Hikvision Strong Domestically, International Business Struggles

Published Jul 25, 2018 14:58 PM

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

Financial ********

********* ************* / ******** ******** ******** a **** * ***** **** ** gross *******: 

**** ** * ***** **** ** ***** margin ********** **** ** **** ****** a *** ******, ** ****, *** year.

*** ******** **** *** ********* ** that ***** ******** ******** (***** ******* competitors *** *********** ******), **** ** * points.

*** *********** ***** *** **** ********* results **** ************ ***** *** ******** business *** **** ****** ***** ******* than ********, *.*.,**** *** ** **** *******:

*** ******** ******** ***** **** ****** gross ******* ******* *** **** ** doing ******** ** *** ** *** the ** ** *** ****** *** the ***** ** ******** **** **** there ** **** *****.

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

********* ***** "******** **** *********** *** overseas ******* ********* ******" ** ****** for *** ***** ****** ****. ***** the ***'* **** ******* *** *** has ****** *** **** ********, ******* the **** *** ********** ** *** same ***** **** *** **** * years, ******** *** ****** **** ***** have, ****** *** ***** *****:

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

******* ******** ********* *** **** **** twice *** **** ** ******* ****** in ** ****:

***** ********* **** ******* * ****** ****** selling *******, ** ** ***** ****** this ** ***** ****** ** ************* costs ** ********* *** ************* ******** efforts ** *** ******* ** *****.

**** ****, ******* ******* ***** ** heading ** *******. *** *******, **** in ****, ********* ***** **** **** 9% ** ******* ** ******* ********, now ** ** ****, ** ** approaching **% ** *******.

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

*********'* #* ****** *** *** '******' with *************. ** ** *****, ********* does *** **** *** ***** ************* it *** ********* **** ****** ** China *** ***** *** *** ** moves ** *** **** **** ****.

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

******* *** ***** ******* ** ***** margin *** ***** ******** ********, ********* ********** steady ******* ****** ** * ********:

****** ** ******** ****** ****** ** revenue ** ******** ******** ******** **********.

通过采取有针对性的区域策略努力保持收入的稳健增长

******** ******* ****** *** **.*% *** H1 ****. ********* *** *********, *** unsurprisingly, *********** ******* ****** **** ******* / ******** ******. ******* ****, ******** Hikvision ******* *** ***** ****** **** overseas, ******* *** ********** *** *** domestic ********, ***** *** ******* ********** size ****** ** *****.

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

******* ******* ****** *** ********* *** nearly **% ** ** ****, ******** to ~**% ** ** ****. **** caused **** * ***** **** ******* the *** ******** *** *** ********* nor *** * ********* ******** ******* domestic *** ******** *** *** ********.

Construction ******** ********* ***%

** *** ******** **** *** *********, at ***** ************, ** **** ***** 'construction', *.*., *********** ******** **** **** doubled **** **** ****.

** ** ***** **** ~*% ** their ******* *** ** ***** ****** but ***** *********'* ******** ****** ** China.

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

******* ******* ******* ****** ******* ******* in **, ********* ******* ******** *** decreased ************* ***** *******, *********'* ******* reported *** ****** ****** ********* **** 19.4% ** **.*% **** ** ** Q2. **** ****** ** * ****** domestic ******.

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

****** ****, ********* ********** ***** ******** ** AI:

***** ********* ** *** ****** *** accuracy ** *********'* ** *** *********, all ***** ***** ** ****** ***** domestic ********** ***** *** ***** ** products. ******* ** *****, *********'* ** uptake ** *** **** ************, ****, e.g., ********* **********, ***** *** ******* in *** **, ****** * **** **** after **** ****** *********** ****'* *******.

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

**** *** **** ****, *********'* *****'* path *** **** * ****** *******, with ****** ******** ** ****, ******** by **** **** ** ****:

** **********, *** ***** **** ******* this ***** ********* **** ********* **** of *** ** ********** ****** ******* against *********.

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

 

** *** *** ****, ********* *** plenty ** ***** ** ******** ** fund *** ************* ******** ** ***** domestic ******** ********* *******. ** *** other ****, ****** ********* *** ******* the ***** ****** ******* *** ****** the **** ** ******* ********, ** will **** ***** ********** ******** ** reduce *** ****** ***************.

******, *********'* ********* ** * *** like ***** *** ****** *** *** been ***************** "****** '******** ** *********' ** ******". *** **** **** ********* ** themselves?

Comments (13)
JH
John Honovich
Jul 26, 2018
IPVM

******: *** ** ***** *** ****** have********* ***** ************** ******. ***** *** ********* *** ***** remains:

** *** ********* *********** *** ******* of **** ***, *********, **** ** an ********* **** ******* *** *** ban.

****: *** ******* (*****) *** ******* and ** ******* **** ****** (*** mentions, *.*. ******** **************, ***** ** often *** ********** *****, *.*. *********). We *** **** ********* **** *******.

(1)
UI
Undisclosed Integrator #2
Jul 26, 2018

*** ********, *.*. ******** **************, ***** is ***** *** ********** *****, *.*. utilities

** ** **** ** *********.  * would ** **** ********* **** *** or ***** *****/***** **** ** ********* at, ***, * ********** ** **** farm.  *** **** *** * ***** see **** ************ ***** ********* ***** is ** **** ******* **** ****** under ** *** **** ** ********* or *****.  ***** ** * *** of ********** ********** *******.

