360 Security Technology Inc (601360.SH) released its 2026 semi-annual report on the evening of August 19.

During the first half of the year, the company generated total revenue of RMB 4.172 billion, marking a 9.01% increase year-on-year. Net profit attributable to shareholders reached RMB 216 million, a sharp turnaround from a loss of RMB 282 million in the prior-year period. Non-GAAP net profit also turned positive at RMB 153 million, compared to a loss of RMB 297 million a year earlier. While the bottom line has swung back to profitability, this improvement stems from both operational enhancements and investment income contributions.

Looking at the revenue composition, the drivers of growth are shifting. Internet advertising and services revenue came in at RMB 2.075 billion, down roughly 1% year-on-year, yet it remains the company's largest revenue source. Internet value-added services revenue climbed 35.4% to RMB 1.226 billion, emerging as the primary growth engine.

Smart hardware revenue slipped about 1.5% to RMB 347 million, while security business revenue rose 22.3% to RMB 310 million. In comparison, the traditional advertising business held roughly steady, with value-added services and security growing at a faster clip.

However, internet value-added services cannot be simply equated with AI-related revenue. The semi-annual report defines this segment as encompassing online gaming, membership subscription services, and other internet value-added offerings, without separately disclosing AI product revenue. As a result, the specific revenue contributions from products like NanoAI, 360 Library, and 360 AI Office remain unquantified.

Profit improvement also stems from cost discipline. Operating costs fell 1.14% year-on-year to RMB 1.266 billion in the first half. Selling expenses dropped 6.16% to RMB 1.215 billion, which the company attributed to adjusted product promotion strategies and optimized resource allocation leading to lower marketing expenditures. Administrative expenses decreased 7.40% to RMB 277 million. Meanwhile, research and development expenses rose 0.81% to RMB 1.578 billion, accounting for 37.81% of total revenue.

Investment income cannot be overlooked either. In the first half, 360 Security Technology Inc recorded investment income of RMB 204 million, a 77.43% surge year-on-year, primarily driven by long-term equity investments accounted for under the equity method. The company holds a 30% stake in Tianjin Jincheng Bank, from which it recognized corresponding investment income of RMB 180 million during the reporting period. It's worth noting that the non-GAAP net profit has also turned positive, so the current turnaround cannot be attributed solely to non-recurring items; nevertheless, investment income has made a notable contribution to overall profitability.

On the operational front, 360 Security Technology Inc continues to integrate AI with its existing internet traffic and security capabilities. The semi-annual report reveals that the company is advancing products such as NanoAI, Nano Film Pipeline, 360 Library, and 360 AI Office. On July 28, the company officially launched "NanoWork," an enterprise intelligent agent work platform, extending AI applications further into task execution and corporate office scenarios.

The security business is growing quickly but remains modest in scale, with revenue of RMB 310 million representing approximately 7% of total company revenue. The company disclosed that its 360 Security Large Model has been deployed across government affairs, finance, energy, manufacturing, and transportation sectors, yet the semi-annual report did not provide specific order values or revenue figures for these deployments.

Overall, the first half of 2026 for 360 Security Technology Inc reflects a simultaneous process of operational repair and business structure adjustment: the advertising business remains largely stable, value-added services and security contribute incremental growth, cost controls are enhancing profitability, and AI R&D investment continues at elevated levels. The key areas to watch going forward are whether AI products can generate clearer revenue contributions and whether the security business can sustain growth on a larger scale.