Investment Rating - The report maintains a "Buy" rating for the company, with a target price of $4.30, indicating a potential upside of 21.2% from the current price of $3.52 [1][5]. Core Insights - The company is currently undergoing a transformation phase, leveraging AI to enhance its ecosystem and achieve a positive cycle [5]. - Despite a 22% year-over-year decline in total revenue for Q3 2025, operational efficiency and cost control measures have led to a significant narrowing of Non-GAAP operating losses by 16.3% to 73.5 million yuan [7][10]. - The strategic shift towards an AI-driven community aims to reshape the content ecosystem, enhancing user engagement and monetization opportunities [4][9]. Summary by Sections Financial Performance - In Q3 2025, total revenue was 659 million yuan, down 22% year-over-year, with paid membership revenue declining by approximately 16.1% to 386 million yuan [7][10]. - Marketing services revenue fell by 26.6% to 189 million yuan, while other business revenues, including vocational training, decreased by 35.1% to 83.9 million yuan [7][10]. - The company reported a net loss of 46.7 million yuan for Q3, with adjusted net losses narrowing to 21 million yuan, indicating improved profitability metrics [7][10]. Strategic Initiatives - The company has accelerated its core strategy to build an AI-driven community, focusing on high-quality content, expert networks, and AI capabilities [4][8]. - The penetration rate of the AI product "Zhihu Direct Answer" exceeded 15%, marking a fourfold increase from the previous year, which enhances user experience and information retrieval efficiency [8][10]. - Future growth is expected to rely heavily on the successful execution of AI strategies, including enhanced membership services and innovative advertising products [5][10]. Market Position and Outlook - The company is projected to achieve profitability by 2027, despite short-term revenue declines due to its strategic transformation [5][10]. - With cash and cash equivalents totaling 4.58 billion yuan, the company has a strong financial position to support future strategic investments and AI development [5][10]. - The report emphasizes the unique advantages of the company in high-quality content and professional creator ecosystems, positioning it favorably in the AI era [10].

Core Insights - Zhihu's Q3 2025 total revenue was 659 million yuan, a year-on-year decline of 22% [2] - The net loss for Q3 2025 was 46.7 million yuan, compared to a net loss of 9 million yuan in the same period last year, indicating an expanded loss [2] - Adjusted net loss was 21 million yuan, up from an adjusted net loss of 13.1 million yuan year-on-year [2] Revenue Breakdown - Marketing services revenue for Q3 2025 was 189 million yuan, down 26.6% year-on-year, primarily due to ongoing optimization of service product offerings [4] - Paid membership revenue was 386 million yuan, a decrease of 16.1% year-on-year, attributed to a decline in average monthly subscription members [4] - Other revenues, including vocational education and consumer goods, totaled 83.9 million yuan, down 34.96% year-on-year, mainly due to strategic optimization in Zhihu's vocational training business [4] Expense Analysis - Total operating expenses for Q3 2025 were 503.5 million yuan, a decrease of 19.4% year-on-year [4] - Sales and marketing expenses were 330 million yuan, down 14.9% year-on-year, due to more restrained promotional spending and reduced personnel-related expenses [4] - R&D expenses were 114 million yuan, a significant decrease of 36.2% year-on-year, reflecting improved R&D efficiency [4] Membership and Financial Position - The average monthly subscription members reached 14.3 million, an increase of 8.1% quarter-on-quarter [5] - As of September 30, 2025, Zhihu's cash and cash equivalents, along with short-term investments, amounted to 4.5832 billion yuan [5] - Zhihu repurchased 31.1 million Class A ordinary shares for a total price of 66.5 million USD under its existing share repurchase plan [5] Management Commentary - The CFO of Zhihu stated that the non-GAAP operating loss narrowed by 16.3% year-on-year, reflecting strict cost management and improved operational efficiency [5] - The company aims to strengthen commercial resilience and explore new revenue models, leveraging its strengths in content quality, creator professionalism, and AI-driven innovation [5] Operational Challenges - Zhihu experienced three outages in the second half of the year, with one incident causing significant disruption across both web and mobile platforms, leading to widespread user complaints [6][7] - The CTO of Zhihu resigned for personal reasons on September 30, 2025, and as of November 28, 2025, no announcement regarding a successor has been made, indicating a potential vacancy in this critical role [7]

