360 Security Technology (601360) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was ¥3.69 billion, down 18.02% year-over-year, mainly due to strategic adjustments in smart hardware and reduced security project acceptance.

• Net loss attributable to shareholders was ¥341 million, compared to a loss of ¥231 million in H1 2023.

• Gross margin improved to 62.96%, up 3.86 percentage points year-over-year.

• R&D investment remained high at ¥1.52 billion, accounting for 41.05% of revenue.

• No interim dividend or capital increase from reserves was proposed.

Financial highlights

• Operating cash flow was negative ¥470 million, compared to positive ¥130 million in H1 2023.

• Total assets at June 30, 2024, were ¥38.4 billion, down 4.4% from year-end 2023.

• Net assets attributable to shareholders were ¥30.8 billion, down 3.4% from year-end 2023.

• Basic and diluted EPS were both -¥0.05, compared to -¥0.03 in H1 2023.

• Non-recurring gains totaled ¥175 million, mainly from asset disposals and government grants.

Outlook and guidance

• The company continues to focus on AI and digital security, leveraging its proprietary large models and security cloud platform.

• Strategic shift toward SaaS and subscription-based services for SMEs, with ongoing investment in AI-driven products.

• Management expects further optimization of revenue structure and improved gross margins as cloud and AI services scale.