Prospectus Summary
PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ADSs discussed under “Risk Factors,” before deciding whether to invest in the ADSs. This prospectus contains information from an industry report commissioned by us dated March 2021 and prepared by China Insights Consultancy, an independent research firm, to provide information regarding our industry and our market position in China. We refer to this report as the “CIC Report.”Our Vision
Redefine every individual’s career development with technology and a passion towards delivering user satisfaction, by optimizing efficiency, equality and choice.
Pain Points Our Industry Faces
The online recruitment industry in China has traditionally suffered from two pain points: job seekers find it difficult to locate suitable job positions, and employers find it hard to secure suitable job candidates. Job seekers and employers keep walking past each other in the dark, yearning for a new platform that can deliver unprecedented efficiency.
We believe three common characteristics of traditional industry players caused such pain points.
First, limited functionality beyond submission and downloading of resumes. Information flows one way—from job seekers to employers, via a few pages of stylized introductions, often receiving tardy responses, if any.
Second, a search-based model that unevenly drives internet traffic towards the top—favoring candidates with stellar credentials and well-known corporations with deep pockets, leaving behind the vast majority of average job seekers and SMEs with tremendous unmet demand.
Third, an inability to attract Bosses at scale, relying instead only on recruitment professionals. This resulted from the inefficiencies stemming from the two abovementioned common characteristics. Bosses, including executives, middle-level managers of large enterprises and SMEs, as well as micro business owners, are the only people who truly understand what attributes define the best candidates for a particular job position. This fact is accentuated by the paradigm shift in the Chinese economy towards the next stage of advanced development, and the urgency for businesses to attract a more specialized workforce that can cope with intensified competition.
Who We Are
Cognizant of the industry pain points and their root causes, our founders set out seven years ago to create a transformative product that promotes two-way interactive communication, focuses on intelligent recommendations that is empowering, and brings Bosses onboard the recruitment process. The result was “BOSS Zhipin”—a mobile-native product that promotes instant direct chats between Bosses and job seekers, delivers accurate matching results, and is powered by proprietary AI algorithms and big data insights. This proved to be exactly what the industry needed. Despite being a late comer, we have become the largest online recruitment platform in China, as measured by average MAU in 2020, according to the CIC Report.
Our operating philosophy highly respects job seekers, and we are committed to empowering them by giving them more say in the recruitment process. We do not allow enterprise users to access job seekers’ resumes unless job seekers give express consent. Job seekers can also make their information selectively visible to different types of enterprise users. We believe the superior user experience we provide to individual job seekers attracts them to our platform. Enterprise users also benefit from our operating philosophy as it creates massive opportunities for them to connect with job seekers efficiently.
Our Platform
We connect job seekers and enterprise users in an efficient and seamless manner mainly through our highly interactive BOSS Zhipin mobile app, which together with our other mobile apps and mini programs create a vibrant network. We are relentlessly focused on enhancing user experience by delivering efficient, intuitive and convenient experience to them throughout the recruitment cycle.
Job seekers: We have a large and fast growing pool of job seekers consisting of white and gold-collar users, blue-collar users and college students.
Enterprise users: We serve an extensive network of employers covering small, mid-sized and large businesses. Bosses and recruiting professionals of companies of all sizes, including large and small businesses, are the enterprise users of our platform.
Bosses: Bosses refer to executives or middle-level managers of large enterprises and SMEs and micro business owners, who themselves are supervisors. As of March 31, 2021, 66% of our verified enterprise users are not professional recruiting personnel, and we categorize these people as “Bosses”.
Recruiting professionals: We also serve recruiting professionals, including human resource officers and specialized hiring function employees of an employer, headhunters and hiring staff from human resource agencies.
We pioneered these features in the online recruiting industry:
We highly respect job seekers and are committed to better empowering them by giving them more say in the recruitment process. It is the job seekers themselves, not our platform, who decide which enterprise users can gain access to the job seekers’ resumes. This provides a powerful protection of job seekers’ privacy. We are also devoted to protecting job seekers against false information and frauds. We place great emphasis on the importance of ensuring the information presented on our platform is verified and authentic. We use a screening and monitoring system to examine and verify the authenticity of the job openings posted by enterprise users and leverage our advanced technology to detect and respond to threats and frauds continuously.
We believe our technology capabilities are at the core of our platform. Our proprietary AI infrastructure optimizes the analytics of large datasets consisting of massive static and dynamic data contributed by our extensive active user base and highly interactive platform. Our platform generates more data as we digitalize more steps across the recruitment value chain, we are able to gather more data to feed into our AI infrastructure. Our access to data combined with advanced data analytics and AI technology ensures the accuracy and completeness of the recommendation algorithm. Rapid product iteration and constant upgrading of our matching system further enable us to provide more accurate job and candidate matching results.
