Zhihu (ZH) has been a big winner for us, up ~40% since it was a best Long three months ago and has significantly outperformed its peers and the China indexes.
ZH is laser-focused on growing its content-e-commerce solutions business aka Zhi+ and further establishing itself as a new content leader among the various video platforms.
Videolization is a popular trend these days, and ZH"s highly respected name in the content communities gives it confidence that it can monetize this new channel.
ZH is spending more on ads in Q2 2021 as evidenced by my proprietary ad tracker, as it launched new brand campaigns to attract a diverse audience base and especially highly talented, video content creators.
Sales and marketing expenses as % of MAUs will likely rise in Q2 2021 but investors should care more about the traffic growth, given ZH is in the early innings of its ramp.
My channel checks on its Goodie Recommendations are positive with ~5% growth in its followers each month. This is good news for attracting more FMCG merchants onto its content e-commerce platform.
FMCG has been the biggest contributor to their merchant base. In addition, I expect Recommended Goodies GMV to continue to grow at a triple digit pace.
Furthermore, ZH has got some social media buzz as a good resource, leading up to the high schoolers' preparation for the national college entrance exam (Gaokao) on June 7-9.
I've often characterized ZH as a mini-Bilibili (BILI). There is some overlap BILI and ZH users, and ZH's biggest role model is BILI. I mentioned in my deep dive that ZH has many lessons to learn from BILI.
BILI has a market cap of US$45bn. At US$6bn market cap, ZH has a bright future ahead if it can imitate what BILI has done well. ZH remains my top pick in my space.