360 Security Technology Inc(601360) (601360)
Security dragon hair power government enterprise security: 360 Security Technology Inc(601360) is an early manufacturer of government enterprise security business in China: in the early stage, it accumulated rich tob market experience and security big data through free enterprise security products. Later, it provided traditional tob security products to government agencies and enterprise customers, and incubated a series of network security companies in an investment driven mode. In September 2019, 360 government enterprise security strategy entered the 3.0 era. Based on its own advantages in capital and R & D, the company’s strategy has changed from product orientation and sales orientation to technology orientation, capability orientation and actual combat orientation. With the “360 security brain” and security infrastructure as the underlying architecture, the company has built a new era network security capability framework system to deal with new network threats, and formed a complete software product system.
Sufficient cash flow, strong technical background and significant advantages in safety. The company’s Internet business provides stable cash flow and sufficient book cash, which provides a strong guarantee for the company’s new security businesses such as government enterprise security. The company has a strong team of practical attack and defense security experts, attaches importance to the R & D investment of new technologies, and has rich experience in attack and defense operations and heavy maintenance projects; The huge user base has brought the company a strong big data reserve and panoramic security knowledge base. Based on this, 360 has built the “early warning aircraft and anti missile system” of cyberspace – “360 security brain”, and built a new generation of network security capability system with 360 security brain as the center to export security capability with systematic security solutions. At present, typical projects have been implemented in many cities. In recent years, the company’s government enterprise security business has maintained a rapid growth trend, with a revenue of 912 million yuan in 2021h1 (808 million yuan in 2020), a year-on-year increase of 322.45%. At the same time, the company has comprehensively expanded the fields of data security and intelligent Internet connected vehicle security through investment, mergers and acquisitions, so as to create a more comprehensive security capability.
Network security: the prosperity remains the same, and multipoint drives growth. 1. The industry policy has been continuously released, and the network security industry remains high-profile; 2. The protection network promotes the construction demand from formal compliance to advanced practical exercises, and the customer’s security construction demand changes from passive defense to active defense. Only security manufacturers with combat, confrontation, attack and defense thinking and systematic construction ability can deeply integrate and cover with the customer’s information environment to form effective and systematic protection; 3. Since this year, data security policies have been intensively implemented, and it is expected to leverage the 100 billion data security market in the long term; 4. The network information security market continues to transform into software and service, and the security software and service market is expected to further accelerate.
Investment suggestion: it is estimated that the company’s revenue from 2021 to 2023 will be RMB 12.306 billion, RMB 14.847 billion and RMB 17.694 billion respectively, with a year-on-year growth rate of 5.76%, 20.90% and 19.12% respectively; The net profit attributable to the parent company was RMB 1.751 billion, RMB 2.166 billion and RMB 2.648 billion respectively, with a year-on-year growth rate of – 39.89%, 23.70% and 22.28% respectively. The EPS from 2021 to 2023 were 0.25, 0.30 and 0.37 respectively, and the corresponding PE were 48.8, 39.5 and 32.3 respectively. Using the segment valuation method, we comprehensively give the company a target market value of 150 billion yuan in 2022, corresponding to a share price of 20.99 yuan, maintaining a “buy” rating.
Risk warning: market competition intensifies; New product development is not as expected; Strategic advancement is less than expected; Economic downside risk.
