Hikvision Admits Sanctions Harming Its Financial Performance

By: Charles Rollet, Published on Mar 27, 2020

While Hikvision initially downplayed being sanctioned for human rights abuses, the company is now admitting a significant impact in a new PRC government filing that IPVM has reviewed.

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Inside this note, we examine Hikvision's previous claims, what it's saying now, and what this means for the company overall.

***** ********* ********* ********** being********** *** ***** ****** abuses, *** ******* ** now ********* * *********** impact ** * *** PRC ********** ****** **** IPVM *** ********.

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****** **** ****, ** examine *********'* ******** ******, what **'* ****** ***, and **** **** ***** for *** ******* *******.

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

Hikvision ****** "********** ********"

** ****** *** ***** ******** disclosure, ********* ****** *** sanctions ****** "********** ********" its ***** *** ******** development [******** *****]:

** ****** ****, *** company *** ******** ** the ** ******* ************* Act **** *********** ****.The *********** ** ******** ******* *** **** **********. In October 2019, the company was affected by the US Department of Commerce's entity list sanctions, the ******** ****** *** ********, *** ******** ****** *** ********** ******** ************ **** ******** ** *** *********, *** *** *******'* ******** ****** *** ********** ********** ********. In order to deal with the problem of material restrictions in the United States, the company has adopted measures such as replacing materials, changing product designs, increasing inventory, and expanding upstream technology.

********* **** **** *** sanctions, ***** *********** ****** US ********** **** ******* Hikvision **** ** ***** tech, *** ****** *&* costs ** ******** "*************":

[*********] *** **** *** best ** ****** *** negative ****** ** *********, and *** ********** ** research *** *********** ***increased *************.

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

** ******** ** *.*. material ***********, *** ******* adopted ************. ********, **** as ******** *********, ******** product *******, ********** *********, and ********* ******** **********, and **** ***** ****** to ****** *********

** **********, * *** factor ** **** ****** sanctions **** ** *********'* ability ** ******* ** solutions, *** *******'* **** important ******* ****** ********** of *** **** *** years.

Prior ********* ******: ********* "*****", "*******", *** "*****"

** ***** ********, ********* had ********** ******* *** sanctions **** "*****", "*******," and "*** ** ***** as ******** ******".********* **** * ***** *** **** ***** the *********, **** *** senior ** ***** ******* stating:

** *******, *** **** majority ** *.*. ********** can ** ******** ******** or ******** ** *** design *********.**********, ** **** *** affect ******* *********** ***the ****** ** *****.

***impact ** ********** *******, and the company can provide alternative products with the same or similar performance.

****** *** **** ********* CEO ** ********* ****** the **** *** "**** than * **** ** preparation ****", ******:

****** ******** ***not ** ***** ** ******** ******. The company had two roadshows in Europe yesterday, but the entire Europe sector only received one call asking what impact Hikvision's inclusion in the entity list would have on the company. Clients have slowly come to understand and accept this matter, they are not as scared as before.

** *** ********* ****** of *** *********, ** also ********** *** *********:

** **** **** * little **** ****** ** the *******'* *******, *** it **** *** **** a ******* ****** ** profits

**** ******** ******** ** media ******** **** ******* like*******:

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

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***** **** ****, ********* did *** ******** *******/******* the ****** ** *** sanctions *****.

Hikvision ********* ***** ***** ********** *******

********* **** ********* **** after *** ******** ***** exchange**** ********* * ******** ******* *** ****'* decision ** ****** ******* requirements.

**********, ********* ********* ***** only **** ***** ** two **********: *) **** Hikvision ***** ****** *** above **% *** *) that *********'* ***** ****** was ** *** **** percentile (** *****) ******** to * **** ** peers.

*******, **** **** *****,********* ********* ******* *************** **** *** ** these ********** *** ** be *********. **** ******** in *** ******** ***** exchange ********** ********* ** explain **** **** ** it ***** ******** ******* pressure *** **** ******* shareholders.

Financial ****** ** *********

*** **** ********* ****** of *** ********* ** difficult ** ********* ***** Q4 ** **** ** the **** ******* ** financials **** ******* *** sanctions, ***** ***** *** other ******* ** **** like *** ******* *** economy *** *** ***********.

**** ****** *** *********,********* ******** ** ******** **** ******* *** have *** **** ******* for **** * ****.

********* *** *** *** published * ********* ** domestic ** ******** ******** for **** *** **** should **** ** * month *** **** **** clarify *** ************* ******** sales **** **** ********. We **** ****** **** released.

**********

*********'* ****** ********** **** that *** ****** ** the ********* ** *** as ***** ** ********* once *******, *** *** likely ** ******** ** undermine *** *******.

*******, ** **** ******* are ************** ********* ********* beyond ** ********* *** bans, ********* *********** *** a ********* ****** ********* that ** ** ***** to ** ********* ** determine ***** ******* ********** have *** ******* ******. The *******, ****** ** certainly **** ***** *** preparing ** * **** and * **** ***,*********'* ********* ****: “** **** *****, we **** ** ***** on *** ** *******, how ** **** *** bowl ** ****."

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Comments (2)

****'** *** ****** ** pull ******* ****. **** make **** ********* ******** that ******** ****** **** other ************* *** * price **** ***** ** a **** ****** **** to "***-********" *********, *** the **** ****** **** affects ******** ** *** US (**********, * ** not). **** **** **** to ** ****** *** sanctions ********* *** *** beginning ** **** *******. I ***** ****'** *** less ** * ********* than ****** *** ** - ******* ******** - a ******** ******** ******.

*'* *** ***** ***** Hikvision's *************, *** * can't **** **** ** even ****** *** * ghetto ********* ***** *** expect ** ******* *** work. ***** **** **** as ***** *** ***** come ** **** ******* lines **** ******* ** good ** ****** **** Hikvision's ******** *** ** least******* *** **** *****, I **** ******** ** spec *********. ** ******'* be ***** ** **** a **** ** ******* if ***********' ********* *****'******* *** ***** *** lower ** ***********.

**** ** ******* ******** if *** ****, * call ** ***** *********.

* ******** ******* *** Coronavirus ******** *** *** associated ****** ********* ** likely ** **** * bigger ****** **** *** US *********. ********* *** growing ** **** ** the ***** ******* *** US *** **** ** likely ** **** ********** somewhat *** ******* ** US *****.

**** ****** ** * comparison, ** *** **** effectively ****** **** *** US **** ****** ********* but ***** *** ******** was ***** ***** ********** well *** ** ***-** sales.

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