Hikvision's $800 Million Project Expansion into System Integration Examined

Author: John Honovich, Published on Dec 15, 2010

In this note, we review Hikvision's $800 Million Project Announcement and share information from an interview with Hikvision. While project wins are generally uninteresting, $800 Million is a huge amount of money for the video surveillance industry.

Let's start by reviewing the basics of the project:

  • This is a Safe City project for the municipality of Chongqing (located in the southwest of China and having over 30 Million people).
  • The project is scheduled for rollout/construction between 2011 and 2013
  • HikVision is acting as the General Contractor for the whole project, not just as the manufacturer/product supplier

Here are some key details we gathered from questions to Hikvision:

  • While Hikvision was traditionally a manufacturer only (not system integrator like CSST), Hikvision has expanded. They note, "As Hikvision is established in China, and has already built up 28 branch offices over the years in all the major provinces and cities around the country, we have plenty of resources to do more than product supplying. With the booming up of the China market, as well as the escalated requirement for security, the company decided in 2009 to establish another department focusing on projects and vertical solutions design/deployment." Outside of China, Hikvision notes they continue the traditional strategy of product supplier through distribution and system integrators.
  • Hikvision confirms that all $800 Million in revenue will go to their company. Over a 3 year period, this may add $250+ Million per year. This is a very significant revenue level (both compared to industry standards and HikVision's own revenue - i.e., Hikvision 2009 revenue was $310 Million USD).
  • Hikvision clarified the announcement's reference to 500,000 video surveillance 'points'. The term points refers to areas where cameras will be installed so the total number of cameras deployed will be significantly more than 500,000.
  • When asked about IP vs analog and use of analytics, Hikvision noted, "China is embracing prime performance products, solutions and technologies, it is certain that the solutions used in Chongqing will be state-of-the-art products and technologies."

This appears to be very good for Hikvision and further signals the opportunity in the China surveillance market. The main question it raises for us is how it impacts the focus and value of expanding into North America and EMEA. Even major manufacturers like NICE and Verint have surveillance businesses with less than $200 Million revenue per year. Given Hikvision's low market awareness and undifferentiated IP product lineup, will Hikvision have the motivation or resources to maximize its efforts outside of China? Regardless of the outcome, if the Chinese market growth and Hikvision's ability to tap into it continue, Hikvision is likely to do quite well.

Hikvision's Current Financial Position

As of December 15, 2010, Hikvision's market capitalization is about $7.5 Billion USD (50 Billion Yuan). To provide a point of comparison that is 6 times the market cap of Axis (about $1.15 Billion USD). [Note: Hikvision IPOed in May 2010.]

As a publicly traded company, Hikvision's financial reports are now publicly available in a Periodic Reports section of their website (in Chinese).

Through the first 3 quarters of 2010, revenue is up 66% to approximately $350 Million USD. Hikvision is on pace to do $450 - $500 Million revenue in 2010.

2 reports cite this report:

Hikvision New R&D Base To Create 10,000+ Jobs, Says Chinese Government on Jan 10, 2017
Hikvision has secured a major new China government partnership.  In this note, we examine the official statement from the Chinese government and...
Hikvision And The Chinese Government on Dec 07, 2015
Here are the facts about Hikvision's China government ownership. #1 Fact - Hikvision CEO Admits China Government Ownership In the China...
Comments : PRO Members only. Login. or Join.

Related Reports on China

SIA Plays Dumb On OEMs And Hikua Ban on Sep 20, 2018
OEMs widely pretend to be 'manufacturers', deceiving their customers and putting them at risk for cybersecurity attacks and, soon, violation of US...
25% China Tariffs Finalized For 2019, 10% Start Now, Includes Select Video Surveillance on Sep 18, 2018
A surprise move: In July, when the most recent tariff round was first announced, the tariffs were only scheduled for 10%. However, now, the US...
Chinese Government Praises Hikvision For Following Xi Jinping on Sep 17, 2018
The Chinese government council responsible for managing China's state-owned companies praised Hikvision’s obedience to China’s authoritarian leader...
Australia and French National TV Investigate Hikvision, Australia Military To Remove Hikvision Cameras on Sep 12, 2018
An Australian National TV investigation on Chinese video surveillance has put a spotlight on Hikvision, including a promise from Australia's...
Trump Administration Considers Sanctions Against Dahua and Hikvision on Sep 11, 2018
The Trump administration is considering sanctions against Dahua and Hikvision for their involvement in human rights abuses against minorities...
Ambarella on Computer Vision and US Hikua Ban on Sep 10, 2018
Ambarella, a widely-used video surveillance component supplier, is betting on the rise of computer vision and is already seeing a sales impact from...
China "Largest Threat To US National Security", Declares FBI And Counterintelligence Heads on Sep 07, 2018
China is 'bar none', the 'largest threat to [US] national security' plus China has declared 'economic war' on the US, according to William Evanina,...
Congressional Letter Urges Sanctions Against Dahua and Hikvision For Human Rights Abuses on Sep 04, 2018
17 US Congresspeople sent a letter to the Secretary of State and Treasury urging sanctions against Chinese officials plus Dahua and Hikvision,...
Directory Of 110+ Video Management Software (VMS) Suppliers on Aug 30, 2018
This directory provides a list of Video Management Software providers to help you see and research what options are available. Listing...
Sell Dahua or Hikvision At All, Banned From Selling to US Federal Government, Says US HASC on Aug 29, 2018
The US House Armed Services Committee (HASC) Communications Director has confirmed to IPVM that if a company sells Dahua or Hikvision at all, they...

Most Recent Industry Reports

BluePoint Aims To Bring Life-Safety Mind-Set To Police Pull Stations on Sep 20, 2018
Fire alarm pull stations are commonplace but police ones are not. A self-funded startup, BluePoint Alert Solutions is aiming to make police pull...
SIA Plays Dumb On OEMs And Hikua Ban on Sep 20, 2018
OEMs widely pretend to be 'manufacturers', deceiving their customers and putting them at risk for cybersecurity attacks and, soon, violation of US...
Axis Vs. Hikvision IR PTZ Shootout on Sep 20, 2018
Hikvision has their high-end dual-sensor DarkfighterX. Axis has their high-end concealed IR Q6125-LE. Which is better? We bought both and tested...
Avigilon Announces AI-Powered H5 Camera Development on Sep 19, 2018
Avigilon will be showcasing "next-generation AI" at next week's ASIS GSX. In an atypical move, the company is not actually releasing these...
Favorite Request-to-Exit (RTE) Manufacturers 2018 on Sep 19, 2018
Request To Exit devices like motion sensors and lock releasing push-buttons are a part of almost every access install, but who makes the equipment...
25% China Tariffs Finalized For 2019, 10% Start Now, Includes Select Video Surveillance on Sep 18, 2018
A surprise move: In July, when the most recent tariff round was first announced, the tariffs were only scheduled for 10%. However, now, the US...
Central Stations Face Off Against NFPA On Fire Monitoring on Sep 18, 2018
Central stations are facing off against the NFPA over what they call anti-competitive language in NFPA 72, the standard that covers fire alarms....
Hikvision USA Starts Layoffs on Sep 18, 2018
Hikvision USA has started layoffs, just weeks after the US government ban was passed into law. Inside this note, we examine: The important...
Chinese Government Praises Hikvision For Following Xi Jinping on Sep 17, 2018
The Chinese government council responsible for managing China's state-owned companies praised Hikvision’s obedience to China’s authoritarian leader...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact