SCHEDULE: Zhihu Insider Ownership Rises to 8% After Share Buyback

Plus Channel Limited and Kastle Limited, entities holding shares for Zhihu Inc.'s incentive plan, increased their beneficial ownership to 8.0% of Class A ordinary shares through recent repurchases.

Summary

• Reporting Persons, Plus Channel Limited and Kastle Limited, now beneficially own 20,027,987 Class A ordinary shares of Zhihu Inc.
• This represents 8.0% of the total 249,124,676 issued and outstanding Class A ordinary shares as of February 28, 2025.
• The ownership includes 19,160,487 Class A ordinary shares in the form of 6,386,829 American Depositary Shares (ADSs) and 867,500 direct Class A ordinary shares.
• The increase in ownership is due to continued share repurchases on the New York Stock Exchange and the Stock Exchange of Hong Kong Limited.
• Funds for these repurchases were provided by Zhihu Inc. from its working capital.
• The shares are held on trust under Zhihu Inc.'s 2022 share incentive plan.
• A material change occurred on September 17, 2025, with the repurchase of 188,916 Class A ordinary shares (62,972 ADSs).

Sentiment

Score: 7

Explanation: The filing indicates increased insider ownership through share repurchases for an incentive plan, funded by working capital. This generally signals management confidence and a commitment to aligning interests, which is positive for shareholders. No negative information is presented.

Positives

• Increased insider ownership (8.0%) signals confidence in the company's future prospects.
• Share repurchases can reduce the number of outstanding shares, potentially increasing earnings per share.
• The use of the Issuer's working capital for repurchases suggests healthy liquidity and financial stability.
• Shares are held for a share incentive plan, aligning management and employee interests with those of shareholders.

Future Outlook

The filing indicates a continued strategy of share repurchases, funded by the Issuer's working capital, to support the company's share incentive plan. This suggests an ongoing commitment to aligning employee and management interests with shareholder value.

Management Comments

• The Reporting Persons hold the Class A ordinary shares they beneficially owned on trust under the Issuer's share incentive plan adopted in 2022.

Industry Context

Share repurchases are a common strategy for companies to return value to shareholders, reduce share count, and signal confidence. For a technology or content platform company like Zhihu, using shares for incentive plans is standard practice to attract and retain talent. Increased insider ownership, even through a trust, can be viewed positively by the market as it aligns interests.

Comparison to Industry Standards

• Many technology companies, including peers in the content and social media space, utilize share incentive plans to attract and retain key talent, a standard practice for aligning employee interests with company performance.
• Share repurchase programs are a common capital allocation strategy among mature and growing companies, often seen in large tech firms like Apple or Meta, to enhance shareholder value and manage dilution from equity compensation.
• An 8.0% beneficial ownership by entities tied to an incentive plan is a significant stake, comparable to substantial institutional holdings, and suggests a strong internal commitment to the company's long-term success.

Corporate Governance

Related Party Transactions

• Plus Channel Limited is wholly-owned by Kastle Limited.
• Funds for share repurchases were provided by the Issuer (Zhihu Inc.) from its working capital to the Reporting Persons (Plus Channel Limited and Kastle Limited) for the share incentive plan.

Stakeholder Impact

• Shareholders: Potential positive impact due to increased insider ownership, share repurchases reducing outstanding shares, and alignment of management interests.
• Employees: Benefits from the share incentive plan, fostering retention and motivation.
• Company: Strengthened corporate governance through the incentive plan, efficient use of working capital for share repurchases.

Next Steps

• Continued operation of the 2022 share incentive plan.
• Potential for further share repurchases by the Reporting Persons.

Key Dates

Recommendation

The filing details an increase in beneficial ownership by entities associated with Zhihu Inc.'s share incentive plan, reaching 8.0% of Class A ordinary shares. This is a positive signal, indicating management confidence and alignment of interests through ongoing share repurchases funded by the company's working capital. However, this is an update on ownership structure and capital allocation rather than a direct report on operational performance or significant new strategic initiatives. While supportive, it does not present new fundamental information that would typically trigger a 'buy' or 'sell' recommendation for a seasoned investor, hence a 'hold' is appropriate, acknowledging the positive but non-transformative nature of the update.

Keywords

Zhihu Inc., Class A ordinary shares, share repurchase, beneficial ownership, Schedule 13D, insider ownership, share incentive plan, ADSs