Huatai United Securities Co., Ltd
Inquiry letter on matters related to 360 Security Technology Inc(601360) foreign investment issued by Shanghai Stock Exchange
Special verification opinions on Relevant Issues
Huatai United Securities Co., Ltd. (hereinafter referred to as "Huatai United Securities" or "sponsor") as the sponsor of 360 Security Technology Inc(601360) (hereinafter referred to as " 360 Security Technology Inc(601360) " and "company") non-public offering of shares in 2018, according to the measures for the administration of securities issuance and listing recommendation business In accordance with the provisions of laws and regulations such as the guidelines for the supervision of listed companies No. 2 - regulatory requirements for the management and use of raised funds by listed companies, the stock listing rules of Shanghai Stock Exchange, we hereby conduct special verification on the relevant issues of the inquiry letter on matters related to 360 Security Technology Inc(601360) foreign investment (SSE Gong Han [2021] No. 3033, hereinafter referred to as the "inquiry letter") and express verification opinions, The details are as follows: Question 4
According to the announcement, in addition to using the raised funds to replace the self raised funds of RMB 1.036 billion in the early stage in June 2021, the raised projects such as Cyberspace Security R & D center project have not been invested, mainly because the objective factors affecting the construction of raised projects have changed greatly after 2018. However, the company did not specify the specific changes and impacts, and the feasibility analysis report of the raised investment project disclosed in June 2020 had no significant changes compared with that disclosed in 2018. The company is requested to make supplementary disclosure: (1) whether the specific factors and changes affecting the construction of raised investment projects occur after June 2020 and have a specific impact on the construction of raised investment projects; (2) In combination with the above situation, explain whether the announcement and document information related to the early non-public offering are accurate and sufficient to prompt the relevant risks. Please comment on the recommendation institution. [reply]
1、 Specific factors and changes affecting the construction of raised investment projects, whether they occur after June 2020, and the specific impact on the construction of raised investment projects
In May 2018, the company held the fourth meeting of the Fifth Board of directors and the second extraordinary general meeting of shareholders in 2018 to consider and approve matters related to the non-public offering of a shares.
Since 2018, with the gradual maturity of the Internet industry, the increase of the user base and the continuous approach to the population size, the growth rate of global Internet users has gradually slowed down, and PC Internet users have gradually transferred to the mobile Internet. At the same time, the innovation of Internet technology and network security technology has also been emerging, In addition, since 2020, the industry has been greatly affected by the epidemic of New Coronavirus pneumonia, and the competition in the Internet industry has continued to intensify. The company has adopted a variety of strategies to continue to consolidate its advantageous position in PC and mobile terminals and minimize the adverse impact of the above factors on the company's operation and the implementation of raised investment projects.
For the Internet advertising and service business, the company officially upgraded the commercial brand to "360 smart business", and upgraded from the marketing promotion platform to the whole scene smart business service platform to meet the multi-dimensional needs of users; At the same time, the company actively improves the quality of information content, enriches product functions, has obvious penetration advantages in vertical fields such as games and finance, and has received the key attention of well-known customers in the industry. For the Internet value-added service business, the company timely adjusted its operation strategy according to market changes. While continuing to promote the integrated transformation of "intermodal transport + distribution", the company actively expanded leisure games and overseas markets to achieve high-quality content and refined operation; For the intelligent hardware business, the company has continuously released a number of star products, and the market share continues to break through and improve. At the same time, with the continuous investment in the field of network security and the leading security technology strength accumulated for many years, the commercialization ability of security business has been gradually confirmed. Therefore, the company believes that the above objective factors have gradually changed since 2018, but the company has adopted a variety of business strategies to minimize the adverse impact on the company's operation and the construction of raised investment projects. Therefore, the feasibility analysis report of raised investment projects disclosed in June 2020 has no significant change compared with that disclosed in 2018, The above objective factors have not had a significant adverse impact on the construction of the company's raised investment projects in 2020.
