The performance has declined year after year, the stock price has plummeted, and 360 is still struggling to find a "new way out".
On April 22, 2022, 360 disclosed its 2021 financial report. According to the financial report data, in 2021, the total revenue of 360 was 10.89 billion, down 6.28% year-on-year; the net profit was 902.22 million, down 69.02% year-on-year.
As a former leader in network security, plagued by performance growth, 360 has been struggling to find new growth points in recent years. However, whether it is the mobile phone business at the beginning, or the later investment in Nezha Automobile into the new energy industry, or even the vigorous development of the government and enterprise security business, 360 has not gained much. Judging from the financial report data, in addition to the decline in performance, the majority of the current three-six-zero profit basically comes from "advertising", and the traditional information security business is "withering".
From the perspective of stock prices, as of the close of trading on April 27, 360 stock price once again hit a stage low since the backdoor listing, the lowest reached 7.52 yuan, although the stock price has recovered from the market surge, but the 360 stock price has only closed at 7.93 yuan / share, the market value is only 56.66 billion, compared with the highest point in 2018 474.3 billion The market value has evaporated more than 400 billion; it is clear that investors have lost hope and patience for this former cyber security leader.
Whether from the performance or stock price, the attractiveness of "information security" that 360 has been talking about for many years is declining; and how to find a "new story" is becoming a problem that 360 needs to solve urgently.
Performance has fallen sharply, and most of the revenue comes from advertising
Judging from the financial report, as a former leader in network security, today's 360 is more like an advertising company.
According to the industry, from the latest financial report data, the main business composition of 360 in 2021 is divided into four categories, namely Internet advertising and services, intelligent hardware, security and other and Internet value-added services.
In these four major types of business, the Internet advertising and service business can be said to have supported half the sky, with revenue reaching 6.306 billion yuan in 2021, accounting for 57.93% of revenue; the main profit was 4.425 billion, accounting for 65.56% of profits.
If you look at the information security business alone, according to the product classification, the main revenue of the 360 security business branch in 2021 is only 907.7 million, and the proportion of revenue is only 8.34%.
It is not difficult to see from the data that the proportion of revenue of the most core information security business of 360 is continuing to decline, more than half of the revenue and profit are supported by advertising, and the former information security leader has slowly transformed into an advertising company.
Under the influence of the continuous "deviation" of the main business, the operating conditions of 360 are also deteriorating, and the performance continues to decline.
According to the financial report data, in the whole year of 2021, 360 achieved a total revenue of 10.89 billion, a sharp decline of 6.28% year-on-year, which is already the third consecutive year of revenue decline of 360, the previous revenue growth rates in 2019 and 2020 were -2.19% and -9.55% respectively; the net profit was 902.2 million, a sharp decline of 69.02% year-on-year, and the net profit was also the second consecutive year of decline, and the net profit growth rate in 2021 was -51.3%.
In fact, at present, the situation of 360 is very common in the old Internet companies, such as the listed Internet companies 2345 that started with navigation websites, and the performance has fallen sharply a long time ago, in addition, most of the revenue and net profit of 2345 come from Internet information services, which is very similar to the current situation of 360.
However, compared with these declining Internet companies, 360 can still use the "family foundation" accumulated before to advertise, which has not yet reached the point of performance loss; but from the current trend, the old base of 360 may not be able to eat for long.
Multiple transformations
The reason why 360 has fallen to this point is not only due to the factors of the times, but also related to the lack of results in its own transformation for many years.
Looking back at the history of the development of 360, the earliest goes back to 1998, 24 years ago. At that time, Zhou Hongyi launched the online real-name website "3721", and with the rapid popularization of 3721, Zhou Hongyi also became famous.
In November 2003, 3721 was acquired by Yahoo and renamed "Yahoo Assistant", and Zhou Hongyi became the president of Yahoo China, which can be said to be the limelight for a while; however, with Alibaba's acquisition of Yahoo China in 2005, Zhou Hongyi left Yahoo and co-founded a new company with Qi Xiangdong - Qihoo.
