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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

OR

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission File Number: 001-40253

Zhihu Inc.

(Exact Name of Registrant as Specified in Its Charter)

N/A

(Translation of Registrant’s Name into English)

Cayman Islands

(Jurisdiction of Incorporation or Organization)

A5 Xueyuan Road

Haidian District, Beijing 100083

People’s Republic of China

(Address of Principal Executive Offices)

Henry Dachuan Sha, Chief Financial Officer

Telephone: +86 (10) 8271-6605

Email: shadachuan@zhihu.com

A5 Xueyuan Road

Haidian District, Beijing 100083

People’s Republic of China

(Name, Telephone, Email and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12 (b) of the Act:

Title of Each Class

    

Trading Symbol

    

Name of Each Exchange on Which Registered

American depositary shares (each representing 0.5 Class A ordinary shares, par value US$0.000125 per share)

ZH

 

New York Stock Exchange

Class A ordinary shares, par value US$0.000125 per share

2390

 

The Stock Exchange of Hong Kong Limited

Securities registered or to be registered pursuant to Section 12 (g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15 (d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report : 297,419,878 Class A ordinary shares (excluding 4,841,744 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plan), par value US$0.000125 per share, and 18,940,652 Class B ordinary shares, par value US$0.000125 per share, as of December 31, 2022.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

  Yes       No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

  Yes       No

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  Yes       No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

  Yes      No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Emerging Growth Company

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.  

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).  

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP

    

International Financial Reporting Standards

    

Other

as issued by the International Accounting Standards Board

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

  Item 17     Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

  Yes       No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

  Yes      No

TABLE OF CONTENTS

INTRODUCTION

1

FORWARD-LOOKING STATEMENTS

3

PART I

4

Item 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

4

Item 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

4

Item 3.

KEY INFORMATION

4

Item 4.

INFORMATION ON THE COMPANY

60

Item 4A.

UNRESOLVED STAFF COMMENTS

98

Item 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

98

Item 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

112

Item 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

123

Item 8.

FINANCIAL INFORMATION

124

Item 9.

THE OFFER AND LISTING

125

Item 10.

ADDITIONAL INFORMATION

126

Item 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

138

Item 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

139

PART II

145

Item 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

145

Item 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

145

Item 15.

CONTROLS AND PROCEDURES

145

Item 16.

[RESERVED]

147

Item 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

147

Item 16B.

CODE OF ETHICS

147

Item 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

147

Item 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

148

Item 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

148

Item 16F.

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

148

Item 16G.

CORPORATE GOVERNANCE

148

Item 16H.

MINE SAFETY DISCLOSURE

149

Item 16I.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

149

Item 16J.

INSIDER TRADING POLICIES

149

PART III

150

Item 17.

FINANCIAL STATEMENTS

150

Item 18.

FINANCIAL STATEMENTS

150

Item 19.

EXHIBITS

150

INTRODUCTION

In this annual report, unless otherwise indicated or unless the context otherwise requires:

“ADRs” refers to the American depositary receipts that evidence the ADSs;
“ADSs” refers to the American depositary shares, two of which represent one Class A ordinary share;
“CAGR” refers to compound annual growth rate;
“CCASS” refers to the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited;
“China” or “PRC” refers to the People’s Republic of China;
“content creators” refers to users who have generated at least one piece of content;
“Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;
“Hong Kong dollars” or “HK$” refers to Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong Listing Rules” refers to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented, or otherwise modified from time to time;
“Hong Kong Stock Exchange” refers to The Stock Exchange of Hong Kong Limited;
“Macao” refers to the Macao Special Administrative Region of the People’s Republic of China;
“mobile MAUs” refers to the number of mobile devices that launch our mobile app at least once in a given month;
“monthly active users” or “MAUs” refers to the sum of our mobile MAUs and the number of logged-in users who visit our PC or mobile website at least once in a given month, after eliminating duplicates. “average MAUs” for a period is calculated by dividing the sum of MAUs for each month during a specified period by the number of months in the period;
“monthly subscribing members” refers to the number of our Yan Selection members in a specified month; and “average monthly subscribing members” for a period is calculated by dividing the sum of monthly subscribing members for each month during a specified period by the number of months in the period;
“monthly viewers” refers to the sum of the number of mobile devices that launch our mobile app at least once in a specified month and the number of independent cookies that visit our PC or mobile website at least once in a specified month. The number of monthly viewers is calculated by treating each distinguishable independent cookie or mobile device as a separate user even though some individuals may access our community with more than one independent cookie or using more than one mobile device and multiple individuals may access our community with the same independent cookie or using the same mobile device;
“ordinary shares” or “shares” refers to our Class A ordinary shares and Class B ordinary shares, par value US$0.000125 per share;
“paying ratio” for a given period refers to the ratio of our average monthly subscribing members divided by the average MAUs in the period;

