Core Viewpoint - The company 360 is facing significant financial challenges, with continuous revenue decline and increasing losses attributed to high sales expenses and unsuccessful investments in various technology sectors [1][5][12]. Financial Performance - 360 expects a net profit loss of 240 million to 320 million yuan for the first half of 2025, primarily due to increased sales expenses aimed at enhancing product promotion and market influence [5]. - The company has experienced a continuous revenue decline over the past six years, with revenues of 108.86 billion, 95.21 billion, 90.55 billion, and 79.48 billion yuan from 2021 to 2024, representing year-on-year declines of 6.28%, 12.54%, 4.89%, and 12.23% respectively [3][6]. - Cumulative net losses have exceeded 4 billion yuan over the past three and a half years since turning from profit to loss in 2022 [1][3]. Business Segments - The main business segments of 360 include internet advertising and services, smart hardware, security services, and internet value-added services, with internet advertising contributing over 50% of total revenue [6]. - In 2024, the revenue from internet advertising and services was 4.166 billion yuan (down 7.85%), smart hardware was 1.014 billion yuan (down 35.44%), and security services was 1.287 billion yuan (down 27.06%), while internet value-added services grew to 1.379 billion yuan (up 25.51%) [6][8]. Expense Trends - The company has seen an increase in expense ratios, with R&D expense ratio rising from 34.28% in 2023 to 40.29% in 2024, sales expense ratio increasing from 22.41% to 26.97%, and management expense ratio from 7.74% to 8.3% [8] Investment Strategy - 360 has been actively investing in various technology trends, including electric vehicles, the metaverse, and AI, but has faced challenges in realizing profitable returns from these investments [12][13]. - The company's investment in the electric vehicle company Hozon Auto has resulted in significant losses, with investment losses of 894 million yuan and 687 million yuan in 2022 and 2023 respectively [12]. - The launch of the "N World" metaverse platform has not achieved significant success due to a lack of foundational technology and ecosystem capabilities [12][13]. Market Position - Following its reverse merger in 2018, 360's stock price has experienced significant volatility, with a peak above 60 yuan per share, but has since declined to 10.87 yuan per share as of July 17, 2025, resulting in a market capitalization of only 76.1 billion yuan [10][12].

Core Viewpoint - Company 360 (601360.SH) continues to report losses, but signs of a turning point are emerging as it anticipates reduced losses in the upcoming quarters [1][4]. Financial Performance - For the first half of 2025, the company expects a net profit attributable to shareholders of approximately -320 million to -240 million yuan, and a non-net profit of about -340 million to -250 million yuan, indicating ongoing losses [1][4]. - Compared to the same period last year, the losses are expected to decrease, with a significant possibility of turning profitable in the second quarter of 2025 [2][5]. - In the first quarter of 2025, the company reported an operating income of 1.864 billion yuan, a year-on-year increase of 8.39%, with net losses of 273 million yuan and 282 million yuan for net profit and non-net profit respectively [5]. Sales and Marketing Strategy - The increase in losses is attributed to heightened sales expenses aimed at enhancing product promotion and market influence, with sales expenses reaching 804 million yuan in the first quarter of 2025, a 72.08% increase from the previous year [5][8]. Research and Development Investment - The company has maintained a strong commitment to research and development, with cumulative R&D investments reaching 23.1 billion yuan from 2017 to 2024, and R&D expenditure accounting for 40% of operating income in 2024 [2][9]. - R&D investments have consistently exceeded 3 billion yuan annually from 2021 to 2024, supporting the company's transition and innovation efforts [8][10]. Business Segments and Performance - The company's main business segments include internet advertising and services, smart hardware, internet value-added services, and security, with varying revenue performance across these segments in 2024 [8]. - The revenue from internet value-added services grew by 25.51%, while other segments like smart hardware and security saw significant declines of 35.44% and 27.06% respectively [8]. Strategic Direction - The company is actively pursuing a dual strategy of "AI + Security" to contribute to the development of a modern digital economy, focusing on digital safety and AI-driven solutions [3][10]. - The company has launched various AI products and solutions, enhancing its capabilities in the digital security domain and aiming to support the digital transformation of various sectors [10][11].

Group 1 - The year 2025 is widely regarded as the "Year of AI Agents" in the global technology and investment markets, with AI agents and their ecosystems seen as significant investment opportunities in the computer sector [1] - The performance gap between different AI models is rapidly narrowing, and domestic computing power supply is maturing, driving demand from traditional industries for AI technology to enhance efficiency and revenue [1][5] - A wave of technological innovation and commercialization surrounding AI agents is sweeping through the global tech sector, with major companies competing to seize the technological and market advantages [1][5] Group 2 - AI agents have evolved from single-task "Chatbots" to "Copilots" and now to "semi-autonomous entities," gaining identity and intent expression capabilities [2] - The new architecture of the AI economy is expected to lead to a revolutionary scenario of "AI hiring AI," where task-leading AI delegates sub-tasks to other AIs, creating a dynamic self-organizing task network [2] - Future development teams may consist of "AI project managers" directing "AI programmers," "testers," and "analysts" to collaborate seamlessly, marking a new dimension of competition for enterprises [2] Group 3 - Major tech companies are launching new competitive initiatives centered around AI agents, with Microsoft and Google leading the charge in creating new application ecosystems [5] - In China, companies are shifting focus from showcasing models to demonstrating the capabilities of AI agents, with a surge of vertical AI products expected in the coming months [5][6] - The launch of the "Nano AI Super Search" by 360 marks a significant milestone, as it is the first domestic product based on super-agent technology, aiming to redefine "AI search" with eight core capabilities [6][12] Group 4 - The "Nano AI Super Search" has quickly gained traction since its launch, becoming one of the largest AI-native search engines globally, ranking fourth in monthly active users in the Chinese market [7][10] - It ranks sixth in the global AI product rankings, being the only domestic product besides DeepSeek to make it into the top ten [10] - The eight core capabilities of the Nano AI Super Search include deep search, complex problem-solving, task decomposition, and multi-model collaboration, enhancing its decision-making, execution, and collaboration abilities [13][14] Group 5 - The Nano AI Super Search aims to realize the vision of "super individuals" and "super companies," where one employee can manage multiple AI agents [12] - It can seamlessly integrate various input methods and emerging hardware, expanding the potential applications of AI agents [15] - The launch of the Nano AI Super Search signifies a shift from AI agent concepts to practical changes in user interaction, strengthening 360's competitive position in the AI product matrix [16]

Core Viewpoint - The article highlights the performance and future prospects of the company's AI products, particularly the "Nano AI Search," while also discussing the financial results for 2024 and Q1 2025, indicating a mixed outlook for the company's internet business and AI upgrades [3][4]. Financial Performance - In 2024, the company achieved a revenue of 7.948 billion, a year-on-year decrease of 12.33%, and a net profit attributable to shareholders of -1.094 billion, with losses widening [3]. - For Q1 2025, the company reported a revenue of 1.864 billion, an increase of 8.39% year-on-year, but a net profit of -0.273 billion, indicating an expanded loss [3]. AI Product Development - The "Nano AI Search" ranked sixth globally and second domestically in the "AI Product List" published in April 2025, showcasing the company's competitive position in AI products [4]. - The company has launched several AI-native products, including "Nano AI Search" and "360 AI Office," and has improved its self-developed large model "360 Smart Brain" [4]. Internet Business Overview - The internet advertising and service business generated a revenue of 4.166 billion in 2024, down 7.85% year-on-year, while the internet value-added services revenue increased by 25.51% to 1.379 billion [5]. - The average monthly active users (MAU) for the company's PC browser and navigation exceeded 400 million, with a market share of over 85% by the end of 2024 [5]. Security Business Development - The company has intensified its focus on national-level cybersecurity, capturing over 1,300 APT attack activities in 2024 [6]. - The "360 Security Large Model 3.0" was launched and integrated into all security products, with successful testing and application in over 50 leading clients and more than 500 SMEs [6].

Investment Rating - The report maintains a rating of "Accumulate" for the company [6]. Core Views - The company's "Nano AI Search" has shown strong performance, ranking sixth globally and second domestically in the latest AI product rankings, indicating a positive outlook for its internet commercialization business driven by AI upgrades [2][3]. - Despite a decline in revenue for 2024, the company is expected to benefit from AI-driven upgrades in its internet advertising and commercial business, with a projected return to profitability by 2027 [4][5]. Summary by Sections Financial Performance - In 2024, the company achieved revenue of 7.948 billion yuan, a decrease of 12.33% year-on-year, and a net loss attributable to shareholders of 1.094 billion yuan, worsening from the previous year [1]. - For Q1 2025, revenue was 1.864 billion yuan, an increase of 8.39% year-on-year, but the net loss attributable to shareholders expanded to 273 million yuan [1]. Business Segments - The internet advertising and services segment generated revenue of 4.166 billion yuan in 2024, down 7.85% year-on-year, while the internet value-added services segment saw revenue growth of 25.51% to 1.379 billion yuan [3]. - The security business reported revenue of 1.287 billion yuan, a decline of 27.06%, and the smart hardware business revenue fell by 35.44% to 1.014 billion yuan [3]. AI Product Development - The company has launched several AI-native products, including "Nano AI Search" and "360AI Office," and has enhanced its self-developed general-purpose large model "360 Smart Brain" [2]. - The "360 Security Model 3.0" was introduced and integrated into all security products, demonstrating the company's commitment to advancing its security offerings [4]. Profitability Forecast - The forecast for net profit attributable to shareholders has been revised downwards for 2025 and 2026 to -0.05 billion yuan and 0.71 billion yuan, respectively, with a new projection of 1.51 billion yuan for 2027 [4][5].

