Shares of Chinese internet company Zhihu Inc. plunged in their Hong Kong trading debut, falling by as much as 27% to 23.45 Hong Kong dollars. The stock was recently 20% lower at HK$25.50.
The question-and-answer website operator had fixed the final offer price of HK$32.06 after earlier setting the maximum offer price at HK$51.80. With 26 million shares offered, this would have taken the deal size to HK$1.35 billion.
Notable investors include Tencent Holdings Ltd. 700,
Zhihu said it had about 92.4 million monthly active users in 2021, compared with 64.2 million in 2020. The company posted a net loss of 1.3 billion yuan ($201.5 million) in 2021 versus CNY517.6 million in 2020, with 2021 revenue rising to CNY3.0 billion from CNY1.4 billion the previous year.
“We expect to continue incurring net loss and net operating cash outflow in the near future” as the company continues investing in its content ecosystem and portfolio to solidify organic growth, Zhihu said.
Credit Suisse and JPMorgan are among banks advising on Zhihu’s share offer.