1

“PCAOB” refers to Public Company Accounting Oversight Board, a nonprofit corporation established by the United States Congress to oversee the audits of public companies, among others;
“PGC” refers to professionally generated content;
“piece of content” refers to any piece of questions, answers, articles, videos, groups, or live streaming in our community;
“Renminbi” or “RMB” refers to the legal currency of China;
“SEC” refers to the United States Securities and Exchange Commission;
“SFC” refers to Securities and Futures Commission of Hong Kong;
“UGC” refers to user-generated content;
“U.S. dollars” or “US$” refers to the legal currency of the United States;
“VIEs” refers to variable interest entities, which are companies established in China that have entered into a series of contractual arrangements with their respective shareholders and our PRC subsidiaries. Under these contractual arrangements, Zhihu Inc. has a “controlling financing interest” in the VIEs as defined in FASB ASC 810 so that it is considered the primary beneficiary of the VIEs for accounting purposes only and thus consolidates each of these entities under U.S. GAAP. The VIEs that Zhihu Inc. consolidates under U.S. GAAP include Beijing Zhizhe Tianxia Technology Co., Ltd., or Zhizhe Tianxia, Shanghai Pinzhi Education Technology Co., Ltd., or Shanghai Pinzhi, and Shanghai Biban Network Technology Co., Ltd., or Shanghai Biban;
“WFOEs” refers to wholly foreign-owned enterprises, and “our WFOEs” refers to Zhizhe Sihai (Beijing) Technology Co., Ltd., or Zhizhe Sihai, Shanghai Zhishi Technology Co., Ltd., or Shanghai Zhishi, and Shanghai Paya Information Technology Co., Ltd., or Shanghai Paya; and
“Zhihu,” “we,” or “our company” refers to Zhihu Inc., a Cayman Islands holding company, and its subsidiaries (where the context requires, in respect of the period prior to our company becoming the holding company of its present subsidiaries, such subsidiaries as if they were subsidiaries of our company at the relevant time) and, in the context of describing our operations and consolidated financial information, the VIEs and their respective subsidiaries, unless otherwise indicated herein. For the avoidance of confusion, “our holding company” or “Zhihu Inc.” only refers to Zhihu Inc., and unless the context requires otherwise, include its predecessor entities; “our subsidiaries” refers to the entities in which Zhihu Inc. holds direct or indirect equity ownership, and thus consolidates their financial results; for “variable interest entities” or “VIEs,” see stand-alone definition sets forth above. Zhihu Inc. does not conduct operations of its own and does not have any equity ownership in the VIEs.

Any discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.

Our reporting currency is Renminbi. This annual report contains translations from Renminbi to U.S. dollars solely for the convenience of the reader. Unless otherwise stated, all translations from Renminbi to U.S. dollars were made at a rate of RMB6.8972 to US$1.00, which was the exchange rate in effect as of December 30, 2022 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The exchange rate in effect as of April 21, 2023 was RMB6.8920 to US$1.00. We make no representation that any Renminbi amounts referred to in this annual report could have been, or could be, converted into U.S. dollars at any particular rate, or at all.

2

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that reflect our current expectations and views of future events. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Known and unknown risks, uncertainties and other factors, including those included in “Item 3. Key Information—D. Risk Factors,” may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify some of these forward-looking statements by words or phrases such as “may,” “might,” “will,” “would,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “future,” “potential,” “continue,” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements include statements relating to:

our goals and strategies,
our future business development, financial condition, and results of operations,
the expected outlook of the online content market in China,
our expectations regarding demand for and market acceptance of our products and services,
our expectations regarding our relationships with our users, clients, business partners, and other stakeholders,
competition in our industry,
relevant government policies and regulations relating to our industry, and
general economic and business conditions globally and in China.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview,” “Item 5. Operating and Financial Review and Prospects,” and other sections in this annual report. You should read thoroughly this annual report and the documents that we refer to in this annual report with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.

We operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

3

PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.    KEY INFORMATION

Our Holding Company Structure and Contractual Arrangements with the VIEs and Their Shareholders

The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIEs, as of the date of this annual report.

Graphic

Notes:

(1)Yuan Zhou and Dahai Li each holds 99.31% and 0.69% of the equity interests in Zhizhe Tianxia, respectively.

(2)

Zhizhe Tianxia owns, through its wholly-owned subsidiaries, 55% equity interests in each of Shanghai Pinzhi Education Technology Co., Ltd., or Shanghai Pinzhi, and Shanghai Biban Network Technology Co., Ltd., or Shanghai Biban. Shanghai Pinzhi and its shareholders entered into a series of contractual arrangements with Shanghai Zhishi Technology Co., Ltd., our subsidiary in China, and Shanghai Biban and its shareholders entered into a series of contractual arrangements with Shanghai Paya Information Technology co., Ltd, or Shanghai Paya, our subsidiary in China.

4

Zhihu Inc. is a Cayman Islands holding company with no equity ownership in its VIEs and their subsidiaries and not a Chinese operating company. We conduct our operations in China through (i) our PRC subsidiaries and (ii) the VIEs, with which we have maintained contractual arrangements, and their subsidiaries. PRC laws and regulations restrict and impose conditions on foreign investment in value-added telecommunication services and certain other businesses. Accordingly, we operate these businesses in China through the VIEs and their subsidiaries, and rely on contractual arrangements among our PRC subsidiaries, the VIEs, and their nominee shareholders to direct the business operations of the VIEs. Such structure enables investors to share economic interests in China-based companies in sectors where foreign direct investment is prohibited or restricted under PRC laws and regulations. Revenues contributed by the VIEs accounted for 27.4%, 25.9%, and 43.0% of our total revenues in 2020, 2021, and 2022, respectively. As used in this annual report, “we,” “our company,” or “Zhihu” refers to Zhihu Inc., its subsidiaries, and, in the context of describing our operations and consolidated financial information, the VIEs in China, including Beijing Zhizhe Tianxia Technology Co., Ltd., or Zhizhe Tianxia, Shanghai Pinzhi Education Technology Co., Ltd., or Shanghai Pinzhi, and Shanghai Biban Network Technology Co., Ltd., or Shanghai Biban. Investors in the ADSs are not purchasing any equity interest in the VIEs in China but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands, and may never directly hold equity interests in the VIEs in China.

