Hikvision Strong Domestically, International Business Struggles

Author: John Honovich, Published on Jul 25, 2018

Hikvision's H1 2018 results are out. Overall revenue growth has sharply dropped, with the company acknowledging their "facing geopolitical headwinds". Hikvision was hurt by Hikvision International (i.e., 'overseas') business but buoyed by the protected domestic market.

In this note, we examine:

  • Steep fall in gross margins
  • Sharp rise in sales expenses
  • Challenges and priorities for Hikvision going forward

*********'* ** **** ********** ***. ******* ******* ****** *** ******* *******, **** *** company ************* ***** "****** ************ *********". ********* *** **** ** Hikvision ************* (*.*., '********') ******** *** ****** ** *** ********* domestic ******.

** **** ****, ** *******:

  • ***** **** ** ***** *******
  • ***** **** ** ***** ********
  • ********** *** ********** *** ********* ***** *******

[***************]

Financial ********

********* ************* / ******** ******** ******** * **** * ***** drop ** ***** *******:

**** ** * ***** **** ** ***** ****** ********** **** to **** ****** * *** ******, ** ****, *** ****.

*** ******** **** *** ********* ** **** ***** ******** ******** (where ******* *********** *** *********** ******), **** ** * ******.

*** *********** ***** *** **** ********* ******* **** ************ ***** the ******** ******** *** **** ****** ***** ******* **** ********, e.g.,**** *** ** **** *******:

*** ******** ******** ***** **** ****** ***** ******* ******* *** cost ** ***** ******** ** *** ** *** *** ** is *** ****** *** *** ***** ** ******** **** **** there ** **** *****.

Exhange ***** ******* *** ** *** *******

********* ***** "******** **** *********** *** ******** ******* ********* ******" as ****** *** *** ***** ****** ****. ***** *** ***'* fall ******* *** *** *** ****** *** **** ********, ******* the **** *** ********** ** *** **** ***** **** *** past * *****, ******** *** ****** **** ***** ****, ****** *** ***** *****:

Sales ***** ** *************

******* ******** ********* *** **** **** ***** *** **** ** revenue ****** ** ** ****:

***** ********* **** ******* * ****** ****** ******* *******, ** is ***** ****** **** ** ***** ****** ** ************* ***** as ********* *** ************* ******** ******* ** *** ******* ** China.

**** ****, ******* ******* ***** ** ******* ** *******. *** example, **** ** ****, ********* ***** **** **** *% ** revenue ** ******* ********, *** ** ** ****, ** ** approaching **% ** *******.

Coping **** *************

*********'* #* ****** *** *** '******' **** *************. ** ** clear, ********* **** *** **** *** ***** ************* ** *** benefited **** ****** ** ***** *** ***** *** *** ** moves ** *** **** **** ****.

Revenue ****** ***** ***************

******* *** ***** ******* ** ***** ****** *** ***** ******** increase, ********* ********** ****** ******* ****** ** * ********:

****** ** ******** ****** ****** ** ******* ** ******** ******** regional **********.

通过采取有针对性的区域策略努力保持收入的稳健增长

******** ******* ****** *** **.*% *** ** ****. ********* *** evidently, *** **************, *********** ******* ****** **** ******* / ******** losses. ******* ****, ******** ********* ******* *** ***** ****** **** overseas, ******* *** ********** *** *** ******** ********, ***** *** already ********** **** ****** ** *****.

Overall ******* ****** ***** ** ** **

******* ******* ****** *** ********* *** ****** **% ** ** 2018, ******** ** ~**% ** ** ****. **** ****** **** a ***** **** ******* *** *** ******** *** *** ********* nor *** * ********* ******** ******* ******** *** ******** *** the ********.

Construction ******** ********* ***%

** *** ******** **** *** *********, ** ***** ************, ** that ***** '************', *.*., *********** ******** **** **** ******* **** over ****.

** ** ***** **** ~*% ** ***** ******* *** ** lower ****** *** ***** *********'* ******** ****** ** *****.

Net ******* ***** ******

******* ******* ******* ****** ******* ******* ** **, ********* ******* expenses *** ********* ************* ***** *******, *********'* ******* ******** *** profit ****** ********* **** **.*% ** **.*% **** ** ** Q2. **** ****** ** * ****** ******** ******.

AI ******* #* ********

****** ****, ********* ********** ***** ******** ** **:

***** ********* ** *** ****** *** ******** ** *********'* ** has *********, *** ***** ***** ** ****** ***** ******** ********** sales *** ***** ** ********. ******* ** *****, *********'* ** uptake ** *** **** ************, ****, *.*., ********* **********, ***** not ******* ** *** **, ****** * **** **** ***** they ****** *********** ****'* *******.

Roller ******* ***** *****

**** *** **** ****, *********'* *****'* **** *** **** * roller *******, **** ****** ******** ** ****, ******** ** **** turn ** ****:

** **********, *** ***** **** ******* **** ***** ********* **** increased **** ** *** ** ********** ****** ******* ******* *********.

Future ** ************* ********* ********?

** *** *** ****, ********* *** ****** ** ***** ** continue ** **** *** ************* ******** ** ***** ******** ******** dominance *******. ** *** ***** ****, ****** ********* *** ******* the ***** ****** ******* *** ****** *** **** ** ******* expenses, ** **** **** ***** ********** ******** ** ****** *** losses ***************.

******, *********'* ********* ** * *** **** ***** *** ****** who *** **** ***************** "****** '******** ** *********' ** ******". *** **** **** ********* ** **********?

Comments (13)

John Honovich

IPVM | 07/26/18 12:09pm

******: *** ** ***** *** ****** ************* ***** ************** ******. ***** *** ********* *** ***** *******:

** *** ********* *********** *** ******* ** **** ***, *********, this ** ** ********* **** ******* *** *** ***.

****: *** ******* (*****) *** ******* *** ** ******* **** before (*** ********, *.*. ******** **************, ***** ** ***** *** government *****, *.*. *********). ** *** **** ********* **** *******.

Undisclosed Integrator #2

In reply to John Honovich | 07/26/18 10:59pm

*** ********, *.*. ******** **************, ***** ** ***** *** ********** owned, *.*. *********

** ** **** ** *********. * ***** ** **** ********* that *** ** ***** *****/***** **** ** ********* **, ***, a ********** ** **** ****. *** **** *** * ***** see **** ************ ***** ********* ***** ** ** **** ******* were ****** ***** ** *** **** ** ********* ** *****. There ** * *** ** ********** ********** *******.

John Honovich

IPVM | In reply to Undisclosed Integrator #2 | 07/26/18 11:30pm

** ** **** ** *********. * ***** ** **** ********* that *** ** ***** *****/***** **** ** ********* **, ***, a ********** ** **** ****.

*********, **** ******* *** *** ********* ** ******** *** ** clearly ********* ********* **** ***** ******* ******* *** ***** ********** offerings.

Undisclosed #1

07/26/18 12:18pm

*** *** **** ****** *** ** *** ***, ******. ****'* the **** ***-*** ***** *********** ** ******** * **** ** - *** ***** *** ***** **********? **** ** ********* ** work **** ** ***'** *** * *******.

John Honovich

IPVM | In reply to Undisclosed #1 | 07/26/18 12:22pm

****** *** ******** ** *********** ***** ********* **** ***.

* ******* **** **********: ***-*** ***** ************ ** ********?*** ****. ******!

Thumbnail jj2

Jon Jones

In reply to Undisclosed #1 | 07/26/18 05:25pm

***** *** ******, *** * ** * ******** ****** *** would ** ** **** ** ** **** ** **** ****. Feel **** ** ***** *** ** **.

John Honovich

IPVM | 07/26/18 03:01pm

********* ****** *********: ******* ******* *****'* ***** ** ******* $** Billion ****** ****

** ** ********* * ******** ******* **** *** *********** ** the ******** ** *** ***** ***** **********.

*******, ** **** ******* ********* ************* **** ******** ****** ("* ********** ******** ** ******* **** *** ******** ********** ********") and ************* **** ("************ ******** **** *** *.*. *** ****** on ******* ***** **** **** ** ******* *** ********** *** clients.").

*************, *** ******* ****** **** ********* *** ******* ** *********'* software *********** ************:

“** ** **** ******* ** *** ******** ********* ********** **** the ******* ** ********* *** *** * ****** ********** *******. It’s **** **** **** ******* *** ********,” **** *** **, an ******* **** *********. “****’* *** ********* **** *** ******* and **** ** * ****** *********.”

*** ***** ****, **** ** **** ****** **************...

Thumbnail newheadshot

Sean Nelson

Nelly Security | 07/26/18 05:34pm

********* *** ************* ***** **** * *****. **** **** **** "completely *********** *** ***********" ** "****** ****** ******** ** *** whoopin"

John Honovich

IPVM | In reply to Sean Nelson | 07/26/18 05:54pm

* **** *** * ***** ****, ****.

*** *** ** *** ********* ***** ** *** **** ***, I *** **. *******, ***** ******* **** *** ******** ** an "*** *******". **** **** ***** ***** *** ******** ** and **** ***** ******* *** ********, ** ***** ***'** ********** to *** *** ****** ** *** ********. **'* *** ***********.

*** ** ** *****, * ***** *** ********* *** **** a *********** ******** *** *** ** *** ********* **** ** has ***.

John Honovich

IPVM | 07/26/18 10:41pm

********* ******* ******** ********* *** **** *********** *******:

*** ****** ** *** ************ ******** ** ******** ******* ***** to ** ****.*** ******* ****** *** **** ******** ** **** ********* *** regions *** ** ***** *********, ** ***** ***** ******

************* ************* *** ******.****,*********’* ***** ** **** ***** *******.** ** ******** **** **** * *********** ******* **** ******** for **** ****.

*** *******'* ******** *** *** ***** ***** ******** ** *********** growth ******* ** *** ***** ** **% ** **%.** *** ******** *********** ******* * ***, ** **** ****** our ************ ** ***********.

****** **** ** *****-*** ********.**** *** ******** ** ******** *******.********** **** *** ** *** ********* ********* *** ** **** ********* *******.******** ****.*** ****** ***** *** ***** *** ****** ***** ********.** *** ******** ***** ** *** ***** ***.**** ** ** ******** *********..

** *******, *** ****** ** ********* ** **%.,** ***** *** ****** ** *** *** ***,***** ****** ** ********** *****.*** ** *** *** **** *** **** ** **%,**** **% ** ***,**** **** ********** ***** ******.** ****, * ********* ** *** **** ***** **** **** I **** ** *** **% ******.** *** * **** ******* ********** ** *** ****** ** ******** *** ****** ************* ******** ** *** ****** States.****, ******* *** ****** ** **** ****** *** *** **** as **** ** ** *** **** ** *** ****** ******* *****.

*** ******** **** *** * ****** ******. ***** * ******. The **** *** ***** ******* ** *** ******.

Undisclosed #3

In reply to John Honovich | 07/26/18 11:23pm

** *** * **** ******* ********** ** *** **** ** to ******** *** ****** ************* ******** ** *** ****** ******.

***, ** ****** ******** ***** ** *** ******** ******* ********** nationwide.

***** ** ***** ** ** **** ******!

Edward Knoch

08/01/18 05:00am

** **** - *** *** ***** ************ ** *** ***** listing ** *** ******* **********? * ***** **** ** ******* that **** ******* **** **** * "**** *********" **** *** embedding *** ***** ********. * **** **'* ***** ********* (****** and ********* ****) - ** **** ** ** - ** the ********* ** **** ***-** ******* **** (***** ***-**** *** camera). * ***** ** ********** ** **** *** **** *** impact ** *******.

John Honovich

IPVM | In reply to Edward Knoch | 08/01/18 10:45am

************ ** *** ***** ******* ** *** ******* **********?

***** '*******' *** *** ********* **?

**'* ***** ********* (****** *** ********* ****) - ** **** to ** - ** *** ********* ** **** ***-** ******* line (***** ***-**** *** ******)

***** ******** **** ***** **** *****. *******, ******* **** ****,**** **** *** ***** *** / ***** (***** *** ******** effectively) ** *****.

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