Hikvision Announces Weakened Profits

By John Honovich, Published Jan 19, 2016, 12:00am EST

Hikvision released a special announcement in Chinese, disclosing weakened profits for 2015 amid fierce competition.

In this note, we examine what happened with Hikvision, the underlying economic conditions and what this means for the Chinese government owned giant.

************

** *** ************ [**** no ****** *********], ********* downwardly ******* ***** *** income ******* *** ****. For *** ***** * quarters ** **** [**** no ****** *********], ********* net ****** ********** ********* ~39%, **** ** ********* full **** ***** ** 30-50%. ***, ********* **** for *** **** ****, net ****** ******** **** **** be ** *** **-**% range. ***** **** ****** an ************ **** *** this, ** *********** **** this **** ** * (negative) ******** *** ****.

*********'* ** *** **** 2015 ******* **** *** yet **** ********. **** announcement *** ********* * warning, ********* ***************** ****** ********* ***** ** *****.

******

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

***** ******** / ***********:

"*ue ** *** *****-******** *********** and other factors, the domestic industry market project has been delayed, an increase of l**** **** ********;the ****** *********** ** *** ******** ******, ***** ******* ********" (emphasis added)

********, * ******** ***** tax ****, **** **** are *** **** ******* they **** ** ***** at * **% ** 10% ****. ****:*****'* ****** ********* *** rate** **%, **** **** companies ****** **% *** evidently **** ********* **** Hikvision ******* * ******* tax *** **** ****** **%. ********* *** *** explain *** ***** *** rate ***** ****.

**** ******* *************

*** *** ***** * quarters, ********* ******* **** 56.3%, ***** ** ********** amazing, **** ** ***** of *********** *** ******** dollars, ***** ***** ******* huge ****. *******, ** growth *** **% ******* to ** ****** ** 47%. ********* *** *** comment ** ** ******. 

******* ******* *************

***** ******* ** ** 55%+, ********* *** **** profits *** **** ***** to **** ***** **** that **** *** ****. Despite *** ****** *** already ************ ***** *****, Hikvision ** ******** ************* less **********. ** ***** announcement, **** ********** ****** challenges ** ***** *** domestic ******, ***** **** are **** ******. ** suspect **** *** *** mention ******** ***** ******** still **** ********** * quarter ** ***** ********; however, ***** *** **** higher ***** ** ******* overseas ********** *** ***** reduced ***** ********, ******* are ****** ***** *****.

***** ***** ****** ****** for ****, ******* **** downtrend, **** ***** ****** astronomically **** *** *** video ************ ******** *******. Instead ** ***** ******** 25%+ *** *******, ********* will ****** ***** ******* into *** **-**% *****.

China '*****-******** ***********'

*****'* ******** ******** ** a ***** *****. **** the ******* **********'* ** agency, ******, ************ ***** [link ** ****** *********]:

"******* ********** ******* ******, shrinking ********** *******, ****** fiscal ******* *** ****** financial *****...******* ****** ** *********** in *** *****"

**********:

"** ****** ***** **** be ** ********** *-***** economic ********, *** ***** painstaking ********** *******, *** world *** ****** * more *********** *** ******* Chinese *******."

*** ******* *********, ********** ***** ** not, *** ****** ** in ****. ** **** end, *********'* ******* ***** the '*****-******** ***********' *** 'fierce competition' *** **************. ******, with *** ******* ** it **, *** *** smaller ************* (*.*., ********) struggling ** **** ******, Hikvision *** *** *** domestic ****** ** ******.

*******

****** ***** ***** ******* problems (********, *********** **********, ********* ****** ****, ***.), ***** *** Hikvision ***** **** ******* reserves / ********* ** *** (e.g., *********'* $*.* *******).

*** *** ******** **** be *** **** **** stimulus / ************** ********** will ***** ********. ********* has **** * ***** beneficiary ** ******* **** 2008 ******** ********. **** argue **** *** ******** has **** *********** / wasteful *** ** *** certainly ******* *** ****** and *** **** ** Chinese ******** *********. **** China ******** **** **** levels ** ******** ** will **** ***** **** to * ******** *** economy?

********* *** **** ********* *** ambitions *** *** ******* Chinese ******* *** *** challenges ** ******** * sustainable ******** ******** ***** be *** **** *** them. 2016 ** ******* ** to ** ** *********** year *** **** *** the ********.

Comments (5)

Worst. Surprise. Ever.

This is the game, isn't it? They get into a war of attrition with manufacturers that they believe can't survive it?

Agree
Disagree
Informative
Unhelpful
Funny

That they did a special announcement would seem to indicate that it came as a surprise even to them, unless they are just that good that that too is part of the plan :)

Agree
Disagree: 1
Informative: 1
Unhelpful
Funny

I understand what you mean, but seriously, part of their attraction to this plan is that they have so much money that it will work despite the fact that they can't forecast exactly how it will unfold.

Agree
Disagree
Informative
Unhelpful
Funny: 1

John this is more a political posture than anything else. Think more longterm

Agree
Disagree
Informative
Unhelpful
Funny

What's a political posture?

Agree: 1
Disagree
Informative
Unhelpful
Funny
Read this IPVM report for free.

This article is part of IPVM's 7,008 reports, 931 tests and is only available to members. To get a one-time preview of our work, enter your work email to access the full article.

Already a member? Login here | Join now
Loading Related Reports