A series of contractual agreements, including exclusive business cooperation agreement or exclusive technology development, consultancy and services agreements, shareholders’ rights entrustment agreement or powers of attorney, share pledge agreements, and exclusive option agreements, have been entered into by and among our PRC subsidiaries, the VIEs, and the VIEs’ nominee shareholders. There is no material difference between the effect of each set of contractual arrangements. As advised by Commerce & Finance Law Offices, our PRC legal counsel, (i) as of the date of this annual report, the ownership structures of our WFOEs and the VIEs in China do not violate any applicable and explicit PRC laws and regulations currently in effect; (ii) subject to the disclosure in this annual report, each agreement of the contractual arrangements between our WFOEs, the VIEs, and the VIEs’ nominee shareholders governed by PRC law is valid, binding, and enforceable in accordance with their terms, subject to enforceability to applicable laws affecting creditors’ rights generally, the discretion of relevant government authorities in exercising their authority in connection with the interpretation and implementation thereof and the application of relevant PRC laws and policies thereto, and general equity principles; and (iii) each of said agreement does not violate any applicable and explicit PRC laws currently in effect. As a result of the contractual arrangements, we are considered the primary beneficiary of the VIEs for accounting purposes, and Zhihu Inc. has consolidated the results of operations, financial position, and cash flows of the VIEs in its consolidated financial statements under U.S. GAAP. The contractual arrangements with the VIEs provide us with a “controlling financial interest” in the VIEs as defined in FASB ASC 810 by entitling us to (i) the power to direct activities of the VIEs that most significantly affect their economic performance, and (ii) the right to receive the economic benefits from the VIEs that could be significant to them. Neither Zhihu Inc. nor its investors has an equity ownership (including foreign direct investment) in, or control through such equity ownership of, the VIEs, and the contractual arrangements are not equivalent to an equity ownership in the business of the VIEs. For more details of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the VIEs and Their Shareholders.”

However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs and their subsidiaries and we may incur substantial costs to enforce the terms of the arrangements. As such, the VIE structure involves unique risks to investors of our Cayman Islands holding company. In addition, the legality and enforceability of the contractual agreements by and among our PRC subsidiaries, the VIEs, and the VIEs’ nominee shareholders, as a whole, have not been tested in a court of law in China. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—Our contractual arrangements may not be as effective in providing operational control as direct ownership and shareholders of the VIEs may fail to perform their obligations under our contractual arrangements.” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The equity holders, directors, and executive officers of the VIEs, as well as our employees who execute other strategic initiatives may have potential conflicts of interest with our company.”

5

There are also substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIEs and their nominee shareholders. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or, if adopted, what they would provide. If we or any of the VIEs is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required licenses, permits, registrations, or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating our business do not comply with PRC laws and regulations, or if these regulations or their interpretations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—Our current corporate structure and business operations may be affected by the Foreign Investment Law.”

Our corporate structure is subject to risks associated with our contractual arrangements with the VIEs. If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our Cayman Islands holding company, our PRC subsidiaries, and the VIEs and their subsidiaries, and investors of our company face uncertainty with respect to potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole. The PRC regulatory authorities could disallow the VIE structure, which would likely result in a material change in our operations and cause the value of our securities, including those that we may register for sale, to significantly decline or become worthless. For a detailed description of the risks associated with our corporate structure, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure.”

We face various legal and operational risks and uncertainties relating to doing business in China. Our business operations are primarily conducted in China, and we are subject to complex and evolving PRC laws and regulations. For example, the PRC government has recently issued statements and regulatory actions relating to areas such as the use of contractual arrangements in certain industries, regulatory approvals on overseas offerings and listings by, and foreign investment in, China-based issuers, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. It remains uncertain how PRC government authorities will regulate overseas listings and offerings in general and whether we can fully comply with the relevant regulatory requirements, including completing filings with the China Securities Regulatory Commission, or the CSRC, pursuant to the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five supporting guidelines released by the CSRC and effective on March 31, 2023, and whether we are required to complete other filings or obtain any specific regulatory approvals from the CSRC, the Cyberspace Administration of China, or the CAC, or any other PRC government authorities for our overseas offerings and listings, as applicable. In addition, if future regulatory developments mandate clearance of cybersecurity review or other specific actions to be completed by China-based companies listed on foreign stock exchanges, such as us, we face uncertainties as to whether such clearance can be timely obtained, or at all. These risks may impact our ability to conduct certain businesses, accept foreign investments, or list and conduct offerings on a stock exchange in the United States or another foreign country. These risks could result in a material adverse change in our operations and the value of our Class A ordinary shares and the ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline or become worthless. For a detailed description of risks relating to doing business in China, see “Item 3.D. Key Information—Risk Factors—Risks Relating to Doing Business in China.”

The PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations in this nature, such as data security or anti-monopoly related regulations, may cause the value of such securities to significantly decline. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PRC government’s oversight over our business operations could result in a material adverse change in our operations and the value of our Class A ordinary shares and the ADSs.”

6

Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our Class A ordinary shares and the ADSs. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The legal system in China embodies uncertainties which could limit the legal protections available to us or impose additional requirements and obligations on our business, and PRC laws, rules, and regulations can evolve quickly, which may materially and adversely affect our business, financial condition, and results of operations.”

The Holding Foreign Companies Accountable Act

Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading in the United States under the HFCAA. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspection” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely registered public accounting firms located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.”

