Summary of 360 Company Conference Call Industry Overview - The computer application sector is expected to be evaluated from a 2026 perspective, with a strong performance in Q3 2025, indicating a continuation of positive results into Q4 and the following year. The recovery of leading companies is a significant variable, and the current investment strategy focuses on stock selection rather than timing, emphasizing the purchase of undervalued stocks at market lows [2][5] Company Performance - 360 Company's traditional internet advertising business is benefiting from AI development, with projected revenue of nearly 2.1 billion yuan in H1 2025, marking a turnaround. Value-added services like 360 AI Office generated 457 million yuan in revenue in H1 2025, with an annual target of 1 billion yuan [2][6] - The company has introduced innovative AI search products, including 360 AI Search and Nano AI Search Super Agent, exploring a membership plus advertising revenue model, which may reshape its AI search business [2][7] - Revenue for 360 Company is expected to achieve close to double-digit growth in 2025, with profits likely turning positive due to the recovery of traditional businesses, growth in membership products, and reduced investment losses [2][8] Financial Metrics - The gross margin for 360 Company reached 66.1% in 2024, a 5 percentage point increase year-on-year, driven by the decline of low-margin businesses and growth in high-margin AI office services. Revenue growth is projected to be around 10% from 2025 to 2027, with a potential return to profitability in 2025 [4][13][15] - The company has seen a positive revenue growth trend for three consecutive quarters in 2025, primarily due to the recovery of traditional internet business and increased contributions from consumer-end revenue [10] Investment Logic - The core investment logic for 360 Company revolves around its traditional internet advertising business, which is expected to stabilize with the embrace of AI. Despite recent revenue declines, the company is optimistic about its recovery trajectory [6][11] - The introduction of the Nano AI Search Super Agent, which is the first domestic search product based on a super intelligent agent, aims to break down information barriers and utilizes a membership model priced at 59 yuan per month [9] Future Outlook - The company is expected to maintain a strong push rating, with anticipated revenue growth of around 10% from 2023 to 2027, and a potential return to profitability this year [15] - The AI and cybersecurity sectors present significant development opportunities, supported by policy backing and a recovering market environment. The company's core competitiveness lies in its large model capabilities and self-developed AI systems [14] Additional Insights - The revenue structure has shifted, with internet advertising accounting for 53% of total revenue last year, and the value-added business showing significant growth since being integrated into the 360 AI membership model [12] - The company’s chairman holds a direct stake of 5.35%, and strategic adjustments have been made to address losses in the smart hardware business [10]