Zhihu homecoming raises HKD834m

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Q&A platform Zhihu raised HKD834 million (USD106.3 million) in a homecoming IPO on HKEX in a deal that saw Skadden advising the issuer on Hong Kong and US law, Han Kun Law Offices on China law and Maples Group as Cayman Islands counsel.

Joint sponsors and underwriters including Credit Suisse, JP Morgan, CICC and CMB International Capital, were advised on Hong Kong and US law by Clifford Chance while Jingtian & Gongcheng advised on PRC law.

Zhihu made its Hong Kong IPO by way of WVR (weighted voting rights) on 22 April pricing the 26 million shares on offer at HKD32.06 each – more than 38% lower than the maximum IPO price of HKD51.8. The public response in Hong Kong was lukewarm with a 100% winning rate of a lot, whereas the international placing was more than 3.37 times oversubscribed.

The total 26 million shares issued were cashed out by early venture investors, lowering the ratio of venture funds, tech giant Tencent retains a 12.8% stake.

Zhihu shares had traded on the NYSE over the past year but it decided on a homecoming by dual primary listing for the future with inclusion in the Southbound Stock Connect list to reach mainland China investors. Stocks in the two bourses, however, cannot be circulated across the markets, making for differences in price performance.

According to the company’s 2021 report, average monthly active users stood at 95.9 million, representing a growth of 40% from 2020. Revenue reached RMB2.9 billion (USD459 million), a year-on-year increase of 119%. The adjusted net loss was 1.2 times higher to RMB750 million.

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