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Zhihu, Inc. Class A (HK:2390)
:2390
Hong Kong Market

Zhihu, Inc. Class A (2390) AI Stock Analysis

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HK

Zhihu, Inc. Class A

(2390)

Rating:54Neutral
Price Target:
HK$10.50
▲(0.77%Upside)
Zhihu's strong points include revenue growth, improved non-GAAP profitability, and strategic AI advancements. However, its financial struggles with profitability, negative cash flows, and valuation issues dampen the overall outlook. Technical analysis indicates potential bearish momentum, adding caution to the stock's near-term prospects.

Zhihu, Inc. Class A (2390) vs. iShares MSCI Hong Kong ETF (EWH)

Zhihu, Inc. Class A Business Overview & Revenue Model

Company DescriptionZhihu Inc. operates an online content community in the People's Republic of China. Its community allows people to seek inspiration, find solutions, make decisions, and have fun. The company also offers technology, business support, and consulting services; information transmission, software, and information technology services; information and marketing services; vocational training; and internet services, as well as holds audio-visual permit. The company was founded in 2010 and is headquartered in Beijing, the People's Republic of China.
How the Company Makes MoneyZhihu, Inc. generates revenue through a combination of advertising services, membership services, and content-commerce solutions. Advertising is a significant revenue stream, where the company leverages its large user base and data analytics to offer targeted advertising solutions to businesses. Membership services include subscription plans that provide users with premium content, enhanced features, and additional functionalities. Additionally, Zhihu offers content-commerce solutions, which include e-commerce and online education services, allowing users to purchase products and courses directly through the platform. Partnerships with brands and content creators further enhance its revenue-generating capabilities, as these collaborations can lead to sponsored content and exclusive offerings.

Zhihu, Inc. Class A Earnings Call Summary

Earnings Call Date:May 27, 2025
(Q1-2025)
|
% Change Since: 0.77%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. Highlights included achieving non-GAAP profitability for the quarter, improvements in user engagement, and strategic advancements in AI-related content. However, these were counterbalanced by declines in total revenue, particularly in marketing services and vocational training sectors, reflecting ongoing business model adjustments.
Q1-2025 Updates
Positive Updates
First Quarter Non-GAAP Net Income Achievement
Zhihu reported a non-GAAP net income of RMB6.9 million, compared to an adjusted net loss of RMB135.7 million in the same period last year. This marks the first time since IPO that Zhihu achieved a non-GAAP net profit in the first quarter.
Improvement in User Engagement Metrics
Average daily user time reached nearly 38 minutes, up 17.6% year-over-year. Core user retention rate improved both sequentially and year-over-year.
Growth in AI-Related Professional Content
AI-related professional content grew by 46% year-over-year, and Zhihu was cited 62.4% of the time by AI assistants in professional domains.
Positive Shareholder Return Program
Zhihu announced a new share repurchase program, authorizing the repurchase of up to 10% of issued shares, demonstrating confidence in long-term success.
Negative Updates
Decline in Total Revenue
Total revenue for the quarter was RMB729.7 million, down from RMB960.9 million in the same period of 2024, a decrease due to adjustments in business focus and revenue quality.
Significant Drop in Marketing Services Revenue
Revenue from marketing services was RMB197 million, a 40.4% year-over-year decline, attributed to the adoption of a trustworthy content model and client mix optimization.
Decrease in Vocational Training Revenue
Vocational training business revenue was RMB94.5 million, down 35% year-over-year, due to strategic transformation and shift in business model.
Company Guidance
During the Zhihu Inc. First Quarter 2025 Financial Results Conference Call, the company provided several key metrics and guidance for the future. Zhihu achieved a non-GAAP net income of RMB6.9 million, marking a significant improvement from a net loss of RMB135.7 million in the same period last year. Average daily user time spent increased by 17.6% year-over-year, reaching nearly 38 minutes. The company's total revenue for the quarter was RMB729.7 million, reflecting a decrease from the previous year, with marketing services revenue at RMB197 million and paid membership revenue at RMB417.9 million. The gross margin expanded to 61.8%, up by 5.2 percentage points year-over-year, while total operating expenses declined by 34.4%. Zhihu also announced a new 2025 share repurchase program, allowing for the buyback of up to 10% of its total issued shares. The company emphasized its commitment to integrating AI with its platform to enhance content quality and user engagement, expecting AI to be a catalyst for rapid growth.

