Growth Stalls for China's Biggest Surveillance Vendor

Author: 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 related to or around the ASIS 2011 show.For each product or change, where...
Comments : PRO Members only. Login. or Join.

Related Reports

BluB0x Company Profile on Feb 20, 2019
BluB0x has doubled in revenue every year since its founding in 2013, according to CEO Patrick Barry. We originally reported on them in 2015. At the...
Massive Leak Of Chinese VMS Provider Exposes Xinjiang Surveillance on Feb 20, 2019
A subsidiary of China’s claimed largest VMS provider is tracking the precise location and ethnicity of millions in China’s Xinjiang region,...
Security Installation Tools Guide - 22 Tools Listed on Feb 19, 2019
In this guide, we cover 22 tools that security installers frequently use. This is one part of our upcoming Video Surveillance...
Hikvision 2018 Revenue Tops $7 Billion USD But Growth Slows To Low on Feb 15, 2019
Hikvision's annual revenue topped $7 billion for the first time in 2018, although growth slowed sharply. In this post, we analyze the latest...
Hikvision Chairman Praises United Front on Feb 14, 2019
Hikvision’s controlling shareholder held a meeting last month praising the United Front, a Communist Party organization known for its secretive...
Barnes Buchanan 2019: Despite 'Strange Narrative' Great Time To Be In Security on Feb 11, 2019
A "strange narrative" is being spun, said Michael Barnes at the 2019 Barnes Buchanan Conference. However, despite that narrative, it is a "great...
US Senator Calls Hikvision and Dahua “Puppets of the Chinese Communist Party”, Urges Sanctions on Feb 07, 2019
Tom Cotton, Republican senator from Arkansas, has publicly called Hikvision and Dahua “puppets of the Chinese Communist Party and the People’s...
3 UK MPs Call For Investigating Hikvision Over Xinjiang on Feb 04, 2019
3 UK members of Parliament, including 2 with direct comments to IPVM, have called for the UK government to investigate Hikvision's Xinjiang...
Hanwha Techwin Favorability Results 2019 on Jan 31, 2019
Hanwha Techwin's favorability results surged, in IPVM's 2019 study, going from barely neutral in 2016 to strongly net positive, as the results...
Access Control Turnstiles Guide on Jan 28, 2019
Turnstiles control pedestrian access to secured areas, essentially becoming moving portions of fences, walls, or barricades for physically stop...

Most Recent Industry Reports

Security Installation Tools Guide - 22 Tools Listed on Feb 19, 2019
In this guide, we cover 22 tools that security installers frequently use. This is one part of our upcoming Video Surveillance...
Sales Cuts At Rasilient on Feb 19, 2019
Over the past 2 years, video surveillance storage specialist Rasilient has expanded its workforce significantly, aiming to build its own branded...
Exacq Raises VMS Software Pricing Twice in Less Than a Year on Feb 18, 2019
Most VMSes regularly release new features, but rarely increase their prices. For the 3rd time in 4 years, and 2nd time in 8 months, since being...
Axis IR Multi Imager Camera Tested (P3717-PLE) on Feb 18, 2019
Axis has released their first IR multi imager, the P3717-PLE, a repositionable model listing 360° IR illumination and flexible positioning,...
Ubiquiti Favorability Results 2019 on Feb 18, 2019
Ubiquiti has quietly grown into a $1+ billion annual revenue company, with offerings across wireless, wireline network and video surveillance (see...
Casino Surveillance Pro Interview: James Lathrop on Feb 15, 2019
James Lathrop has been working in casinos for almost 25 years. During that time, he says he has held "just about every job you can do in the...
Hikvision 2018 Revenue Tops $7 Billion USD But Growth Slows To Low on Feb 15, 2019
Hikvision's annual revenue topped $7 billion for the first time in 2018, although growth slowed sharply. In this post, we analyze the latest...
Hanwha Smaller Multi Imager Tested (PNM-9000VQ) on Feb 14, 2019
Hanwha's first repositionable multi imager PNM-9081VQ tested well, but was huge, over 12" wide and weighing in at over 10 pounds. Now, they have...
ADT And 'The Defenders' Silent About Massive Complaints on Feb 14, 2019
ADT's largest dealer, "The Defenders" has been the subject of a massive number of complaints over many years and many forums, most recently a CBS...
Hikvision Chairman Praises United Front on Feb 14, 2019
Hikvision’s controlling shareholder held a meeting last month praising the United Front, a Communist Party organization known for its secretive...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact