Hikvision Growth Rate and Profits Falling Faster Q1 2016

By: John Honovich, Published on Apr 12, 2016

Just a year ago, Hikvision was an unstoppable force, growing at an astounding 60% rate.

Now, after a weak Q4 2015, Q1 2016 was even worse.

In this note, we examine Hikvision's financials, looking at what is driving this.

**** * **** ***, Hikvision *** ** *********** force, ******* ** ** astounding **% ****.

***, ***** ***** ** ****, ** **** *** even *****.

** **** ****, ** examine *********'* **********, ******* at **** ** ******* this.

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

Q1 **** *******

******* *** ** ~**% year **** ****, **** from ~**% *** ******** quarter, *** **%+ ** the ********* ** ****.

******* *********, *** ****** margins ********, **** ******* ********** at **** **** **** the **** ** ******.

********* ****** ** ************ sharply *** ****** ******* are *********. *** ********* Q1 **** (******* ********) financials [**** ** ****** available].

Raising ****

*** *** **** ** the *** ** **** was*********'* $*.* ******* *********. ** **, ********* issued ~$*** ******* ** new ****, ** ***% year **** ****.

Burning ****

******* *********'* **** **** reported *** ******* (~**%, though **** **** ~**% in *** **** *** years), *** ******* ********* to **** ****. ******, Hikvision ****** **** **** from ********** ** ** 2016 **** **** *** in ** ****, ****** the ****** **** *** down ** ~**.

High ******** **********

*** ***** ** ******* cash ** ****** ** Hikvision's ********* ****** ****. Hikvision's ******** *********** *** growing ** ****** ***** their ****** **** **** days ***** *********** ** ~150 ****.

** ***** **** * Chinese ***** ********* ****** who ******** *** **** likely cause ** *** ************* ******** economy / *********. ** says ****, ***** * DSO ** *** **** may ** ******** ** the **** (*.*., **** is ~** ****), **** worse ****** *** ******* in *****. ********, ** says, ***** *********'* ****** government **** / ************, Hikvision ** ** ********** good ***** ** ** paid (**********) ** *** government *********.

Domestic ** ******** ********

** ******* **** *** main ****** **** ** Hikvision ** *****'* ******** *******, which ** ****** ******** dealing **** ***** *** normal ** ***** ****** / ***** ** * potential **** *******. ******, after ***** ** ********** infrastructure ****** ***** *** been * **** **** for *********, *** **** will **** ********?

********* ***** *** **** strong ******** ******** *********** positioning, **** * *** more ** *** ****** that **** *** **** over. *******, **** ** ******* like ***** *******, ***** growth *** **** *********** relative ** ******** *****, keeping ***** ****** ***** will ** ************ ****, as ****** *** ******* market, **** ******** ******* tend ** ** ****** fragmented *** ** *** benefit **** ********** ********* / *************.

********, ** ***** ******* ******** to ***********, *** ** the ******* ******** ****** worsens, **** ***** ****** their ************* *********. **** noted, ** ********* ************ $*.* ******* ** their ********* ** ******* overseas, **** **** ****** of ******** ** **** losses *** ***** ** come.

*******

*** ***, ** ** not *** **** ******** Hikvision's ******* ******** *** impact. *******, *** *** question ** *** *** down **** ********* ****? Will **** ********* ****** these ******? **** *** Chinese ******* ******* ******* or **** ** *** a **** *******? ***** are ***** ********* **** the ***** **** *** debating.

** ** *******, ******, that *** ****** ** the ***** ************ ****** depends ******* ** *** future ** *** ******* government *** *** ******* / ********** **** *********.

 

Comments (8)

John, do you foresee struggles for Hik in the future leading to other brands possibly making a rebound? For example, if their pricing increases due to investor pressure, could that help the other top brands (Axis, Avigilon, etc)?

do you foresee struggles for Hik in the future leading

This mostly depends on what happens to the Chinese economy. Hikvision executes very well so I would not bet on that significantly changing.

But it is quite possible for burst infrastructure spending bubble in China to cut their ambitions and vast resources. Whether that will happen ever or anytime soon, I do not know.

If it did, it would certainly help Axis, Avigilon, etc. On the flip side, if something like that does not happen, it seems inevitable that the pressure on the premium Western brands will only get worse as Hikvision moves up market.

Hikvision growth is decelerating sharply and profits are declining.

Do you mean profit margins? Because profits increased, no?

Yes, corrected.

What would be interesting to see is more detail comparing Hik to others - market share, profit margins, etc. over the past few years. Any rapid growth company can't be expected to sustain that growth over time so the article reflects what should be expected for any industry with lots of competition.

In terms of lots of competition and rapid growth, it is hard to compare Hikvision (and to a lesser extent Dahua) to video surveillance manufacturers in the rest of the world.