We adopt an ecosystem-friendly revenue model that balances the supply and demand of jobs and candidates. Most of our enterprise users can use our basic services for free, including posting jobs, browsing mini resumes, chatting with job seekers, hosting video and audio interviews and sending offers. For certain positions where the demand exceeds the supply of job seekers to a certain degree, we charge enterprise users a fee for posting such jobs. Enterprise users can also purchase our value-added services to facilitate their recruitment process. We had served 11.4 million verified enterprise users and 5.5 million verified enterprises as of December 31, 2020. Our verified enterprise users and verified enterprises reached 13.0 million and 6.3 million as of March 31, 2021, respectively. In 2020 and the twelve months ended March 31, 2021, we had 2.23 million and 2.89 million paid enterprise customers, respectively.
We have achieved significant growth. Our average MAU grew by 73.2% from 11.5 million in 2019 to 19.8 million in 2020 and from 14.5 million in the three months ended March 31, 2020 to 24.9 million in the three months ended March 31, 2021, representing growth of 71.8%. Our revenues increased by 94.7% from RMB998.7 million in 2019 to RMB1,944.4 million (US$298.0 million) in 2020 and from RMB282.6 million for the three months ended March 31, 2020 to RMB788.5 million (US$120.4 million) for the three months ended March 31, 2021, representing growth of 179.0%. Our calculated cash billings increased by 89.7% from RMB1,334.0 million in 2019 to RMB2,529.9 million (US$387.7 million) in 2020 and from RMB310.3 million for the three months ended March 31, 2020 to RMB1,182.4 million (US$180.5 million) for the three months ended March 31, 2021, representing growth of 281.0%. We recorded net losses of RMB502.1 million, RMB941.9 million (US$144.4 million) and RMB176.2 million (US$26.9 million) in 2019, 2020 and the three months ended March 31, 2021, respectively. Our adjusted net losses were RMB467.8 million, RMB284.7 million (US$43.6 million) and RMB127.5 million (US$19.5 million) in 2019, 2020 and for the three months ended March 31, 2021, respectively. Our operating cash flow turned positive and reached RMB395.9 million (US$60.7 million) in 2020 and RMB165.3 million (US$25.2 million) for the three months ended March 31, 2021. For discussions of our calculated cash billings and adjusted net loss and reconciliation of calculated cash billings to revenues and reconciliation of adjusted net loss to net loss, see “—Non-GAAP Financial Measures” for details.
We include both job seekers and enterprise users when calculating key metrics, including MAU and DAU. The number of job seekers and enterprise users provide insights to our management’s evaluation of user engagement, customer billings and revenue generation. First, in terms of user engagement, active job seekers and enterprise users are both integral to increasing overall user engagement. Our platform has developed powerful network effects, which rely on the active participation and engagement from both job seekers and enterprise users in the recruitment process on the platform. The increase in the number of job seekers and enterprise users generates more interactions and facilitates the effective connection between jobs and candidates, thereby increasing user engagement. Second, in terms of customer billings and revenue generation, we view the scale of our user base and interaction between job seekers and enterprise users as the keys to creating value and generating monetization opportunities. In addition, we serve individuals during their entire career life cycles. Individuals who join our platform as job seekers at one time and enjoy our services may at another time come back as paid enterprise customers, recruiting on behalf of enterprises. Therefore, every user is potentially fee paying and equally important to the prosperity of our platform.
Our Industry Opportunities
Leveraging our first-mover advantage, innovative business model and market leadership, we believe we can capitalize on the following market trends:
reach 34.9% in 2025, according to the CIC Report. The shift from PC to mobile is an ongoing industry trend, and we leapfrogged our peers to build a mobile-native online recruitment platform. Job seekers, especially those from younger generations, are switching their jobs more frequently. Due to the proliferation of mobile internet and smart devices, job seekers are increasingly using online recruitment platforms when looking for jobs and especially value those platforms that can match them with the most suitable jobs more efficiently and conveniently.
Our Strengths
We believe that the following competitive strengths contributed to our success:
Our Strategies
We seek to connect and empower job seekers and enterprise users through technology and innovation. We plan to attract more users, including both job seekers and enterprise users to our platform, further enhance our user experience, and improve our brand equity by focusing on the following key growth strategies:
Summary of Risk Factors
Investing in the ADSs involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in the ADSs. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully in the section titled “Risk Factors.”
