In-depth Analysis of the Impact of Zhou Hongyi's Financial Fraud Allegations on 360 Company

: According to the latest market data, 360 Security Technology (601360.SS) showed a significant decline after the controversial incident was exposed. The current stock price is 10.86 yuan, with a single-day drop of 5.07% [0]. Over the past 30 trading days, the company’s stock price fell from 12.75 yuan to 10.86 yuan, a cumulative decline of 14.82%, showing the market’s sensitive response to executive disputes [0].

: After the incident broke out, trading volume increased significantly to 192.9 million shares, far higher than the average level of 233.4 million shares, reflecting investor sentiment fluctuations and increased trading activity [0]. Such a decline with increased volume usually indicates strong selling pressure in the market.

: Financial analysis shows that 360 Security Technology is currently facing certain operational pressure. The company’s net profit margin is -7.58%, operating profit margin is -9.34%, and ROE is -2.14%. These negative indicators indicate that the company has profitability challenges [0]. The negative price-to-earnings ratio of -119.31 times further reflects the market’s concerns about the company’s profit prospects.

: The current price-to-book ratio of 2.59 times is relatively reasonable, but the negative EV/OCF ratio (-208.41 times) indicates worrying cash flow conditions [0]. Against the background of executive disputes, investors may re-evaluate the company’s valuation model, especially considering potential financial transparency risks.

: As an important enterprise in the cybersecurity industry, 360 Security Technology’s governance issues have greater sensitivity and amplification effects. The cybersecurity industry itself requires extremely high integrity and transparency, and any financial fraud allegations will seriously damage the company’s reputation and customer trust.

: Such executive dispute incidents usually trigger investors’ reassessment of the following aspects:

• Effectiveness of the company’s internal control mechanisms
• Independence and authenticity of financial reports
• Professionalism and ethical standards of the executive team
• Independence of the board’s supervisory functions

: From a historical performance perspective, 360 Security Technology’s stock price increased by 59.71% over 3 years but fell by 35.47% over 5 years [0], indicating that the company’s long-term development is volatile. Executive disputes may exacerbate this uncertainty and affect institutional investors’ long-term holding confidence.

:

1. Regulatory Risk
   : If the allegations are true, it may face regulatory investigations and penalties
2. Reputational Risk
   : Brand image damage affects business cooperation and customer relationships
3. Liquidity Risk
   : Increased stock price volatility may trigger pledge liquidation risks

: The technology sector performed relatively well on December 16, 2025, rising by 0.83% [0], which indicates that 360 Security Technology’s decline is more due to company-specific factors rather than overall industry impacts.

:

• Short-term
  : Wait and see, wait for more information disclosure and official company response
• Medium-term
  : Focus on company governance improvement measures and increased financial transparency
• Long-term
  : If the company can properly handle the dispute and strengthen internal controls, there is an opportunity for value recovery

The incident of Zhou Hongyi being accused of financial fraud by former executives has had a significant negative impact on 360 Security Technology, mainly reflected in short-term stock price decline, increased trading volume, and weakened market confidence. In the cybersecurity industry, which requires extremely high integrity, such disputes often trigger broader corporate governance questions.

It is recommended that investors closely follow the subsequent development of the incident, especially:

• Official company investigation results and handling measures
• Progress of regulatory authorities’ investigations
• Third-party independent audit report
• Specific improvement plans for the company’s governance structure

Only through transparent and timely information disclosure and substantive governance improvements can 360 Security Technology rebuild investor confidence and achieve long-term stable growth in stock prices.

[0] Gilin API Data - Real-time stock price, historical price, financial data and company overview of 360 Security Technology (601360.SS)