Company

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DONGXING SECURITIES

August 29, 2019

Three hundred and sixty (601 360): steady increase
Recommended / maintain

performance, government and enterprise security gradual landing Three hundred sixty Company reports
Dongxing
Securities - - 2019 Daily News Comments

Co., Report Summary: Company Profile:

The company is China's leading Internet and mobile security products

Ltd.
event: and services provider with a leading domestic-scale high-level security

team that includes 360 brand is a leading brand of network security.

2019 In the first half, the company achieved a total revenue of RMB 59.25 Billion, essentially flat with last year; attributable to

shareholders of listed companies net profit of 40.52 Billion, an increase of 163.66% Buckle non-profit 16.09 Billion, an increase

of 15.76% .
The next 3-6 months Tips on major issues:

View: Release set by the company planned to enter the final stages, it is

expected to raise 10.9 billion yuan of funds.

Internet advertising revenue was essentially flat, the future is expected to remain stable. Affected by macroeconomic
Equity Research
poor performance of the overall advertising market. The company's Internet advertising business also affected the overall revenue Trading Data

47 Billion yuan, down year on year 7.7% .

52 Week price range (yuan) 21.32-23.49
The company presents structural changes in advertising revenue, the traditional display, search advertising has declined,
The total market value (million) 1442.1
while PC End end and mobile advertising information flow strong growth, rising income share. The company also launched
Market capitalization (million) 84.68
an innovative marketing platform to help advertisers more precise advertising. We expect the company's advertising business will remain stable.
Total equity / Circulation A Shares (million shares) 676406/39718
The company gradually government and enterprise security business has landed, the future worth looking forward
Circulate B share/ H Shares (million shares) /
to. The government and enterprise security company as an important strategic direction and future business growth. 360 Outstanding
52 Sunday both turnover 2.12
technical advantages, particularly in the big data security, with the Eastern Hemisphere's largest "white hat" Legion, pay

52 weeks Price Graph

attention to the threat of driving, driving safety and offensive and defensive capabilities. The company focuses on the

development of government and enterprise business to seize the big one, the company won the first turnkey government or the city, to the eco-companies, make their own core security business. At present, the company a
68.9% Three hundred sixty CSI 300
Million has been landed. The future is expected to have large single have been released, it is worth the wait.

The company is controlled vanguard of security, insist on technological innovation . 2019 year 6 Month, the company

announced. " 360 Security brains "comprehensive enabling domestic operating systems, government and enterprises to

enhance the level of security. And, the company released a small business program, became the only PC Eco-end applet platform.
- 31.1%
Company earnings forecasts and investment rating: We expect the company 2019-2021 Annual net profit 39 ,
8/30 10/30 12/30 2/28 4/30 6/30
43 with 51 Billion, corresponding to EPS Respectively 0.59 , 0.65 with 0.75 yuan. The current stock price corresponds
Source: wind, Dongxing Securities Research Institute
2019-2021 year PE Values ​were 37 , 33 with 29 Times. Maintain the "recommended" rating.
Analyst: Wang Jianhui
Risk Warning: the advertising market is less than expected, government and enterprise security business fell short of expectations.
010-66554035 wangjh_yjs@dxzq.net.cn

S1480519050004
Financial indicators forecast Practicing Certificate Number:

Analyst: Ye Sheng
index 2017A 2018A 2019E 2020E 2021E 010-66554022 yesheng@dxzq.net.cn

Operating income ($ million) 12,238.1 13,129.2 14,554.7 16,367.6 18,761.1 Practicing Certificate Number: S1480517070003

growth rate(%) 406.28%

1 7.28% 6 10.86%
4 12.46% 14.62%
7 4

Net profit ($ million) 3,421.78 3,508.30 3,940.07 4,345.76 5,065.45

growth rate(%) 1918.94 2.53% 12.31% 10.30% 16.56%

Roe(%) 21.01% 14.74% 15.48% 14.69%

% 14.73%

Earnings per share (yuan) 0.00 0.53 0.59 0.65 0.75

PE - 40.58 36.65 33.23 28.51

PB - 6.07 5.67 4.88 4.20

Source: Company earnings, Dongxing Securities Research Institute

Please refer to the disclaimer at the end of the report Source prosperity of the East Wise
P2 Dongxing Securities Company Report DONGXING SECURITIES
Three hundred and sixty (601 360): steady increase performance, government and enterprise security gradual landing

