PUBLIC - This article does not require an IPVM subscription. Feel free to share.
Hikvision deceives about its PRC government ownership.
Contrary to their claims about 'independence' and simply having 'shareholders' that are 'state-owned', Hikvision is controlled by a PRC government entity (CETHIK) that exists specifically for running Hikvision. In this note, we expose this ownership, sharing proof from their own Chinese language records.
Hikvision deceives about the 'SOE' they note, which is CETHIK. As the last three letters indicate, CETHIK is a PRC government organization that controls Hikvision. CETHIK, and its government parent, CETC, do not simply 'own' shares, as 'passive' investors in companies. This information is hiding in plain sight, at least in Chinese, and can be reviewed at www.cethik.com.
Same Naming / Group Leadership
Hikvision's PRC government parent is the "CLP Hikvision Group Limited" (from the cethik.com website). The name clearly references what CETHIK does, it is a government run group centered around Hikvision, as their own graphic shows:
Hikvision Core Of That Group
Industry insights delivered to your inbox weekly.
IPVM is the authority on physical security technology, including video, access, weapons detection and more. Get updates emailed 3 to 4 times per week.
achieved  revenue of 33.91 billion yuan, a total profit of 8.25 billion yuan.
This contradicts Hikvision's marketing claim of being 'independent' as CETHIK claims Hikvision's revenue as their own. Hikvision reported 2016 revenue of 31.9 billion yuan and profit of 7.4 billion yuan. Hikvision is ~90% of CETHIK's revenue and profit, showing that CETHIK is literally little more than Hikvision.
And if CETHIK was simply a 'shareholder', as Hikvision marketing alleges, than CETHIK could not claim Hikvision's revenue as their own.
CETHIK Claims Hikvision Employees
Moreover, CETHIK claims Hikvision's ~20,000 employees as its own, declaring:
I would like to thank more than 20,000 serving staff for your dedication and hard work and for today's CLP Hikvision.
Again, this contradicts Hikvision's marketing claim that they are 'independent' and that CETHIK is just a 'shareholder'.
Same Chairman For CETHIK and Hikvision
The leader/chairman of CETHIK, Chen Zongnian, is simultaneously the chairman of Hikvision, shown on CETHIK's leader's speech webpage and in the image below:
The fact that these organizations share the same chairman, claims the same revenue and employees shows that CETHIK controls Hikvision.
Do Not Blame Hikvision Overseas Employees
Hikvision overseas employees are not to be blamed here. Hikvision management is hiding this from them as well. Given local employee's general lack of knowledge of Chinese language and PRC government structure, this is not something they could easily determine for themselves. Worse, these Western employees have it even harder as they are caught in the middle and on the front lines of this.
Blame Hikvision PRC Leadership
On the other hand, surely Hikvision PRC leadership (e.g., Hu Yangzhong, Jeffrey He , Jason Yang, etc.) knows all about CETC, CETHIK and how they truly work.
Trust Problems For Hikvision
That Hikvision is willing to deceive people about something that can so clearly and distinctly be disproven by their own Chinese language documentation raises serious concerns. How does one trust a company that does this? And if Hikvision is going to be deceptive about this, what other things, like cybersecurity, are they willing to deceive about?
How does one trust a company that does this? And if Hikvision is going to be deceptive about this, what other things, like cybersecurity, are they willing to deceive about?
There will always be integrators who just grab what is on the endcap at ADI or stops and asks at the counter for the cheapest camera available. For those folks, the only thing that will shake them from Hik-addiction will be when the subsidization train ends.
Hikvision management is hiding this from them as well. Given local employee's general lack of knowledge of Chinese language and Chinese government structure, this is not something they could easily determine for themselves.
But as you show, the controlling relationship by a Central State-owned entity is in the English language financials:
Yes, and we first shared that evidence more than a year ago here. The name alone is a pretty strong sign of their owner's relationship. The Chinese language materials help demonstrate/visualize the control and how open and clear it is in China.
Hi-Tech Electric Co., Ltd. Hangzhou Italian Bo is the leading intelligent lighting control and solutions provider.Founded in 1989, the Department of China Electronics Technology Group Corporation (referred to as China Electronics Branch) under the CLP Hikvision Group in Hangzhou state-owned enterprises, national high-tech enterprises, the Chinese light industry standard-setting unit, Hangzhou Municipal Enterprise Technology Center . "China Electronics Branch" is one of the ten major military groups under the direct administration of the Central Government, and is a large-scale 100 billion-yuan central government enterprise with the strategic goal of "excellent in the domestic market and world-class."
so, what is the problem? Don't expose your Hik devices to Internet and you're safe. Make sure you monitor internal network as well.
