Megvii Financials and Growth Examined

By: Charles Rollet, Published 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 IPO this week on the Hong Kong Stock Exchange.

megvii financials and growth examined

This 500+ page IPO document reveals significant details into the size, growth, and usage of AI inside of China.

In this post, we look at the firm's financials, growth, City IoT focus, and the possible competitive threat to Hikvision & Dahua, including:

  • Megvii Background
  • Deeply Unprofitable, Growing Fast
  • Principal Verticals
  • Main Customers Mostly Security/Surveillance SIs
  • Low International Presence
  • City IoT Largest Segment By Far
  • Covered Cities, Revenue Per Customer Booming
  • Capitalizing on AI Camera Switch
  • Threat to Hikvision and Dahua?
  • Alibaba Ownership Stake Impact
  • US Sanctions Risk
  • Conclusion

********

****** *** * **** reliance ** *** **** surveillance ******** (**** ~*/**** of ***** *******), *********** threatening ********* *** *****'* strong ********. *** ******* Megvii *** ********* ***** firms' ****** ******* ******* to ** ****, **** 95% ** *** ******'* business ********* ** *****.

Megvii **********

******, ****-***** *** *******++********, ******** ****** *********** and ** ********* ** PRC *********** *** ********** sectors (***********, ******, *********** communities, ***.) ****** ** one ** *****'* **** face *** ******** - startups ****** **** $* billion - ***** ********,*********, ************. *** ****, **'* in *******, *** *,*** employees ** ** **** its *** ******.

Fast *******, **** *** $***+ ******* ******* **** ****

**** ******** *******, *** **** *** 2018 ******* ** ~$*** million, **** ** **** revenue ********, ******* *** firm ** **** ** generate $***+ ******* ******* in ****.

** ******* ***** ************ AI ******* *** ******** near **** ***** ** revenue *** ******, **** even ****-***** *********** **** Briefcam ***** **** **** of ******** ** ******* per **** (*** ***** ******** ********).

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

**** **** ******** ****** is ************, ****** ****** half * ******* ******* last ****, ******** *********** this ** * ***-*** change ** *****-***** ************ and *&* ********.

** *** ***** ****, their **** **** ****** rate (******** ******** *********) and ******* ******** ******* make ** ********** ** investors ** *** ******* scales **.

Low ************* ********

****** ***** **% ** its ******* ****** *****, the *** ******:

****** *** ***** ****** Period, ** ********* *.*%, 0.8%, *.*% *** *.*% of *** ******** **** markets ******* ** *** PRC ** ****, ****, 2018 *** *** *** months ***** **** **, 2019, ************."

**** ** *** ** a *********** ** ******* - *** ***'* ***** internal ******, *** *******'* mandate *** ********* ** / ****** *********** (******** ****** ***** ************ Guide: **** ****** ** Sharp ****), ****** ***'* ******* ** disadvantaging ** ******* *****.

Main *********

****** ******* *** ******** into * **** *********:

  • "******** ***" (*.*. ****** recognition ** ****** ***********)
  • "**** ***" (***** ******/****** surveillance *****, *********** *********)
  • "****** ***** ***" (***** logistics *** ******)

***** ** ***** ********* of ****:

City *** ****** */*** ** *******

**** ****** ****** **** it ******** **** *** authentication ** "**** **% of *******-***** ***********" ** China **** ****, **** IoT ** ** *** its **** ********* *******, making ** **% ** its ******* *** *** first *** ****** ** 2019 (~$*** *******). **** IoT ******* **** **** quadrupled ****-**-****, ************* ****** growth **** *** ***** areas:

Clients ****** ********/************ ***********

**** ** ******'* ******* are ******* *********** ** the **** ************ *** smart ********* *****:

** ****, *** *** five ********* ******** (*) a ****** ********** ** China *** ***** **** management *********, (**) * system ********** ** ***** for ***** **** ********** solutions, (***) * ****** integrator ** ***** *** smart ********* *********, (**) a ******** ** ****************** service ** ***** *** (v) * ****** ********** in ***** *** ***** logistics *********"

***** ******* *** **** clients ********* *** **% of ******'* ******* ** 2019.

Covered ****** & ******* *** ******** *******

** **** ***, ****** says ** *** ****** 112 ***** ******, ****** twice ** **** ** a **** ***:

***** ***** ******** ********* declined **** *** ** the ***** ** *** year ** *** *****, average ******* *** ******** customer *** **** **** doubled ** ~$***,***.

*** *** ********* *** not ***** / **** which ***** ****** *** Megvii.

City *** ******* *******

**** *** ** * booming ******, **** ***** spending ** ***** ****** and "********* **********" (***** includes, *.*. ****-***** ****** control ** *********-*** ************) expected ** **** **** quadruple **** **** $* billion **** **** ** over $** ******* ** 2023:

AI ******* ******** ** ***** ******* ******

****** ******* ** ********** on *** ****** ** AI ******* ** *****'* smart ******, ***** ** estimates **** * **% presence **** ****, ********** to **** **% ** 2023:

********** ** ******* *** other ********,******* ** *** *** its "****-*****" (*.*. ***-**-***) offering ** "**-********* *** devices":

****** ******* *** *** MegEye ******, ***** *** firm ****** *** "************** extract **** ***** ** features, ****** ***** *******, faces, ******** *** ******* plates, ** *** ***** end":

**** *** **** ******** manufacturer ***** ******* *** did *** ******** ***** source *** ** ****** tell **** *** *********** we **** *********.

Threat ** ********* *** *****?

******'* **** *** ***** could ********* ***** *** Hikvision's ********* *****. *** firms ********* *** **** PRC ********** ************ *****, notably**** $*.* ******* ** Xinjiang *****.

****** ****** *** *** mention *** ********* ** its *** ******, ****** is **** ** **** its ****** ** "*** largest**-*********** *** ******** ********" [emphasis *****]:

****** **** *****, ** have ****** * *********** market ******** ** *****’* City *** ********, *****used ** ** ********* ** *********** ******** *************

****** *** ** ******** to *********/***** ** **** chart ********** "*** **-******* players" (****** *** *** respond ** *** ******* to ******* ****):

**** *****'* ****** ************ switching ** ** *******, if ****** ******* ** capture **** ******, ** could **** * ****** threat ** * *** part ** *********/*****'* ********. There ** ** ********* of ****, *******, *** it's ***** ****** **** telecoms *********** *** **** *************** *** ********* **** video ************ ** ********* 'AI *******' ** ***** cities ** ***** *** the *****.

Alibaba ********* ****** ** ************

******* ** * '********* investor' **** ******, **** a **.**% ***** ** the *******. **** '***********', as **** ********, ***** have ** ****** ** their ********* **** ***** surveillance *** *********** **** surveillance **********. ******* ** a **** ***** *******, some ** ****** **** Hikvision, **** ********* ** expand **** ***** **** / **** ************. ********, recently,******* **** * *********** investment **** *******, *****'* **** ******* direct ******** **********.

*** *********** ** *******, Megvii, *** ******* *** the ********* ** ** a *********** ****** ** PRC ***** ************.

One *** ******'* ****** ********* ***** ** ********

************* *** *****, ****** *** ******** operations*** *** ***** ** Chinese ******* * '********* ******* unit' ** *** ******** Public ******** ***** **********. The **** **** ********* ethnicity ********* **** ***** PRC ****** ** ************* identify ******* ** ********* Uyghur ********,*** *** ********.

******* ** **** ****** was******** ********** *** ** sanctions, ***** **** ********* and ***** *** ***** China ************ *****. ********* on *** **** ** sanction, ****** ***** ** barred **** ***** **** US ********** (** ** is ***** ** *** '****** ****') ** ** ******* banned **** *** ** and *** ** ****** frozen (** *** **** of********* *********). ** ******* ****** has **** *** **** SoCs"*** ** *** *****"******** **************** ****** ********* *****:

** *** *** ******, Megvii *** *** ******* Xinjiang, *** *** ******** that ********* ** ********* could:

***** ** ****** *** development ** *** **********, products *** *********, ****** the ********* ** *** supply *****, *** *** result ** ******** *********, require *********** ********** **** and ********* *** ******* us ** *****, ********* or ****** **** ** cease ** ****** *** existing ******** *********, *** of ***** *** **** a ******** *** ******* effect ** *** ********, financial ********* *** ******* of **********.

****** **** ********* *** creation ** ** "** Ethics *********" *****, *********, includes *** ***** ********** Officer ** ********* **************** ************ *** **** ***-*** member. ********** *** ** public ********** ** ************* *********-**********.

**********

****** ***** ********* ********* and *****'* ****** ******* model, ****** ** * protected **** ****** *** strong ******. ******* **** is ******** ** *** current *** ** **-***** tensions *** ************* *** surveillance ******** ******* ** be ****. ************, ******, by ******** ** **** IoT, ****** ***** * long-term ****** ** ********* and *****.

Comments (3)

***** **** *******! ******** great ******* **** *** market ** *****.

******'* ******* ********** ********* is ********** ***** ** do $*** ******* ******* in ****,*** *******:

******* *** **** ******* to ******** ** **** than ***% ****-**-**** ** around $*** *******, *** sources ******** **** *** matter ****.

*** *** ******** *** therefore ***** ** ** $1+ ******* ** ******* this ****, ***** ***** literally ** ** *** amount **** ***** ***-***** facial *********** / ***** surveillance ** ******** ******** will ** **** ****.

******:********* ******** ******** **** ** growth, "********* ** ********* ******* for *********" **** *** that:

**** ******* * **** 2.7% ** ****’* ****** half ***** **** **** tripling ***** ** *** first *** ****** ** the ****...

****** **** ***** ** its ****** *** *.* billion **** ($*** *******) ** ***** ** almost **%, * ****** familiar **** *** ****** said, ****** *** ** be ********** ********** ******** targets.