7

Permissions Required from the PRC Authorities for Our Operations

We conduct our business primarily through our PRC subsidiaries and the VIEs in China. Our operations in China are governed by PRC laws and regulations. As of the date of this annual report, as advised by Commerce & Finance Law Offices, our PRC legal counsel, except as disclosed in this annual report and subject to the uncertainties with respect to the interpretation and application of PRC laws, regulations, and policies, our PRC subsidiaries, the VIEs, and the VIEs’ subsidiaries have obtained the requisite licenses, permits, filings, and approvals from the PRC government authorities that are material for their business operations in China, including, among others, Value-Added Telecommunication Business Operation Licenses, or ICP Licenses, Internet Cultural Business Licenses, or ICB Licenses, Radio and Television Program Production and Operation Licenses, an Internet Medicine Information Services Qualification, and Publication Operation Licenses. However, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we cannot assure you that our PRC subsidiaries and the VIEs have obtained all the permits or licenses required for conducting businesses in China. And we may be required to obtain additional licenses, permits, filings, or approvals for our business operations in the future. We cannot assure you that we will be able to obtain such additional licenses, permits, qualifications, or approvals in a timely manner, or at all. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—If we fail to obtain and maintain the requisite licenses and approvals required under the complex regulatory environment applicable to our businesses in China, or if we are required to take compliance actions in this regard, our business, financial condition, and results of operations may be materially and adversely affected.”

For example, on December 28, 2021, the CAC and several other PRC government authorities jointly issued the Cybersecurity Review Measures, which took effect on February 15, 2022. Pursuant to the Cybersecurity Review Measures, critical information infrastructure operators that intend to purchase internet products and services and internet platform operators engaging in data processing activities that affect or may affect national security must be subject to the cybersecurity review. The Cybersecurity Review Measures further stipulate that if an internet platform operator has personal information of over one million users and pursues a foreign listing, it must be subject to the cybersecurity review. In addition, on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Offering and Listing Measures, which came into effect on March 31, 2023. On the same day, the CSRC also published a series of guidance rules and Q&As in connection with the implementation of the Overseas Offering and Listing Measures. The Overseas Offering and Listing Measures establishes a new filing-based regime to regulate overseas offerings and listings by PRC domestic companies, according to which an overseas offering of securities (including shares, depository receipts, corporate bonds convertible into shares and other securities in nature of equity) and listing by a PRC domestic company, either in direct or indirect manner, has to be filed with the CSRC. On February 17, 2023, the CSRC also held a press conference for the release of the Overseas Offering and Listing Measures, which, among other things, clarifies that companies that have already been listed overseas before the effective date of the Overseas Offering and Listing Measures are not required to complete the overseas listing filing immediately, but shall complete filings as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC.

As of the date of this annual report, we have not been asked to obtain or denied any permission by any PRC government authority in connection with our historical issuances of securities to foreign investors. Based on the foregoing and pursuant to current PRC laws and regulations and in connection with our historical issuances of securities to foreign investors that have been completed before the effective date of the Overseas Offering and Listing Measures, as advised by Commerce & Finance Law Offices, our PRC legal counsel, we, our PRC subsidiaries, and the VIEs, (i) are not required to obtain permissions from the CSRC despite that we shall be required to go through filing procedures with the CSRC for our future issuance or offering of securities (including shares, depository receipts, corporate bonds convertible into shares, and other securities in nature of equity) to foreign investors if we meet certain conditions set forth in the Overseas Offering and Listing Measures for an indirect overseas offering and listing by a PRC domestic company, and (ii) are not required to go through cybersecurity review by the CAC. However, if any of our holding company, our PRC subsidiaries, and the VIEs are deemed to be a critical information infrastructure operator, or CIIO, or a network platform operator, whose network product or service purchasing or data processing activities affect or may affect national security, we would be required to go through a cybersecurity review by the CAC.

However, the PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas by, and foreign investment in, China-based issuers, and has promulgated certain regulations and rules in this respect. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PRC government’s oversight over our business operations could result in a material adverse change in our operations and the value of our Class A ordinary shares and the ADSs.”

8

Cash and Asset Flows Through Our Organization

Zhihu Inc. is a holding company with no operations of its own. We conduct our operations in China primarily through our PRC subsidiaries and VIEs in China. As a result, although other means are available for us to obtain financing at the holding company level, Zhihu Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and service fees paid by the VIEs and their subsidiaries. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to Zhihu Inc. In addition, under PRC laws and regulations, our PRC subsidiaries are permitted to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Furthermore, our PRC subsidiaries and VIEs and their subsidiaries are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Holding Company Structure.”

The VIEs may transfer cash to the relevant WFOE by paying service fees according to the exclusive business cooperation agreement or exclusive technology development, consultancy and services agreements. In 2020, 2021, and 2022, the total amount of such service fees that VIEs paid to the relevant WFOE under the relevant agreements was RMB159.7 million, RMB45.6 million, and RMB896.3 million (US$130.0 million), respectively.

Under PRC laws and regulations, our PRC subsidiaries and the VIEs and their subsidiaries are subject to certain restrictions with respect to payment of dividends or otherwise transfers of any of their net assets to us. Remittance of dividends by a wholly foreign-owned enterprise out of China is also subject to examination by the banks designated by the PRC State Administration of Foreign Exchange, or the SAFE. These restrictions are benchmarked against the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the net assets of the VIEs in which we have no legal ownership. As of December 31, 2020, 2021, and 2022, the total amount of such restriction to which our PRC subsidiaries and the VIEs and their subsidiaries are subject was RMB754.4 million, RMB3.6 billion, and RMB3.1 billion (US$442.8 million), respectively. For risks relating to the fund flows of our operations in China, see “Item 3. Key Information—Risk Factors—Risks Relating to Doing Business in China—We principally rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our PRC subsidiaries to make payments to us could materially and adversely affect our ability to conduct our business or financial condition.”

Under PRC laws, Zhihu Inc. may fund its PRC subsidiaries only through capital contributions or loans, and fund the VIEs or their subsidiaries only through loans, subject to satisfaction of applicable government registration and approval requirements. As of December 31, 2020, 2021, and 2022, the aggregate amount of capital contribution by Zhihu Inc. to its intermediate holding companies and subsidiaries was RMB5.9 billion, RMB10.5 billion, and RMB10.3 billion (US$1.5 billion), respectively, and the outstanding balance of the principal amount of loans to the VIEs and their subsidiaries was RMB45.7 million, RMB51.7 million, and RMB51.7 million (US$7.5 million), respectively.

