Core Viewpoint - The majority of popular Chinese concept stocks in the US market are experiencing declines, with notable drops in several key companies [1] Group 1: Stock Performance - Xiaopeng Motors, Li Auto, and NIO have all fallen by over 2% [1] - Alibaba, JD.com, iQIYI, and Miniso have seen declines exceeding 1% [1] - Zhihu has increased by over 2%, while Douyu has risen by over 1% [1]

Core Insights - The company reported better-than-expected adjusted net profit of 91.34 million yuan for Q2 2025, despite a revenue decline of 23% year-on-year to 717 million yuan, which was slightly below the expected 730 million yuan [1][2] - The company is seeing initial success from business adjustments, particularly in marketing services and paid membership, with expectations for a turning point in upcoming quarters [1][2] Revenue and Profit Trends - Q2 2025 revenue from marketing services decreased by 35% year-on-year, but the company is optimistic about future improvements in the advertising structure [1] - Paid membership revenue fell by 7% year-on-year, but the average revenue per paying user (ARPPU) is expected to grow by 3% [1] - The company is shifting its focus towards acquiring long-lifecycle users and enhancing user engagement through new content formats [1] AI Integration and Community Value - The company upgraded its core AI product, Zhihu Zhidao, enhancing its knowledge base functionality, which has led to a significant increase in active usage penetration [2] - The presence of 365,000 professional creators in discussions related to technology and AI highlights the growing value of the company's content community [2] - The company’s quality content is becoming a valuable data asset, with AI assistants citing Zhihu more frequently than other content communities [2] Financial Performance and Share Buyback - The company achieved adjusted profitability for three consecutive quarters, with a decrease in operating expense ratio by 4 percentage points year-on-year [2] - In the first half of 2025, the company repurchased 7.42 million shares, representing about 3% of the total share capital [2] Revenue and Profit Forecast - Revenue forecasts for 2025 and 2026 have been revised down by 8.2% and 9.9% to 2.82 billion yuan and 2.97 billion yuan, respectively, due to ongoing adjustments in marketing services and vocational training [2] - Adjusted net profit for 2025 has been revised from a loss of 72.86 million yuan to a profit of 31.80 million yuan, while the 2026 adjusted net profit forecast has been reduced from 140 million yuan to 77.07 million yuan [2] - The current stock price corresponds to 1.0 times the price-to-sales ratio for 2025/2026, with a target price of 16 HKD/6.1 USD, indicating an upside potential of 25%/24% [2]

Core Viewpoint - In 2025, despite facing growth bottlenecks in content community platforms, Zhihu reported a unique semi-annual performance, showcasing its ability to balance commercialization and user experience through refined operations and AI integration [1][2]. Financial Performance - Zhihu's total revenue for the first half of 2025 was 1.447 billion yuan, a year-on-year decline of 23.7%, but adjusted net profit reached 98.28 million yuan, a significant turnaround from a net loss of 180 million yuan in the same period last year [4]. - The second quarter was particularly strong, with revenue of 717 million yuan and adjusted net profit of 91.3 million yuan, marking three consecutive quarters of Non-GAAP profitability [4]. - Cost control and operational optimization were key drivers of profit improvement, with revenue costs down 31.1% to 547 million yuan and operating expenses down 30.9% to 1.043 billion yuan [4]. Cost Structure and Efficiency - In the second quarter, costs related to content and operations, personnel expenses, and cloud services significantly decreased, leading to a total cost reduction of 28.8% to 269 million yuan [4]. - R&D spending was 146 million yuan in the second quarter, down 30.4%, indicating a balance between cost-saving and innovation [4]. AI Integration - AI technology has been deeply integrated into Zhihu's operations, enhancing efficiency in content review, member promotion, and vocational training, thereby reducing labor costs [5]. - The AI-assisted content review system quickly identifies violations, while smart recommendation algorithms improve paid membership conversion rates [5]. Business Strategy and Structure - Zhihu has strategically reduced investment in underperforming business lines, particularly in marketing services and vocational training, with revenues declining by 37.78% and 43.87% respectively [6]. - This proactive approach to shedding low-efficiency businesses marks a shift from a "burning money for growth" model to a sustainable business model focused on profitability [6]. Content Ecosystem and User Engagement - Zhihu is evolving its content ecosystem through a three-pronged strategy of high-quality content, a trusted expert network, and AI capabilities, aiming to build a knowledge community moat in the AI era [9]. - The platform has seen a more than 10% increase in daily high-quality content additions, with AI-related professional content growing over 45% year-on-year [9]. User Demographics and Engagement - 74.1% of active users are under 30 years old, with female users making up 59.3%, providing a diverse foundation for content [9]. - Despite stable monthly active user numbers, metrics such as daily active user engagement time, core user retention rates, and creator activity have significantly improved [9]. Expert Network and Knowledge Production - Zhihu has developed a large expert network, including 16 million participants in technology and AI discussions, and 365,000 deep creators in related topics [10]. - This "knowledge production network" is a core asset that differentiates Zhihu from other content platforms and is crucial for addressing challenges in the AI era [11]. AI Strategy and Product Development - Zhihu's AI strategy focuses on practical applications rather than generic models, launching the "Zhihu Direct Answer" AI search product to enhance knowledge acquisition [11]. - The strategy emphasizes integrating AI across the platform and extending reliable content and services to broader applications beyond the community [11]. Conclusion - Zhihu's performance and market strategy in the first half of 2025 demonstrate the strategic resilience and transformation wisdom of a mature internet company, achieving significant profit improvement amid industry pressures [12].

