Dahua Revenue Plunges, 3 Execs Resign Q1 2020

By Charles Rollet, Published Apr 29, 2020, 08:12am EDT (Info+)

Dahua's sales dropped by 19.47% in the first quarter of 2020 amid the coronavirus pandemic, while three senior executives resigned, including its CFO.

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The drop is far worse than crosstown rival Hikvision, whose sales fell ~5%. Plus, the Dahua resignations add to significant turbulence, with the firm's CEO leaving only two months ago.

In this note, we examine this news and what it means for Dahua's long-term outlook, including:

  • Sales Plunge
  • Dahua Blames Pandemic, "Big Projects" In Q1 2019
  • Executives Resign for "Personal Reasons"
  • Dahua Response to Resignations: Execs Need to take Responsibility
  • Li Ke Was Supposed to Make Things "Clear"
  • Chinese Media Reaction: What Happened to Dahua?
  • Dahua Says Overseas Sales Still Growing
  • Dahua's Mysterious Rise in Profits
  • Thermal Camera Sales Surge But Still "Niche"
  • Thermal Cameras Dahua's Best Hope?

Sales ****** **%

** ***** **** **********, ******** ***** **, ***** **** its ** ******* **** **.**% ** about $*** ******* ****-**-****, * ******** drop (******* ***** *** ** ******* yuan):

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Dahua ****** ********, "*** ********" ** ** ****

** *** ******** ****, ***** ********** the **** **** ****** ** *** pandemic:

***** *** ***** *******, *** *******'* business *** **** ******** ** * certain ****** *** ** *** *********** outbreak *** *** ******** ** *** macro *******. *** ****** ** *** domestic ******** ****** *** *********, ******* execution *** ******** **** **** **** delayed.

*******, ***** ***** **** *** ***** drop *** **** *** ** ******* "big ********" ***** ******* ** ******* for ** **** - ******* *****,"*** ****** ** *** ******* ****** be **** ** **** *** ****" as *** ***********:

*******, ***** **** ****big ******** **** *** ****** ******* ********* ** *** **** ****** last ****so *** **** ***** [** ****] *** ****. Therefore there's been a [big] decline on the revenue part. But if ** **** *** *** ******* *** ******* ****** ** ** ****, *** ****** ** *** ******* ****** ** **** ** **** *** **** with what was disclosed by two other competitors. [emphasis added]

***** *** *** ******* **** ***** projects ***** **** *** **** ***** not **** **** ** ***** ***** disclosures.**** ** ***** ** **** *****'* ** ***** ****** *** ************ been ****** **** *** *** **** year, ** ***** *** ********* ****** to ******* **** *** ****:

Executives ****** *** "******** *******"

***** **** ************* ***** **** ********** *** ******** their ******** "*** ******** *******": *** Meizhong, *** ****, *** ***** ***. Wei ******** *** *** ****'* *** as ****. * ** *** * are *** *** *** **** ******* with ***** ** ** ** ******* Management.

Dahua ******** ** ************: ***** **** ** **** **************

** *** ******** ****, ***** **** these ***** **********, ********* *** *** CFO, *** **** ****** **** *** decisions **** *** **** *** ***** and ****** ** **** "**************":

***** *** ********** ******: ******* ********, the ****** ********** ****** **** **** this ****haven't ****** **** ******** ** *** *******'* **** ******** **** **** *** **** *** *****. We want to use this chance to sort things out clearly. This is also in line with our management principle that was brought up this year, which is making **** *** ************** ** ***** for every matter and every matter falls on the shoulder of specific personnel. [emphasis added]

***** ******* *** *** *** ** Qiaofen ** * ****** **** - Qiaofen ** *** ** ** *****'* finance ********** *** *** **** **** the ******* ***** ****:

*** *** *** *** *** ****** of *** *** ******* ********. *** had **** *** ******* ****** ** the ******* ********** ****** ** ** practice ***** ****'* **** *** **** change ******** ** *** ****.

Li ** *** ******** ** **** ****** "*****"

***** **** *** ************ **** **** of * **** "** **** ****** out *******" *** **** "*****" **** each ****** *** ** ****** ***** "responsibility".

********** *******, **** ** *** **** reason **** *****'* ****** *** ** Ke *** ******* **; ** ** a ****** ********* ** ******, ***** is ***** *** *************/*********** ********* *******.*** **** ** ***** ***** ********** may ** **** ******* ** * historically ***** ********* ****** *** *** need *** ******* ** **** *** fall.

*** ***** *** **** **** *** of * ************** ********* ****** ***** (********* *** **** day ** ***** ************) ***** ****** from $*.* ******* ** $*.* ******* worth ** *****. ***** ** *********, the ***** ***** *** ********** *** salaries ($***,***-$***,***) *** $*.* ******* ** $3.4 ******* ** ***** ***** ****.

Chinese ***** ********: **** ******** ** *****?

*** ************ **** ******* ** *** media **** **** ********, ******** ******* much *********** ** *** **** ********.

**** **** ******* ******** *****,"**** ******** ** *****?"

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*** **** ******* ************** ***** *****'* ******:

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Dahua **** ******** ***** ***** *******

******* ******* **** ** *****'* ** 2020 ****** ** *** ***** **** overseas ******* ****, ******* *** ******* near-20% **** ** ***** *****:

*** ********, *** ********* *****-** ******** has **** ******** **** ** *** business **********. *** *** ********** ************* of *** ******** ******* **** *** past ******* ***** *** ********* ***** results. *** ******** ****** *** ********** growth ** **

***** *** *** ********* *** ***** between ***** *** ******** *** **. In*** **** ******, ***** **** **.**% ** *** sales **** ********, ************* ****** **** Hikvision's ~**% ******** *****:

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Dahua's ******* **** ** *******

*********, **** * ******* ******* * staggering **% **** ** *****, ******* go **** ** ****, ***** ** is ****** ** *** ***** ** quick ** ******* *****. *******, ***** reported * *.*% ***************** ** ****. ** *** ******** call, ** ********* ** ********* **** this *** **** ****** ** ***** operating ***** ** ******** ****** ** "continuous ************ ** ******* *********":

*** ********* **** ********* ** **.**% compared ** *** **** ****** **** year, ****** ** *) *** *******'* improved ********** **** **** ******* **** continuous ************ ** ******* ********* *** 2) *** ******** ** ******* ** the **** ******.

**** *********** ** ***** *** ********* to ********* **** ****** ********* ******** but ***** ******* ** ******* *******.

***** **** ** *******

** *** ******** ****, ***** **** "the ******* **** *** *** *** staff":

the ******* **** *** *** *** *****. The cost control will strengthen some local operations and improve some online operations and delivery capabilities. Overall we will do some flexible budget management, strengthen investment accuracy and effectiveness, reduce unnecessary losses, optimize our fee structure, including investing in some key areas. [emphasis added]

**** ** ******** **** ******** ********** than *********, ********* ** *****"******* ****** ** ***** ****".

Thermal ****** ***** *****, *** ***** "*****"

** *** ****, ***** **** ** has ********* **** ******** ****** ********, *** **** **** *** ***** a "********** *****" *******:

******** ******* ******* ******** **** *********** to ** *** **,they *** ***** ********** ***** ******** ******** ** *** ******* ’* ******* ******* ******. They can really contribute to the company from the perspective of the year. [But] the performance may not be very large, more reflects the company's rapid response ability as a platform company [emphasis added]

Thermal ***** ******* *****'* **** ****?

************, ***** **** ** *** ******** "several *** ******* ******* ** ***** [of ******* **** *****]" ** ***** of ***** ******* ** **, ****** domestic. ** *****, **** ********** ****** to ***** **** ($***), ** **** means ***** ******* **** ** **% of *** ** ***** ** *.* billion ******* **** ($****), * ************ percentage ***** **** ****** ** ***** surge ********:

** *** ***** *******, ***** **** hundreds ** ******** ** ******** ******* imaging *****. ** *** ***** *******, it *** ****** *** ******** ******. It ** ******** *** ****** ******* ** ******* ******* should ** ********* ********

******, ******* ******* *** *****'* **** hope, **** *** **** ************ ********* them ****** *** ***** (****** *********'* more ******** ********); ** ******* **** reported,****** *** ************ *,*** ***** ******* ******* ** a **** $** ******* ****.

Outlook ********** *** ****** ** ***** *******

*****'* **** **% ***** **** ** far ****** **** *** ***** **********'* and ** ************* *** ******, ******* Dahua's ************. *** ********* ** ****** staff, ********* *****'* ***, **** ***** continued ********** ** *** **** ** an ******* ********* ************* ****.

*******, *** ****'* ********** **** **** fever ******* ** ****** *** *** should ******* * *********** ******, ************ as *** ******** ******* ****** *** globe *** *****'* ******** ******** ** benefit.

Comments (8)

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Funny: 1

Yes that is mentioned in the report. We also have this item posted on that: "Amazon Turns To Chinese Firm [Dahua] On U.S. Blacklist To Meet Thermal Camera Needs" Reports Reuters

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Funny

So... Amazon is selling Dahua, but Dahua is on the “entity list” and all of the restrictions covered by NDAA... What could that mean for Amazon selling to US government departments, etc?

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Funny

Yes, Reuters brought that up. It depends on how the US government implements (or delays) the blacklisting aspect.

The short answer is that these systems are likely (generally) to be trashed at some point regardless.

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Funny

doesnt mean they sold to the Governement.

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doesnt mean they sold to the Governement

Damith, The 'blacklist' he is referring to is the one where users of banned equipment can no longer sell to the government. In this case, Amazon would not need to sell Dahua to the US government, Amazon would simply have to use Dahua to be banned from selling to the US government. This is scheduled to go into effect this August, see: White House Proposes Blacklist of Dahua, Hikvision Users, US DoD Declares "Can No Longer Do Business" With Contractors Using Dahua, Hikvision, Huawei

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Funny

The full impact of Covid19 on our industry will be visible in Q3 2020. A lot of project in Q1 were not affected by the virus since the contracts and everything was signed long time ago especially for big projects. In my opinion the number drops because they made their distributors to buy goods on stock in Q4 2019.

Agree: 1
Disagree
Informative: 1
Unhelpful
Funny

Dahua France employee objects to our reporting here calling it biased:

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This was literally the lead of Dahua's own financial filings this week.

Agree
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Funny: 3
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