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Author: Wen Yu, Editor: Xiao Shi Mei

On August 2, the listed company Qihoo 360 (hereinafter referred to as "360") issued an announcement. Since it involved scary words such as "liquidation" and "divestment", many investors will inevitably have some preconceived negative views. But in fact, there is no need to make a fuss. This incident does not have much impact on the listed company and the majority of investors.

【More changes in form than substance】

First of all, it needs to be emphasized that this liquidation is not bankruptcy liquidation, nor is it because the controlling shareholder Qi Xin Zhicheng is experiencing operational difficulties or insolvency. It is just the completion of a paper agreement that year as planned.

360 is China's largest cybersecurity company. In 2016, in order to devote itself to the construction of national cybersecurity, the company responded to the national call to delist from the US stock market and return to China. In this process, 36 investors invested and loaned 20 billion yuan to help the company complete the delisting, and established Qixinzhicheng as a "shareholding platform" to jointly assume the responsibility of loan repayment. According to the agreement at the time, shareholders could dissolve and liquidate after the loan was repaid. As early as June 2023, the above 20 billion loan had been fully repaid. Since the task has been completed, dissolution and liquidation is reasonable.

From a global perspective, this stock split is more of a formal change, without much substantive impact. It is just a change from collective shareholding to individual shareholding. The core issues such as the equity structure and governance structure of the listed company have not changed. As for the issue of shareholders reducing their holdings after the adjustment, which is of most concern to investors, the company has also made very appropriate arrangements.

According to the content of the announcement, Qixinzicheng shareholders need to jointly abide by the relevant provisions of laws and regulations regarding the reduction quota of major shareholders, pre-disclosure, etc., that is, if the centralized bidding transaction method is adopted, the total number of shares reduced shall not exceed 1% of the total number of shares of the listed company within any consecutive 90 days; if the block transaction method is adopted, the total number of shares reduced shall not exceed 2% of the total number of shares of the listed company within any consecutive 90 days.

In layman's terms, the total number of shares sold by all shareholders of Qixinzhicheng within 90 consecutive days before liquidation must not exceed 3% of the total number of shares of the listed company. After liquidation, the total number of shares sold by all shareholders is still this amount, that is, the speed of share reduction has not changed before and after this incident. Although these 36 investors can decide whether to reduce their holdings in the future, their share reduction behavior and reduction pace will be strictly controlled, and it is impossible for large-scale share reduction to occur in a short period of time.

In short, this adjustment has not affected normal operations, nor has it touched the foundation of development. Even if some shareholders withdraw later, it will not have a fundamental impact on the company's subsequent development.

[Intrinsic value determines the future of the company]

In the past few years, an investment view has gradually formed in A-shares, which regards all share reduction and selling behaviors as a scourge. In fact, this is an obvious cognitive misunderstanding.

The essence of the capital market is to allocate resource factors. It is highly liquid in nature. Buying and selling, inflows and outflows are the norm. For any large enterprise, the entry and exit of financial investors are commonplace, and the future trend of the enterprise will not change significantly because of this. Sometimes, on the contrary, as old investors withdraw and new investors intervene, the enterprise may be further activated. Looking around the world, Apple, Microsoft, Google, Amazon, Alibaba, Tencent, etc. have also experienced the withdrawal of early investors, but this has not prevented these companies from continuing to grow into world-class giants.

Ultimately, it is intrinsic value that ultimately determines the future success or failure of a company. So instead of worrying about the changes and stays of shareholders, it is better to pay more attention to the value and prospects of the company.

Many years ago, the country's top leaders clearly stated that "without cybersecurity, there is no national security" and made every effort to promote the development of China's cybersecurity industry. According to a previous IDC statistical data, China's cybersecurity market accounts for about 1.8% of the information market, less than half of the global average of 3.7%, and far behind the 4.7% of the United States.

It can be seen that there is still a lot of room for development in China's cybersecurity industry. The recent Microsoft blue screen incident once again sounded the alarm for us. This field must be firmly in our own hands.

As the absolute leader in China's cybersecurity field, 360 has undertaken many important national scientific research tasks and is a cybersecurity operation service provider for major cities, governments, enterprises and critical information infrastructure in China. In the past 10 years, the company has invested nearly 30 billion to help the country establish an "early warning and anti-missile system" in cyberspace, overcoming the "bottleneck" problem in one fell swoop. So far, it has independently captured tens of thousands of advanced threat attacks launched by 54 foreign national-level hacker organizations, accounting for 98% of the entire industry. For this reason, 360 was directly included in the "Entity List" of the US Department of Commerce and the "List of Chinese Military Companies" of the Ministry of Defense, becoming the only cybersecurity company subject to dual sanctions by the United States.

He is an expert in cybersecurity, and he is no pushover in AI either.

On August 1, at the opening ceremony of the 12th Internet Security Conference and Artificial Intelligence Summit of ISC.AI2024, Zhou Hongyi officially released the "AI Assistant". While retaining the independent website entrance, the AI ​​Assistant will be fully built into 360's national-level entrance products. Users can get the AI ​​experience without installing plug-ins. At the same time, when using the AI ​​Assistant function, users can also switch models with one click, and 16 domestic mainstream models can be selected at will.

If they fight alone, it is difficult for domestic large-scale model companies to compete with Open AI, but if they attack together, it is another matter. This is where 360's brilliance lies. The company has integrated the strongest large-scale model resources in China, taking advantage of each and performing their respective duties, and finally maxing out the capabilities. According to the latest evaluation results, the Beta version of the AI ​​assistant based on 360 CoE AI capabilities has surpassed GPT-4o in 11 individual capability test indicators, which has really earned face and boosted the morale of China's AI industry.

In order to plan for longer-term development, 360 has made a lot of basic strategic investments in the fields of cybersecurity and AI in the past few years, which has dragged down the company's short-term profits to a certain extent. In addition, the overall environment of the capital market is not ideal, resulting in the company's stock price not performing well for a period of time. However, this state is ultimately unsustainable. On the one hand, the Fed's interest rate cut window is getting closer and closer, and the global capital market will usher in a recovery; on the other hand, 360 will eventually gradually enter the harvest period and effectively improve its profitability.

Despite rumors in the market, Zhou Hongyi, the founder of 360, has never sold a single share since its listing, which shows his responsibility and confidence. After the completion of the liquidation, Zhou Hongyi continued to make a commitment not to reduce his holdings for at least the next 12 months, and said that he would continue to work with 360, which shows that he is still confident in the future development of the company.

The founder is the true soul and key to success of a company. As long as Zhou is still around, 360 is still worth looking forward to. From another perspective, if even Americans are worried about a company, why should we not be optimistic about it?

Disclaimer

The content of this article related to listed companies is the author’s personal analysis and judgment based on the information disclosed by listed companies in accordance with their legal obligations (including but not limited to interim announcements, regular reports and official interactive platforms, etc.); the information or opinions in the article do not constitute any investment or other business advice, and Market Value Observation shall not bear any responsibility for any actions arising from the adoption of this article.