For example, back in 2007, Hikvision did ~$170 million in revenue. 8 years later (2015), they have become 24x later doing $4 billion revenue. The growth rate, the size, all of this is completely out of scale to anything outside of China.

Part of it is the sheer growth of the Chinese economy, part of it is the massive infrastructure stimulus incentives China spent after the 2008 financial crisis, part of it is being owned by the Chinese government.

Because of this it is hard to say 'what should be expected', good or bad, because it is so unlike any other video surveillance manufacturer.

But is it any different for a large corporate than a small to medium business like most of us ie if you chase the lower end of the market which is simply looking for the cheapest deal you will make less money for more hassle. Deal with people who appreciate quality over price

The same could be said for chasing whales. I think what you need is to balance your value for each client. No two will be alike. Some may have larger budgets, where higher quality gear will be called for. Others a shoestring budget, where Analog HD is the max. You can make money in both deals. Just make sure you balance value for both and you can prosper.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Dahua CEO Is Out on Feb 28, 2020
Dahua CEO Li Ke has resigned less than 3 years after he was brought in from Huawei to professionalize management. Inside this note, we examine...
NetPosa Revenue Plunges 90% on Nov 04, 2019
Revenue for China's long-time largest VMS provider NetPosa plunged 90% in the latest quarter, adding to the firm's serious financial...
Resideo Stock Plunges 37%, CFO Ousted on Oct 23, 2019
The horrible year for the ADI / Honeywell Home spinout, Resideo, just got worse, with their stock plunging another 37% today. Not even a year...
Crisis At China's Largest VMS Provider, Netposa, Now State-Controlled on Oct 07, 2019
NetPosa, which bills itself as the PRC's largest VMS provider, is in a crisis. The firm is pursuing huge unpaid bills from clients, and its...
Knightscope Sells Just 1 Net New Robot In 6 Months on Oct 04, 2019
For the first half of 2019, US government records show that Knightscope has sold just 1 net new robots ('machines-in-network'), inching up from 52...
Megvii Financials and Growth Examined on Aug 30, 2019
Megvii has already received more than a billion dollars in investment. Now, the company, a top China facial recognition provider, has filed for an...
In China, Foreign AI Companies Banned or Disadvantaged, Says Top China AI Company on Aug 28, 2019
Non-China (PRC) companies are prejudiced and unfairly targeted inside of the PRC's booming AI market, which not only denies them revenue inside of...
Stanley Makes "Multi-Million Dollar Investment" Into Banned Hikvision Products on Aug 09, 2019
Just days from the US government ban going into effect, US mega-corporation Stanley has dramatically increased its imports of banned Hikvision...
Knightscope Adds Just 2 Total Customers In Past Year, Yet Raising Money at $300 Million Valuation on May 02, 2019
This is no longer funny. While Knightscope has laughed it up promoting robot selfies, joking about a 'suicidal robot', the man who attacked a...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...

Most Recent Industry Reports

Wyze Raises $10 Million And Seeks Services Expansion on May 27, 2020
Wyze has raised $10 million, the company's first disclosed raise since the $20 million announced at the beginning of 2019. Inside this note,...
Startup Videoloft Presents Cloud Storage on May 27, 2020
Videoloft presented offsite cloud storage at the May 2020 IPVM Startups show. A 30-minute video from Videoloft including IPVM...
Directory of 250+ Fever Camera News Reports Globally on May 27, 2020
This global directory tracks 250+ articles about thermal cameras used to detect fevers in response to the coronavirus pandemic. Articles are...
Integrators Rising Against Coronavirus on May 27, 2020
IPVM integrator statistics make it clear - Coronavirus's impact on business is lessening and many are anticipating even better news in weeks...
Netposa Stock Surges 46% After US Human Rights Abuse Sanctions on May 27, 2020
Last Friday, the US government announced it would sanction PRC video management provider NetPosa for being "complicit in human rights violations...
LILIN Presents NDAA-Compliant P2 Cameras on May 26, 2020
Merit LILIN presented its NDAA-compliant P2 camera series at the April 2020 IPVM New Products show. Inside this report: A 30-minute video...
ZKTeco Body Temperature and Mask Detection Reader Tested on May 26, 2020
While dedicated fever cameras emerged first, now tablet/kiosk fever detectors are ramping up. China's ZKTeco has been aggressively promoting such...
IDIS Presents 12MP IR Panoramic Fisheye on May 26, 2020
IDIS presented its 12MP IR panoramic fisheye camera at the April 2020 IPVM New Products show. Inside this report: A 30-minute video from...
FDA Defines Correct Operation of "Fever Cameras" on May 26, 2020
The US FDA has now defined the correct operation of "Thermal Imaging Systems", colloquially known as "fever cameras". Many in video...
OnSSI Founders Return, Start Corsight on May 25, 2020
The OnSSI founders are back, less than 2 years after selling OnSSI to Qognify, they have returned to Corsight, a spin-out of an Israeli AI...