Core Viewpoint - CICC maintains an outperform rating for Zhihu-W (02390) due to increased investment income and an upward shift in industry valuation, setting a target price of HKD 16 / USD 6.1, which corresponds to a 1.25x 2025 target P/S ratio, indicating an upside potential of 25% / 24% for Hong Kong and US stocks respectively [1] Group 1: Business Performance - In Q2 2025, the company reported revenue of CNY 717 million and adjusted net profit of CNY 91.34 million, exceeding expectations primarily due to fair value changes in investment income and effective cost control [1] - The marketing services segment shows initial success from targeted structural adjustments, with expectations for growth in the advertising client structure and a projected 3% year-over-year increase in ARPPU for paid memberships [2] - The company is shifting its vocational training business from a traditional model focused on core categories to a new model driven by social interaction and knowledge sharing [2] Group 2: AI Integration and Community Value - In Q2 2025, the company upgraded its core AI product, Zhihu Zhidao, enhancing its knowledge base functionality to support subscriptions and sharing, leading to a significant increase in active usage penetration [3] - The company emphasizes the growing value of its content community in the AI era, with 3.65 million professional creators actively discussing technology and AI topics, and high citation rates of Zhihu content by AI assistants compared to other content communities [3] Group 3: Financial Health and Share Buyback - The company achieved adjusted profitability for three consecutive quarters, with a year-over-year decrease in operating expense ratio by 4 percentage points, and realized investment income of CNY 140 million from fair value changes [4] - In the first half of 2025, the company repurchased 7.42 million shares, accounting for approximately 3% of the total share capital [4]

Core Viewpoint - The company maintains an outperform rating due to increased investment income, with a target price of HKD 16 / USD 6.1, reflecting a 25% / 24% upside potential in Hong Kong and US stocks respectively [1] Group 1: Financial Performance - In Q2 2025, the company reported revenue of CNY 717 million and an adjusted net profit of CNY 91.34 million, exceeding expectations primarily due to fair value changes in investment income and effective cost control [1] - The company achieved adjusted profitability for three consecutive quarters, with a year-on-year decrease in operating expense ratio by 4 percentage points [4] Group 2: Business Adjustments and Growth Potential - Initial results from targeted structural adjustments in marketing services are promising, with expectations for growth in the advertising client structure and a projected 3% year-on-year increase in ARPPU for paid memberships [2] - The company is shifting its vocational training business from a traditional model to a more interactive and knowledge-sharing driven approach [2] Group 3: AI Integration and Community Value - The company upgraded its core AI product, Zhihu Zhidao, enhancing its knowledge base functionality, which has significantly increased active usage penetration [3] - The company emphasizes the value of quality content in the AI era, with 3.65 million professional creators engaging in discussions related to technology and AI, suggesting potential monetization opportunities for high-quality content [3] Group 4: Share Buyback Activity - In the first half of 2025, the company repurchased 7.42 million shares, accounting for approximately 3% of its total share capital [4]

