"Investor Network" Wu Wei
Recently, the red leader Zhou Hongyi has been a little busy. On the one hand, he needs to guide the development of the domestic AI industry, and on the other hand, he is mediating the business war in the automobile industry. In a daze, the leader in red has become the "leader", leading all sentient beings to transcend suffering. However, behind the guidance of the "leader", its core asset 360 (601360.sh) has experienced a decline in revenue for five consecutive years. Affected by the loss of its investment in Nezha Auto, 360 has experienced two consecutive years of decline in 2022 and 2023. Loss.
needs to point out that as competition in the Internet industry intensifies, in order to enhance the company's influence, Microsoft is building its own software market, computer manager and other platforms just like its mobile phone system. Previously, when smartphones first emerged, the popular "360 Mobile Guard", "Tencent Mobile Manager" and "Cheetah Mobile" withdrew from the market due to the establishment of a closed-loop ecosystem of mobile phone manufacturers.
Of course, in order to respond to market changes, in 2023, 360 launched the company's general-purpose large model "360 Intelligent Brain" with a high profile. However, currently, it is still difficult for large AI models to achieve profitability in the short term. And can 360, which has been losing money for two consecutive years, afford the huge investment in computing power in the early stage of large model training?
The industry ecology has undergone drastic changes
360’s core product is “360 Security Guard”. In the initial stage of the Internet, the government supervision and management system was not perfect, so there was a mixed bag of people on the Internet. At that time, computer and mobile phone security auxiliary software played a vital role in the security of equipment and personal information. Anti-virus software such as Rising and Kingsoft also became a generation's choice. remember.
is different from the early charging models of anti-virus software such as Rising and Kingsoft. "360 Security Guard"'s pioneering model of free installation and use and earning revenue through advertising and website navigation has defeated traditional anti-virus software companies in one fell swoop. After the success of the 360 model, Kingsoft and Tencent also entered the free anti-virus market, but they were unable to compete with 360. At its peak, 360 even dared to challenge Tencent (00700.hk) and publicly boycotted Tencent QQ and "360 Security" Guards” policy of choosing one from the other.
Since then, with the popularity of smart phones, the "360 Mobile Security Guard" launched by 360 has become one of the must-install software for Android smart phones, and the company has also ushered in another peak of development. Under the pressure of the huge installed base of "360 Mobile Security Guard", small and medium-sized companies such as Cheetah Mobile have no choice but to go overseas.
However, 360 did not dominate the mobile security market for a long time. With the rise of domestic mobile phones such as Huawei, Xiaomi, and Oppo, competition in the mobile phone industry has become increasingly fierce, and the commission profit model of Apple's app store has allowed mobile phone manufacturers to see new business opportunities. With fierce competition, domestic mobile phone brands are vying to seize the market with low gross profits and then make profits through the software ecosystem. Under this situation, the soil for the survival of "360 Mobile Security Guard" is gradually disappearing, and the installed capacity and influence of the product are also far less than before. .
It should be pointed out that with the development of the mobile Internet, Microsoft has also experienced growth pressure. In the latest Windows 11 system, Microsoft has also begun to recommend downloading and installing software from their software market. Software downloaded from other markets will be installed. There are safety tips. In addition, Microsoft also launched Computer Manager to achieve functions such as resource management, garbage cleaning, startup optimization, and virus scanning. With the advancement of network security technology, resource management, garbage cleaning, boot optimization, and virus scanning are the functions that people need most. Judging from the recent updates of Windows, Microsoft also plans to build its own closed-loop ecosystem.
With the rapid development of the mobile Internet industry, the Internet advertising ecology has also changed. Compared with the computer version, it is easier for mobile software manufacturers to understand user needs from user preferences, thereby achieving a higher conversion rate; in recent years, Douyin has become an important sales channel for enterprises, especially FMCG brands.
When the Internet ecology gradually changed, 360 failed to transform in time. As of the end of 2022, 49.47% of the company's revenue was still provided by Internet advertising and services. However, affected by the decrease in the company's Internet advertising and service revenue, 360 has been unable to transform in time since 2018. After reaching its peak, the company's revenue shows a clear downward trend.