Core Insights - The article emphasizes the focus on value investing in Asia, particularly in Hong Kong, targeting stocks with significant discrepancies between market price and intrinsic value [1] - It highlights two main categories of investment opportunities: deep value balance sheet bargains and wide moat stocks, which are characterized by their strong competitive advantages [1] Group 1: Investment Strategy - The research service aims to identify deep value stocks, such as net cash stocks and low price-to-book (P/B) ratio stocks, which are available at a discount [1] - It also seeks wide moat stocks, which are high-quality businesses with sustainable competitive advantages, often referred to as "Magic Formula" stocks [1] Group 2: Market Focus - The primary market of interest is the Asian equity market, with a specific emphasis on Hong Kong-listed stocks [1] - The service provides monthly updates and watch lists to assist investors in tracking potential investment opportunities [1]

Core Insights - The article emphasizes the focus on value investing in Asia, particularly in Hong Kong, targeting stocks with significant discrepancies between market price and intrinsic value [1] - It highlights two main categories of investment opportunities: deep value balance sheet bargains and wide moat stocks, which are characterized by their strong competitive advantages [1] Group 1: Investment Strategy - The research service aims to identify deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) ratio stocks, which are available at a discount [1] - It also seeks wide moat stocks, which are high-quality businesses with strong earnings power that can be acquired at a discount [1] - The service provides monthly updates and watch lists to assist investors in tracking potential investment opportunities [1] Group 2: Market Focus - The primary focus is on the Asian equity market, with a particular emphasis on Hong Kong-listed stocks [1] - The service is designed for value investors looking for unique investment opportunities in the region [1]

Group 1 - Haitong International initiated coverage on Zhihu (02390) with an "outperform" rating, highlighting its unique positioning in the Q&A community and the potential of AI applications [1][2] - The company forecasts Zhihu's target price at HKD 14.8 for 2025, with projected total revenue of approximately RMB 6.59 billion for Q3 2025 and a non-GAAP operating loss narrowing by 16.3% year-on-year [1][2] - Zhihu's cash reserves are robust, totaling RMB 4.58 billion as of the end of Q3, which supports its capital and profit flexibility [1] Group 2 - The usage and penetration of Zhihu's AI product, Zhihu Zhida, have been steadily increasing, with a penetration rate exceeding 15%, nearly four times that of the same period last year [1] - Haitong International believes that Zhihu's high user engagement and trust in its "professional discussion" space will continue to attract high-value users and brand budgets, benefiting from the generative AI trend [2] - The firm predicts Zhihu's total revenue for Q4 2025 and the fiscal year 2025 to be RMB 640 million and RMB 2.75 billion, respectively, with a projected price-to-sales ratio of 1.2 times [2]

Core Viewpoint - Haitong International initiated coverage on Zhihu (02390) with an "Outperform" rating, highlighting its unique positioning in the Q&A community and the potential of AI applications [1][2] Financial Performance - Zhihu's total revenue for Q3 2025 is projected to be approximately 659 million yuan, with a non-GAAP operating loss narrowing by 16.3% year-on-year, indicating improved operational efficiency and quality [1] - The company reported a slight loss in Q3 due to proactive optimization efforts aimed at eliminating inefficiencies and solidifying sustainable long-term operations [1] - As of the end of Q3, Zhihu's cash and cash equivalents, along with short-term investments, totaled 4.58 billion yuan, indicating a strong cash reserve [1] AI Application and Growth - Zhihu's AI product, Zhihu Zhidao, has seen a significant increase in usage, with penetration rates exceeding 15%, nearly quadrupling from the same period last year [1] - Future upgrades for Zhihu Zhidao will enhance AI capabilities across various scenarios, including search, content creation, and consumption, further increasing AI penetration within the community [1] Market Position and Revenue Forecast - Haitong International believes Zhihu's high engagement and trust in the "professional discussion" space will continue to attract high-value users and brand budgets [2] - The firm forecasts Zhihu's total revenue for Q4 2025 and the fiscal year 2025 to be 640 million yuan and 2.75 billion yuan, respectively, with a target price of 14.8 HKD based on a price-to-sales ratio of 1.2 times for FY 2025 [2]

