China's Zhihu Q2 revenue falls; gross margin narrows on higher content costs
China's Zhihu Q2 revenue falls; gross margin narrows on higher content costs
Overview
China online content platform's Q2 revenue fell yr/yr to RMB690.1 mln
Company reported Q2 net loss of RMB37.4 mln, versus net income a year earlier
Revenue decline driven by lower marketing services, partly offset by paid content growth
Outlook
Zhihu did not provide specific guidance for future quarters or the full yr
Result Drivers
MARKETING SERVICES DECLINE - Co said lower marketing services revenue was due to proactive and ongoing refinement of service offerings
PAID CONTENT GROWTH - Co said paid content and IP operations revenue increased due to growth of revenues from IP operations
HIGHER CONTENT COSTS - Increase in content-related costs contributed to lower gross margin
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue |
| RMB 690.1 mln |
|
Q2 Net Loss |
| RMB 37.4 mln |
|
Q2 Adjusted Net Loss |
| RMB 10.3 mln |
|
Q2 Operating Expenses |
| RMB 469.4 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the online services peer group is "buy"
Wall Street's median 12-month price target for Zhihu Inc is HK$10.00, about 22% above its August 25 closing price of HK$8.20
The stock recently traded at 40 times the next 12-month earnings vs. a P/E of 18 three months ago
Reuters Recommended Reads
Aug 25 - Newborn Town H1 revenue rises on social networking business strength
Aug 25 - Online recruitment platform Kanzhun Q2 revenue rises 14% on enterprise customer growth
Aug 24 - Chinese ad-tech firm Mobvista's H1 revenue rises on Mintegral platform strength
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)