NetPosa Revenue Plunges 90%

By: John Honovich and Charles Rollet, Published 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 troubles.

In this note, we examine the news and what it could mean for the company, including:

  • Revenue Nosedives
  • Official Explanation: "External Environment" and "Market Competition"
  • NetPosa Already in Crisis
  • Immediate Impact Unclear
  • Stock Price Decline and Market Valuation
  • Contrast to other PRC Manufacturers Include Dahua and Hikvision
  • Contrast to Western Manufacturers

******* *** *****'* ****-**** largest *** ******** ******* plunged **% ** *** latest *******, ****** ** the****'* ******* ********* ********.

** **** ****, ** examine *** **** *** what ** ***** **** for *** *******, *********:

  • ******* *********
  • ******** ***********: "******** ***********" and "****** ***********"
  • ******* ******* ** ******
  • ********* ****** *******
  • ***** ***** ******* *** Market *********
  • ******** ** ***** *** Manufacturers ******* ***** *** Hikvision
  • ******** ** ******* *************

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

Revenue *********, ****** ***** ********

***** ** ******** ******, ******* ********* **** revenue **** ** **** $5.5m, **** **** **% from $*** ** ** of **** **** (******* are ** ***):

****** **** *******, **** the ******* ****** **** than ** *** ***** revenue, * ***** ******** from *** **** *******:

Official ***********: "******** ***********" *** "****** ***********"

******* *** *** ******* the **** ******* **** in *** ** *********; IPVM ***** *** **** an *********** ******** ****. However, ******* *** ****** ******** ************** ** *** ** report ******* ********* **** its ****** *** ********, giving * ******* *** this ***********:

*) *** ** *** external *********** *** *** impact ** ****** ***********, the *******'* **** ******** income **** *******.
*) *** **** ** our ********** ***** *********** Technology ** [...] **** affect *** ****** ** approximately [$** *******] **.* million ***
*) *** **** ** financing ********* [*** ** the] ****** ** *** company's ********* ***** ** the *** ** **** and ***** ************* *******
*) ***** *** ******** of ******** ******** [...] the **** ** ******* in *** ******** [*.*. accounts **********] *** ****** down

**** ********* *** ********** sold, ******* ******* ~**% and ****** **** ********* high.

NetPosa ******* ** ******

****** ********** **** *****, ******* ** ********* being ******* ** *** creditors ** ***** **** massive ************ ***** **** by *** ******* ***** over $*** *******. **** of *******'* ******* ****** space *********** ****** **** *** dispute.

***** ***** ***** **** partly **** ** ***** NetPosa's **** ******** ********** (unpaid *******' *****), ***** currently ***** ** $**** or *.** ******* ***, per *** ** ******, not **** ********* **** the *.* ******* *** in */* ** *** same ***** **** ****:

**** ***** ******* *** well **** *******'* ****** 2018 ****** ******* ** $310m.

Immediate ****** *******

*** ********* ****** ** NetPosa ** *******. *** media *** *** ******* this ******* ***** **** (aside ******* ***** *******) *** ******* *** not ******** *** ******** statement ***** **** **** we ***** ****.

Stock ***** **** **%

*******'* ***** ***** *** decreased ****** **% ***** the ** ****** *** released ** ******* **, 2019:

Valuation ***** ****

******, *******'* ****** ********* of ~$*** ******* *** is ***** ***** ****, at ***** ******** ** world *********. *** * company ********* ***** ****** and ****** ***-**** ******* of ~$** *******, *** valuation ** ********* ****.

*** ******** ****** ***** be **** ********* ****** Netposa's ******* ** ****** back **, ****** ***** the ****** *** ******* is **, **** ******* some ****.

******* ******** ****** ** that******* ** *** *** state-controlled** ** *** ******* that *** ****.

** *** ***** ****, given ************ ** *** stock *******, *** ****** may *** ** ****** reflecting *** **** *** future ********** ** *******.

Dahua *** ********* **********

** ******* **** ***** and ********* *** **** better ********** **** *******. While *******'* ************ ******** was ******* ************ ** domestic ********** ********, ***** and ********* **** **** more *********** ******** ** SMB ************ ** **** as ********.

*******, ******* *** ************* may **** ******* ****** as *** **** ********* fast-growing *** ************ ****** faces *** ***** ******* headwinds ** **** * decade.

Western **********

***** *** ** ******* surveillance ** ******** ********* that *** ** ******* compared ** *******'* *********. This ***, ******, ********** fundamental *********** ******* *** two *******.

** ****** ****** * Western ************ ************ ***** revenue ******* ******** ** steeply *** ** ******* as *******. ******* ********* decline *** ********* ******** and ************ **** * number ** *****.

*** **** ********* ******** is ** *** ********* of *******. *** *******,*******'* ***** ********* **%**** ** ********* **** its ******* *** ******* would ** ********** **** than **** **** ******** previously. ******* ** ******* whose ***** ******* **** 20% *** * ************ deeper *******. ******, *******'************** ********* ** * price ** ***** ***** is ****** **** **** Avigilon ** **** **** strong ******** ****** *********, which ** **************** ** us.

** ********* ** *** sufficiently **** *** ********* of *** *** ***** market *** ****** ******* will ********* ******* ** short ***** ** *** PRC ***** ****** ** not ********** *** ************ of *******.

*******

**** *******, ** *** PRC *******'* ********** ********, we ****** ** *** more *** ************ ********* be **********, ** ******* degrees.

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