Risks Relating to Our Business and Industry
Risks and uncertainties related to our business and industry include, but are not limited to, the following:
could deter current and potential users from using our services, damage our reputation, result in legal liability, bring regulatory scrutiny, and in turn materially and adversely affect our business, financial condition and results of operations.
Risks Relating to Our Corporate Structure
Risks and uncertainties relating to our corporate structure include, but are not limited to, the following:
Risks Relating to Doing Business in China
We are also subject to risks and uncertainties relating to doing business in China in general, including, but are not limited to, the following:
Risks Relating to Our ADSs and This Offering
In addition to the risks and uncertainties described above, we are subject to risks relating to our ADSs and this offering, including, but not limited to, the following:
Corporate History and Structure
We commenced operations by setting up Beijing Huapin Borui Network Technology Co., Ltd., or our VIE, in December 2013. Our holding company, KANZHUN LIMITED, was incorporated in January 2014 to facilitate offshore financing.
In February 2014, KANZHUN LIMITED established a wholly owned subsidiary in Hong Kong, Techfish Limited. In May 2014, Techfish Limited established a wholly owned subsidiary in China, Beijing Glorywolf Co., Ltd., or our WFOE. In May 2014, we gained control over our VIE through our WFOE by entering into a series of contractual arrangements with our VIE and its sole shareholder then. The contractual arrangements with our VIE were subsequently replaced and superseded by updated agreements as a result of change in our VIE’s shareholders in December 2014, June 2016, February 2017, and February 2020.
The following diagram illustrates our corporate structure, including our significant subsidiaries and our VIE, as of the date of this prospectus:
Note:
Implication of Being an Emerging Growth Company
As a company with less than US$1.07 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of the ADSs that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. We have elected to take advantage of the extended transition period for complying with new or revised accounting standards and acknowledge such election is irrevocable pursuant to Section 107 of the JOBS Act.
[Implication of Being a Controlled Company
Upon the completion of this offering, Mr. Peng Zhao, our Founder, Chairman and Chief Executive Officer, will beneficially own % of our total issued and outstanding ordinary shares, representing % of our total voting power, assuming that the underwriters do not exercise their option to purchase additional ADSs, or % of our total issued and outstanding ordinary shares, representing % of our total voting power, assuming that the option to purchase additional ADSs is exercised by the underwriters in full. As a result, we will be a “controlled company” as defined under the Nasdaq Stock Market Rules because Mr. Zhao will hold more than 50% of the voting power for the election of directors. As a “controlled company,” we are permitted to elect not to comply with certain corporate governance requirements. If we rely on these exemptions, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.]
Corporate Information
Our principal executive offices are located at 18/F, GrandyVic Building, Taiyanggong Middle Road, Chaoyang District, Beijing 100020, People’s Republic of China. Our telephone number at this address is + 86 10 8415 0633. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
Investors should submit any inquiries to the address and telephone number of our principal executive offices. Our main website is https://www.zhipin.com/. The information contained on our website is not a part of this prospectus. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
Conventions that Apply to this Prospectus
Unless otherwise indicated or the context otherwise requires, references in this prospectus to:
Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their option to purchase up to additional ADSs representing Class A ordinary shares from us. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this prospectus are made at a rate of RMB6.5250 to US$1.0000, the exchange rate in effect as of December 31, 2020, or RMB6.5518 to US$1.0000, the exchange rate in effect as of March 31, 2021, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all.
The Offering
The depositary will hold Class A ordinary shares underlying your ADSs. You will have rights as provided in the deposit agreement among us, the depositary and holders and beneficial owners of ADSs from time to time. We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our Class A ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our ordinary shares after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement. Subject to the terms of the deposit agreement, you may surrender your ADSs to the depositary for cancellation in exchange for Class A ordinary shares. The depositary will charge you fees for any cancellation. We may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs after an amendment to the deposit agreement, you agree to be bound by the deposit agreement as amended. To better understand the terms of the ADSs, you should carefully read the “Description of American Depositary Shares” section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus. We intend to use the net proceeds from this offering for (1) investment in technology infrastructure and research and development to upgrade our service offerings and to improve technology capabilities in areas such as AI and big data analytics, (2) marketing activities to drive user growth and to expand into a wider user base and more geographical markets, (3) exploration of new product and service offerings, such as providing other human resource services, and (4) general corporate purposes. See “Use of Proceeds” for more information.The number of ordinary shares that will be outstanding immediately after this offering: