Hikvision Stock Surges - Doubling In Past Year

By: John Honovich, Published on Jun 29, 2017

Hikvision's stock, on the China Shenzhen stock exchange, has more than doubled in the past year, vaulting the company's worth to an astounding (for the video surveillance industry) $44 billion USD (~300 billion RMB).

Inside this note, we examine the rise, the factors driving it and comparing to the rest of the video surveillance industry.

*********'* *****, ** *** China ******** ***** ********, has **** **** ******* in *** **** ****, vaulting *** *******'* ***** to ** ********** (*** the ***** ************ ********) $44 ******* *** (~*** billion ***).

****** **** ****, ** examine *** ****, *** factors ******* ** *** comparing ** *** **** of *** ***** ************ industry.

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

Rise ** ***** *****

***** **** ****, *********'* stock ***** *** **** than *******, **** **** 2016 **** * ***** valuation ** ~*** ******* RMB (~$** ******* ***), now ***********~*** ******* *** ($44 ******* ***).

Charts *** ********

***** ****** ************ *** overall ***** ** *********'* stock ** * ****** stock ***** ** ***** incorrectly ** * ****** day ***** **** ******* readjusting *** *** ******* number ** ******, *.*.:

Revenue *******

** ******** ** *********'* 100%+ ***** ***** ******, 2016 ******* *** ** 26% ** ~$*.* *******, up **** ****'* ~$*.* billion, ******* ** *********'* **** financial ******* (******* *******).

** **** ******* *** up **% ** $* billion ***. ****, ******* of ******* *** **** falling ** **, ** is ********* *** ****** revenue ******* ** *** year.

Profit *******

********* ******** **** *** profits ** ~$* ******* USD, **.*% ** *******.

Domestic / ************* *****

** ****, ***** ******** sales *** **.**% ** revenue, ~$*.* ******* ***, with ******** ***** ******* at **.**%, ~$*** ******* higher **** ****.

** ********, ********* ***-***** sales (********* *** *** branded, ***** *** *** split) *** **.**% (~$*.* billion ***), ******* ** 40.62% **** ****.

Dahua ********* ** **%

*********'* ******** ***** *****'* stock ***** *** **** up ************* ** *** past ****, ** * robust **%, *** *********** a $** ******* *********:

Other ******* ************ ***** *****

********* *** ***** *** not ***** **** ***** rises.******* (******** ****)*** **** ******** ******** ***%+ ********** ******** **** ***. And *******, * ***** surveillance ********* ********,***** ***** *** **** than ************ ***** ******** **** IPO.

$44 ******* ***** ***** ** ***********

*********'* $** ******* *********, for *** ***** ************ industry, ** ********.**** *** ******** ** 2015 *** **** $* billion ***, ** **** ********** terms, ** **** * sense ** ***********.

***** ********* ******** *** ~20% ** ****** ***** surveillance (********* ***** ******** position ****** ** *****), Hikvision ****** ******** *** 60%+ ** *** ****** valuation ** *** ****** industry (**** - **** is ** ******** ***** rest ** ******** ******* of $** ** $** billion *** * **** conventional ***** ** ******* ratio ** ~*).

Chinese ***** ****** *******

*** ******* ***** ****** has **** ***** ***** well *** ********* ** these ********* **** **** willing ** ****** **** richer ********** ******** ** revenues *** *******.

*** **** ****** ******* is *** ****** **** to *** ********* *** other***** ******* ********* ** the **** *****, ***** ***** **** for **** ***** ** Chinese ****** *** ******** their ******.

Artificial ************ *********

********* *** **** ********* and ******** **** **** promoting *** ***** ** video ************ ** ** / **** ******** (*******:***** *** *** *********** Video,********* ****** ************** ***********).******'* **** / ****** has ***** **** *** Hikvision.

** ***** ** ******* shipment *** ****** ******, AI *** ***** ************ is ********** *****. *******, if **** *** ***** out **, ********* **** a $*+ ******* **** China ****** *** ** to **** *** ****** of ******* *** ******** using ** ** *** massive '******' ********* ************ systems **** ********* ** so ****** ******** **.

Government ********* ********* **** ****** *********

********* ******* ********** ******** ******** ******. **** is ****** ***** ***** state ***** ***********, *.*., the **** ** *****, China ******* *****, ********** are ***** ***** ***** owned ****** ********* ****, along, **** ********* *** being ****** ** *** MSCI ***** (*** **** ** ** large ***** ********* ***** listed *****).

Outlook / ******

** *** **** ****, very **** ********** ******* companies ** **** **** acquisitions *******, ** ****** reward ********* **** ********** stock ****** *** *********** to **** ****** ***** funds *** *********.

** *** ******** ****, very **** ********** (***, e.g., ********* ****** ** a ****** */* ** 40+), *** **** ***** downturns, ***** *** ************* extremely ********** ** *** reverse ** *** ***** positives **** **** ****. The ******* ******* **** face *********** ********** **** debt ********** ***********, ** **********, ***** steeply **** **********.

*** ******* **, *** now, *** ***** ** Hikvision (*** ** * lesser *** ********* ****** Dahua) ***** ***** ** a ****** ***** *** the ********* ** *** China *************.

Comments (9)

Undisclosed Distributor #1

06/29/17 04:31pm

A story reporting on "data" from the Shenzhen stock market may as well be reporting on the official length of unicorn horns, the temperature of dragon's fire or how many times Tinkerbell has to flap her wings to hover, it's all fantasy with no base in reality.

John Honovich

IPVM | In reply to Undisclosed Distributor #1 | 06/29/17 04:53pm

"data" from the Shenzhen stock market may as well be reporting on the official length of unicorn horns

Two things:

The stock price is 'correct'. Hikvision's market valuation is really $44 billion USD. It certainly might go down, it might be inflated relative to 'fundamentals" (depending how one views them), it might benefit from the China government's ownership / control of the Shenzhen market but that's the 'true' output of the situation. 

The underlying financials could be inflated, e.g., just recently China State Owned Enterprise reported inflating revenues and a Chinese lawyer who declared "Buying Stock in China’s Publicly Traded Companies: Good Luck With That" and that "we rarely see a Chinese company with fewer than three sets of books".

But whether or how much Hikvision inflates or distorts its financials, I have no evidence or reports on so it I am not going to feature it in the 'story'.

Undisclosed Integrator #2

In reply to John Honovich | 06/30/17 05:23pm

-But whether or how much Hikvision inflates or distorts its financials, I have no evidence or reports on so it I am not going to feature it in the 'story'.

 

Why the sudden IPVM Journalism change? Normally information such as actual reports are not needed when "IPVM style reporting" can garner a sensationalized hikvision headline for the week.

 

John Honovich

IPVM | In reply to Undisclosed Integrator #2 | 06/30/17 10:39pm

Normally information such as actual reports are not needed

My man, it's good that you are asking hard questions! :)

But seriously, come on, our reporting is well sourced. Whatever we report on has a source or sources.

Here are some examples:

Good or bad for companies we cover, we consistently establish and cite sources / evidence. Are you unhappy that we said something positive about Hikvision in this article? :)

John Honovich

IPVM | 07/25/17 12:15pm

Update: Bloomberg with a new article that cites Hikvision as one of 3 Shenzhen top gainers but cites risks:

In the seven months since China started a trading link between Hong Kong and Shenzhen, the top purchases of overseas investors have been Hangzhou Hikvision Digital Technology Co., Gree Electric Appliances Inc. and Midea Group Co. Each of the three has risen more than 50 percent this year, as the Shenzhen Composite Index retreated 6 percent...

With such big surges, analysts are warning about excessive valuations on the three.

 

Undisclosed Integrator #2

07/25/17 09:24pm

This is a slap in the face if I ever have seen one. All the horror stories that have been written about the wonderful folks at Hikvision for the past year and how much money they are losing because of the "double dips" and so-forth and now its reported they are actually making more money than GENITALTEC and AXIS Combined? Left-Right-Up -Down, which way is it?

Do I see a 'correction of sorts' in the forecast for IPVM or smoke and mirrors chanting they sell everything in China, numbers are skewed, Bla Bla Bla?

John Honovich

IPVM | In reply to Undisclosed Integrator #2 | 07/25/17 10:00pm

GENITALTEC

That's immature.

Do I see a 'correction of sorts'

No. For example, Dahua's H1 2017 financials came out today, reporting 50% revenue growth and 94% operating profit growth, much higher than your partner Hikvision.

So either we can conclude here that Dahua is doing much much better than Hikvision or we can more reasonably assume that something is amiss inside China with these unrealistic results.

John Honovich

IPVM | 01/10/18 12:47pm

Hikvision has made Nikkei Asian Review's article about top growing / most valuable Chinese companies:

A roughly 160% surge in market cap lifted Hangzhou Hikvision Digital Technology, the world's top maker of surveillance cameras, to 40th place. The company has used its close ties to the Chinese government to dominate the domestic market while capitalizing on demand abroad as countries strengthen defenses against terrorism.

John Honovich

IPVM | 02/26/18 12:34pm

Hikvision is the #2 overall stock gainer, up 441% since Supreme Leader Xi came to power in 2013, as this new Bloomberg chart shows:

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