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cailianshe news, august 31 (reporter wu xin)the a-share semi-annual report disclosure has come to an end, and the overall situation of the cybersecurity industry in the first half of the year has basically taken shape. according to statistics from cailianshe reporters, in the first half of the year, only three of the top 20 companies in the information security industry in terms of revenue scale achieved profits, and the top 10 all suffered losses; in terms of roe, the median value of the above 20 companies has dropped to -3.49%.

in response to the reasons for the industry's losses, many network security vendors mentioned project cyclicality and seasonality of payment collection in interviews with reporters, but the fact that the industry's overall growth is under pressure cannot be ignored. in the context of the general financial pressure and declining purchasing power of downstream g-end customers, the network security industry needs to expand more market-oriented customers as a new growth point.

payment collection is concentrated in h2, and profitability may improve

a reporter from cailianshe found that in the network security industry, the losses of qi'anxin-u (688561.sh), sangfor (300454.sz), and 360 (601360.sh) in the first half of the year reached 820 million yuan, 592 million yuan, and 341 million yuan, respectively, making them the three companies with the largest losses among the top 20 companies in terms of revenue. in addition, the losses of topsec (002212.sz), dianke network security (002268.sz), and green alliance technology (300369.sz) all exceeded 200 million yuan, and the losses of xin'an century (688201.sh), beixinyuan (300352.sz), and renzixing (300311.sz) were between 30 million yuan and 100 million yuan.

the cyclical nature of project settlement and the seasonality of payment collection are considered by manufacturers as the main reasons for the losses in the first half of the year. beixinyuan told reporters that the company's orders and business volume in the first half of this year were basically the same as the same period last year. mid-term revenue and performance have seasonal characteristics. among the disclosed peers, most of them are in the red. dianke network security also stated in the announcement that it is mainly due to the complex macroeconomic environment, the severe development of the industry, the slowdown in demand from major customers such as the government, which are greatly affected by funding, and the longer cycle of project implementation, which has led to a decline in revenue.

cailianshe reporters learned that the cybersecurity industry has a wide range of downstream customers, including government agencies and institutions, state-owned enterprises, and operators, but the g-end is the main customer group. idc data shows that from the perspective of end-user investment, the government is the industry with the highest cybersecurity spending, accounting for 24.9% of spending in 2024.

considering only the project cycle and payment collection factors, the industry's profitability may improve in the second half of the year. "this type of customer usually applies for the annual it budget package at the end of the year or the beginning of the year, conducts bidding and installation in the middle of the year, and the entire project cycle is relatively long. from the normal business rhythm, bidding in the first half of the year, then installation, user training, and confirmation of revenue are generally at the end of the year." a person from the investor relations department of venustech (002439.sz) told reporters.

yang hua, vice president of beixinyuan, also told cailianshe reporters that the second half of the year will be the peak period for cybersecurity and "will definitely be stronger than the first half."

zhang yi, chief analyst of imedia research, told reporters that "the overall situation in the second half of the year may be slightly better. first, enterprises may increase their efforts to reduce costs and increase efficiency, and second, projects will be delivered. but i personally don't think the overall situation this year is particularly optimistic."

the industry is under pressure to find new space

in the short term, the profitability of the cybersecurity industry may improve to a certain extent in the second half of the year due to concentrated collection and settlement, but in the long term, it is an indisputable fact that the industry's growth is under pressure.

according to statistics from reporters, the average year-on-year growth rate of revenue of the information security industry of changjiang securities in 2021 will reach 22.38%, but it will only be 0.70% in 2022, and will be as low as -2.72% in 2023.

the imedia consulting report also shows that in 2019, the market size of my country's cybersecurity industry grew by 21.5%, but the growth rate from 2020 to 2023 showed a fluctuating downward trend, and the pace of growth may continue to slow down in the next few years.

the aforementioned venustech employee also told the reporter from cailianshe that "at present, the third quarter does not show stronger market demand than the second quarter, nor does it release more market expenditure. the current situation of weak downstream demand will remain in the next 1-2 years."

finding new growth points is a top priority. zhang yi said, "the main products of the cybersecurity industry are matched with government and other related fields, with a slow payment cycle and are greatly affected by government fiscal revenue and expenditure. in the long run, we should increase product innovation and shift our customer base from government-oriented to market-oriented customers, such as smart homes, smart cars, and smart factories."

based on the replication and deep cultivation of technology upgrades among customers in different industries, as well as the development of more market-oriented customers other than the g-end, it is regarded as an important path for the cybersecurity industry to find new growth space. for example, beixinyuan stated in a recently disclosed research memo that the company "will continue to adjust its customer structure and focus more on 2c customers to improve the collection of payments."

according to beixinyuan, in the first half of this year, the company launched the new version of linkdood, an overseas version of xinyuan secret message that integrates ai technology, targeting the c-end market, and realized the function of instant simultaneous translation. in addition, there are xinyuan secret message (quantum edition) and xinyuan secret message "black box" versions, which are mainly used to protect personal privacy and business secrets and ensure communication security.

beixinyuan recently won the bid for kunlun digital intelligence technology co., ltd.'s "network security emergency command system project customized development subsystem consulting implementation service" project, which mainly develops a network emergency command and disposal platform based on the "xinyuan mixin secure instant messaging base" and is used to ensure network security emergency command and disposal covering multiple key information infrastructures. it is reported that the "xinyuan mixin secure instant messaging base" has been widely used by military customers before, and the cooperation model with cnpc may be replicated among energy customers.

in addition, developing new application scenarios and corporate customers is also a key focus for network security vendors. for example, qi'anxin disclosed in response to investor inquiries in may this year that in recent years, the company has conducted research on attack and defense technologies in the network security of low-altitude aircraft and has accumulated certain experience in network security construction.

topsec is aiming at the integration of vehicles, roads and clouds. the company has publicly stated that it has formed an integrated security protection system of cloud, pipe, terminal and edge in terms of vehicle-road-cloud security, covering scenarios such as environmental safety and data security. it has launched intelligent connected vehicle safety solutions and vehicle-road-cloud integrated security defense solutions, and has implemented multiple projects.