Core Viewpoint - Haitong International initiates coverage on Zhihu-W (02390) with an "Outperform" rating, setting a target price of HKD 14.8 based on a projected price-to-sales ratio of 1.2x for the fiscal year 2025 [1] Group 1: Company Analysis - The integration of generative AI in Zhihu's Q&A expansion, personalized recommendations, and advertising creative generation is expected to enhance both content supply and commercial conversion efficiency, providing new monetization flexibility [1] - Zhihu's unique positioning in the Q&A community, combined with the benefits from large models and ample cash reserves, is viewed positively [1] - The management has committed to returning value to shareholders, having repurchased USD 66.5 million worth of shares in the first nine months of 2025 [1]

Core Viewpoint - Haitong International initiates coverage on Zhihu-W (02390) with an "Outperform" rating, setting a target price of HKD 14.8 based on a projected price-to-sales ratio of 1.2x for the fiscal year 2025 [1] Group 1: Company Analysis - The integration of generative AI in Zhihu's Q&A expansion, personalized recommendations, and advertising creativity is expected to enhance both content supply and commercial conversion efficiency, providing new monetization flexibility [1] - Zhihu's unique positioning in the Q&A community, combined with the benefits from large models and ample cash reserves, is viewed positively [1] - The management has committed to returning value to shareholders, having repurchased USD 6.65 million in the first nine months of 2025 [1]

Investment Rating - The report initiates coverage on Zhihu-W (2390 HK) with an "Outperform" rating, targeting a price of HK$14.80 [2][5][24]. Core Insights - Zhihu is positioned as China's leading Q&A-centric online content community, leveraging generative AI to enhance content supply and commercial conversion, which is expected to unlock new monetization opportunities [3][19]. - The company aims to achieve its first annual adjusted profit in 2025, with a focus on improving operational efficiency and reducing costs [8][22]. - The integration of AI tools is transforming the community ecosystem, significantly increasing user engagement and monetization potential [23]. Financial Overview - For FY25, total revenue is projected to decline by 24% to RMB 27.5 billion, with adjusted net profit expected to be RMB 33.34 million, marking a return to profitability [9][20]. - The company reported a total revenue of RMB 6.589 billion in Q3 2025, a 22% year-over-year decline, but better than market expectations [20][21]. - Adjusted gross profit margin is expected to improve from 60.6% in FY24 to 61.7% in FY25, indicating a focus on margin expansion [17][20]. Business Segment Outlook - Online marketing services are anticipated to bottom out in Q4 2025, with management confident in maintaining revenue levels in 2026 [21]. - Paid membership services are being refined to enhance user experience and community integration, with projected revenue of RMB 344 million for Q4 2025 [21][22]. - The vocational education segment has reached breakeven and is now included in the "Other" business category, contributing to overall revenue stability [21][22]. Valuation Analysis - The report assigns a price-to-sales (P/S) ratio of 1.2 for FY25, reflecting a cautious valuation approach due to ongoing business adjustments [13][24]. - The target price of HK$14.80 is based on the company's unique positioning in the Q&A community and the anticipated benefits from AI integration [5][24].

Core Insights - The documentary interview series "People Whose Minds Are in a Storm," focusing on adult ADHD, has successfully entered the Macau International Film Festival, marking a significant achievement for ADHD awareness and education [1][4]. Group 1: Project Background - The documentary is part of the "ADHD Advantages in Me" science popularization project supported by the Zhihu Lighthouse Plan in 2023, aimed at providing comprehensive information about ADHD [3][4]. - The project was initiated to counteract the growing trend of "overdiagnosing ADHD" and to promote a more balanced understanding of the condition [3]. Group 2: Project Impact - The project has led to significant social outcomes, with more participants accepting their ADHD traits and overcoming associated stigma, thus embarking on a journey of self-realization [4]. - The Zhihu Lighthouse Plan has allocated 10 million yuan since 2023 to support projects with significant public science education value that face various challenges in implementation [4]. Group 3: Future Directions - Zhihu plans to continue collaborating with platform creators to produce in-depth and emotionally resonant science popularization works, aiming to foster a more inclusive and understanding societal environment regarding diverse traits [4].