Summary of the report:
Event: on August 30, 2022, Zhihu Inc. released the 2022 mid-term report and Q2 performance report, the company achieved operating income of 1.579 billion yuan in the first half of the year, + 41.4% compared with the same period last year. The adjusted net profit was-811 million yuan, compared with-394 million yuan in the same period last year. The company realized operating income of 836 million yuan in the second quarter, + 31.0% year-on-year, and adjusted net profit of-444 million yuan, compared with-200 million yuan in the same period last year.
Comments:
Actively promote the "ecology first" strategy, optimize the ecology of content, and raise the payment rate. The revenue of member business 22H1 is 493 million yuan, + 75.1% compared with the same period last year, of which the income of Q2 member business is 270 million yuan, + 75.1% compared with the same period last year. The main driver of income growth is the increase in the number of members. The average number of monthly paid members reached 7.7 million in the first half of 2022, + 75.8% compared with the same period last year. The company continues to optimize its content recommendation system, stimulate the creative enthusiasm of creators, cultivate a content supply system with a sense of achievement, continuously optimize member content and member ecology, and increase user payment rates.
The advertising business is affected by the epidemic and overall economic fluctuations, precision delivery is expected to improve the effectiveness of advertising.
The company's advertising revenue in the first half of the year was 450 million yuan, down 1.5% from the same period last year. We believe that due to the impact of the epidemic and overall economic fluctuations, the advertising business is facing certain pressure. By focusing on the upgrading of its infrastructure, it is expected to continue to improve the effectiveness of advertising by improving the accuracy of advertising delivery and diversifying the categories of advertising delivery.
Commercial Solutions (CCS) business keeps growing and transformation efficiency is outstanding. The business revenue of commercial solutions in the first half of the year was 470 million yuan, which was + 42.3% compared with the same period last year. Q2 the revenue of this business is 270 million yuan, which is + 15.9% compared with the same period last year. This business form is consistent with the tone of Zhihu Inc. 's products, and the user conversion effect is better. Under the background of the overall advertising market pressure, the CCS business with high conversion efficiency is recognized by the market and customers, and the overall revenue keeps growing.
Vocational training has a high growth rate and is expected to create a second growth curve. The income of vocational training in the first half of 2022 was 86 million yuan, which was + 789.2% compared with the same period last year. Vocational training matches with the relatively strong knowledge atmosphere of Zhihu Inc. community, and has strategic cooperation. With the deep cultivation of the company in the field of vocational education, the ability of user transformation and service is expected to be further improved, and is expected to create a second growth curve.
Investment advice: we expect that the macro environment and epidemic situation will still have a certain impact on the advertising and commercial solutions business, reducing the company's operating income in 2022-2024 to 3.628x5389max 7.33 billion, and return to its mother's net profit to-18.03pm, maintaining a "buy" rating.
Risk tips: macro-economy is not as expected; industry supervision is strengthened