Compared with 2019, 360’s revenue in 2022 dropped by 25.85% in three years. According to the company's 2024 performance forecast, "the company's operating income will decrease slightly compared with the same period last year" in 2023. Affected by the large losses of joint ventures, 360 will still suffer losses of 550 million to 370 million yuan in 2023. After deducting non-recurring gains and losses, the company's losses reached 850 million yuan to 570 million yuan.
's revenue continues to decline, and the company has suffered losses for two consecutive years. In the new environment, how will 360 transform?
Hesitant about the direction of development
Faced with the company's continued decline in revenue, the leader in red also led 360 to make some changes. The company has successively entered the smart hardware, enterprise-level security services and gaming markets. However, these businesses are in a track where industry competition is fierce or the market space is limited. Therefore, as of 2022, 360’s main revenue still comes from Internet advertising and Services provided.
In order to reverse the company's declining revenue trend, under the leadership of the red leader, 360 made a major layout in the field of automotive safety in 2021. In October 2021, 360 reviewed and approved the "Proposal on Investing in Hezhong New Energy Automobile Co., Ltd. (Nezha Automobile)", and plans to invest 2.9 billion yuan in Nezha Automobile and become its major shareholder. In that year's annual report, 360 also used a lot of space to explain the company's layout in smart cars.
However, after transferring part of the investment in Nezha Auto in 2022, 360 ultimately invested only 1.9 billion yuan in Nezha Auto. However, after 360’s capital increase, Nezha Auto’s market performance is still not ideal; in 2022, 360 made an impairment provision of 894 million yuan for its investment in Nezha Auto, and in the first half of 2023, it made an additional provision of 2.83 million yuan. Billions of impairments. After
failed to invest in Nezha Automobile, although 360 also received a project subsidy for the "Safety Brain" of intelligent connected cars from the Zhongguancun National Independent Innovation Demonstration Zone in 2022, the company rarely mentioned car safety in its annual report that year. The entries about cars have also dropped from 54 in the 2021 annual report to 34 in 2022, and most of the entries are related to Hezhong Automobile. In the 2023 semi-annual report, only 12 cars are mentioned. times, and they are all related to Hezhong Motors.
In addition to Nezha Automobile, the investment performance of the Red Leader himself is also not very satisfactory. At present, Zhou Hongyi's listed companies mainly include 360, Qifu Technology (qfin.us), Master Lu (03601.hk) and Huafang Group (03611.hk), among which Master Lu is a holding subsidiary of 360, and Qifu Technology and Huafang Group are directly controlled by Zhou Hongyi. According to
data, Qifu Technology’s revenue has declined for two consecutive years, and the company’s stock price has fallen by about 20% compared with the peak after listing; while Hanafang Group has been involved in cases involving its equity subsidiaries, the company has been affected since 2023. Trading has not resumed since it was suspended in March this year.
At the end of 2022, the launch of chatgpt made AI a hot topic in the market discussion. 360 has also actively followed up and embraced AI. In March 2023, 360 released its general-purpose large model "360 Intelligent Brain", which was launched in June of the same year. After announcing the large-scale model plan, 360’s stock price also rose from a maximum of 7 yuan/share to 20 yuan/share, an increase of nearly three times.
However, 360 is not alone in the AI track. Baidu and iFlytek (002230.sz) have also launched their own general-purpose large models. Today, although major companies are enthusiastic about investing in large models, commercialization is still a problem. After 360 launched the “360 Intelligent Brain” in a high-profile manner in 2023, the company’s revenue that year still saw a slight decline year-on-year.
It should be pointed out that judging from the development history of Internet industries such as search engines, e-commerce platforms, and takeout platforms, the Internet industry has a winner-takes-all characteristic; and the development of large models is essentially a competition of computing power. According to Openai disclosed that chatgpt consumes more than 500,000 kilowatt hours of electricity every day. Last year, the company also received a US$10 billion investment from Microsoft.
With the participation of Baidu, iFlytek and other companies, can Cardinal lead 360 to commercialize "360 Intelligent Brain" before Microsoft establishes a closed-loop computer system ecosystem? (Produced by Think Finance) ■
