Investment was significantly impaired, two of the three core businesses declined, and a loss of 398 million yuan in 3606

Image source: Visual China

Reporter | Li Biao

On August 25, 360 (601360.SH, hereinafter referred to as “360”) released its 2022 half-year financial report. The company achieved revenue of 4.823 billion yuan in the first half of the year, down 14.15% year-on-year; profit turned from profit to loss, and the net loss attributable to the parent was 398 million yuan, which expanded to 505 million yuan after deducting non-recurring gains and losses. In the first half of last year, the net profit attributable to the parent was 572 million yuan, and the deduction was 496 million yuan.

360 issued a pre-loss announcement last month, saying that the company’s net loss in the first half of 2022 was about 348-518 million yuan, mainly due to the decrease in main business income and investment income.

The traditional main business of 360 Group includes three major lines, namely Internet commercialization and value-added (the former mainly refers to advertising, the latter mainly refers to games), security and intelligent hardware. It is reported that the decrease in revenue in the first half of the year was mainly due to the decrease in revenue from Internet advertising and service business.

At the beginning of the year, 360 announced that it would focus on security and comprehensively transform a digital security company. Security has also become the only business that has grown in the first half of the year, with revenue of 1.038 billion yuan, a year-on-year increase of about 13.78%.

Internet commercialization and value-added services realized revenue of 2.849 billion yuan, a year-on-year decrease of approximately 21.96%. Among them, the income of Internet advertising and service business was 2.309 billion yuan, a year-on-year decrease of about 24.52%; the income of Internet value-added services represented by games was 540 million yuan, a year-on-year decrease of about 8.71%. The intelligent hardware business achieved related income of 912 million yuan, a year-on-year decrease of about 13%.

360’s foreign investment also turned sharply. The company’s investment loss in the first half of the year was 351 million yuan, compared with a gain of 135 million yuan in the same period last year, mainly due to the impairment of 360’s investment income in associates and joint ventures.

Heading into 2022, the company has been scaling back investment moves. The latest financial report data shows that the ending balance of the company’s long-term equity investment was 5.328 billion yuan, a year-on-year decrease of 21.16%; the balance of other equity instrument investments was 1.519 billion yuan, a decrease of 18.43%, and the cumulative investment was reduced by about 1.8 billion yuan.

Previously, 360 also gave up its holdings of Nezha Auto, and transferred part of its shares at a price of 0 yuan. After the transfer is completed, the company still holds an 11.42% stake in Nezha Auto. Talking about the reasons for giving up, Zhou Hongyi said in an interview with “Chinese Entrepreneur” that he wanted to give Nezha more autonomy. “The team should lead the car building, and we are willing to play supporting roles.” He also emphasized that 360 is not currently Not short of money.