
    
    
    
    50,125
    
    
    
    2,972
    
    
    
    108,180
  Contractual Purchase Obligations
  Advertising
    
    
    Commitment to
    
    
    Officeservices
    
    
    Area Link
    
    
    furnishings
    
    
    TotalRMB
    
    
    RMB
    
    
    RMB
    
    
    RMB2009
    
    
    35,261
    
    
    
    8,000
    
    
    
    1,016
    
    
    
    44,2772010
    
    
    12,826
    
    
    
    8,000
    
    
    
    
    
    
    
    20,8262011
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    5548,142
    
    
    
    16,000
    
    
    
    1,016
    
    
    
    65,158
 Contingencies
    F-22




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##### Table of Contents



51JOB, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
   14. FINANCIAL INSTRUMENTS
  15. CERTAIN RISKS AND CONCENTRATION
    16. SUBSEQUENT EVENT
   F-23




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##### Table of Contents



ADDITIONAL INFORMATION  FINANCIAL STATEMENT SCHEDULE I
 51JOB, INC.
 CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 Note
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2008(in thousands)
    
    
    
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$ (Note 5)Net revenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cost of services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    
    
    
    
    (32,918
    )
    
    
    (33,222
    )
    
    
    (30,247
    )
    
    
    (4,433
    )Loss from operations
    
    
    
    
    
    
    (32,918
    )
    
    
    (33,222
    )
    
    
    (30,247
    )
    
    
    (4,433
    )Equity in profit of subsidiary companies, net
    
    
    1
    
    
    
    129,688
    
    
    
    142,143
    
    
    
    118,380
    
    
    
    17,351Loss from foreign currency translation
    
    
    
    
    
    
    (9,344
    )
    
    
    (17,835
    )
    
    
    (17,317
    )
    
    
    (2,538
    )Interest income
    
    
    
    
    
    
    11,970
    
    
    
    12,541
    
    
    
    5,851
    
    
    
    857Other expense
    
    
    
    
    
    
    (55
    )
    
    
    (50
    )
    
    
    (66
    )
    
    
    (10
    )Income before provision for income tax
    
    
    
    
    
    
    99,341
    
    
    
    103,577
    
    
    
    76,601
    
    
    
    11,227Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income for the year
    
    
    
    
    
    
    99,341
    
    
    
    103,577
    
    
    
    76,601
    
    
    
    11,227
  F-24




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##### Table of Contents



ADDITIONAL INFORMATION  FINANCIAL STATEMENT SCHEDULE I
 51JOB, INC.
 CONDENSED BALANCE SHEETS AS OF DECEMBER 31, 2007 AND 2008
 Note
    
    
    2007
    
    
    2008
    
    
    2008(in thousands, except number of shares and per share data)
    
    
    
    
    
    RMB
    
    
    RMB
    
    
    US$ (Note 5)ASSETSCurrent assets:Cash
    
    
    
    
    
    
    246,046
    
    
    
    218,037
    
    
    
    31,959Receivables due from related parties
    
    
    2
    
    
    
    826
    
    
    
    3,428
    
    
    
    502Prepayments and other current assets
    
    
    
    
    
    
    877
    
    
    
    781
    
    
    
    114Total current assets
    
    
    
    
    
    
    247,749
    
    
    
    222,246
    
    
    
    32,575Long term receivables due from related parties
    
    
    2
    
    
    
    318,403
    
    
    
    318,403
    
    
    
    46,669Long-term investments
    
    
    3
    
    
    
    8,788
    
    
    
    15,927
    
    
    
    2,335Investment in subsidiaries
    
    
    1
    
    
    
    555,584
    
    
    
    673,580
    
    
    
    98,729Total assets
    
    
    
    
    
    
    1,130,524
    
    
    
    1,230,156
    
    
    
    180,308LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Due to related parties
    
    
    2
    
    
    
    2,717
    
    
    
    2,731
    
    
    
    400Other payables and accruals
    
    
    
    
    
    
    1,272
    
    
    
    582
    
    
    
    85Total current liabilities
    
    
    
    
    
    
    3,989
    
    
    
    3,313
    
    
    
    485Total liabilities
    
    
    
    
    
    
    3,989
    
    
    
    3,313
    
    
    