Core Insights - Zhihu has demonstrated its profitability during business adjustments, reporting Q2 2025 revenue of 717 million yuan and adjusted net profit of 91.3 million yuan, achieving Non-GAAP profitability for three consecutive quarters [2][3]. Revenue Performance - Q2 2025 revenue decreased by 23.23% year-on-year from 934 million yuan to 717 million yuan, with Q1 2025 revenue at 730 million yuan. The decline in revenue was primarily due to a drop in paid reading subscriptions, which contributed 402 million yuan, accounting for 56.1% of total revenue [3][4]. - The average monthly subscription members decreased from 14.7 million in the previous year to 13.2 million in Q2 2025 [3]. Business Strategy - The company is focusing on improving member retention and increasing Average Revenue Per User (ARPU) by optimizing the structure of new members and expanding content offerings, such as voice live broadcasts [3][4]. - Marketing services revenue fell to 223 million yuan from 344 million yuan year-on-year, attributed to a strategic focus on improving profit margins [4][5]. Profitability and Cost Management - Despite revenue decline, Zhihu achieved a net profit of 72.5 million yuan in Q2 2025, compared to a net loss of 80.6 million yuan in the same period last year. Adjusted net profit was 91.3 million yuan, up from an adjusted net loss of 44.6 million yuan [5][6]. AI Integration - The company is fully embracing AI technology, launching the "Zhihu Direct Answer" AI search product to enhance user experience and content quality. This includes integrating professional content sources and improving search capabilities [6][7]. - The CEO emphasized the importance of high-quality content as a trust currency in the AI era, indicating that the platform's content quality will determine its value [7][8]. Future Outlook - The company aims to optimize its client structure and upgrade commercial products, focusing on high-value categories and enhancing the monetization of its IP [5][6]. - Continuous upgrades to the AI search and knowledge base are planned, with expectations for significant user experience improvements in Q4 2025 [7][8].

Core Viewpoint - Zhihu demonstrates its profitability during business adjustments, reporting a revenue of 717 million yuan and a non-GAAP net profit of 91.3 million yuan for Q2 2025, achieving non-GAAP profitability for three consecutive quarters [2][3]. Revenue Performance - Zhihu's Q2 2025 revenue decreased by 23.23% year-on-year from 934 million yuan to 717 million yuan, with Q1 2025 revenue at 730 million yuan [3]. - The paid reading business remains the largest revenue contributor, generating 402 million yuan in Q2 2025, accounting for 56.1% of total revenue, down from 433 million yuan in the same period last year [3]. - The average monthly subscription members decreased to 13.2 million in Q2 2025 from 14.7 million in the same period last year [3]. Business Strategy and Adjustments - The company is focusing on improving member retention and increasing ARPU (Average Revenue Per User) through various initiatives, including optimizing new member structures and expanding content offerings [3]. - Marketing service revenue fell to 223 million yuan in Q2 2025 from 344 million yuan year-on-year, attributed to a strategic focus on improving profit margins [4]. - The vocational education segment generated 62.1 million yuan, down from 62 million yuan year-on-year, due to strategic optimization [4]. Profitability and Cost Management - Despite revenue declines, Zhihu achieved a net profit of 72.5 million yuan in Q2 2025, compared to a net loss of 80.6 million yuan in the same period last year [4]. - The adjusted net profit (non-GAAP) was 91.3 million yuan, a significant improvement from an adjusted net loss of 44.6 million yuan in Q2 2024 [4]. AI Integration and Community Development - The company is fully embracing AI technology, with the launch of the new AI search product "Zhihu Direct Answer" aimed at enhancing user experience and content quality [5][6]. - The integration of AI with community content is seen as a key strategy, with ongoing upgrades to improve the search and answer quality [6]. - The CEO emphasized the importance of high-quality content as a trust currency in the AI era, indicating a shift towards more reliable and professional content [5][6]. Future Outlook - The company aims to optimize its client structure and upgrade its commercial products to achieve positive year-on-year growth in marketing services [4]. - Continuous iterations and upgrades of the AI search capabilities are planned, with a focus on enhancing user experience in Q4 2025 [6].

