Core Insights - Haitong International initiates coverage on Zhihu with an "outperform" rating, highlighting its unique positioning in the Q&A community and the potential of AI applications [1][2] Financial Performance - In Q3 2025, Zhihu reported total revenue of approximately 659 million yuan, with a non-GAAP operating loss narrowing by 16.3% year-on-year, indicating improved operational efficiency and quality [1] - Zhihu's cash reserves are robust, totaling 4.58 billion yuan as of the end of Q3, which includes cash and cash equivalents, time deposits, restricted funds, and short-term investments [1] Strategic Initiatives - The company is actively optimizing operations to eliminate inefficiencies, which has resulted in a slight loss as part of its investment in sustainable long-term operations [1] - Zhihu has implemented share buybacks and cost-reduction measures to strengthen its capital and profit flexibility, with positive expectations for profitability and margin improvement in 2025-2026 [1] AI Development - Zhihu's AI application, Zhihu Zhidao, has seen significant growth, with its penetration rate exceeding 15% by the end of Q3, nearly four times the level 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 usage within the community [1] Market Outlook - Haitong International anticipates 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 projected price-to-sales ratio of 1.2 times for FY 2025 [2]

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].

Core Insights - The company reported a revenue of 659 million yuan for Q3 2025, a year-on-year decline of 22%, which aligns with expectations [1] - Non-GAAP net loss was 21 million yuan, better than the anticipated loss of 55 million yuan, attributed to lower-than-expected sales and R&D expenses [1] - The CFO indicated that the current market value is significantly below cash assets, which amounted to 4.58 billion yuan at the end of Q3 2025, and the company plans to continue share buybacks [1] Business Development Trends - The company is focused on optimizing its platform business and balancing commercialization with community ecology [1] - Marketing business revenue decreased by 26% to 189 million yuan in Q3 2025, but the decline rate improved from 35% in Q2 2025, suggesting effective adjustments that may lead to growth next year [1] - Paid membership revenue reached 386 million yuan, with a notable increase in daily active user engagement, achieving double-digit year-on-year growth for six consecutive quarters [1] - IP copyright revenue saw a significant increase, with triple-digit year-on-year growth in Q3 2025, driven by the accelerated development of the "Salt Story" IP into various media formats [1] - Other revenue declined by 35% to 83.9 million yuan, with a focus on optimizing ROI in vocational training [1] - The company is relatively confident in achieving Non-GAAP profitability in 2025 [1] AI Application and Collaboration Potential - The penetration rate of the Zhihu direct answer community increased to 15% in Q3, with AI search upgraded to an Agentic assistant [2] - Upcoming features include full user access to search results and enhanced AI search capabilities for community trends [2] - The introduction of AI Copilot tools aims to boost content creation frequency and community engagement, with over 20% usage rate by the end of Q3 2025 [2] - The combination of high-quality content, expert networks, and AI capabilities is expected to create a competitive advantage for Zhihu in the AI era [2] Profit Forecast and Valuation - Revenue forecasts for 2025 and 2026 have been adjusted downwards by 2% and 17% to 2.76 billion yuan and 2.48 billion yuan, respectively [2] - The Non-GAAP net profit forecast for 2026 has been reduced by 47% to 40.86 million yuan [2] - Current stock prices correspond to 0.8/0.9x and 0.9/0.9x P/S ratios for Hong Kong and US stocks for 2025/2026 [2] - The target price has been lowered by 11% and 13% to 14 HKD and 5.4 USD, respectively, with an upside potential of 34% for both markets [2]

Core Viewpoint - Zhihu-W's stock price fell by 8.52% following the release of its Q3 2025 earnings report, indicating market concerns over its financial performance [1]. Financial Performance - For Q3 2025, Zhihu-W reported revenue of 659 million RMB, representing a year-on-year decline of approximately 22% [1]. - The company recorded an adjusted net loss of 21 million RMB, compared to an adjusted net loss of 13 million RMB in the same period last year [1]. Stock Market Reaction - As of 10:55 AM on November 26, Zhihu-W's stock was trading at 9.55 HKD, down 0.89 HKD from the previous close [2]. - The total market capitalization of Zhihu-W is approximately 2.524 billion HKD [2].

Core Insights - Zhihu Inc. is a leading online content community in China, similar to Quora, providing a platform for knowledge sharing despite facing competition from Baidu and Tencent [1] Financial Performance - Zhihu reported an earnings per share (EPS) of -$0.08 for Q3 2025, missing the estimated EPS of $0.18 [2][6] - The actual revenue for Q3 2025 was $92.53 million, significantly below expectations and down from $116 million in the same period of 2024 [3][6] - The gross margin decreased to 61.3% from 63.9% year-over-year [3] - The company experienced a net loss of $6.6 million, an increase from the $1.2 million loss in Q3 2024, with an adjusted net loss of $3 million compared to $1.8 million last year [3][6] Management Outlook - CEO Yuan Zhou expressed optimism about achieving a full-year non-GAAP breakeven, citing solid progress during the quarter [4] - The average number of monthly subscribing members reached 14.3 million, indicating a strong user base [4][6] Financial Metrics - Zhihu has a price-to-sales ratio of 0.66 and a negative enterprise value to sales ratio of -0.28, indicating a unique financial situation [5] - The debt-to-equity ratio is low at 0.055, suggesting conservative debt use [5] - The company maintains a strong liquidity position with a current ratio of 3.48 [5]

Core Insights - Zhihu reported a revenue of 659 million yuan for Q3 2025, with a year-on-year reduction in non-GAAP operating loss by 16.3% [1] Revenue Breakdown - The paid reading business generated 386 million yuan in revenue, accounting for 58.5% of total revenue [1] - Marketing services revenue reached 189 million yuan, representing 28.7% of total revenue [1] - Other businesses, including vocational education and consumer goods, contributed 83.9 million yuan, making up 12.8% of total revenue [1]

Financial Performance - The company reported total revenue of 659 million yuan for the third quarter, down from 845 million yuan in the same period of 2024, indicating a decrease of approximately 22% [1] - The net loss for the quarter was 46.7 million yuan, compared to a loss of 9 million yuan in the same quarter of 2024, reflecting a significant increase in losses [1] - Adjusted net loss (non-GAAP) was 21 million yuan, compared to a loss of 13.1 million yuan in the same quarter of 2024 [1] Revenue Breakdown - Marketing services revenue was 189 million yuan, down from 257 million yuan in 2024, primarily due to the company's ongoing optimization of service product offerings [3] - Paid membership revenue was 386 million yuan, a decrease from 459 million yuan in 2024, attributed to a decline in the average number of monthly subscribers [3] Strategic Direction - The company's chairman and CEO, Zhou Yuan, stated that the company is steadily progressing towards achieving non-GAAP breakeven for the year, with solid advancements in the current quarter [4] - The company is focusing on optimizing service products and balancing commercialization with community health, which has led to increased user engagement and high-quality content contributions from both daily users and professional creators [4] - The company is transforming into an AI-native community, leveraging high-quality content, expert networks, and AI capabilities to provide a differentiated and trustworthy experience for users both on and off the platform [4]

Group 1 - Alibaba's stock dropped over 2% following its earnings report [1] - Xiaoma Zhixing-W saw an increase of over 5% [1] - NIO's stock declined by approximately 7% [1] - Zhihu's stock fell by over 4% [1]

Core Viewpoint - Zhihu reported a revenue of 659 million yuan for Q3 2025, with a steady increase in subscription membership and user engagement metrics [1] Revenue Structure - The paid reading business generated 386 million yuan, accounting for 58.5% of total revenue [1] - Marketing services contributed 189 million yuan, representing 28.7% of total revenue [1] - Other businesses, including vocational education and consumer goods, generated 83.9 million yuan, making up 12.8% of total revenue [1] User Engagement - The average monthly subscription membership reached 14.3 million, reflecting a quarter-on-quarter growth of 8.1% [1] - Key user metrics such as monthly active users, daily active users, usage duration, and core user retention have shown steady improvement [1] Strategic Initiatives - Zhihu's "Salted Story" brand has authorized nearly 100 works for short drama adaptations, indicating a growing integration with the web literature and film industries [1] - In October, Zhihu represented the Chinese online literature platform at the Frankfurt Book Fair, promoting high-quality IPs for short stories internationally [1] Management Perspective - The founder and CEO, Zhou Yuan, stated that the company is steadily moving towards achieving a break-even point for the year [1] - Ongoing structural optimization measures are yielding positive results, balancing commercialization with community health [1] - Increased user activity, contributions from daily active users and professional creators, along with a rise in high-quality content, are enhancing community vitality [1]