    485Shareholders equity:Common shares (US$0.0001 par value; 500,000,000 shares
authorized, 56,519,471 and 56,378,139 shares issued
and outstanding as of December 31, 2007 and 2008,
respectively)
    
    
    
    
    
    
    47
    
    
    
    47
    
    
    
    7Additional paid-in capital
    
    
    
    
    
    
    894,019
    
    
    
    917,352
    
    
    
    134,460Other
comprehensive income
    
    
    
    
    
    
    680
    
    
    
    1,054
    
    
    
    154Retained earnings
    
    
    
    
    
    
    231,789
    
    
    
    308,390
    
    
    
    45,202Total shareholders equity
    
    
    
    
    
    
    1,126,535
    
    
    
    1,226,843
    
    
    
    179,823Total liabilities and shareholders equity
    
    
    
    
    
    
    1,130,524
    
    
    
    1,230,156
    
    
    
    180,308
  F-25




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##### Table of Contents



ADDITIONAL INFORMATION  FINANCIAL STATEMENT SCHEDULE I
 51JOB, INC.
 CONDENSED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 2006
    
    
    2007
    
    
    2008
    
    
    2008(in thousands)
    
    
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    US$ (Note 5)Net cash provided by (used in) operating activities
    
    
    
    
    
    (9,690
    )
    
    
    10,307
    
    
    
    548
    
    
    
    80Net cash provided by (used in) investing activities
    
    
    
    
    
    22,283
    
    
    
    (8,788
    )
    
    
    (7,972
    )
    
    
    (1,168
    )Net cash provided by (used in) financing activities
    
    
    
    
    
    6,099
    
    
    
    4,470
    
    
    
    (4,101
    )
    
    
    (601
    )Effect of foreign exchange rate changes on cash
    
    
    
    
    
    (8,861
    )
    
    
    (17,715
    )
    
    
    (16,484
    )
    
    
    (2,416
    )Net increase (decrease) in cash
    
    
    
    
    
    9,831
    
    
    
    (11,726
    )
    
    
    (28,009
    )
    
    
    (4,105
    )Cash, beginning of year
    
    
    
    
    
    247,941
    
    
    
    257,772
    
    
    
    246,046
    
    
    
    36,064Cash, end of year
    
    
    
    
    
    257,772
    
    
    
    246,046
    
    
    
    218,037
    
    
    
    31,959
  F-26




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##### Table of Contents



ADDITIONAL INFORMATION  FINANCIAL STATEMENT SCHEDULE I
 51JOB, INC.
 NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 1. BASIS OF PRESENTATION
     2. RELATED PARTY BALANCES
  2007
    
    
    2008RMB
    
    
    RMBReceivables due from related parties:51net HR
    
    
    785
    
    
    
    74851net Beijing
    
    
    41
    
    
    
    5251net.com Inc.
    
    
    
    
    
    
    2,628826
    
    
    
    3,428Long term receivables due from related parties:51net.com Inc.
    
    
    318,403
    
    
    
    318,403319,229
    
    
    
    321,831Due to related parties:Qianjin Network Information Technology (Shanghai) Co., Ltd.
    
    
    275
    
    
    
    381Shanghai Qianjin Advertising Co., Ltd.
    
    
    2,369
    
    
    
    2,35051net.com Inc.
    
    
    73
    
    
    
    2,717
    
    
    
    2,731
  3. LONG-TERM INVESTMENTS
   F-27




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##### Table of Contents



ADDITIONAL INFORMATION  FINANCIAL STATEMENT SCHEDULE I
 51JOB, INC.
 NOTES TO THE CONDENSED FINANCIAL STATEMENTS  (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 4. COMMITMENTS
  5. FOREIGN CURRENCIES
   F-28




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##### Table of Contents



EXHIBIT INDEX
 Exhibits
    
    Description4.17*
    
    Domain Name License Agreement dated as of May 3, 2008 between Shanghai Run
An Lian Information Consultancy Co., Ltd. and 51net.com Inc.12.1*
    
    CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2*
    
    CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1*
    
    CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2*
    
    CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1*
    
    Consent of Maples and Calder15.2*
    
    Consent of Jun He Law Offices15.3*
    
    Consent of PricewaterhouseCoopers Zhong Tian CPAs Limited Company
 
 *
    
    Filed with this annual report on Form 20-F.