Core Viewpoint - Company achieved significant growth in revenue and gross margin, indicating a strong performance in the first quarter of 2025, driven by continuous investment in R&D and advancements in AI technology [1][2][14] Financial Performance - In Q1 2025, company reported revenue of 1.864 billion yuan, a year-on-year increase of 8.39% [1] - Gross margin increased from 60.76% in the previous year to 71.79% in Q1 2025, marking a substantial rise of 9.22 percentage points [1] R&D Investment - Company invested 3.202 billion yuan in R&D in 2024, a 3.16% increase year-on-year, accounting for 40.29% of total revenue [2] - R&D expenses grew by 18.15% in Q1 2025, reflecting a strong commitment to innovation [2] - Cumulative R&D investment over the past decade reached approximately 30 billion yuan, establishing a solid foundation in AI and digital security [2] AI Development - Company is enhancing its AI capabilities with the development of a self-researched general model, "360智脑," which ranks among the top domestic models in comprehensive capabilities [3] - The "360zhinao2-o1" model received a gold medal in the 2024 evaluation for its strong performance in deep reasoning and logic [3][4] Product Innovation - Launched "Nano AI Search," an AI-native internet product that integrates multiple models, achieving over 19 million monthly active users by March 31, 2025 [7] - Internet value-added service revenue reached 1.379 billion yuan in 2024, a year-on-year increase of 25.51%, indicating a shift towards subscription-based income [8] Market Expansion - Established the "360 Digital Intelligence Group" in 2024 to focus on B2B and B2G markets, developing AI solutions for various industries [9] - The company has completed training and delivery of AI models in nearly 20 vertical fields, enhancing its service offerings [9] Security Initiatives - Company is building a new generation digital immune system to address AI security risks, highlighted by the rise in cyberattacks targeting AI models [10][11] - Captured over 1,300 APT attacks in 2024, demonstrating its leading position in cybersecurity [12] - The "360 Security Model" has been tested and applied in over 50 major clients across various sectors, reinforcing its market position [12] Strategic Outlook - The integration of AI technology and digital security is expected to drive long-term value, with the potential for significant growth as AI adoption increases [14] - The company is positioned to leverage its technological advancements and strategic focus to capitalize on emerging opportunities in the digital economy [14]

Core Viewpoint - Company 360 (601360.SH) has not yet turned a profit, reporting a net loss of 273 million yuan in Q1 2025 despite a revenue increase to 1.864 billion yuan [1][6]. Financial Performance - In Q1 2025, the company achieved a revenue of 1.864 billion yuan, an increase of 8.39% year-on-year, but the net loss attributable to shareholders was 273 million yuan, representing a year-on-year increase in loss of 149.16% [1][6]. - From 2022 to 2024, the company has recorded continuous net losses totaling 3.79 billion yuan [2][8]. - The revenue for 2022, 2023, and 2024 was 9.521 billion yuan, 9.055 billion yuan, and 7.948 billion yuan respectively, showing a decline of 12.54%, 4.89%, and 12.23% year-on-year [8]. Business Segments - The company's main business segments include internet advertising and services, smart hardware, internet value-added services, and security and others. In 2024, revenues from these segments were 4.166 billion yuan, 1.014 billion yuan, 1.379 billion yuan, and 1.287 billion yuan respectively [8]. - The internet value-added services segment saw a revenue increase of 25.51%, while the other three segments experienced declines, with smart hardware revenue dropping by 35.44% and security and other revenues decreasing by 27.06% [8]. Research and Development - The company has consistently invested over 3 billion yuan in R&D annually from 2021 to 2024, with R&D expenses accounting for 40% of revenue in 2024 [4][5][14]. - The company is pursuing a dual strategy of "AI + Security" and has launched various AI products and solutions aimed at enhancing digital security and operational efficiency [13][14]. Dividend Policy - Despite ongoing losses, the company has maintained a dividend payout, distributing 700 million yuan in both 2023 and 2024, with a proposal for a similar payout in 2025 [3][15].