Hikvision Strong Domestically, International Business Struggles
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?
*** ********, *.*. ******** **************, ***** is ***** *** ********** *****, *.*. utilities
** ** **** ** *********. * would ** **** ********* **** *** or ***** *****/***** **** ** ********* at, ***, * ********** ** **** farm. *** **** *** * ***** see **** ************ ***** ********* ***** is ** **** ******* **** ****** under ** *** **** ** ********* or *****. ***** ** * *** of ********** ********** *******.
** ** **** ** *********. * would ** **** ********* **** *** or ***** *****/***** **** ** ********* at, ***, * ********** ** **** farm.
*********, **** ******* *** *** ********* by ******** *** ** ******* ********* utilities **** ***** ******* ******* *** other ********** *********.
*** *** **** ****** *** ** the ***, ******. ****'* *** **** two-way ***** *********** ** ******** * know ** - *** ***** *** other **********? **** ** ********* ** work **** ** ***'** *** * partner.
****** *** ******** ** *********** ***** ********* **** ***.
* ******* **** **********: ***-*** ***** ************ ** Motorola?*** ****. ******!
***** *** ******, *** * ** a ******** ****** *** ***** ** my **** ** ** **** ** work ****. **** **** ** ***** out ** **.
********* ****** *********: ******* ******* *****'* ***** to ******* $** ******* ****** ****
** ** ********* * ******** ******* from *** *********** ** *** ******** of *** ***** ***** **********.
*******, ** **** ******* ********* ************* both ******** ****** ("* ********** ******** ** ******* **** was ******** ********** ********") *** ************* ones ("************ ******** **** *** *.*. and ****** ** ******* ***** **** ties ** ******* *** ********** *** clients.").
*************, *** ******* ****** **** ********* are ******* ** *********'* ******** *********** capabilities:
“** ** **** ******* ** *** software ********* ********** **** *** ******* is ********* *** *** * ****** technology *******. **’* **** **** **** selling *** ********,” **** *** **, an ******* **** *********. “****’* *** investors **** *** ******* *** **** it * ****** *********.”
*** ***** ****, **** ** **** better **************...
********* *** ************* ***** **** * level. **** **** **** "********** *********** the ***********" ** "****** ****** ******** an *** *******"
* **** *** * ***** ****, Sean.
*** *** ** *** ********* ***** to *** **** ***, * *** it. *******, ***** ******* **** *** opposite ** ** "*** *******". **** your ***** ***** *** ******** ** and **** ***** ******* *** ********, it ***** ***'** ********** ** *** and ****** ** *** ********. **'* not ***********.
*** ** ** *****, * ***** can ********* *** **** * *********** business *** *** ** *** ********* that ** *** ***.
********* ******* ******** **** ***** *** **** *********** *******:
*** ****** ** *** ************ ******** 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 ***** ******* ** *** ******.
** *** * **** ******* ********** at *** **** ** ** ******** the ****** ************* ******** ** *** United ******.
***, ** ****** ******** ***** ** the ******** ******* ********** **********.
***** ** ***** ** ** **** pissed!
** **** - *** *** ***** specifically ** *** ***** ******* ** the ******* **********? * ***** **** to ******* **** **** ******* **** push * "**** *********" **** *** embedding *** ***** ********. * **** it's ***** ********* (****** *** ********* wise) - ** **** ** ** - ** *** ********* ** **** DNZ-30 ******* **** (***** ***-**** *** camera). * ***** ** ********** ** find *** **** *** ****** ** overall.
************ ** *** ***** ******* ** the ******* **********?
***** '*******' *** *** ********* **?
**'* ***** ********* (****** *** ********* wise) - ** **** ** ** - ** *** ********* ** **** DNZ-30 ******* **** (***** ***-**** *** camera)
***** ******** **** ***** **** *****. However, ******* **** ****,**** **** *** ***** *** / Lorex (***** *** ******** ***********) ** Dahua.
******: *** ** ***** *** ****** have********* ***** ************** ******. ***** *** ********* *** ***** remains:
** *** ********* *********** *** ******* of **** ***, *********, **** ** an ********* **** ******* *** *** ban.
****: *** ******* (*****) *** ******* and ** ******* **** ****** (*** mentions, *.*. ******** **************, ***** ** often *** ********** *****, *.*. *********). We *** **** ********* **** *******.