Zhihu, Inc. Class A Financial Statement Overview

Summary
Zhihu, Inc. shows strong revenue growth and a solid equity base, but struggles with achieving profitability and positive cash flows. The company exhibits financial stability with low leverage but faces challenges in converting revenue growth into net income and cash flow, which are critical for long-term sustainability and growth.
Income Statement
60
Neutral
The company shows a consistent pattern of revenue growth, with a notable 210% increase in total revenue from 2019 to 2024. However, profitability remains a challenge, as indicated by negative net income and EBIT margins over the years. The gross profit margin has improved, yet the net profit margin is still negative, reflecting ongoing operational challenges.
Balance Sheet
55
Neutral
The balance sheet highlights a strong equity position with an equity ratio of 72% in 2024, indicating financial stability. However, the company has a history of negative net income, affecting the return on equity. The debt-to-equity ratio is low, suggesting minimal financial leverage, which can be both a strength and an area for potential growth through strategic borrowing.
Cash Flow
50
Neutral
Cash flow analysis reveals persistent negative operating and free cash flows, posing liquidity challenges. Despite significant investing cash inflows in 2022 and 2024, the company has yet to achieve positive free cash flow growth, indicating difficulty in generating cash from its core operations.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.60B4.20B3.60B2.96B1.35B
Gross Profit
2.18B2.30B1.81B1.55B757.80M
EBIT
-481.08M-1.07B-1.60B-1.39B-602.88M
EBITDA
-456.19M-1.05B-1.58B-1.37B-583.27M
Net Income Common Stockholders
-171.80M-843.64M-1.58B-1.30B-517.55M
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.86B5.46B6.26B7.21B3.10B
Total Assets
5.73B6.80B7.66B8.81B3.76B
Total Debt
19.13M45.73M96.56M40.52M2.89M
Net Debt
-3.98B-2.06B-4.43B-2.12B-954.93M
Total Liabilities
1.54B2.09B1.96B2.07B1.01B
Stockholders Equity
4.14B4.60B5.65B6.74B2.75B
Cash FlowFree Cash Flow
-282.92M-424.40M-1.12B-447.67M-246.37M
Operating Cash Flow
-280.19M-415.53M-1.11B-440.23M-244.42M
Investing Cash Flow
2.56B-1.68B3.49B-3.14B430.11M
Financing Cash Flow
-403.86M-365.06M-108.35M4.88B9.29M

Zhihu, Inc. Class A Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.42
Price Trends
50DMA
10.43
Positive
100DMA
10.92
Negative
200DMA
10.02
Positive
Market Momentum
MACD
-0.06
Negative
RSI
56.08
Neutral
STOCH
63.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2390, the sentiment is Positive. The current price of 10.42 is above the 20-day moving average (MA) of 10.37, below the 50-day MA of 10.43, and above the 200-day MA of 10.02, indicating a bullish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 56.08 is Neutral, neither overbought nor oversold. The STOCH value of 63.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2390.

Zhihu, Inc. Class A Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$14.60B5.88-4.32%3.68%2.75%-30.55%
54
Neutral
HK$2.76B-0.40%-19.99%98.97%
$110.32B20.0223.82%
$12.78B29.758.17%
81
Outperform
HK$404.81B8.0619.79%3.02%7.67%90.63%
81
Outperform
HK$2.22T15.6713.02%0.84%3.92%27.80%
80
Outperform
HK$254.29B16.3425.82%9.42%33.34%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:2390
Zhihu, Inc. Class A
10.64
1.92
22.02%
MPNGF
Meituan
19.26
5.20
36.98%
WXIBF
Wuxi Biologics (Cayman)
3.20
1.72
116.22%
HK:9618
JD.com, Inc. Class A
134.00
21.23
18.83%
HK:9988
Alibaba Group Holding Ltd.
119.30
44.47
59.43%
HK:1024
Kuaishou Technology Class B
62.40
10.75
20.81%

Zhihu, Inc. Class A Corporate Events

Zhihu Inc. Announces AGM with Key Resolutions
May 29, 2025

Zhihu Inc. has announced its upcoming Annual General Meeting (AGM) scheduled for June 25, 2025, in Beijing. The meeting will address several key resolutions, including the adoption of the company’s audited financial statements for the year ending December 31, 2024, the re-election of certain directors, and the authorization for directors to manage the issuance of additional Class A ordinary shares. These resolutions are significant for the company’s governance and strategic financial management, potentially impacting its market operations and shareholder interests.

