Kanzhun Limited (NASDAQ:BZ): Institutional Confidence and Growth Potential in China's Evolving Labor Market

Institutional ownership is often a leading indicator of undervalued tech plays, as it reflects the strategic bets of sophisticated investors with access to deep research and market insights. For Kanzhun Limited (NASDAQ:BZ), the data from Q3 2025 underscores a compelling narrative of institutional confidence, driven by the company's dominant position in China's online recruitment sector and its alignment with the country's evolving labor market dynamics.

Institutional Ownership Trends: A Barometer of Confidence

As of Q3 2025, institutional investors hold approximately 67.40% of Kanzhun's shares, with Capital World Investors emerging as the largest stakeholder at 9.60% ownership, according to Simply Wall St. This level of institutional concentration signals strong conviction in the company's long-term prospects. Notably, several major institutional players have significantly increased their holdings in the quarter. For instance, Man Group plc boosted its stake by 147.1%, acquiring 2.0 million shares valued at $35.73 million, while AQR Capital Management LLC saw a staggering 9,990.8% increase in its position, according to the company's Q2 2025 press release. These moves suggest that institutional investors view Kanzhun as a high-conviction play amid China's structural labor market shifts.

Conversely, some institutions, like Pitcairn Co. and CANADA LIFE ASSURANCE Co, reduced their stakes by 20.4% and 5.4%, respectively, per the company's Q2 2025 press release. However, the net effect of these transactions-particularly the aggressive accumulation by growth-focused firms-points to a broader trend of institutional alignment with Kanzhun's strategic direction.

Financial Performance and Market Positioning

Kanzhun's Q2 2025 financial results reinforce this institutional optimism. The company reported revenue of RMB2,102.4 million (US$293.5 million), a 9.7% year-over-year increase, driven by a 10.2% growth in paid enterprise customers to 6.5 million and a 16.5% rise in average monthly active users (MAUs) to 63.6 million, according to the company's Q2 2025 press release. Net income surged by 70.4% to RMB711.2 million, reflecting disciplined cost management and operational leverage.

The company's strategic investments in AI-driven tools-such as an AI interview training robot and job-matching algorithms-have further enhanced its value proposition. These innovations not only improve user engagement but also position Kanzhun to capture growth in underserved segments like blue-collar recruitment and lower-tier cities, where it already contributes 39% of revenue, according to Kanzhun's Q2 slides.

China's Labor Market: Tailwinds and Regulatory Tailwinds

China's labor market in 2025 is characterized by a mix of stabilization and transformation. The urban unemployment rate remains steady at 5.0%, but youth unemployment remains a pressing issue, per the company's Q2 2025 press release. Meanwhile, demand for skilled professionals in AI, data security, and advanced manufacturing is surging, with over 20% of talent demand in 2024 attributed to these sectors, according to Simply Wall St. Kanzhun's AI-powered platform is uniquely positioned to address these needs, offering enterprises scalable solutions for talent acquisition in a competitive environment.

Regulatory developments also favor Kanzhun's growth trajectory. The Private Sector Promotion Law, enacted in 2025, encourages foreign collaboration in advanced manufacturing and services, sectors where Kanzhun's enterprise clients are heavily concentrated, per the company's Q2 2025 press release. Additionally, relaxed cross-border data transfer regulations for HR-related data reduce compliance burdens for multinational clients, further expanding Kanzhun's addressable market (as noted in Kanzhun's Q2 slides).

Valuation and Sector Positioning: Is Kanzhun Undervalued?

Despite its strong fundamentals, Kanzhun's valuation appears to diverge from its peers. The stock trades at a trailing P/E of 35.30, significantly higher than the recruitment sector's peer average of 22.3x, per StockAnalysis. However, this premium is justified by its 13.20% projected five-year revenue growth and a forward P/E of 19.86, indicating analysts' expectations of earnings acceleration.

Comparative metrics highlight Kanzhun's operational efficiency: its 36% adjusted operating margin in Q1 2025, according to Market Is Open, outpaces industry averages, driven by cost reductions and a high-margin digital platform. The company's robust cash position-$2.24 billion in cash and a net cash position of $2.22 billion-further supports its ability to execute share repurchases (up to $250 million) and dividends, enhancing shareholder value (data per Simply Wall St).

Risks and Considerations

While institutional confidence is strong, investors must consider macroeconomic risks, including China's cautious hiring environment and regulatory scrutiny of tech platforms. However, Kanzhun's focus on AI-driven efficiency and its alignment with government priorities-such as workforce digitalization-mitigate these concerns.

Conclusion: A High-Conviction Play in a Transformative Sector

Kanzhun Limited's institutional ownership trends, coupled with its financial performance and strategic alignment with China's labor market evolution, present a compelling case for undervaluation. As institutional investors like Man Group and AQR Capital double down on their stakes, the company is well-positioned to capitalize on the AI-driven recruitment boom. For investors seeking exposure to China's tech-enabled labor market transformation, Kanzhun offers a rare combination of growth, profitability, and institutional endorsement.