360 Financial Report: Revenue of 8.539 billion yuan in the first three quarters increased by 7.09% year-on-year

360 Financial Report: Revenue in the first three quarters of 8.539 billion yuan increased by 7.09% year-on-year ###

On October 27, 360 (601360.SH, hereinafter referred to as "360") disclosed its financial results for the third quarter of 2021. According to the financial report, the company's revenue in the first three quarters reached 8.539 billion yuan, an increase of 7.09% year-on-year, and the net profit attributable to the shareholders of the listed company was 1.003 billion yuan. Revenue in the third quarter was 2.92 billion yuan, and net profit attributable to shareholders of listed companies was 432 million yuan.

360's intention and determination to invest in the future is becoming more and more obvious. In the field of digital security, in the first three quarters, 360's R&D investment reached 2.442 billion yuan, an increase of more than 21% year-on-year, and the scale of investment far exceeded that of its peers, becoming the only network security company among the top 50 in the two lists of "500 private enterprises invested in R&D in 2021" and "500 private enterprise invention patents in 2021".

In the field of intelligent networked vehicles, 360 invested 2.9 billion yuan in Nezha Automobile, becoming its largest shareholder in addition to its management team. In the first three quarters of this year, the delivery volume of Nezha automobiles increased by 425% year-on-year, and it has been two consecutive months since September, and it is also the third time this year that it has entered the top three new car-making forces.

The value of 360's continued investment in the future is also highlighted, and in Kantar's newly released "2021 Top 100 Most Valuable Chinese Brands List", 360 is the only cybersecurity company on the list.

Digital security: High R&D to promote the sustained high growth of government and enterprise affairs

The continued growth of 360's revenue in the first three quarters was mainly due to the formation of the second growth curve. From the financial report in the first half of 2021, it can be seen that the revenue of the network security business for governments and enterprises increased by 322% year-on-year, and the half-year revenue scale has exceeded the whole year of 2020, accounting for nearly 1/5 of the company's total revenue, and the strength of network security has further been recognized by the market.

As China's digitalization process enters the fast lane, cybersecurity issues are receiving more and more attention. According to the "Three-year Action Plan for the High-quality Development of the Network Security Industry" to be officially issued by the Ministry of Industry and Information Technology of the People's Republic of China, the scale of China's network security industry will exceed 250 billion yuan by 2023, and the favorable policy will further promote China's network security industry into an explosive period.

As a "network security leader", more than 360 years of investment layout, is currently entering the harvest period, customer expansion frequently signed a large order of 100 million yuan, including a strategic cooperation with Zhengzhou High-tech Industry Investment Group Co., Ltd., won the bid of 236 million yuan "National Network Security Industry Base Major Infrastructure Cluster Project", and joined hands with Tianjin Binhai High-tech Zone to jointly build Tianjin Xinchuang Security Base, winning a total bid of 100.7 million yuan Xinchuang Security Project.

Behind the frequent signing of hundreds of millions of large orders is the persistent pursuit of technology for more than 360 years and continuous investment in research and development. At the 2021 Wuzhen World Internet Conference held in September, Zhou Hongyi, chairman and founder of 360, proposed that China's Internet companies should adhere to the belief of serving the country with science and technology and give play to the spirit of "going up the mountains and going to the sea" in the new era. "Going up the mountain" is to climb the peak of science and technology and solve the problem of the "card neck" of the national core technology; "going to the sea" is digital empowerment, willing to be a supporting role for traditional enterprises, and support the digital transformation of traditional enterprises with technology, talents and funds.

The network security industry is a technology-intensive enterprise, and 360 insists on maintaining high investment in core technology research and development. For more than a decade, 360 has invested more than 20 billion yuan in research and development funds, and in the first three quarters of this year alone, 360's research and development investment has reached 2.442 billion yuan, an increase of more than 21% year-on-year, and the scale of investment far exceeds that of the same industry. With the blessing of high R&D investment, 360 has not only gained world-class vulnerability mining and offensive and defensive confrontation capabilities, but also accumulated massive network-wide security big data and nearly 10,000 original technology and core technology patents.

On October 11, the All-China Federation of Industry and Commerce officially released the list of "500 private enterprises investing in R&D in 2021" and the list of "500 invention patents of private enterprises in 2021". Whether it is "R&D investment" or "number of patents", 360 is the only cybersecurity company that ranks among the top 50. Among them, 360 ranks 9th in the number of patents and 33rd in R&D investment. According to the national patent database data, as of September 2021, 360 has applied for 12,755 patents and 11,312 invention patents, which is the company with the largest number of patents in the network security industry.

Digital empowerment: Invest 2.9 billion yuan in Nezha to lay out the blue ocean market of the Internet of Vehicles

If the continuous increase in R&D investment is the embodiment of "going up the mountain", then 360's cooperation with Nezha Automobile to empower the digital transformation of the automobile manufacturing industry is an interpretation of "going to the sea".

On October 25, 360 Company issued an announcement showing that 360 invested 2.9 billion yuan in Nezha Automobile, which has fulfilled the procedures required by the relevant government authorities, and the relevant investment agreements have been signed, becoming the largest shareholder in addition to the management team.

The relevant data also confirms Zhou Hongyi's strategic vision. Since the beginning of this year, Nezha Automobile has set a delivery record for 8 consecutive months. In September this year, Nezha automobile delivery volume was 7699 vehicles, an increase of 281% year-on-year, for two consecutive months, but also the third time this year into the top three new car-making forces, breaking the existing "Wei Xiaoli" pattern of new car-making forces; from January to September this year, Nezha Automobile delivered 41427 units, an increase of 425% year-on-year.

The investment in Nezha Automobile shows the strategic layout of 360 in the intelligent and connected vehicle safety market, and in the three-year plan disclosed by the Ministry of Industry and Information Technology, it emphasizes the importance of vehicle networking security, and expresses support for the innovation of vehicle networking security technology and the research and application of solutions.

360 has been involved in the research of vehicle networking security since 2014, and has set up a special research team Sky-Go, creating the world's leading car networking security technology. As the earliest entrant in the field of vehicle networking security, 360 actively builds the internet of vehicle security ecology, shortlisted the ministry of industry and information technology networking security pilot project, led the world's first vehicle intrusion detection system evaluation standard approved project, and also released a free and open source "car networking security guardian plan" for car companies, assisting upstream and downstream enterprises in the intelligent networked vehicle industry chain to quickly establish vehicle network security monitoring capabilities, and jointly build a healthy and orderly vehicle networking security ecology with the industry. At present, 360 has established a joint laboratory for automobile safety with more than 10 car companies, protecting the safety of tens of millions of cars.

It is reported that 360 will deeply study the safety of intelligent networked vehicles, build Nezha Automobile into a benchmark for intelligent networked vehicle safety, and then provide security services and guarantees for car companies and industrial chain partners in the whole industry.

The strength of network security has been recognized by the market, the return on R&D investment can be expected, the investment in Nezha empowers the physical manufacturing industry, 360 has shown a comprehensive layout this year, and the development trend of multi-point blossoming has also increased the company's brand value. On October 18, Kantar BrandZ, known as "hard currency in the field of global brand value assessment", released the "2021 Top 100 Most Valuable Chinese Brands List", and 360 became the only cybersecurity company on the list.