*** [*****] ***** ** ********* [...] recentlyreceived * ******* *********** ****** submitted by the company's director and president, Mr. Li Ke. Mr. Li Ke applied for resignation of the company's directorship due ** ******** *******. He also resigned as the president of the company, a member of the board's remuneration and assessment committee, and a member of the board's strategy committee. After resigning, Mr. Li ** **** ** ****** **** *** ******** ** *** *******.
the old boss wanted back in. common in Asian corporate culture , the founder feels only he understands the business he started and wants to take the reigns again.
I saw it happen in quite a few Taiwanese companies too, it's not dahua specific.
I voted positive even though I knew I would be in the minority.
Dahua is a large company with an established manufacturing and sales base. Slowing sales does not necessarily mean the company is having issues, almost all companies see sales slow as they (and the industry their in) mature.
There are companies in the EU that actually use it as part of their sales pitch that they do not have any US components in their products given the nightmare of dealing with US Export controls on sensitive technology. So while it may be a temporary inconvenience for Dahua not to be able to buy US origin technology many tech companies do just fine without it. I think we will see them do what Huawei is doing: strengthening relationships and investing everywhere but in the US.
In the town where I live there are four main integrators, I have relationships with all of them and only one of them knew of the bans and NDAA - and that one focuses solely on government and nothing else. The other three did not seem to care much when I told them about it, they do not pursue government contracts and their customers do not care enough for them not to pursue least cost materials.
Fu grew the company to what it is so he can probably stabilize it (if it needs it) and continue its trajectory, as long as he is smart about it and leverages non-US tech. So yes, I think their future is positive.
Some color, on my side, from dealing with various Dahua HQ people over the past 5 years.
The consensus that I heard was that while Dahua was growing revenue robustly (helped clearly by an extremely strong China domestic market in the 2010s), the company lacked organization and was managed fairly haphazardly. Of course, when the market is really good and revenue is growing so well, organizational problems and mistakes can be handled.
The challenge, now, for Fu, is that Dahua is now really large, the market has fundamentally slowed and the competitive challenges have increased.
Btw, to #2's points, yes, almost all companies sales slow as they mature but Dahua has never really 'matured'. Li Ke was the attempt to bring that maturity. That's the risk here among the PRC's far more uncertain future.
Also, on the management side question, I would be careful about trusting Dahua's financials, from things that Dahua HQ and Dahua partners have told me over the years.
This is a general PRC risk (two sets of books, etc.) but Dahua's management challenges and the professional CEO exiting so cryptically make this a special concern.
I get it, but I work at a public company here in the US and in the last few years we have had multiple executives exit the company for "personal reasons," I do not find that a particular reason for concern.
Executives leave their posts all the time and unless there was a very public failure (e.g. Boeing CEO's recent departure) or they are moving up to a different company they frequently come up with some nondescript - "cryptic" - reason for leaving.
I work at a public company here in the US and in the last few years we have had multiple executives exit the company
Your company has significant internal issues, so I don’t think that’s a good comparison to make. I’m not going to disclose your company, of course, but since you brought it up I think it’s fair to give that context.
More broadly, it’s very rare for a CEO to leave that quickly with no replacement in place. In my experience that’s almost always a signal of significant problems.
Fair enough, although I think it a bit of an overstatement to say my "company has significant internal issues." My division, yes, the entire company less so.
You compared Fu to Elon Musk, Telsa has had a large amount of executive turnover, although Telsa is probably not a good example because it is so chaotic. But it is not just my company, and Tesla, and Dahua...a record number of CEO's stepped down in 2018 - incidentally "CEO turnover rose notably in every region in 2018 except China."
I'm not trying to stick up for Dahua, heaven knows I have had my fill of them. I just don't see a CEO departure as a clear negative signal - it could be, as Marshall points out, but it could also be a signal of the company's commitment to fixing what is wrong, and therefore good news.
Dahua had a lot wrong with Li, but still managed to become the second largest player in the world. his relationships and intimate knowledge of the company play a great deal in relaxing the anxiety among channel partners.
I believe that for many, in china especially, to see the old management back at the helm might be reassuring.
whether or not this is the best way to run a billion dollar conglomerate is debatable. I personally dont think so, but I have seen it happen before.
not just in China, it's common also in Taiwan and in other industries. Moris Chang, the founder and CEO of TSMC, retired in 2005, only to become ceo again in 2009.
Dahua Hong Kong partner EMPIRETECANDY offered the following explanation for Li's exit:
real reason is dahua boss think Li not bring the company better in the past 2 years and have to pay big money for Li's team. Li brought lots of his fellows from huawei when he was the ceo in dahua, and kick out the old dahua guys.
That seems reasonable to me, though the 'big money' part does not make much sense. If Dahua's reported revenue (billions) and profits are correct, Li Ke's comp is not that much:
截至本公告日，李柯先生持有公司股份2,420,000股，占公司总股本的0.08%。
Li Ke had 2.4 million shares at ~$2.7 each or ~$6.6 million, which for the CEO of a multi-billion dollar company is not burdensome.
The bigger question is why Li Ke did not make the company better? Is it Li Ke's fault? Is it because Fu blocked him? I don't know.
I do know that Dahua had management problems when they brought Li Ke in. Bringing Li Ke was implicitly an acknowledgement from Fu of those problems, so what now?
real reason is dahua boss think Li not bring the company better in the past 2 years and have to pay big money for Li's team. Li brought lots of his fellows from huawei when he was the ceo in dahua, and kick out the old dahua guys.
100% support this statement. Li Ke came into the company and just wanted to bring all Huawei people in who had no idea about the security industry. Almost all the good people left Dahua and most of what was left were the shit staff who could not get a job somewhere else.
At the beginning when Li Ke came on board it was common knowledge that he would gradually push all managers out and replace them with Huawei people even if they had no idea about how to sell CCTV. It was also common knowledge that Li Ke would not last and that once he was gone that all of the ex Huawei people that he hired would be gone as well.
Next on the Hitlist will be his underling Jason Zhao.
@Jason I hope you enjoy being on the side being pushed out, now you can learn how it feels. :) :) I hope you can get a job back at Huawei
I dont not see how Dahua can recover after losing so many good people. These new people who came in have messed up the channels and made Dahua a joke. In some countries, they have even appointed their Chinese friends who are running one or two man operations as AUTHORIZED distributors and given them better pricing than their old distributors who purchase tens of millions of dollars in product.
I would encourage people from all different markets to post examples of these types of distributors on this blog so that the security community can see what the truth is.
I dont see a way out for Dahua, they faltered at a crucial moment in their growth. When compared to their main rival Hikvision they are losing in every way and the current staff at Dahua are mostly incapable of doing what is needed.
1. Good staff do not want to join Dahua. It is a company of last resort now. Hikvision is one of the first choices for people wanting to enter the CCTV industry or change jobs.
That shows the reason good people do not want to join Dahua. The truth can not be hidden forever. I am surprised we dont see more of this.
2. Channel is a mess. Even some of their largest distributors are moving to other brands because of their bad experience with Dahua now. Hikvision has a very stable channel globally.
3. Intercoms - The Dahua intercom range has a significant advantage however other companies like Hikvision have now overtaken them
4. Dahua had access control many years ago however again Hikvision has overtaken them
5. Dahua seems to be incapable of developing their own features and mainly relies on features offered by the SOC vendor. A classic example of this is the cloud upgrade feature. Most technical people in Dahua tell customers not to use it because it is not stable and that there is a good chance it will brick the device being upgraded.
It really is annoying when companies go around promoting all these technologies as their own when actually it is the SOC manufacturer who makes it all possible. An example is the features on this Amberella CV2S SOC. Much of the tech is on the chip. The camera manufacturer now just needs to extract the data and do some fine tuning.
6. Dahua has holes from top to bottom. if anything it is just going to get worse due to the way Chinese people manage people. Promoting and hiring friends rather than qualified people. Have a look at the Dahua employees on Linkedin and see how many have relevant education or experience.
7. Many Dahua country managers also lack experience. How can these people help to build the company back up again when they are the ones that helped destroy it.
Try searching for Dahua General Manager on Linkedin and open some of their profiles. Time and time again you will see a complete lack of relevant experience or education.
I can confirm similar issues in Israel market for the last 2 years:
"Authorization" of an unauthorized distributor, price war, stock dumping / market flooding, price drop, and eventually money loss for all sub-distribution channels. The inevitable damage for Dahua is a drop in sales volume, and the loss of trust from the channels. Recently they hired a local team, but instead of recovering old channels (the cost is high), they seem to try to replace them with new ones.
Nevertheless, the product line is rich, quality is good, it's cost-effective, and well accepted in the Israeli market.
Update: Li Ke has launched a new venture, called Hangzhou Shuopan Smart Technology Ltd. The details of his new venture aren't very clear. Leiphone's report said it's something about big data service, software development, internet data service, communication device manufacture, and sales, etc. The overall goal, according to Leiphone, is to push traditional industries for digitalization transformation. The venture was registered on April 29 with an incorporation capital of 50 million yuan (~$7 million USD).
