Qihoo 360 swung to a RMB 216 million first-half profit selling China's answer to Anthropic's Mythos
Qihoo 360 swung to a first-half net profit of RMB 216 million as the AI lines Zhou Hongyi promoted all summer became its fastest growers. The shares still sit near a 52-week low.
Vincent Jiang · 3 min read
Zhou sells China the answer Washington locked out
Zhou Hongyi took the stage at the ISC.AI 2026 conference in Beijing on June 24 and unveiled Tulongfeng, an automated bug hunter he called "China's version of Mythos," after Anthropic's vulnerability-finding model 1. It had found 3,432 software vulnerabilities, 105 of them confirmed by Chinese authorities, and Reuters could not independently verify either number 1. A day later he called Mythos a "cyber nuclear weapon" that Chinese firms had "no qualification to catch a glimpse of" 2.
Washington had just ordered Anthropic to suspend exports of a less powerful version of Mythos worldwide 1. It had put 360 itself on the Entity List in May 2020 and the Pentagon's Chinese-military-companies list in October 2022 3.
The curbs do the selling for him. Chinese ministries and banks that want this class of tooling now have one domestic shelf to buy from, and the US vendors who built the original are locked out of the sale.
AI subscriptions carried the turnaround
The interim report published on August 20 turned the theater into a P&L: revenue of RMB 4.172 billion, up 9.01%, and net profit of RMB 216 million against a RMB 282 million loss a year earlier 45. The adjusted line swung to RMB 153 million positive, and an interim dividend of RMB 0.5 per 10 shares was paid on September 22 46.
The fastest growth sits in the lines Zhou promoted all summer. Internet value-added services, the bucket holding Nano AI, Nano Work and 360 AI Office subscriptions, grew 35.38% to RMB 1.226 billion; security grew 22.26% to RMB 310 million and is live in government, finance, energy, manufacturing and transport 4. Nano Work went live on July 28 with 100 million free tokens aimed at 1,000 small businesses 42.
AI subscriptions grew almost four times as fast as the whole company
Data
| Value | |
|---|---|
| AI subscriptions (internet VAS) | 35.38% |
| Security | 22.26% |
| Whole company | 9.01% |
A bug count that doubles, unverified
By July 31 the company says Tulongfeng had found nearly 7,000 vulnerabilities, roughly double the June figure 4. Zhou concedes domestic models trail by 20 to 30 percent in base capability and sells a swarm instead: "If the US route is to cultivate a genius hacker, 360's route is to organize a professional attack-and-defense team" 1. A Pwnie Award for joint work with Tsinghua, reported by Futu, does not appear in the organizers' winners archive, which stops at 2023 78.
The market has not paid yet
At 8.95 yuan on October 7 the stock sits just above its 52-week low of 8.26 and 39% below its high; the Reuters quote page prices that at about 259 times earnings 9. The profit base is thin: FY2025 net income was RMB 263 million, after a RMB 1.09 billion loss in 2024 9.
From a RMB 1.09 billion loss in 2024 to thin profits
Data
| Net income | |
|---|---|
| FY2024 | -RMB 1,090M |
| FY2025 | RMB 263M |
| H1 2026 | RMB 216M |
The market did try to pay: the stock touched a limit-up on August 28, chalked up to AI optimism and the swing to profit 6. Operating cash flow stayed negative, minus RMB 57 million in the half, even as R&D ran at 37.8% of revenue 45.
The verdict date is October 30
A-shares reopen on October 8 after the National Day closure, and 360's third-quarter report is scheduled for October 30 106. That report decides whether the AI subscriptions keep compounding and whether cash finally follows profit. The bug count doubled in five weeks; the share price did not move.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