Zhihu Inc. Announces Board of Directors and Their Roles
May 27, 2025

Zhihu Inc. has announced the composition of its board of directors, highlighting the roles and functions of each member. This announcement is significant as it outlines the governance structure of the company, which could impact its strategic direction and reassure stakeholders about its leadership stability.

Zhihu Inc. Announces Q1 2025 Financial Results
May 27, 2025

Zhihu Inc. has released its unaudited financial results for the first quarter of 2025, prepared in accordance with U.S. Generally Accepted Accounting Principles. The announcement, made on May 27, 2025, highlights the company’s financial performance for the period ending March 31, 2025, and advises shareholders and potential investors to exercise caution when dealing with the company’s securities.

Zhihu Inc. Announces Board Changes with New Independent Director Appointment
May 27, 2025

Zhihu Inc. announced a change in its board of directors, with Mr. Hanhui Sam Sun resigning as an independent non-executive director and chairman of several board committees, effective May 27, 2025, due to other professional commitments. The company has appointed Dr. Li-Lan Cheng as the new independent non-executive director, bringing extensive experience in financial management and corporate governance from his previous roles in various companies. This change is expected to bring fresh perspectives to Zhihu’s board, potentially impacting its strategic direction and governance practices.

Zhihu Inc. Schedules Board Meeting and Earnings Call for Q1 2025 Results
May 13, 2025

Zhihu Inc. has announced a board meeting scheduled for May 27, 2025, to review and approve the company’s unaudited financial results for the first quarter of 2025. The management will also hold an earnings conference call on the same day, indicating the company’s commitment to transparency and stakeholder engagement.

Zhihu Inc. Sets Record Date for Shareholder Meeting
May 8, 2025

Zhihu Inc. has announced the record date for determining the eligibility of shareholders to vote and attend its upcoming annual general meeting (AGM). The record date is set for May 23, 2025, for holders of Class A and Class B ordinary shares. Holders of American depositary shares (ADSs) will also be able to instruct the Depositary on how to vote their shares. This announcement is significant as it outlines the procedural steps for shareholder participation in the AGM, potentially impacting investor engagement and corporate governance practices.

Zhihu Inc. Grants RSUs to Boost Employee Engagement and Shareholder Value
Apr 11, 2025

Zhihu Inc. announced the grant of 226,800 Restricted Share Units (RSUs) to three eligible employees under its 2022 Share Incentive Plan. This move aims to align the interests of the grantees with those of the company’s shareholders and enhance employee motivation and retention. The RSUs, representing approximately 0.09% of the total shares, are subject to a 48-month vesting period and performance targets. The initiative is designed to promote the company’s success by incentivizing outstanding performance and ensuring the continued contribution of key personnel.

Zhihu Inc. Reports Improved Net Loss Despite Revenue Decline in 2024
Mar 26, 2025

Zhihu Inc. announced its unaudited annual results for the year ending December 31, 2024, revealing a 14.3% decrease in total revenues compared to the previous year. Despite the decline in revenue and a reduction in average monthly active users by 21.2%, the company reported a significant improvement in its net loss, which decreased by 79.9%. The company also saw a slight increase in average monthly subscribing members, indicating a potential shift towards more engaged users.

Zhihu Inc. Announces 2024 Financial Results
Mar 26, 2025

Zhihu Inc. has released its unaudited financial results for the fourth quarter and full year ending December 31, 2024. The results, prepared according to U.S. Generally Accepted Accounting Principles, highlight the company’s financial performance and are intended to comply with regulatory requirements in both the U.S. and Hong Kong. Stakeholders are advised to exercise caution in dealing with the company’s securities, as the announcement includes forward-looking statements that involve inherent risks and uncertainties.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.