Core Viewpoint - Zhihu-W (02390) reported a significant increase in stock price by over 6% following the release of its Q2 earnings, indicating positive market reception despite a decline in total revenue [1] Financial Performance - For the second quarter ending June 30, 2025, Zhihu achieved total revenue of 717 million yuan, a year-on-year decrease of 23.23% [1] - The company reported a net profit attributable to shareholders of 72.48 million yuan, compared to a loss of 82.73 million yuan in the same period last year [1] - Basic earnings per share were reported at 0.3 yuan [1] Operational Insights - The Chairman and CEO, Zhou Yuan, highlighted that the company has achieved non-GAAP profitability for three consecutive quarters, reflecting the effectiveness of its refined operational strategies and the integration of artificial intelligence technology [1] - Key performance indicators such as daily active user engagement, core user retention rates, and creator activity have shown significant improvement [1] AI Integration and Future Strategy - The integration of artificial intelligence has enhanced the user experience and created greater value for both users and creators, positioning Zhihu as an important platform for AI-related content and expert interactions [1] - The CFO, Wang Han, noted that the company achieved a non-GAAP net profit of 91.3 million yuan in Q2, compared to a non-GAAP net loss of 44.6 million yuan in the previous year [1] - The gross margin increased by approximately 3 percentage points to 62.5%, reflecting ongoing improvements in cost structure and operational efficiency driven by AI [1] - The company aims to maintain rigorous execution and sustainable commercialization to drive long-term growth [1]

Core Insights - Zhihu-W (02390) shares rose over 6% following the release of its Q2 earnings report, with a current price of HKD 13.59 and a trading volume of HKD 1.4538 million [1] Financial Performance - For the three months ending June 30, 2025, Zhihu reported total revenue of CNY 717 million, a year-on-year decrease of 23.23% [1] - The company achieved a net profit attributable to shareholders of CNY 72.482 million, compared to a loss of CNY 82.739 million in the same period last year [1] - Basic earnings per share were CNY 0.3 [1] Management Commentary - The Chairman and CEO, Zhou Yuan, stated that the company has achieved non-GAAP profitability for the third consecutive quarter, reflecting the effectiveness of its refined operational strategy and the efficiency gains from integrating artificial intelligence [1] - Zhou highlighted the active community engagement, stable user base, and significant improvements in daily active user engagement, core user retention, and creator activity [1] - The CFO, Wang Han, noted that the company achieved a non-GAAP net profit of CNY 91.3 million in Q2, compared to a non-GAAP net loss of CNY 44.6 million in the same period last year [1] - Gross margin increased by approximately 3 percentage points to 62.5% year-on-year, indicating ongoing improvements in cost structure and operational efficiency driven by AI [1]

Financial Performance - In the first half of the year, the company achieved total revenue of 1.447 billion yuan, a year-on-year decline of 23.7% [1] - Adjusted net profit was 98.28 million yuan, compared to a loss of 180 million yuan in the same period last year [1] - In Q2, revenue reached 717 million yuan, with an adjusted net profit of 91.3 million yuan, marking three consecutive quarters of Non-GAAP profitability [1] Cost Management - The company's cost of revenue was 547 million yuan, down 31.1% year-on-year [1] - Operating expenses decreased by 30.9% to 1.043 billion yuan [1] - The CFO indicated that improvements in cost structure and operational efficiency were driven by AI-driven productivity enhancements [1] Revenue Sources - The three main revenue streams all experienced declines, with paid membership being the largest source, accounting for over 50% of revenue, generating 820 million yuan, down 7% year-on-year [2] - Marketing services and vocational education recorded revenues of 420 million yuan and 160 million yuan, with year-on-year declines of 37.78% and 43.87%, respectively [2] Content Strategy - The company is expanding its supply of medium and long-form content to support its membership ecosystem [4] - Paid membership revenue share increased to 56.7%, up over 10 percentage points year-on-year, although the average monthly subscription count decreased by 6.7% to 13.7 million [4] - The short drama industry is seen as a growth area, with the company leveraging its community content for adaptation into popular series [2][4] AI Integration - The company is focusing on two key areas for AI: accelerating integration across the platform and expanding reliable content and services beyond the community [5] - AI-related professional content has seen over 45% year-on-year growth for two consecutive quarters [5] - The CEO emphasized that AI is deeply integrated into the product experience, enhancing value for users and creators [6] Market Outlook - The micro-short drama market in China is expected to exceed 50 billion yuan by 2025, presenting a significant opportunity for the company [4] - The company aims to convert its traffic advantages into revenue, which remains a challenge [4]