36Kr Holdings Inc. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter filing; the supplied filing does not provide clear Q4-only financial results. Financial statements are prepared under U.S. GAAP and reported in RMB. U.S. dollar equivalents use the filing’s stated exchange rate.
Business context
36Kr is a China-focused New Economy content and business-services platform. It earns revenue from online advertising, enterprise value-added services and subscriptions. It operates substantially all of its China business through a variable interest entity (VIE) controlled by contractual arrangements; the VIE generated 100% of revenue in 2019–2021.
Financial and operating performance
| Metric | FY2020 | FY2021 |
|---|---|---|
| Revenue | RMB386.8 million | RMB316.8 million (US$49.7 million), down 18.1% |
| Gross profit / margin | RMB125.4 million / 32.4% | RMB187.9 million / 59.3% |
| Operating loss | RMB267.3 million | RMB94.1 million |
| Net loss | RMB279.3 million | RMB90.6 million (US$14.2 million) |
| Adjusted net loss (non-GAAP) | RMB240.1 million | RMB75.6 million (US$11.9 million) |
| Adjusted EBITDA (non-GAAP) | RMB232.2 million loss | RMB73.7 million loss (US$11.6 million) |
| Net cash from operating activities | RMB17.1 million used | RMB195.0 million provided |
Revenue mix: Online advertising rose 24.3% to RMB214.7 million and represented 67.8% of revenue. Enterprise value-added services fell 61.7% to RMB74.0 million; management attributed the decline largely to shifting certain low-margin work from principal to agent accounting, recognizing related revenue net rather than gross. The company also reported 2021 gross transaction value of RMB217.2 million for enterprise value-added services, versus RMB193.2 million in 2020. Subscription revenue increased 35.1% to RMB28.0 million.
Margins and expenses: Gross margin improved as the company shifted toward higher-margin business and changed the presentation of certain services. Cost of revenue fell 50.7% to RMB128.8 million. Operating expenses declined 28.2% to RMB282.0 million: general and administrative expense fell 57.3% to RMB90.6 million, while sales and marketing rose 2.3% to RMB143.9 million and R&D rose 24.3% to RMB47.5 million.
Cash, liquidity and debt: At year-end, cash and cash equivalents were RMB97.0 million (US$15.2 million), and short-term investments were RMB119.1 million, for combined balances of about RMB216.1 million. Current assets were RMB442.5 million and current liabilities RMB193.9 million. The company reported a RMB5.0 million short-term bank loan and RMB16.9 million of operating lease liabilities. Operating cash flow improved substantially, aided mainly by lower accounts receivable following increased collections. Investing cash outflow was RMB158.0 million, including RMB179.0 million paid on behalf of customers for advertisement-agent services; financing cash flow was approximately neutral. Management said available cash and short-term investments were expected to cover anticipated needs for at least 12 months.
Other metrics: Net accounts receivable decreased to RMB180.2 million from RMB304.8 million; RMB129.4 million related to financing customers’ advertising purchases. The top five customers represented 14.5% of 2021 revenue and the largest customer 5.2%. Average monthly page views across self-operated and major third-party platforms were 850.7 million for 2021, including 821.7 million from third-party platforms. Share-based compensation was RMB15.0 million, down from RMB39.3 million in 2020.
Material changes, outlook and notable matters
- Revenue contracted, but gross profit and gross margin improved and the net loss narrowed. The reported margin improvement should be assessed alongside the principal-to-agent accounting change and the sharp decline in enterprise value-added revenue.
- Individual subscribers declined to about 1,900 from 9,600 in 2020. The company attributed this to curtailing paid columns and COVID-related cancellations of some offline training. Institutional investor subscribers increased to 208 from 141.
- COVID-19 delayed or cancelled offline events and training, affected some customers’ spending and collections, and contributed to credit-loss allowances and impairment risks. Management said industry diversity partly offset weaker demand; the duration and overall effect remained uncertain.
- The company provided no specific revenue or earnings guidance. It described plans to improve monetization, expand business services and video content, and commercialize its enterprise-service review platform, which had not yet been monetized by year-end.
- Management reported one material weakness in internal control over financial reporting: insufficient appropriately skilled U.S. GAAP accounting and financial-reporting personnel for period-end controls and SEC reporting. Disclosure controls and internal control over financial reporting were assessed as ineffective at December 31, 2021; remediation was underway, with no assurance it would fully resolve the weakness.
- Material risks include dependence on the VIE contractual structure, evolving PRC oversight of data, content and overseas listings, and missing or potentially required Internet news, audio-visual and publishing licenses. The filing said the company had not received regulatory notice or material penalties for these license gaps as of its report date.
- The PCAOB had determined it could not fully inspect the company’s China-based auditor. The filing warned that, under then-current HFCAA rules, U.S. trading restrictions or delisting could occur in 2024, potentially earlier if proposed legislation took effect. The company also disclosed newly effective PRC cybersecurity review rules and uncertainty about their application.
- No material litigation was reported as of December 31, 2021. Subsequent events included a March 2022 exchange of the company’s Dianqier subsidiary for a 7.273% stake in Hangzhou Jialin; management expected to recognize an approximately RMB36 million gain in Q1 2022.
Most important facts for investors to verify
- How much of the gross-margin improvement reflects durable economics versus net revenue presentation after the shift to agent arrangements; reconcile reported revenue with gross transaction value.
- Whether operating cash generation is sustainable, especially given customer financing, RMB129.4 million of related receivables, collection terms of 90–270 days, and the large 2021 agent-service cash outflow.
- Progress in remediating the material weakness and whether subsequent reporting or audits identify additional control deficiencies.
- Current status of the VIE agreements, required operating licenses, PRC cybersecurity review or overseas-listing filings, and PCAOB inspection and HFCAA exposure.
- Updated liquidity, bank borrowing, lease obligations, customer concentration, and the effect of COVID-19 and reduced individual subscriptions on demand and collections.