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Comments (16)
Undisclosed #1
the old boss wanted back in. common in Asian corporate culture , the founder feels only he understands the business he started and wants to take the reigns again.
I saw it happen in quite a few Taiwanese companies too, it's not dahua specific.
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Undisclosed Manufacturer #2
I voted positive even though I knew I would be in the minority.
Dahua is a large company with an established manufacturing and sales base. Slowing sales does not necessarily mean the company is having issues, almost all companies see sales slow as they (and the industry their in) mature.
There are companies in the EU that actually use it as part of their sales pitch that they do not have any US components in their products given the nightmare of dealing with US Export controls on sensitive technology. So while it may be a temporary inconvenience for Dahua not to be able to buy US origin technology many tech companies do just fine without it. I think we will see them do what Huawei is doing: strengthening relationships and investing everywhere but in the US.
In the town where I live there are four main integrators, I have relationships with all of them and only one of them knew of the bans and NDAA - and that one focuses solely on government and nothing else. The other three did not seem to care much when I told them about it, they do not pursue government contracts and their customers do not care enough for them not to pursue least cost materials.
Fu grew the company to what it is so he can probably stabilize it (if it needs it) and continue its trajectory, as long as he is smart about it and leverages non-US tech. So yes, I think their future is positive.
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John Honovich
Some color, on my side, from dealing with various Dahua HQ people over the past 5 years.
The consensus that I heard was that while Dahua was growing revenue robustly (helped clearly by an extremely strong China domestic market in the 2010s), the company lacked organization and was managed fairly haphazardly. Of course, when the market is really good and revenue is growing so well, organizational problems and mistakes can be handled.
The challenge, now, for Fu, is that Dahua is now really large, the market has fundamentally slowed and the competitive challenges have increased.
Fu also has been pursuing his own Elon Musk type play, with his Leap Motor (zero running car) electric car startup. However, various China reports say that the car company is struggling and draining Fu (e.g., Fu Liquan transfused blood for zero-running car and In the first year of the new car's launch, the zero running car slipped into the abyss).
Can Fu refocus on Dahua?
Btw, to #2's points, yes, almost all companies sales slow as they mature but Dahua has never really 'matured'. Li Ke was the attempt to bring that maturity. That's the risk here among the PRC's far more uncertain future.
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John Honovich
Dahua Hong Kong partner EMPIRETECANDY offered the following explanation for Li's exit:
That seems reasonable to me, though the 'big money' part does not make much sense. If Dahua's reported revenue (billions) and profits are correct, Li Ke's comp is not that much:
Li Ke had 2.4 million shares at ~$2.7 each or ~$6.6 million, which for the CEO of a multi-billion dollar company is not burdensome.
The bigger question is why Li Ke did not make the company better? Is it Li Ke's fault? Is it because Fu blocked him? I don't know.
I do know that Dahua had management problems when they brought Li Ke in. Bringing Li Ke was implicitly an acknowledgement from Fu of those problems, so what now?
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Undisclosed #4
100% support this statement. Li Ke came into the company and just wanted to bring all Huawei people in who had no idea about the security industry. Almost all the good people left Dahua and most of what was left were the shit staff who could not get a job somewhere else.
At the beginning when Li Ke came on board it was common knowledge that he would gradually push all managers out and replace them with Huawei people even if they had no idea about how to sell CCTV. It was also common knowledge that Li Ke would not last and that once he was gone that all of the ex Huawei people that he hired would be gone as well.
Next on the Hitlist will be his underling Jason Zhao.
@Jason I hope you enjoy being on the side being pushed out, now you can learn how it feels. :) :) I hope you can get a job back at Huawei
I dont not see how Dahua can recover after losing so many good people. These new people who came in have messed up the channels and made Dahua a joke. In some countries, they have even appointed their Chinese friends who are running one or two man operations as AUTHORIZED distributors and given them better pricing than their old distributors who purchase tens of millions of dollars in product.
I would encourage people from all different markets to post examples of these types of distributors on this blog so that the security community can see what the truth is.
Rant Over!
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John Honovich
Update: Li Ke has launched a new venture, called Hangzhou Shuopan Smart Technology Ltd. The details of his new venture aren't very clear. Leiphone's report said it's something about big data service, software development, internet data service, communication device manufacture, and sales, etc. The overall goal, according to Leiphone, is to push traditional industries for digitalization transformation. The venture was registered on April 29 with an incorporation capital of 50 million yuan (~$7 million USD).
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