Dahua Launches Aggressive Hikvision Style Sale

Seems a losing strategy if you hop in to a fight that you can't possible stay in for long, it just speeds up the day that HIK runs them out of money

Matthew, good question / observation. They reported ~$200 million net profits in 2015 off of ~$1.2 billion in revenue.

Right now, they claim ~60 US employees, let's say $15 million annual expense assuming $250,000 per employee (factor in total comp, travel, marketing expenses, etc.).

Assume a fairly bad example that they sell next to nothing this year, Dahua could absorb that $15 million.

So not as big as Hikvision (which is roughly 3x+ greater) but still big enough to do it now.

Of course, as you allude to, at some point, it needs to turn the corner. I think it will be tough for them to get their (unclear / limited differentiation and copying Hikvision market approach but late even if they could fix their poor organization) but they can surely spend some more and cut some prices, at least for the foreseeable future to see if this will work.

Seems a losing strategy if you hop in to a fight that you can't possible stay in for long...

You're assuming they're losing money.

There's no evidence of that in their financials, as of yet anyway.

From the recent article regarding Longse, Dahua is selling a 4MP camera for $150-160, while Longse sells it for $40 and is still making at least some profit.

There is a decent chance they're both using the same chips from Ambarella, Hisilicon, TI, etc. Based on this, Dahua's hardware costs are probably very similar to what Longse's are, so there is a quite a bit of extra profit for them. This is of course purely on a hardware level, Dahua would obviously have much higher overhead.

From what they posted, yes. Same as $1900 would cost you more than $2000 worth of stuff.

All the more reason to add a few more things to your order, which is most likely exactly what they would want.