Even though the stock price is sky-high now, the break-even point is yet to come.
The share price of Chinese cybersecurity company Qi An Xin (688561:SH) rose by 115.70% to reach an opening price of CNY 121.01, which grew to the closing price of CNY 133 per share. On its first trading day, the market value hit CNY 90 billion.
Based on its prospectus, the issue price of Qi An Xin is CNY 56.10 per share, and the total capital stock of the company is 679 million shares. The original plan is to raise 4.5 billion yuan, hinting at an enterprise valuation of CNY 38 billion.
Founded in 2014, the inception of Qi An Xin came from the spin-off of the security business of Qihoo 360 (601360:SH) which was then integrated with peer companies through several buyouts. It provides cyber safety solutions by deploying mission-critical software and hardware in clients' network infrastructure. Its products support infrastructure security, protection and data security detection. The company also offers security consulting, evaluation and testing services. The business model includes distribution and direct sales channels. Qi's clients are mainly state-owned entities and enterprises.
CCID consulting expects the market size of cybersecurity in China will reach CNY 92.68 billion in 2021, at a CAGR of around 20%. The proportion of hardware revenue will gradually decline, shifting to software and services.