In 2020, 2021, and 2022, no assets other than cash were transferred through our organization.

Zhihu Inc. has not declared or paid any cash dividends, nor does it have any present plan to pay any cash dividends on its ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy.” For PRC and United States federal income tax considerations of an investment in our ADSs, see “Item 10. Additional Information—E. Taxation.”

A.[Reserved]

Selected Financial Data

The following selected consolidated statements of operations data and selected consolidated statements of cash flow data for the years ended December 31, 2020, 2021, and 2022 and the selected consolidated balance sheet data as of December 31, 2021 and 2022 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1. Our historical results are not necessarily indicative of results expected for future periods. You should read this selected financial data together with our audited consolidated financial statements and the related notes and information under “Item 5. Operating and Financial Review and Prospects” in this annual report. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP.

9

The following table sets forth our selected consolidated statements of operations data for the years indicated.

For the Year Ended December 31,

2020

2021

2022

    

RMB

    

RMB

    

RMB

    

US$

(in thousands)

Selected Consolidated Statements of Operations Data:

  

 

  

 

  

 

  

Revenues

1,352,196

 

2,959,324

 

3,604,919

 

522,664

Cost of revenues

(594,399)

 

(1,405,423)

 

(1,796,867)

 

(260,521)

Gross profit

757,797

 

1,553,901

 

1,808,052

 

262,143

Selling and marketing expenses

(734,753)

 

(1,634,733)

 

(2,026,468)

 

(293,810)

Research and development expenses

(329,763)

 

(619,585)

 

(763,362)

 

(110,677)

General and administrative expenses

(296,162)

 

(690,292)

 

(621,973)

 

(90,178)

Total operating expenses

(1,360,678)

 

(2,944,610)

 

(3,411,803)

 

(494,665)

Loss from operations

(602,881)

 

(1,390,709)

 

(1,603,751)

 

(232,522)

Investment income

56,087

 

59,177

 

70,380

 

10,204

Interest income

24,751

 

31,305

 

68,104

 

9,874

Fair value change of financial instrument

(68,818)

 

27,846

 

(176,685)

 

(25,617)

Exchange gains/(losses)

62,663

 

(16,665)

 

71,749

 

10,403

Others, net

11,728

 

(4,391)

 

5,983

 

867

Loss before income tax

(516,470)

 

(1,293,437)

 

(1,564,220)

 

(226,791)

Income tax expense

(1,080)

 

(5,443)

 

(14,183)

 

(2,056)

Net loss

(517,550)

 

(1,298,880)

 

(1,578,403)

 

(228,847)

Net income attributable to noncontrolling interests

(2,754)

(399)

Accretions of convertible redeemable preferred shares to redemption value

(680,734)

(170,585)

Net loss attributable to Zhihu Inc.’s shareholders

(1,198,284)

(1,469,465)

(1,581,157)

(229,246)

Net loss per share

  

 

  

 

  

 

  

Basic

(18.36)

 

(6.12)

 

(5.19)

 

(0.75)

Diluted

(18.36)

 

(6.12)

 

(5.19)

 

(0.75)

Weighted average shares used in net loss per share

  

 

  

 

  

 

  

Basic

65,279,970

 

240,174,108

 

304,836,318

 

304,836,318

Diluted

65,279,970

 

240,174,108

 

304,836,318

 

304,836,318

10

The following table sets forth our selected consolidated balance sheet data as of the dates indicated.

As of December 31,

2021

2022

    

RMB

    

RMB

    

US$

(in thousands)

Selected Consolidated Balance Sheet Data:

 

  

 

  

 

  

Cash and cash equivalents

 

2,157,161

4,525,852

656,187

Term deposits

 

2,815,509

948,390

137,504

Short-term investments

 

2,239,596

787,259

114,142

Total current assets

 

8,334,165

7,319,799

1,061,272

Term deposits

 

159,393

Intangible assets, net

 

68,308

80,237

11,633

Total non-current assets

 

471,000

336,440

48,779

Total assets

 

8,805,165

7,656,239

1,110,051

Accounts payable and accrued liabilities

 

1,026,534

916,112

132,824

Salary and welfare payables

 

313,676

283,546

41,110

Contract liabilities

 

239,757

355,626

51,561

Total current liabilities

 

1,897,714

1,824,841

264,578

Net current assets

 

6,436,451

5,494,958

796,694

Total non-current liabilities

 

169,302

137,130

19,882

Total liabilities

 

2,067,016

1,961,971

284,460

Net assets

 

6,738,149

5,694,268

825,591

Total shareholders’ equity

 

6,738,149

5,694,268

825,591

Total liabilities and shareholders’ equity

 

8,805,165

7,656,239

1,110,051

The following table sets forth our selected consolidated statements of cash flow data for the years indicated.

For the Year Ended December 31,

2020

2021

2022

    

RMB

    

RMB

    

RMB

    

US$

(in thousands)

Selected Consolidated Statements of Cash Flow Data:

 

  

 

  

 

  

 

  

Net cash used in operating activities

(244,421)

(440,234)

(1,114,954)

(161,653)

Net cash provided by/(used in) investing activities

430,113

(3,136,503)

3,490,467

506,071

Net cash provided by/(used in) financing activities

9,286

4,876,247

(108,350)

(15,710)

Effect of exchange rate changes on cash and cash equivalents

(137,508)

(100,169)

101,528

14,720

Net increase in cash and cash equivalents

57,470

1,199,341

2,368,691

343,428

Cash and cash equivalents at the beginning of the year

900,350

957,820

2,157,161

312,759

Cash and cash equivalents at the end of the year

957,820

2,157,161

4,525,852

656,187

Financial Information Relating to the VIEs

The following tables present the condensed consolidating schedules for our consolidated variable interest entities and other entities for the years and as of the dates indicated.