Since 2021, the release of policies, laws and regulations such as the industrial Internet innovation and development action plan (2021-2023) and the personal information protection law has accelerated the development of the network security industry and the standardization process of the Internet industry. At the same time, the company has gradually made it clear from the changes in the industry that the network security industry needs to be upgraded to digital security in order to match the digital strategy of the whole China. Accordingly, the company made strategic adjustments in 2021 and released its strategic goal at the ISC conference in July 2021: to build a national distributed security brain. In December 2021, the company upgraded its digital security strategy and released the first digital security framework system. To sum up, since 2021, based on the changes of macro policies, industrial development and the company's strategy, it has had a great impact on the construction of the company's raised investment projects. Based on the above changes, the company carefully considers the investment of raised investment projects, and analyzes the factors affecting the construction of raised investment projects one by one in combination with the construction content of raised investment projects, as follows:
1. 360 Cyberspace Security R & D Center Project
Based on the characteristics of traditional network security industry, this project is expanded and upgraded, including system security, network security, Internet of things (IOT) security, big data security and industrial Internet security. Since 2020, with the rapid development of digital society, the superimposed epidemic has been fermenting all over the world, major network security events have occurred frequently all over the world, and various attack means such as supply chain attack, blackmail attack, industrial control equipment attack, apt attack, data theft and so on have emerged. The traditional network security development idea guided by compliance requirements is gradually changing. Coping with new network threats with "combat, confrontation, attack and defense thinking" has become a new development direction of network security. In the future, apt organized and organized cyber crime will become the biggest threat to network security. The targets, methods and damages of cyber attacks break through the Convention, and the threat continues to escalate. Therefore, the relevant research and development of the original raised investment project based on the characteristics of the traditional network security industry can no longer adapt to the new laws and regulations and the collectivization and high-end characteristics of network security threats. Based on this, the company will re study the specific arrangement of the project.
2. 360 new generation AI innovation R & D Center Project
This project is to provide artificial intelligence technology support in line with the "big security + content" strategy for all business lines of the company, and provide technical products with customization ability by studying the common needs of all business lines of the company in artificial intelligence technology. With the normalization of the epidemic since 2021, the development speed of urban digitization is much faster than expected. In essence, the digital transformation of the city is to build the digital twin of the city. Through the production, collection and operation of data, and through more accurate data analysis and decision-making, the digital operation of the city can be enabled by data.
The three foundations of the future digital world are data, intelligence (software, Computing) and network. They are indispensable and closely linked to form the digital era, which poses a greater challenge to network security. Compared with the security of the content end, the security of the bottom layer of the system is becoming more and more important. Therefore, the company's original "big security + content" strategy can no longer fully adapt to the changes of the overall network security environment in recent years, and needs to be comprehensively upgraded. Taking artificial intelligence (AI) as the technical support of "big security + content" will also be further adjusted according to the company's strategic upgrading. In order to maximize the use efficiency of raised funds, The company needs to redesign the security defense system from the bottom to solve the increasingly serious security problems by building a security ecosystem of interconnected things.
3. 360 big data center construction project
The project plans to build a new generation of big data center with high security level, high energy conservation and environmental protection, high density and high management level, so as to meet the needs of the company's network security and other business lines for Beijing Vastdata Technology Co.Ltd(603138) storage, high-performance computing platform, high-speed network transmission, security and reliability, and improve the company's support and service capabilities in data storage, data analysis, network and security, Achieve the purpose of effectively ensuring the company's data security management, optimizing the company's data use efficiency and saving the rental cost of the data center.
In 2021, the normalization defense of the epidemic situation intensified the digitization process of society, and the relevant laws and regulations in the field of data security, such as the data security law, the network security review measures (Revised Draft for comments), the data security management measures in the field of industry and information technology (Trial) (Draft for comments), were successively issued and implemented, Significant changes have taken place in the industry pattern of big data centers. All localities have accelerated the investment and construction of big data centers, resulting in a significant increase in the current industry supply and reducing the cost performance of self built big data centers. Considering the changes of IDC industry policy environment, supply and demand pattern, technology iteration and other factors, the company needs to make prudent decisions on the use of subsequent raised funds.
4. 360 intelligent search and commercialization project
This project is going to carry out the upgrading of the business data center, and enhance the user experience of the product system through content construction, copyright purchase, search and information flow product optimization, and information distribution channel, and realize the upgrading of the intelligent advertising platform. Since 2020, the market pattern of Internet advertising has been changing. From the supply side, the superposition of the impact of the epidemic has squeezed the market space for the commercialization of the original traditional Internet due to the increase of home time and the rapid development of advertising forms such as short video and live broadcast; From the demand side, the main advertisers are affected by the macro environment, industrial policy changes and epidemic situation, resulting in the reduction of commercialization investment, which increases the uncertainty of the future development of the project. In the future, the company will make prudent decisions on the use of subsequent raised funds according to the development trend of the industry.
