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Recently, 360 Company announced its financial results for 2022. According to the financial report, the revenue in 2022 was 9.521 billion yuan, down 12.54% from the same period last year; the net loss reached 2.204 billion yuan, while the profit for the same period in 2021 was 902 million yuan, and the net profit fell 344.23% from the same period last year. This loss is the first loss since 2014.

In view of the loss, 360 said it was mainly due to the decline in revenue and the loss of the company's external investment, which refers to the loss of the car and the sale of the Norwegian browser company Opera at a discount. the two items are currently confirmed losses of 593 million yuan and 510 million yuan respectively.

Relevant data show that Naha Automobile is a car brand of Hezhong New Energy Automobile Co., Ltd., which was established in 2014. In April 2017, it was qualified to produce pure electric vehicles, launched its car brand in 2018, and launched its first mass-produced car, Nali N01, in 2018. In May 2021, 360th announced that it would join hands with Naha Automobile to enter the field of smart cars. In October of the same year, it invested 2.9 billion of Naha Automobile to become the second largest shareholder of Nashi Automobile, with a shareholding ratio of 16.594%. In June last year, the group announced that it would transfer its 3.53 per cent stake in Nahan to two limited partnerships, with a corresponding capital increase of 1 billion yuan. After the completion of the equity transfer, 360 holds 11.4266% of the equity of Nahan Automobile.

With regard to the equity transfer, Zhou Hongyi, chairman of 360 Company, has responded that Naha Automobile is still a start-up company and needs to be led by the founder team rather than full capital, but now there is too little equity in the founder team. 360 is still positioned to support and support the team. Nezha Automobile responded that the fund of part of the equity transferred by 360 will form a consistent actor with the management team, which will help to improve the corporate governance structure and increase the control of the management team. it is more beneficial to the long-term sustainable operation of the automobile business.

It is worth noting that the transfer of shares in Naga Motor in 360 may have something to do with the continuous losses of Naga in recent years, and the decline in revenue in 360's main business. According to the financial report released by 360, we can see that in 2022, Naha's revenue was 13.329 billion yuan and a net loss of 6.919 billion yuan. Based on the annual sales of 152073 cars in 2022, it is not difficult to calculate that it will lose 45500 yuan for every car sold. In the past few years, Naha is also in the stage of loss, with a net loss of 2.9 billion yuan in 2021 and 1.321 billion yuan in 2020, with a cumulative net loss of 11.14 billion yuan over the past three years.

The loss of Nezha car has something to do with the layout of its products. Compared with many new power brands, Naha Automobile follows a price-for-volume strategy, but this strategy is also difficult to reverse the situation of losses and weak sales. Take the sales of its models in 2022 as an example, most of its sales in 2022 come from Nezhu V and Nezhu. In 2022, Naxi V sold 98847 vehicles, accounting for 65% of the total sales ratio, while Naxi U delivered 51021 vehicles, accounting for 33.55% of the total sales ratio.

Relevant data show that Nezhu will be on the market on March 21, 2020 with a vehicle price of 13.98-199800 yuan, while Naxi V will be listed on November 3, 2020 with a vehicle price of 6.59-123800 yuan. This price range also determines which car is difficult to get out of the loss situation quickly. Car insiders have revealed that because the product is priced low, the gross profit margin of the car is only about 5%. As a reference, the gross profit margin of Lulai Automobile in 2022 is 13.7%, that of Xiaopeng Motor is 11.5%, and that of ideal car is 19.4%.

In order to get rid of the situation and reverse the losses, Nahu is also trying to make changes. The Negro S model, which entered the high-end market, was launched in July 2022, but sales of the model were not satisfactory after its launch, with only 2003 delivered in the first month. At the Shanghai Auto Show in April this year, the GT unveiled a new car model, which will be launched in the first half of this year. With the launch of the new car, it remains to be seen whether it can reverse the loss of the car.

From the point of view of 3060 itself, its main business is also in a downward trend. Among them, the revenue from its main Internet advertising and services business was 4.71 billion yuan in 2022, down 25.32 percent from the same period last year; revenue from smart hardware business was 1.888 billion yuan, down 8.5 percent from the same period last year; and revenue from Internet value-added services was 1.082 billion yuan, down 2.03 percent from the same period last year. Only security and other businesses achieved revenue growth of 1.791 billion yuan.

In order to reduce costs and increase efficiency, last year's 360th sales expenses decreased by 5.30% compared with the same period last year, and the number of in-service employees decreased by 912, but it still could not change the loss situation. This year, 360 said that it will vigorously develop AI technology and put forward higher requirements for the financial capacity of the group, which also means that 360 will face greater challenges. And with regard to the cooperation between the two sides, it may also increase a lot of uncertainty because of the perennial loss of Nezha Automobile. After all, from the current point of view, Nahu car does not have its own hematopoietic ability.

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