I'd say most of the cheap solutions shouldn't have any other access except VPN to your router and local connection after that. No port mapping, no hik-connect or similar services, no gateway settings for the devices itself
It's important to remember that when we're criticizing the Chinese ownership, it's not just saying that these things may have junky vulnerabilities where you can firewall it off of the internet and everything will be fine. The real risk to your customers and to be frank, our nation, is that they may have functional back doors. In that case, it doesn't matter that you firewall the sucker off from the Internet or disable it's cloud services. Think more along the lines of iodine dns tunneling. Corporate networks with active monitoring struggle to detect such things, let along a camera installer.
I don't want to hijack this thread but as someone who has sold Hik & LTS product, I have been looking for alternatives and at Digital ID View of Dallas, Texas and have found nothing on IPVM, not a single mention. Does anyone have any experience with this company? Thanks?
We are looking for products that are not going to be sold directly to consumers that have value added in their US customer support. Prices for many Chinese made product are easily available online. Kits from some look Walmart ready in their packaging graphics. As far as their technology, they seemed to offer products that can mix both HD analog and IP based video streams and networks, allowing use of existing cabling and reducing install labor cost. We have not installed anything from them yet.
When I called the company to discuss some aspects of my first project, I Shin Lee,
who is listed as the trademark owner, was actually on the call along with others.
That was a first for me but possibly not that unusual for other industry veterans.
To be perfectly honest, I would not consider any technology product from a company that is still featuring Flash on their website. It is horribly out of date, and has many security vulnerabilities, and at least to me, send signals of "cheap and out of touch".
The majority of the Chinese import brands are all being sold directly to consumers, it is just a matter of what company logo is silk-screened on the units.
It sounds like you are mostly looking for an "obscure" brand so that customers can not price-shop your quotes?
Just returned from a two week trip to China. Of course we flew to Hangzhou as well. Truly, EVERYONE with any exposure to this industry is aware Hik is controlled and owned by the Chinese Communist Government. Every manufacturer in China aware and they also verbalize it frequently.
It's late so i'll keep it short. EVERY CCTV distributor, re-seller, installer, online purveyor can sell Hik products. There are no barriers to entry with Hik and the others. So you are not "special" or unique if selling Hik. You are simply spreading a disease.
Any American marketing and selling Hikvision has crossed an ethics line that will likely sometime in the future cause real damage to their reputation. It is refreshing to hear so many firms refusing to cooperate with Hik these days based on their moral compass. WE CAN ALL sell it, yet more and more refuse due to integrity standards.
For those still supporting Hik, making a quick buck on Hik, "enough already" with the excuses. If its OK to sell a Chinese government owned product, then why are YOU NOT disclosing this key fact in your marketing material? Why? because you know your sales would go to 0.00 if your customers knew the truth.
You can end your Hik addiction. Its so easy. Offer Hik and a competing brand simultaneously. Customer inquires, use that opportunity to sell your other brand after advising them Hik is owned by the communist China government. You are indeed using their brand awareness to build someone else, to grow a more transparent manufacturer, to grow your future. That's called "justice".
Good Article, John, informative as always. A few thoughts came to mind:
CCTV is all networking now, it's not analog, it's not BNCs. The good ol boys who have been doing it for 30 years are still doing it, and they're doing it wrong because no one is telling them, or holding them accountable to doing it right. The same teams doing low voltage work should not be the same ones doing CCTV still, but this is all too common.
As a system administrator, network engineer, and integrator, I am skeptical of every network device that gets installed on my networks. People want to single out HikVision, or blame hardware manufacturing for problems that should be managed and mitigated by the installers, integrators, and managers of said equipment.
Regardless of HikVision's ownership status, any device can be compromised and used for malicious activity; the difference is whether it was deployed in an environment where it can actually do so. I feel this is this is the responsibility of the installer, and no one owns it.
Physically segment your networks; cameras should never be connected to a switching infrastructure with internet on it. If your server needs to be remotely accessed, do so through a VPN, or source lock the NAT policies.
This was well written. It explains the publicly available information on the ownership and then compares the concept of a Chinese SOE to that of a German SOE.
It all seems perfectly square to me now, well...
If Germany were a Communist country with a ruling leader that just appointed himself ruler for life. Term Limits Removed or if they swore an oath to the party Leadership and Party and if we knew who the balance of shareholders were.
Which leads me to Wikipedia and although I wouldn't bet my life on their information, it does seem to identify some connections and that the "Party" may have a little more influence than they are letting on. Wikipedia