JH
John Honovich
Jul 26, 2018
IPVM

** ** **** ** *********. * would ** **** ********* **** *** or ***** *****/***** **** ** ********* at, ***, * ********** ** **** farm.

*********, **** ******* *** *** ********* by ******** *** ** ******* ********* utilities **** ***** ******* ******* *** other ********** *********.

(2)
(1)
U
Undisclosed #1
Jul 26, 2018

*** *** **** ****** *** ** the ***, ******. ****'* *** **** two-way ***** *********** ** ******** * know ** - *** ***** *** other **********? **** ** ********* ** work **** ** ***'** *** * partner.

(1)
JH
John Honovich
Jul 26, 2018
IPVM
Avatar
Jon Jones
Jul 26, 2018

***** *** ******, *** * ** a ******** ****** *** ***** ** my **** ** ** **** ** work ****.  **** **** ** ***** out ** **.

JH
John Honovich
Jul 26, 2018
IPVM

********* ****** *********: ******* ******* *****'* ***** to ******* $** ******* ****** ****

** ** ********* * ******** ******* from *** *********** ** *** ******** of *** ***** ***** **********.

*******, ** **** ******* ********* ************* both ******** ****** ("* ********** ******** ** ******* **** was ******** ********** ********") *** ************* ones ("************ ******** **** *** *.*. and ****** ** ******* ***** **** ties ** ******* *** ********** *** clients.").

*************, *** ******* ****** **** ********* are ******* ** *********'* ******** *********** capabilities:

“** ** **** ******* ** *** software ********* ********** **** *** ******* is ********* *** *** * ****** technology *******. **’* **** **** **** selling *** ********,” **** *** **, an ******* **** *********. “****’* *** investors **** *** ******* *** **** it * ****** *********.”

*** ***** ****, **** ** **** better **************...

(2)
Avatar
Sean Nelson
Jul 26, 2018
Nelly's Security

********* *** ************* ***** **** * level. **** **** **** "********** *********** the ***********" ** "****** ****** ******** an *** *******" 

(4)
(2)
(5)
JH
John Honovich
Jul 26, 2018
IPVM

* **** *** * ***** ****, Sean.

*** *** ** *** ********* ***** to *** **** ***, * *** it. *******, ***** ******* **** *** opposite ** ** "*** *******". **** your ***** ***** *** ******** ** and **** ***** ******* *** ********, it ***** ***'** ********** ** *** and ****** ** *** ********. **'* not ***********.

*** ** ** *****, * ***** can ********* *** **** * *********** business *** *** ** *** ********* that ** *** ***.

(3)
(1)
(1)
JH
John Honovich
Jul 26, 2018
IPVM

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

*** ****** ** *** ************ ******** in ******** ******* ***** ** ** flat. *** ******* ****** *** **** ******** in **** ********* *** ******* *** ** ***** *********, ** ***** trade ******

************* ************* *** ******. *************’* ***** ** **** ***** *******.** ** ******** **** **** * competitive ******* **** ******** *** **** time.

*** *******'* ******** *** *** ***** three ******** ** *********** ****** ******* in *** ***** ** **% ** 35%** *** ******** *********** ******* * lot, ** **** ****** *** ************ of ***********.

****** **** ** *****-*** ********. **** *** ******** ** ******** ***************** **** *** ** *** ********* c******** *** ** **** ********* *******. ******** ****. *** ****** ***** *** ***** *** mainly ***** ********. ** *** ******** ***** ** *** front ***.**** ** ** ******** *********..

** *******, *** ****** ** ********* by **%.,** ***** *** ****** ** *** too ******** ****** ** ********** *****.*** ** *** *** **** *** goes ** **%,**** **% ** ***,**** **** ********** ***** ******** ****, * ********* ** *** very ***** **** **** * **** to *** **% ******. ** *** * **** ******* ********** at *** **** ** ** ******** *** ****** ************* industry ** *** ****** ******. ****, ******* *** ****** ** **** tariff *** *** **** ** **** as ** *** **** ** *** ****** ******* *****.

*** ******** **** *** * ****** impact. ***** * ******. *** **** are ***** ******* ** *** ******.

(2)
U
Undisclosed #3
Jul 26, 2018
IPVMU Certified

** *** * **** ******* ********** at *** **** ** ** ******** the ****** ************* ******** ** *** United ******.

***, ** ****** ******** ***** ** the ******** ******* ********** **********.

***** ** ***** ** ** **** pissed!

EK
Edward Knoch
Aug 01, 2018

** **** - *** *** ***** specifically ** *** ***** ******* ** the ******* **********? * ***** **** to ******* **** **** ******* **** push * "**** *********" **** *** embedding *** ***** ********. * **** it's ***** ********* (****** *** ********* wise) - ** **** ** ** - ** *** ********* ** **** DNZ-30 ******* **** (***** ***-**** *** camera). * ***** ** ********** ** find *** **** *** ****** ** overall.

 

JH
John Honovich
Aug 01, 2018
IPVM

************ ** *** ***** ******* ** the ******* **********? 

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

**'* ***** ********* (****** *** ********* wise) - ** **** ** ** - ** *** ********* ** **** DNZ-30 ******* **** (***** ***-**** *** camera)

***** ******** **** ***** **** *****. However, ******* **** ****,**** **** *** ***** *** / Lorex (***** *** ******** ***********) ** Dahua.