Schedule: Earnings Forecast Table

Balance Sheet Unit: RMB million Income Statement Unit: RMB million

2017A 2018A 2019E 2020E 2021E 2017A 2018A 2019E 2020E 2021E

Total current assets

13305 18557 26432 30078 35408 Operating income 12238 13129 14555 16368 18761
Money funds 10013 14977 22629 25864 30654 Operating cost 3296 3998 4791 5678 6752
accounts receivable
2438 2346 2791 3139 3598 business tax and surcharges 252 236 261 294 337
Other receivables Operating expenses
76 249 277 311 356 1907 2034 2038 2128 2251
Prepayments Management fees
96 92 92 92 92 3118 838 728 818 750
stock 104 123 144 171 203 Financial expenses
- 46 - 345 --376 --485 --565
Other current assets
491 483 483 483 483 Asset impairment losses 214.99 97.32 20.00 20.00 20.00
Total non-current assets
7745 10791 7033 6935 6827 Changes in fair value 0.00 0.00 0.00 0.00 0.00
Long-term equity investment Net investment income
4431 4427 4427 4427 4427 521.58 413.33 300.00 300.00 300.00
Fixed assets 356 482 506 502 484 operating profit 4050 4174 4627 5105 5951
Intangible assets Non-operating income
314 339 310 284 261 72.24 19.66 10.00 10.00 10.00
Other non-current assets Operating expenses
twenty two 265 400 350 300 2.78 7.35 2.00 2.00 2.00
total assets 21050 29348 33465 37013 42235 The total profit 4119 4186 4635 5113 5959
Total current liabilities Income tax
4369 4901 5304 4725 5137 697 678 695 767 894
short-term loan
0 0 0 0 0 Net profit 3422 3508 3940 4346 5065
accounts payable
2121 2350 2757 2178 2590 Minority interests 50 --27 --30 - 33 - 38
Advances from customers
558 588 588 588 Net profit attributable to parent company 588 3372 3535 3970 4379 5104
Due within one year of non-current
14 18 18 18 18 EBITDA 4721 4439 4404 4796 5574
Liabilities
Total non-current liabilities
365 168 140 140 140 EPS (RMB) 0.00 0.53 0.59 0.65 0.75
Long term loan
0 0 0 0 0 Key financial ratios

Bonds payable
0 0 0 0 0 2017A 2018A 2019E 2020E 2021E

Total Liabilities
4734 5069 5444 4865 5277 Ability to grow
Minority interests 267 297 267 235 Operating income grew 196 406.28% 7.28% 10.86% 12.46% 14.62%
Paid-up capital (or share capital)
2000 6764 6764 6764 6764 operating profit increased 2075.02% 3.08% 10.86% 10.31% 16.59%
Capital reserve
9746 7032 7032 7032 7032 net profit attributable to parent company 12.31% 10.30% 12.31% 10.30% 16.56%
undistributed profit Profit growth
4393 7765 10543 13609 17181 Profitability
Attributable to shareholders' equity Gross margin (%)
16048 23982 25641 29801 34650 73.07% 69.55% 67.08% 65.31% 64.01%
totalEquity
Liabilities and Net profit margin (%)
21050 29348 33465 37013 42235 27.96% 26.72% 27.07% 26.55% 27.00%
Cash Flow Unit: RMB million Total net assets (%) 16.02% 12.04% 11.86% 11.83% 12.08%
2017A 2018A 2019E 2020E 2021E ROE (%) 21.01% 14.74% 15.48% 14.69% 14.73%
Cash flow from operating activities
4143 3748 3332 2785 4296 Solvency
Net profit 3422 3508 3940 4346 5065 asset-liability ratio (%) twenty two% 17% 16% 13% 12%
Depreciation and amortization Current Ratio
717.09 610.13 0.00 145.72 159.12 3.05 3.79 4.98 6.37 6.89
Financial expenses
- 46 - 345 --376 --485 --565 Quick ratio 3.02 3.76 4.96 6.33 6.85
Reduce accounts receivable
0 0 --446 --348 --459 Operating capacity

Prepaid accounts increased

0 0 0 0 0 Total asset turnover 1.03 0.52 0.46 0.46 0.47
Cash flow from investing activities
9046 --4042 4153 184 184 Accounts receivable turnover 7 5 6 6 6
Changes in fair value gains
0 0 0 0 0 Accounts payable turnover 9.01 5.87 5.70 6.63 7.87
Reduce long-term equity investment
0 0 3806 0 0 Indicators per share (yuan)