11

Selected Condensed Consolidated Statements of Operations and Comprehensive Loss Data

    

For the Year Ended December 31, 2022

    

    

    

WFOEs as

    

    

    

Parent

Other

Primary

VIEs and Their

Consolidated

Company

Subsidiaries

Beneficiaries

Subsidiaries

Eliminations

Total

(RMB in thousands)

Inter-company revenues(1)(4)

 

143,888

 

1,930,305

 

866

 

(2,075,059)

 

Third-party revenues

 

2,034,032

 

22,884

 

1,548,003

 

 

3,604,919

Inter-company cost(1) (4)

 

(1,358,161)

 

(133,729)

 

(582,440)

 

2,074,330

 

Third-party cost

 

(539,352)

 

(639,150)

 

(618,365)

 

 

(1,796,867)

Gross profit

 

280,407

 

1,180,310

 

348,064

 

(729)

 

1,808,052

Others, net

 

(8,083)

 

15,574

 

(1,508)

 

 

5,983

Loss of the VIEs

 

 

(11,027)

 

 

11,027

 

Share of (loss)/income of subsidiaries(2)

(1,502,792)

 

(1,507,327)

 

9,097

 

 

3,001,022

 

Loss before income tax

(1,581,157)

 

(1,487,230)

 

(1,503,674)

 

(4,207)

 

3,012,048

 

(1,564,220)

Income tax expense

 

(3,583)

 

(3,652)

 

(6,948)

 

 

(14,183)

Net loss

(1,581,157)

(1,490,813)

(1,507,326)

(11,155)

3,012,048

(1,578,403)

Net (income)/loss attributable to noncontrolling interests shareholders

 

(2,882)

 

 

128

 

 

(2,754)

Foreign currency translation adjustments

273,310

(276,630)

9,350

267,280

273,310

Comprehensive loss attributable to Zhihu Inc.’s shareholders

(1,307,847)

 

(1,770,325)

 

(1,497,976)

 

(11,027)

 

3,279,328

 

(1,307,847)

For the Year Ended December 31, 2021

    

    

    

WFOEs as

    

    

    

Parent

Other

Primary

VIEs and its

Consolidated

Company

Subsidiaries

Beneficiaries

Subsidiaries

Eliminations

Total

(RMB in thousands)

Inter-company revenues(1)(4)

 

85,835

 

1,817,488

 

196

 

(1,903,519)

 

Third-party revenues

 

2,187,253

 

6,039

 

766,032

 

 

2,959,324

Inter-company cost(1) (4)

 

(1,487,138)

 

(85,844)

 

(330,486)

 

1,903,468

 

Third-party cost

 

(444,113)

 

(587,920)

 

(373,390)

 

 

(1,405,423)

Gross profit

 

341,837

 

1,149,763

 

62,352

 

(51)

 

1,553,901

Others, net

 

11,770

 

(13,075)

 

(3,137)

 

51

 

(4,391)

Loss of the VIEs

 

 

(21,266)

 

 

21,266

 

Share of loss of subsidiaries(2)

(1,268,461)

 

(1,308,592)

 

(1,480)

 

 

2,578,533

 

Loss before income tax

(1,298,880)

 

(1,267,933)

 

(1,308,592)

 

(17,831)

 

2,599,799

 

(1,293,437)

Income tax expense

(2,008)

(3,435)

(5,443)

Net loss

(1,298,880)

 

(1,269,941)

 

(1,308,592)

 

(21,266)

 

2,599,799

 

(1,298,880)

Foreign currency translation adjustments

(143,190)

(65,566)

65,566

(143,190)

Accretions of convertible redeemable preferred shares to redemption value

(170,585)

(170,585)

Comprehensive loss attributable to Zhihu Inc.’s shareholders

(1,612,655)

 

(1,335,507)

 

(1,308,592)

 

(21,266)

 

2,665,365

 

(1,612,655)

12

For the Year Ended December 31, 2020

Parent

Other

WFOEs as Primary

VIEs and their

Consolidated

Company

Subsidiaries

Beneficiaries

Subsidiaries

Eliminations

Total

(RMB in thousands)

    

    

    

    

    

    

Inter-company revenues(1)(4)

 

30,547

 

991,771

 

1,113

 

(1,023,431)

 

Third-party revenues

 

982,821

 

442

 

368,933

 

 

1,352,196

Inter-company cost(1)(4)

 

(804,374)

 

(31,064)

 

(187,993)

 

1,023,431

 

Third-party cost

 

(101,203)

 

(315,598)

 

(177,598)

 

 

(594,399)

Gross profit

 

107,791

 

645,551

 

4,455

 

 

757,797

Loss of the VIEs

 

 

(7,583)

 

 

7,583

 

Share of loss of subsidiaries(2)

(507,712)

 

(524,073)

 

(5,839)

 

 

1,037,624

 

Loss before income tax

(517,550)

 

(513,520)

 

(524,073)

 

(6,534)

 

1,045,207

 

(516,470)

Income tax expense

 

(31)

 

 

(1,049)

 

 

(1,080)

Net loss

(517,550)

(513,551)

(524,073)

(7,583)

1,045,207

(517,550)

Foreign currency translation adjustments

(143,326)

 

(98,859)

 

 

 

98,859

 

(143,326)

Accretions of convertible redeemable preferred shares to redemption value

(680,734)

