Jiemian News reported on December 25 that Zhihu, the largest Q&A-focused online content community in China, plans to go public in Hong Kong in the near future, and might submit related IPO documents in January 2022. On the same day, BKEconomy reported that Zhihu responded it had never heard of the news.
BKEconomy learned from several sources in capital market that it is unlikely that Zhihu, which was listed in the U.S. in March of 2021, will go public in Hong Kong. After all, it’s not a small amount of money to pay the intermediary fee for a second listing. Currently, Zhihu is valued at $3 billion, and it doesn’t seem possible to raise a large amount of money. So, it is not cost-effective to go public again as a whole.
Recently, the ownership structure of Zhihu in China has changed significantly. Domestic business data enquiry platform Tianyancha shows that on December 21, many shareholders of Zhihu withdrew, including its main company Beijing Zhizhe Tianxia Technology Co., Ltd., as well as Beijing Sogou Inc. Information Service Co., Ltd. and Shenzhen Litong Industrial Investment Fund Co., Ltd. The last company remaining is affiliated to Chinese tech giant Tencent.
In response, Zhihu said Beijing Zhizhe Tianxia Technology is an affiliated company of Zhihu Inc., its overseas-listed entity. This structural change is a normal change in corporate governance, and its actual controllers, key shareholders and their shareholding ratios remain unchanged.
Zhihu‘s Q3 financial report was released last month. According to the report, the firm’s total revenue in the period was 823.5 million yuan, up 115.1% year-on-year, and the net loss was 269.8 million yuan, up from 110 million yuan a year previously. The platform’s average monthly active users totaled 101.2 million, up 40.1% year-on-year.
Zhihu adopts a business model comprising online advertising, commercial content solutions, paid membership and other businesses (including online education and e-commerce). Up to now, Zhihu earns most revenue from its online advertising operations. In Q2, commercial content solutions earned more than paid membership as the second largest source of revenue. But in essence, commercial content solutions should be considered a variant of advertising.