5. 360 interactive entertainment platform project
This project is mainly for the upgrading of the game platform. Based on improving the technical means, broadband and server performance of the platform, we will continue to increase and optimize the functions of the game platform and build a multi-dimensional and multi-directional game service ecosystem. With the release of the online game age instruction in December 2020 and the detailed rules for game review and scoring in March 2021, the overall supervision of the game industry has become stricter and the game review and copyright management have been standardized. The total amount of game version numbers is controlled, the distribution frequency tends to be strict, and the policy and supervision trend of the game industry have been greatly adjusted. At the same time, at the end of 2020, the company will gradually adjust the original business model of game business based on platform distribution to the business model of distribution + operation, in which the operation takes into account both agency and self research, and strive to improve the revenue and profitability of game business. Therefore, for the raised investment funds that have not been invested, the company will postpone the continuous investment, and the company will invest gradually after careful decision-making according to the latest game business development strategy, so as to maximize the use efficiency of the raised funds.
6. 360 traffic anti fraud platform project
The project is planned to focus on five aspects: traffic anti fraud data center, traffic anti fraud basic platform, integrated solution, value-added service and platform customized module upgrade service, so as to provide accurate "wool party" identification ability for all kinds of customers and effectively solve the problem of enterprises being cheated by bad channel customers in app traffic expansion And enterprises are troubled by the "wool party" in market promotion, and more truly transform the marketing and traffic expansion expenses paid by customers into users. Its essence is the expansion of Internet services. Since 2021, with the release of industrial laws and regulations and the deepening of industrial supervision, industrial monopoly has been further curbed, and measures such as strengthening the protection of personal information and data have been introduced one after another to continuously improve the online experience of Internet users. The Internet industry has moved from "shallow farming" to "intensive farming", Traffic fraud represented by the "wool party" has gradually faded out of the mainstream mode of the Internet. Various forms of substantive fraud such as telecom fraud and app fraud have become the main force of Internet fraud, and the overall trend of the industry has changed greatly. For the emerging network fraud, the company has developed relevant software to solve its security problems. For the project, the company will make prudent decisions on the use of subsequent raised funds according to the development trend of the industry.
7. 360 smart children's ecosystem project and 360 smart IOT project
360 smart children's ecosystem project plans to start from four dimensions: hardware, software, content and channel, and realize the capacity expansion and service upgrading of the original children's smart hardware business with the help of the upgrading of original hardware products, the R & D of new hardware products, the expansion of sales channels, the improvement of platform capacity and the construction of content resources, Build a "smart children ecosystem" for children aged 3-12 and their parents, and continue to enhance the company's brand influence and market competitiveness in the field of smart children's equipment.
360 intelligent IOT project is divided into two parts: software platform construction and hardware product construction. The software platform construction includes two parts: IOT operating system and cloud service platform. It is the company's future oriented technology enabling center and the basic platform to support multi-level IOT application products in the future. Hardware products are mainly consumer IOT products, including smart home products and smart car networking. The construction content covers iterative upgrading of hardware products, expansion of hardware categories and optimization of value-added services.
In 2021, with the rapid development of the network security industry, the company's intelligent hardware development strategy was adjusted. With the positioning of "guardian of the digital age", the company integrated the security system with the digital system, attack and defense capability and control capability through the idea of systematic construction, so as to build a new generation of security capability framework with "security brain" as the core. The company's intelligent hardware products have also changed from the original full category coverage to "focusing on security scenarios". It is planned to build a "digital security world" with "security" as the core and intelligent hardware as the real-world probe. Based on the above changes, the raised investment project will be invested after further evaluation.
8. 360 new smart city project
The project plans to meet the management needs of China's new smart city, comprehensively layout the field of smart city governance, and build a management and operation system covering the new smart city. With the accelerating process of urban digitization, especially in the period of normalization of the epidemic in 2021, the three characteristics of digital city are gradually emerging: everything is programmable, everything should be interconnected, big data driven business, in the final analysis, software defines the city, and the urban architecture is based on software. Therefore, the primary solution at this stage is the security of smart cities. Network security is no longer an indispensable auxiliary function, and data security has become unprecedented important to urban operation. Once the data is attacked, it will cause serious economic losses and social consequences. Therefore, it is necessary to plan the urban digital construction and network security construction simultaneously to create a safe base that can escort the digital city. In 2021, the company will further optimize the strategic deployment and create a set of security capability framework with the security brain as the core, which can create a set of city for the digital city
