NetPosa Revenue Plunges 90%

By John Honovich and Charles Rollet, Published Nov 04, 2019, 08:19am EST (Info+)

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

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

***** ** ******** ******, ******* ********* **** ******* **** to **** $*.**, **** **** **% from $*** ** ** ** **** year (******* *** ** ***):

****** **** *******, **** *** ******* losing **** **** ** *** ***** revenue, * ***** ******** **** *** 2018 *******:

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

******* *** *** ******* *** **** revenue **** ** *** ** *********; IPVM ***** *** **** ** *********** anywhere ****. *******, ******* *** ****** ******** ************** ** *** ** ****** ******* investors **** *** ****** *** ********, giving * ******* *** **** ***********:

*) *** ** *** ******** *********** and *** ****** ** ****** ***********, the *******'* **** ******** ****** **** sharply.
*) *** **** ** *** ********** Huaqi *********** ********** ** [...] **** affect *** ****** ** ************* [$** million] **.* ******* ***
*) *** **** ** ********* ********* [due ** ***] ****** ** *** company's ********* ***** ** *** *** of **** *** ***** ************* *******
*) ***** *** ******** ** ******** downturn [...] *** **** ** ******* in *** ******** [*.*. ******** **********] has ****** ****

**** ********* *** ********** ****, ******* dropped ~**% *** ****** **** ********* high.

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

****** ********** **** *****, ******* ** ********* ***** ******* by *** ********* ** ***** **** massive ************ ***** **** ** *** founder ***** **** $*** *******. **** of *******'* ******* ****** ***** *********** ****** **** *** *******.

***** ***** ***** **** ****** **** to ***** *******'* **** ******** ********** (unpaid *******' *****), ***** ********* ***** at $**** ** *.** ******* ***, per *** ** ******, *** **** different **** *** *.* ******* *** in */* ** *** **** ***** last ****:

**** ***** ******* *** **** **** NetPosa's ****** **** ****** ******* ** $310m.

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

*** ********* ****** ** ******* ** unclear. *** ***** *** *** ******* this ******* ***** **** (***** ******* ***** *******) *** ******* *** *** ******** any ******** ********* ***** **** **** we ***** ****.

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

*******'* ***** ***** *** ********* ****** 20% ***** *** ** ****** *** released ** ******* **, ****:

Valuation ***** ****

******, *******'* ****** ********* ** ~$*** million *** ** ***** ***** ****, at ***** ******** ** ***** *********. For * ******* ********* ***** ****** and ****** ***-**** ******* ** ~$** million, *** ********* ** ********* ****.

*** ******** ****** ***** ** **** investors ****** *******'* ******* ** ****** back **, ****** ***** *** ****** the ******* ** **, **** ******* some ****.

******* ******** ****** ** *********** ** *** *** *****-************ ** *** ******* **** *** help.

** *** ***** ****, ***** ************ in *** ***** *******, *** ****** may *** ** ****** ********** *** risk *** ****** ********** ** *******.

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

** ******* **** ***** *** ********* are **** ****** ********** **** *******. While *******'* ************ ******** *** ******* concentrated ** ******** ********** ********, ***** and ********* **** **** **** *********** business ** *** ************ ** **** as ********.

*******, ******* *** ************* *** **** similar ****** ** *** **** ********* fast-growing *** ************ ****** ***** *** first ******* ********* ** **** * decade.

Western **********

***** *** ** ******* ************ ** security ********* **** *** ** ******* compared ** *******'* *********. **** ***, indeed, ********** *********** *********** ******* *** two *******.

** ****** ****** * ******* ************ manufacturer ***** ******* ******* ******** ** steeply *** ** ******* ** *******. Western ********* ******* *** ********* ******** and ************ **** * ****** ** years.

*** **** ********* ******** ** ** the ********* ** *******. *** *******,*******'* ***** ********* **%**** ** ********* **** *** ******* and ******* ***** ** ********** **** than **** **** ******** **********. ******* to ******* ***** ***** ******* **** 20% *** * ************ ****** *******. Indeed, *******'************** ********* ** * ***** ** sales ***** ** ****** **** **** Avigilon ** **** **** ****** ******** traded *********, ***** ** **************** ** us.

** ********* ** *** ************ **** the ********* ** *** *** ***** market *** ****** ******* **** ********* rebound ** ***** ***** ** *** PRC ***** ****** ** *** ********** the ************ ** *******.

*******

**** *******, ** *** *** *******'* challenges ********, ** ****** ** *** more *** ************ ********* ** **********, to ******* *******.

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