At the beginning, Qihoo's targeting was not antivirus software, but search technology providers; however, because the search market at that time had been occupied by Baidu and Yahoo, it was too difficult to enter the search market, qihoo transformed antivirus software under the leadership of Zhou Hongyi, and it was not this decision that made Qihoo successful.
In 2006, Qihoo launched 360 Security Guard, using anti-rogue software as an entry point into the Internet market. With the strategy of free use, 360 Security Guard, which broke the rules, quickly defeated a number of antivirus software and became the security software with the largest number of users in China, with the rapid development of the PC side in those years, Qihoo's volume expanded rapidly, and Zhou Hongyi also achieved great success.
However, with the advent of the mobile Internet era, 360 Security Guard, which has previously achieved great success on the PC side, has begun to "disobey", and the reason is very simple - in the field of mobile phones, because there is already a highly secure mobile phone system, the demand for antivirus software is not high, so three or six zero is slowly declining, which is the factor of the times mentioned above.
When he realized that mobile phones may not need antivirus software, Zhou Hongyi did not fail to make efforts.
In recent years, 360 has also made many attempts, such as cooperating with Coolpad Mobile phone in 2015 to jointly establish a mobile phone brand "Qiku", intending to develop mobile phones, but because it was too late to enter the game, this business was suspended in the first two years.
In 2016, under the background of the rise of Douyu and Huya, 360 entered the live broadcasting industry and invested in the establishment of peppercorn live broadcasting, although the final peppercorn live broadcast in 2021 and the six rooms operation main body Huafang Group Company planned to go public, but there was not much achievement.
In 2021, with the rise of new energy vehicles, 360 invested 2.9 billion yuan in Nezha Automobile; however, although the rapid rise of Nezha Automobile later, sales in the first quarter of 2022 increased significantly, but the 360 that invested in the shares did not gain much results, and 360's vision of expanding the information security business to the intelligent automotive industry has not yet been realized.
Under this transformation attempt again and again, the former network security leader has gradually moved to the altar.
As of the close of trading on April 27, the total market value of 360 was only 56.66 billion, which had evaporated more than 400 billion from the highest point of 474.3 billion when it returned to A-shares in 2018.
To transform the security of government and enterprises, 360 still has a long way to go
After going around in a big circle, Three-Six-Zero returned to the security field that he was most familiar with.
This time, 360 is no longer aiming at the C-end business, but to the B-end business - government and enterprise security.
According to media reports, since 2020, 360 is increasing investment in the field of government and enterprise security, and at the first full meeting of the 360 government and enterprise security group last year, Zhou Hongyi even proposed that "we should be the security guard of China's digital economy".
In public, Zhou Hongyi also said: The protagonist of the first half of the Internet is the Internet company, which realizes the digitization of the lifestyle for the Chinese people's eating, drinking, food, housing and transportation, while the protagonist of the second half of the Internet is governments at all levels and traditional enterprises, and the new generation of smart cities, industrial Internet, and Internet of Vehicles will become the main scenes.
It is not difficult to see that Zhou Hongyi's hopes for the safety of government and enterprises are great, and from the current point of view, the government and enterprise security business of 360 has also become a rare bright spot in its 2021 financial report.
According to the financial report data, 360's security and other businesses achieved operating income of 1.381 billion yuan, an increase of 70.91% year-on-year, with a strong growth momentum; the first quarter report of 2022 disclosed in the same period showed that 3601 quarter had completed the actual collection of 547 million yuan of urban safety orders, and safety-related revenue was close to 40% of last year's full year.
However, from the overall performance point of view, although the government and enterprise security business has improved, but the proportion of total revenue is still not large, the government and enterprise security business is still difficult to bear the burden of the transformation of three six zero; and in the two trading days after the disclosure of the 2021 financial report, the three six zero stock price fell by 6.1% and 2.75% respectively, it is clear that investors are not optimistic about this financial report.
From this point of view, for 360, the "story" of government and enterprise security is far from enough to lead it out of the quagmire; if you want to reverse the current situation, 360 may have a long way to go.