China's Quora-Like Zhihu Widens Loss 11% in Third Quarter Due to Bad Bets
Xu Wei
DATE:  Dec 01 2022
/ SOURCE:  Yicai
China's Quora-Like Zhihu Widens Loss 11% in Third Quarter Due to Bad Bets China's Quora-Like Zhihu Widens Loss 11% in Third Quarter Due to Bad Bets

(Yicai Global) Dec. 1 -- Zhihu, a Chinese question-and-answer platform, deepened its net loss in the third quarter due to poor investments despite its rising revenue.

From July to September, Zhihu recorded a net loss of CNY300 million (USD42.2 million), up 11 percent from a year ago, the Beijing-based Quora-like platform wrote in its earnings report published yesterday.

Revenue climbed 11 percent to CNY912 million over the quarter. In the first nine months this year, revenue surged by 28 percent to CNY2.5 billion (USD350.2 million). Meanwhile, the platform's net loss increased by 13 percent to CNY1.4 billion.

Zhihu had 97 million monthly active users in the third quarter, down from 101 million. But an increasing number of users were paying as the scale of the subscriber base was 10.9 million, up 88 percent, generating CNY335 million.

The company made some unfortunate investments as its fair value of financial instruments slipped to negative CNY79.3 million (USD11.2 million) in comparison to a profit of CNY11.1 million a year ago.

Advertising revenue was down but that of training increased. Zhihu's vocational training business surged almost six times to CNY78 million. But revenue from ads dropped almost 39 percent to CNY197 million because China’s online advertising sector was greatly affected by the challenging macroeconomic conditions and the recurring Covid-19 outbreaks, the firm said.

Content and community focus are key. "In the third quarter, we made further strides executing our 'community ecosystem first' strategy, shifting our focus to quality user growth and bolstering the strength and resilience of our content-centric business model," Chairman Yuan Zhou said.

Zhihu's stock price [HKG: 2390] closed 2.2 percent lower at HKD17.76 (USD2.30).

Editor: Emmi Laine, Xiao Yi

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Keywords:   Zhihu,Financial statements