(680,734)

Comprehensive loss attributable to Zhihu Inc.’s shareholders

(1,341,610)

 

(612,410)

 

(524,073)

 

(7,583)

 

1,144,066

 

(1,341,610)

13

Selected Condensed Consolidated Balance Sheet Data

As of December 31, 2022

    

    

    

WFOEs as

    

    

    

Parent

Other

Primary

VIEs and their

Consolidated

Company

Subsidiaries

Beneficiaries

Subsidiaries

Eliminations

Total

(RMB in thousands)

Cash and cash equivalents

 

197,012

 

1,761,406

 

2,316,675

 

250,759

 

 

4,525,852

Term deposits

 

 

803,714

 

144,676

 

 

 

948,390

Short-term investments

 

 

139,966

 

608,793

 

38,500

 

 

787,259

Trade receivable, net

 

 

701,883

 

10,572

 

121,796

 

 

834,251

Amounts due from related parties

 

 

2,283

 

502

 

22,013

 

 

24,798

Amounts due from group companies(3)(4)

 

1,981

 

153,757

 

317,515

 

8,671

 

(481,924)

 

Prepayments and other current assets

 

7,651

 

27,910

 

95,197

 

68,491

 

 

199,249

Total current assets

 

206,644

 

3,590,919

 

3,493,930

 

510,230

 

(481,924)

 

7,319,799

Property and equipment, net

 

1,723

 

4,754

 

813

 

 

7,290

Intangible assets, net

 

12,300

 

1,813

 

66,124

 

 

80,237

Goodwill

 

22,830

 

 

103,514

 

 

126,344

Net assets of the VIEs

 

 

(18,602)

 

 

(18,602)

 

Investment in subsidiaries(2)

5,527,483

 

2,770,503

 

42,053

 

 

(8,340,039)

 

Right-of-use assets

 

10,109

 

85,238

 

4,772

 

 

100,119

Other non-current assets

 

791

 

12,716

 

8,943

 

 

22,450

Total non-current assets

 

5,527,483

 

2,818,256

 

127,972

 

184,166

 

(8,321,437)

 

336,440

Total assets

 

5,734,127

 

6,409,175

 

3,621,902

 

694,396

 

(8,803,361)

 

7,656,239

Accounts payable and accrued liabilities

4,841

 

319,274

 

404,402

 

187,595

 

 

916,112

Salary and welfare payables

 

17,928

 

255,486

 

10,132

 

 

283,546

Taxes payable

 

6,583

 

15,467

 

3,925

 

 

25,975

Contract liabilities

 

85,717

 

484

 

269,425

 

 

355,626

Amounts due to related parties

 

 

8,861

 

16,000

 

 

24,861

Amounts due to group companies(3) (4)

58,665

 

186,544

 

91,468

 

145,247

 

(481,924)

 

Short term lease liabilities

 

6,491

 

44,271

 

2,428

 

 

53,190

Other current liabilities

16,925

 

110,186

 

15,429

 

22,991

 

 

165,531

Total current liabilities

 

80,431

 

732,723

 

835,868

 

657,743

 

(481,924)

 

1,824,841

Long term lease liabilities

 

 

3,875

 

36,967

 

2,525

 

 

43,367

Deferred tax liabilities

 

 

3,075

 

 

8,555

 

 

11,630

Other non-current liabilities

 

 

51,760

 

 

30,373

 

 

82,133

Total non-current liabilities

 

 

58,710

 

36,967

 

41,453

 

 

137,130

Total liabilities

 

80,431

 

791,433

 

872,835

 

699,196

 

(481,924)

 

1,961,971

Total Zhihu Inc.’s shareholders’ equity

 

5,653,696

 

5,614,860

 

2,749,067

 

(18,602)

 

(8,345,325)

 

5,653,696

Noncontrolling interests

 

 

2,882

 

 

13,802

 

23,888

 

40,572

Total shareholders’ equity

 

5,653,696

 

5,617,742

 

2,749,067

 

(4,800)

 

(8,321,437)

 

5,694,268

Total liabilities and shareholders’ equity

 

5,734,127

 

6,409,175

 

3,621,902

 

694,396

 

(8,803,361)

 

7,656,239

14

As of December 31, 2021

    

    

    

WFOEs as

    

    

    

Parent

Other

Primary

VIEs and their

Consolidated

Company

Subsidiaries

Beneficiaries

Subsidiaries

Eliminations

Total

(RMB in thousands)

Cash and cash equivalents

 

94,427

 

478,265

 

1,525,156

 

59,313

 

 

2,157,161

Term deposits

 

 

2,815,509

 

 

 

 

2,815,509

Short-term investments

 

 

941,909

 

863,182

 

434,505

 

 

2,239,596

Trade receivable, net

 

 

771,225

 

2,121

 

58,282

 

 

831,628

Amounts due from related parties

 

 

5,818

 

4,407

 

7,971

 

 

18,196

Amounts due from group companies(3) (4)

 

12,711

 

62,646

 

1,553,054

 

7,742

 

(1,636,153)

 

Prepayments and other current assets

 

42,232

 

33,149

 

145,941

 

50,753

 

 

272,075

Total current assets

 

149,370

 

5,108,521

 

4,093,861

 

618,566

 

(1,636,153)

 

8,334,165

Property and equipment, net

 

2,700

 

6,608

 

557

 

 

9,865

Intangible assets, net

 

 

2,122

 

66,186

 

 

68,308

Goodwill

 

 

 

73,663

 

 

73,663

Net assets of the VIEs

 

 

22,613

 

 

(22,613)

 

Investment in subsidiaries(2)

6,666,713

3,260,373

(14,905)

(9,912,181)