********* ***** ****, ************, that *********** ***** ******* are *** *** ******* stream *** *** *******.

Login to read this IPVM report.

Related Reports

Anyvision Presents AI Facial Recognition and Mask Detection on Jun 08, 2020
AnyVision presented its AI facial recognition and mask detection at the May...
IDIS Presents 12MP IR Panoramic Fisheye on May 26, 2020
IDIS presented its 12MP IR panoramic fisheye camera at the April 2020 IPVM...
2020 Mid Year Video Surveillance Industry Guide on Jul 27, 2020
The first half of 2020 has been shocking, for the world generally, and for...
Hikvision Global News Reports Directory on Aug 13, 2020
Hikvision has received the most global news reporting of any video...
Sony Launches AI Camera Sensors on May 18, 2020
Weeks after exiting the branded video surveillance business, Sony is making a...
Hanwha and Hikvision Selling H.265 Without HEVC Licensing on Aug 19, 2020
IPVM has confirmed that Hanwha and Hikvision do not have H.265 licenses from...
Hikvision's India Dominance Faces Threat on Jul 08, 2020
While Hikvision has become a dominant video surveillance provider in India,...
Salesforce Drops Dahua and Hikvision on Aug 12, 2020
Salesforce has dropped Dahua and Hikvision as customers, forcing the two mega...
Uniview Deep Learning Camera Tested on Jul 14, 2020
Uniview's intrusion analytics have performed poorly in our shootouts. Now,...
Hikvision Buys Baltics' Largest Distributor (BK Group) on Aug 20, 2020
While Hikvision faces global scrutiny over its connections to the PRC...
Drako's Companies (Brivo, Eagle Eye) Take $4+ Million in PPP Funds on Jul 14, 2020
While centimillionaire Dean Drako is the owner of two of the largest SaaS...
Leica Presents AI LIDAR / Thermal / Visible Camera (BLK247) on May 06, 2020
Leica presented its AI multispectral BLK247 camera at the April 2020 IPVM New...
Hanwha Presents AI Analytics and First 8K Camera on May 11, 2020
Hanwha presented their AI Analytics and the "Industry's First 8K" camera at...
Euklis Presents AI Analytics on May 05, 2020
Euklis presented its AI facial recognition, LPR, and object recognition...
Directory of 96 Video Surveillance Startups on May 20, 2020
This directory provides a list of video surveillance startups to help you see...

Recent Reports

FLIR CEO: Many New Fever Entrants "Making Claims That The Science Just Won't Support" on Sep 22, 2020
FLIR's CEO joins a growing number calling out risks with fever / screening...
China Bems Temperature Measurement Terminal Tested on Sep 22, 2020
Guangzhou Bems (brand Benshi) is the manufacturer behind temperature...
Axis Exports To China Police Criticized By Amnesty International on Sep 21, 2020
Axis Communications and other EU surveillance providers are under fire from...
Milestone XProtect on AWS Tested on Sep 21, 2020
Milestone finally launched multiple cloud solutions in 2020, taking a...
Mobile Access Control Usage Statistics 2020 on Sep 21, 2020
Most smartphones can be used as access control credentials, but how...
Axis Compares Fever Camera Sellers to 9/11 on Sep 18, 2020
Axis Communications, the West's largest surveillance camera manufacturer, has...
Avigilon Elevated Temperature Detection Camera Tested on Sep 17, 2020
Avigilon has entered the temperature screening market with the release of...
Chilean Official Investigated for Motorola And Hikvision Contracts on Sep 17, 2020
A corruption investigation is underway in Chile after a crime prevention...
Huawei HiSilicon Production Shut Down on Sep 17, 2020
Huawei HiSilicon chips are no longer being manufactured or supplied to...
Virtual ISC West and GSX+ Exhibiting Contrasted on Sep 17, 2020
Both ISC West and ASIS GSX are going virtual this year, just weeks apart, but...
X.Labs Sues FLIR on Sep 16, 2020
X.Labs, the maker of Feevr, has sued FLIR, the publicly traded thermal...
Video Surveillance 101 September Course - Last Chance on Sep 16, 2020
Today is the last chance to sign up for the Fall Video Surveillance 101...
No Blackbody Mistake, Half Million Dollar, Hikvision Fever Camera System in Georgia on Sep 16, 2020
A Georgia school district touted buying Hikvision fever screening "about...
Costar Technologies / Arecont H1 2020 Financials Examined on Sep 16, 2020
Costar's financial results have been hit by the coronavirus with the company...
Startup Cawamo Presents Live Alerts With Edge AI and Cloud VMS on Sep 15, 2020
Cawamo, an Israeli edge-to-cloud analytics and VMS startup, presented its...