Investment income
522 413 300 300 300 Earnings per share (the latest share 0.00 0.53 0.59 0.65 0.75
Cash flow from financing activities thin)
--11 981 --247 167 266 310 Net cash flow per share (the latest 0.60 - 0.08 1.13 0.48 0.71
Bonds payable increase Diluted)
0 0 0 0 0 Net assets per share (the latest share 8.02 3.55 3.79 4.41 5.12
Long-term borrowings increased thin)
0 0 0 0 0 Valratio
Common stock increase
1603 4764 0 0 0 P/E - 40.58 36.65 33.23 28.51
Capital reserve increase
9396 --2713 0 0 0 P/B - 6.07 5.67 4.88 4.20
Net increase in cash
1207 --541 7652 3235 4790 EV / EBITDA 7.00 29.41 27.90 24.95 20.61

Source: Company earnings, Dongxing Securities Research Institute

Please refer to the disclaimer at the end of the report Source prosperity of the East Wise
 P3
Dongxing Securities Company Report
DONGXING SECURITIES
Three hundred and sixty (601 360): steady increase performance, government and enterprise security gradual landing

Summary reports

Report Type title date

the company 2019-5-31

Three hundred and sixty (601360.SH): the layout of government and enterprise security business, look forward to the future

industry Industrial software industry: One of the Sino-US science and technology industry battle Vital depth reporting software 2019-5-22

industry American SaaS industry: industry visits and the overall analysis 2019-5-22

industry The core beneficiaries of new retail: Tencent, Ali and SaaS companies 2019-5-7

the company China has praised (08083) Depth Report: China took the lead off the SaaS service providers 2019-3-5

Source: Dongxing Securities Research Institute

Please refer to the disclaimer at the end of the report Source prosperity of the East Wise
P4 Dongxing Securities Company Report DONGXING SECURITIES
Three hundred and sixty (601 360): steady increase performance, government and enterprise security gradual landing

Analysts Introduction

Analyst: Wang Jianhui

Principal analyst in the computer industry, four years of securities industry experience, both TMT Industry research and development experience and a secondary market research

experience, worked Founder Securities, won 2018 Wind team in first place gold medal in the computer industry analyst, 2019 Dongxing Securities, joined the computer team, practicing

industrial research study to create value concept.

Analyst: Ye Sheng

The computer industry researcher, Bachelor of Industrial Engineering, Xi'an Jiaotong University, Central University of Finance Master of Finance, 2015 Joined in Dongxing Securities

Research Institute, mechanical industry had engaged in research, it is now engaged in the computer, the Internet industry research.

Analysts promise

Responsible for this research report in whole or in part of each of the securities analyst, hereby certify that the views expressed in this report, analyst with logic and arguments are the

results of my research, information, and have been quoted text indicate the source. This report is based on public sources of information, and strive to clearly and accurately reflect the

research analyst's own point of view. No part of my compensation in the past was, is not now and in the future will not directly or indirectly related to the specific recommendations in this

report or opinion.

risk warning

Information contained in this Securities research report, opinions, conclusions and other content for investors decision-making. In any case, the Company's Securities research report does

not constitute investment advice to any institutions and individuals, market risk, investors before deciding to invest, it is important to be prudent. Investors should make independent

investment decisions and bear the investment risk.

Please refer to the disclaimer at the end of the report Source prosperity of the East Wise
 P5
Dongxing Securities Company Report
DONGXING SECURITIES
Three hundred and sixty (601 360): steady increase performance, government and enterprise security gradual landing

Disclaimer

This research report was prepared by the Institute of Dongxing Securities Co., Ltd., is a legitimate Dongxing Securities Co., Ltd.

Securities investment consulting business qualification institutions. This research report cited information is derived from publicly available information, the company

The accuracy and completeness of such information does not make any guarantee, does not guarantee that the information and recommendations contained not happen

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Contrary to the original intent of the reference line, deletions and modifications.

This research is for Dongxing Securities Co., Ltd. and customers of the Company the right to license the use of institutions, not

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And responsibility.

Industry rating system

The company investment rating (the Shanghai and Shenzhen 300 Index is the benchmark index):

To report the future 6 Within months, the company's share price relative to the market over the same period the benchmark index's performance as the standard definition:

Highly recommended: Outperform the market benchmark rate of return 15 %the above;

Recommended: Outperform the market benchmark rate of return 5 % ~ 15 %between;

Neutral: relative to the market benchmark rate of return of between - 5 +% 5 %between;

Avoid: weaker than the market benchmark rate of return 5 %the above.

Industry ratings (with CSI 300 Index is the benchmark index):

To report the future 6 Within months, industry index relative to the benchmark index over the same period the market's performance as the standard definition:

Optimistic: Outperform the market benchmark rate of return 5 %the above;

Neutral: relative to the market benchmark rate of return of between - 5 +% 5 %between;

Bearish: weaker than the market benchmark rate of return 5 %the above.

Please refer to the disclaimer at the end of the report Source prosperity of the East Wise