Long-term investments

19,127

19,127

Term deposits

159,393

159,393

Right-of-use assets

14,504

106,130

5,878

126,512

Other non-current assets

 

791

 

13,098

 

243

 

 

14,132

Total non-current assets

 

6,666,713

 

3,456,888

 

135,666

 

146,527

 

(9,934,794)

 

471,000

Total assets

 

6,816,083

 

8,565,409

 

4,229,527

 

765,093

 

(11,570,947)

 

8,805,165

Accounts payable and accrued liabilities

30,828

 

455,139

 

420,510

 

120,057

 

 

1,026,534

Salary and welfare payables

 

29,956

 

281,247

 

2,473

 

 

313,676

Taxes payable

 

3,359

 

60,317

 

2,508

 

 

66,184

Contract liabilities

 

108,994

 

343

 

130,420

 

 

239,757

Amounts due to related parties

 

 

67,288

 

16,303

 

 

83,591

Amounts due to group companies(3) (4)

 

54,601

 

1,139,697

 

21,444

 

420,411

 

(1,636,153)

 

Short term lease liabilities

 

5,927

 

32,985

 

1,613

 

 

40,525

Other current liabilities

 

89,204

 

15,706

 

22,537

 

 

127,447

Total current liabilities

 

85,429

 

1,832,276

 

899,840

 

716,322

 

(1,636,153)

 

1,897,714

Long term lease liabilities

9,130

69,314

3,689

82,133

Deferred tax liabilities

14,030

14,030

Other non-current liabilities

64,700

8,439

73,139

Total non-current liabilities

73,830

69,314

26,158

169,302

Total liabilities

 

85,429

 

1,906,106

 

969,154

 

742,480

 

(1,636,153)

 

2,067,016

Total Zhihu Inc.’s shareholders’ equity

6,730,654

 

6,651,808

 

3,260,373

 

22,613

 

(9,934,794)

 

6,730,654

Noncontrolling interests

7,495

7,495

Total shareholders’ equity

6,730,654

 

6,659,303

 

3,260,373

 

22,613

 

(9,934,794)

 

6,738,149

Total liabilities and shareholders’ equity

6,816,083

 

8,565,409

 

4,229,527

 

765,093

 

(11,570,947)

 

8,805,165

15

Selected Condensed Consolidated Statements of Cash Flow Data

    

For the Year Ended December 31, 2022

Parent

Other

WFOEs as Primary

VIE and their

Consolidated

Company

    

Subsidiaries

    

Beneficiaries

    

Subsidiaries

    

Eliminations

    

Total

    

(RMB in thousands)

Purchases of goods and services from group companies(1)

 

(2,429,435)

 

(98,100)

 

(906,100)

 

3,433,635

 

Sales of goods and services to group companies(1)

 

107,900

 

3,325,735

 

 

(3,433,635)

 

Other operating/administrative activities with external parties

(51,752)

 

1,348,530

 

(3,139,585)

 

727,853

 

 

(1,114,954)

Net cash (used in)/provided by operating activities

(51,752)

 

(973,005)

 

88,050

 

(178,247)

 

 

(1,114,954)

Purchases of short-term investments

 

(4,394,721)

 

(4,638,000)

 

(1,513,535)

 

 

(10,546,256)

Proceeds of maturities of short-term investments

 

5,215,100

 

4,906,959

 

1,924,071

 

 

12,046,130

Purchases of term deposits

 

(3,426,857)

 

(144,833)

 

 

 

(3,571,690)

Proceeds from withdrawal of term deposits

 

5,768,675

 

 

 

 

5,768,675

Repayment from subsidiaries of investment

256,942

(256,942)

Investment in subsidiaries(2)

 

(649,935)

 

 

 

649,935

 

Other investing activities with external parties

 

(19,782)

 

(145,767)

 

(40,843)

 

 

(206,392)

Net cash provided by/(used in) investing activities

256,942

 

2,492,480

 

(21,641)

 

369,693

 

392,993

 

3,490,467

Repayment from subsidiaries of investment

 

(256,942)

 

 

 

256,942

 

Investment from group companies(2)

 

 

649,935

 

 

(649,935)

 

Payments for repurchase of shares

(127,962)

(127,962)

Other financing activities with external parties

19,612

 

 

 

 

 

19,612

Net cash (used in)/ provided by financing activities

(108,350)

 

(256,942)

 

649,935

 

 

(392,993)

 

(108,350)

Effect of exchange rate changes on cash and cash equivalents

5,745

 

20,608

 

75,175

 

 

 

101,528

Net increase in cash and cash equivalents

102,585

 

1,283,141

 

791,519

 

191,446

 

 

2,368,691

Cash and cash equivalents at beginning of the year

94,427

 

478,265

 

1,525,156

 

59,313

 

 

2,157,161

Cash and cash equivalents at end of the year

197,012

 

1,761,406

 

2,316,675

 

250,759

 

 

4,525,852

16

    

For the Year Ended December 31, 2021

Parent

Other

WFOEs as Primary

VIE and their

Consolidated

Company

    

Subsidiaries

    

Beneficiaries

    

Subsidiaries

    

Eliminations

    

Total

    

(RMB in thousands)

Purchases of goods and services from group companies(1)

 

(676,191)

 

(95,561)

 

(45,579)

 

817,331

 

Sales of goods and services to group companies(1)

 

115,561

 

701,770

 

 

(817,331)

 

Other operating/administrative activities with external parties

(3,182)

 

1,490,154

 

(2,359,237)

 

432,031

 

 

(440,234)

Net cash (used in)/provided by operating activities

(3,182)

 

929,524

 

(1,753,028)

 

386,452

 

 

(440,234)

Purchases of short-term investments