知乎-W(2390.HK):UGC长图文社区稀缺标的 商业化价值加速兑现

Zhihu-W (2390.HK): The commercialization value of scarce targets in the UGC long graphic community is being realized at an accelerated pace

中信建投證券 ·  08/26/2022  · Researches

Zhihu Inc. is one of the largest question and answer communities and UGC long picture and text communities in China. In 2022, in the online content community industry, short video has highly penetrated the largest proportion of low-level and elderly people, and the growth of the picture and text community is divided: Weibo Corp in the form of short picture and text recommendation stream and Xiaohongshu opened the sinking market. In the past, long picture and text communities such as Zhihu Inc., Douban and Tieba did not completely get out of the "niche market" of high-line young groups, and their expansion speed was relatively slow or for several reasons: the picture and text communities that need to be displayed on a large screen lost their natural advantage after transplanting the mobile end; there is a certain threshold for the reading and creation of long pictures and text; the above text communities were the earliest to serve minority and subcultural groups, and it is difficult for users to expand their circles. But now, Zhihu Inc. 's mobile transformation is more successful, and the number of monthly active users continues to grow, becoming the only large long picture and text community with more than 100 million monthly active users. On the one hand, the success of moving to mobile is due to its unique Q & A community form and long-term accumulation of high-quality content, on the other hand, it benefits from the optimization of mobile products and positive marketing strategies: the introduction of recommendation stream, short video, live broadcast and other forms, the early high-quality content to a new form of information flow; a large number of popular content such as hot current events, campus, makeup and skin care. Today, Zhihu Inc. is not only one of the largest Chinese question and answer communities, but also one of the largest long picture and text UGC communities.

From the minority Internet technology community to the mass knowledge community, taking into account both expansion and tone maintenance.

Zhihu Inc. has completed the transformation from a minority community of highly knowledgeable people to a mass graphic community. Zhihu Inc. entered an open period after 2015, the tone of the content changed from "the Internet and its surrounding areas" to "covering all kinds of professional knowledge", and the organization number was invited to enter in 2017. with the influx of a large number of new users, the head Big V has undergone a large-scale change, and low-threshold and popular content has gradually become the mainstream of the platform. After entering the commercialization acceleration period, the proportion of current politics and life increased significantly; in 2021, the category with the most views was consumer goods, followed by public science and entertainment, and the page distribution reached a steady state. In 2021, consumer goods, popular science and entertainment content accounted for relatively high views, accounting for 31%, 22% and 21% respectively, while the initial high-tech Internet and commercial and financial categories accounted for 5% respectively. The penetration of hot lists, ideas, live streaming and other functions in DAU has increased, and the mental training of users has achieved results.

While expanding, Zhihu Inc. promotes community autonomy, supports professional creators, and maintains a rigorous and professional content tone with an internal circle structure and a strong recommendation flow mechanism with private domain attributes.

With the accelerated realization of the commercialization value of the platform, Zhihu Inc. 's advertising business is expected to maintain a higher growth rate than the industry for a long time. In the first quarter of 2022, the advertising industry was hit to a certain extent due to macroeconomic factors and the industry's own regulatory reform. During this period, Zhihu Inc. 's advertising business (advertising + content commercialization solution) revenue increased by 33% compared with the same period last year, which is higher than the industry average.

Zhihu Inc. 's advertising growth rate far exceeded that of MAU by 19.4% because of the late start of commercialization.

Companies in the commercialization rate promotion stage such as Bilibili Inc. show similar numerical characteristics; at the same time, Zhihu Inc. 's advertising revenue per MAU is 4.4yuan, which is at a lower level than other companies, and there is room for an increase in advertising loading rate. Among them, the volume of traditional advertising is stable, and the proportion of revenue is gradually declining. at the same time, the income of users who place orders in the retention strategy of high-quality advertisers has increased significantly; the content commercialization solution has replaced traditional advertising as the first revenue in the first quarter of 2022.

The promotion content will be integrated into the community in the form of answers, articles, videos, round tables, etc., and the number of major customers and income per customer will maintain rapid growth. With the accelerated realization of the commercialization value of the platform, Zhihu Inc. 's advertising business (advertising + content commercialization solution) is expected to maintain a growth rate higher than the industry average.

The penetration rate of payment has increased steadily. Zhihu Inc. salt selection membership system to interesting stories and popular science columns to promote products, long-term cultivation of users' minds. Under the premise of the growth of the total number of active users, the penetration rate of paying users has increased for eight consecutive quarters. 1Q22 Zhihu Inc. MPU6 grew 72.5% year-on-year to 6.9 million yuan, and paid member revenue increased 75.1% year-on-year to 221.7 million yuan. Annual single customer income decreased due to the increase in product renewal rate (the renewal price is lower than the regular subscription price) and the short subscription cycle of incremental users, but the overall renewal rate of users increased year by year, reaching 65% in 2021. At the same time, the proportion of paying users in total users is growing steadily, with MPU/MAU reaching 6.8% in 1Q22.

The proportion of new business income such as e-commerce and vocational education continues to increase. Zhihu Inc. e-commerce "good thing recommendation" to give full play to the creativity of users to carry out picture and text goods, 2021H1 with goods GMV increased by 148% to 3.52 billion compared with the same period last year. The 1P service was launched in 2022 and the closed loop was initially completed. The advantages of Zhihu Inc. bringing goods are as follows: (1) Q & A + long picture and text form is conducive to product recommendation; Zhihu Inc. 's long picture and text interaction with the community facilitates consumers'in-depth understanding, comparison and discussion of commodities. The evaluation and recommendation of the platform digital 3C category has spontaneously formed a community and has great potential for commercialization. (2) the average circulation time of the content with goods is long, which brings long-term benefits. (3) accurate push of specific groups. Zhihu Inc. has a large and active user base in the fields of consumer goods, education, Internet technology, etc. The long-polished TopicRank sorting algorithm and the SEO delivery system for search scenarios help to accurately reach the content with goods. Proprietary business is still in the trial stage, currently mainly promoting digital 3C products. At the same time, a positive layout of vocational education, 1Q22 revenue of 39.5 million, month-on-month growth of 77.9%, accounting for 5.3% of income.

Valuation forecast: we expect revenue of 3.96 billion yuan in 2022, an increase of 34% over the same period last year. If the expected average PS of the comparable company in 2022 is 2, the corresponding market capitalization of the company is 7.91 billion yuan, then the share price is 24.3 yuan, and the corresponding stock price is 27.7 Hong Kong dollars. For the first time, coverage gives a "buy" rating.

Risk hints: repeated domestic epidemics, lower-than-expected macroeconomic and consumer recovery, Internet regulatory risks, company commercialization and user growth falling short of expectations, and new business promotion falling short of expectations. the lower-than-expected membership retention rate led to lower-than-expected revenue of the company's paid member business and lower-than-expected growth of the company's business solutions business. Short video and other video industry competition risks, competition risks with companies in the industry.

This page is machine-translated. Futubull tries to improve but do not guarantee the accuracy and reliability of the translation, and will not be liable for any loss or damage caused by any inaccuracy or omission of the translation.

Risk disclosure: The above content only represents the opinion of the authors or guests, and does not represent any positions of Futu or constitute any investment advice on the part of Futu. Before making any investment decision, investors should consider the risk factors related to investment products based on their own circumstances and consult professional investment advisers where necessary. Futu makes every effort to verify the authenticity, accuracy, and originality of the above content, but does not make any guarantees or promises.

    Write first comment