Growth Stalls for China's Biggest Surveillance Vendor

By John Honovich, Published on Aug 04, 2011

While reports consistently emphasize bullish growth for the Chinese surveillance market, perhaps the biggest Chinese vendor of them all, CSST has reported declining revenue for Q2 2011.

CSST is a fascinating company. After the past few years of dramatic growth and sweeping acquisitions, now growth has stalled and the company is going private.

Let's start with a review of Q2 2011 financial results (based on CSST's 10Q and Management's Call transcript):

  • Revenue declined 7.1% to $156.34 million USD for the quarter (yearly annual pace of ~$600 million USD).
  • Installation revenue was about 75% of total revenue while manufacturing revenue was ~20%.
  • R&D expenditures continue to be nearly non-existent at less than $1 Million USD per quarter. By contrast, Axis spent ~$18 Million USD for the same time frame.
  • Advertising expenditures nearly tripled from less than $1 Million USD per quarter to almost $3 Million USD this quarter.
  • No good explanation was provided for falling revenue after years of strong growth. The explanation given was: "As we succeeded in securing more larger scale installation projects which generally require longer installation time, we completed less installation projects in this quarter."
  • A major strategic shift occurred as almost all revenue is now from the Chinese government: "Approximately 88% of revenues came from the government sector as compared to approximately 55% in the same quarter of 2010."

While we are not Chinese market experts, CSST exhibits a number of major red flags: declining revenue in a supposedly growing market, almost zero R&D expenditure and near complete dependence on a single customer. This is a company who could easily collapse like a house of cards if any shocks occur to the Chinese economy or government. The company would almost certainly be at a massive disadvantage in competing against global video surveillance vendors.

1 report cite this report:

New Surveillance Products Directory Fall 2011 on Sep 21, 2011
This report provides a summary of key announcements and news being made...
Comments : Members only. Login. or Join.

Related Reports

ADT Slides Back, Disappointing Results, Poor Commercial Performance on Aug 06, 2020
While ADT had an incredible start to the week, driven by the Google...
Fever Camera Sales From Integrators Surveyed on Jun 01, 2020
Fever cameras are the hottest trend in video surveillance currently but how...
NetPosa Revenue Plunges 90% on Nov 04, 2019
Revenue for China's long-time largest VMS provider NetPosa plunged 90% in the...
Axis Compares Fever Camera Sellers to 9/11 on Sep 18, 2020
Axis Communications, the West's largest surveillance camera manufacturer, has...
Dahua Revenue Grows But Profits Down, Cause Unclear on Oct 20, 2020
While Dahua's overall revenue was up more than 12% in Q3 2020, a significant...
2020 Mid Year Video Surveillance Industry Guide on Jul 27, 2020
The first half of 2020 has been shocking, for the world generally, and for...
IP Camera Browser Support: Who's Broken / Who Works on Dec 10, 2019
For many years, IP cameras depended on ActiveX control, whose security flaws...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Open vs End-to-End Systems: Integrator Statistics 2019 on Nov 11, 2019
Preference for open systems is on the decline, according to new IPVM...
Facial Recognition: Weak Sales, Anti Regulation, No Favorite, Says Security Integrators on Jul 07, 2020
While facial recognition has gained greater prominence, a new IPVM study of...
Integrators Rising Against Coronavirus on May 27, 2020
IPVM integrator statistics make it clear - Coronavirus's impact on business...
Masks Cause Major Facial Recognition Problems on Feb 24, 2020
Coronavirus is spurring an increase in the use of medical masks, which new...
Dahua Revenue Plunges, 3 Execs Resign Q1 2020 on Apr 29, 2020
Dahua's sales dropped by 19.47% in the first quarter of 2020 amid the...
Verkada Favorability Results 2019 on May 29, 2019
Verkada has taken the industry by storm with the fastest growing video...
Intersec 2020 Final Show Report on Jan 21, 2020
IPVM spent all 3 days at the Intersec 2020 show interviewing various...

Recent Reports

Deceptive Meridian Temperature Tablets Endanger Public Safety on Oct 21, 2020
IPVM's testing of and investigation into Meridian Kiosk's temperature...
Honeywell 30 Series and Vivotek NVR Test on Oct 21, 2020
The NDAA ban has driven many users to look for low-cost NVRs not made by...
Ubiquiti Access Control Tested on Oct 21, 2020
Ubiquiti has become one of the most widely used wireless and switch providers...
Mexico Video Surveillance Market Overview 2020 on Oct 20, 2020
Despite being neighbors, there are key differences between the U.S. and...
Dahua Revenue Grows But Profits Down, Cause Unclear on Oct 20, 2020
While Dahua's overall revenue was up more than 12% in Q3 2020, a significant...
Illegal Hikvision Fever Screening Touted In Australia, Government Investigating, Temperature References Deleted on Oct 20, 2020
The Australian government told IPVM that they are investigating a Hikvision...
Panasonic Presents i-PRO Cameras and Video Analytics on Oct 19, 2020
Panasonic i-PRO presented its X-Series cameras and AI video analytics at the...
Augmented Reality (AR) Cameras From Hikvision and Dahua Examined on Oct 19, 2020
Hikvision, Dahua, and other China companies are marketing augmented reality...
18 TB Video Surveillance Drives (WD and Seagate) on Oct 19, 2020
Both Seagate and Western Digital recently announced 18TB hard drives...
Watrix Gait Recognition Profile on Oct 16, 2020
Watrix is the world's only gait recognition surveillance provider IPVM has...
Intel Presents Edge-to-Cloud Ecosystem for Video Analytics on Oct 16, 2020
Intel presented its processors and software toolkit for computer vision at...
Best Manufacturer Technical Support 2020 on Oct 16, 2020
5 manufacturers stood out as providing the best technical support to ~200...
Microsoft Azure Presents Live Video Analytics on Oct 15, 2020
Microsoft Azure presented its Live Video Analytics offering at the September...
Worst Manufacturer Technical Support 2020 on Oct 15, 2020
4 manufacturers stood out as providing the worst technical support to ~200...