20211124-招银国际-Better-than-feared_3Q21_4页_844kb

报告摘要

Zhihu (ZH US) 3Q21 Company Update Summary

Core Content

This report provides an update on Zhihu's financial performance for the third quarter of 2021 (3Q21) and outlook for the fourth quarter of 2021 (4Q21E) and full-year 2022 (FY22E). The analysis highlights Zhihu's strong user growth, revenue performance, and strategic initiatives, while maintaining a "BUY" rating and a target price of US$15.

Key Financial Highlights

Revenue

3Q21 Revenue: RMB824mn, +115% YoY, slightly above consensus and the author's estimates.
4Q21E Revenue Guidance: RMB1.01–1.03bn, +94%–98% YoY, with midpoint 1% below consensus but 3% above the author's estimate.
FY21E Revenue: RMB2,955mn
FY22E Revenue: RMB5,374mn
FY23E Revenue: RMB9,119mn

Adjusted Net Profit

3Q21 Adjusted Net Profit: RMB-112mn, better than both consensus and the author's estimate.
FY21E Adjusted Net Profit: RMB-983mn
FY22E Adjusted Net Profit: RMB-983mn
FY23E Adjusted Net Profit: RMB45mn

Earnings Per Share (EPS)

3Q21 Adj. EPS: RMB-0.19
FY21E Adj. EPS: RMB-1.73
FY22E Adj. EPS: RMB-1.73
FY23E Adj. EPS: RMB0.08

P/E and P/S Ratios

P/S (Price-to-Sales): 5.5x (FY22E), expected to decrease to 3.2x (FY23E)
P/E (Price-to-Earnings): 655.1x (FY23E)

Share Performance

1-month: -22.8%
3-month: -22.8%
6-month: +1.2%

User Growth and MAU

3Q21 MAU: 101.2mn, +40% YoY, 1% above the author's estimate.
4Q21E MAU Forecast: Expected to grow by +36% YoY, reaching 103mn.
User Acquisition Efficiency: Expected to improve in 4Q21E and FY22E.
Upcoming Upgrade in Dec: Will enhance user engagement through increased focus on video content.

Revenue Breakdown

Segment	3Q21 Revenue (RMB mn)	YoY Growth (%)
Content-commerce solutions (CCS)	278	+511%
Advertising	321	+39%
Paid membership	178	+96%
Others	46	+202%

Business Performance and Outlook

Ads Momentum: Despite a soft industrial ads sentiment, Zhihu's ads revenue grew +39% YoY, 18% above the author's estimate.
Ads Defense: Zhihu has low exposure in the education and insurance verticals, and still achieved double-digit growth in the auto and property segments.
4Q21E Ads Forecast: Expected to grow +12% YoY.
CCS Growth: Strong momentum with +435% YoY growth forecast for 4Q21E.
Paid Membership: Continued growth, with +96% YoY revenue in 3Q21 and +81% YoY forecast for 4Q21E.

Key Ratios

Metric	FY19A	FY20A	FY21E	FY22E	FY23E
Gross Margin (%)	48.9%	52.6%	50.9%	55.4%	59.9%
Operating Margin (%)	-46.1%	-44.6%	-52.5%	-25.8%	-5.4%
Adj. Net Margin (%)	-31.6%	-25.0%	-33.3%	-18.3%	0.5%
ROE (%)	-20.7%	-12.3%	-14.0%	-16.3%	0.7%
ROA (%)	-25.6%	-12.3%	-14.0%	-16.3%	0.4%

Strategic and Operational Notes

Content-commerce Solutions (CCS): Expected to continue its strong growth, especially with the benefit of e-commerce seasonality.
User Growth Drivers: Job-hunting season, multiple hot topics, and effective video content.
Defensive Position in Ads: Zhihu's ads business is relatively defensive compared to other entertainment companies.
Investor Confidence: The firm maintains its "BUY" rating and target price of US$15, with a 82.9% upside from the current price of US$8.2.

Related Reports

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2H21E topline & user momentum to continue – 17 Aug 2021
Initiation: A go-to Q&A-inspired content community – 30 Jun 2021

Important Disclosures

The report is prepared by CMB International Securities Limited, a wholly owned subsidiary of China Merchants Bank.
The analyst certifies that the views expressed accurately reflect personal opinions and confirms no conflicts of interest.
CMBIS is not a registered broker-dealer in the U.S. and this report is intended solely for "major U.S. institutional investors".
In Singapore, the report is distributed by CMBI (Singapore) Pte. Limited, an exempt financial adviser.
The report is not a recommendation or solicitation to buy or sell securities and should be used for informational purposes only.

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