RaySharp Revealed - Major China OEM For Western Consumer Video Surveillance

By Charles Rollet, Published Jul 02, 2019, 10:54am EDT

RaySharp is mostly unknown, even among people in the video surveillance industry, though it is a major supplier of OEM surveillance equipment such as the camera/recorder kits sold in big box retailers like Costco. The company does this by OEMing for major distributors like Swann, Hanwha, and Lorex, benefiting from Hikvision/Dahua's move to sell under their own brand.

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However, not much is known about RaySharp. But thanks to a recent China IPO application, we now have an unprecedented level of information. In this post, we take a detailed look at this PRC company, examining its US customers, partial Chinese government ownership, legal disputes, financials, sales strategy, repeated failures to IPO in China, and more:

  • Background
  • Ownership Structure
  • Large PRC Government Stake Revealed
  • Financials: Low Margins, Poor 2018 Revenue Growth
  • RaySharp's Top Market: North America
  • Top Customers: Swann, Lorex, Hanwha
  • Top Suppliers
  • Sales Strategy: Mostly Big Box
  • Legal Dispute Over Night Owl Security Shipment
  • Failed China IPOs
  • PRC Regulators Allegations' Against RaySharp
  • Chinese Media Investigate RaySharp Sales Strategy
  • Latest RaySharp IPO
  • Cybersecurity Issues
  • Hanwha Reaction to OEM Cybersecurity Risks
  • Overall Risks/Strengths

*******

******** *** ********** ** 2007 *** ** ***** in******, * ******* **** city **** *****. ** is ******* ** *******: only * ***** ********** (1-3%) ** *** ***** are **** ************, *** latest *** ****** ******.

Ownership / ******* ********** *****

******** *** * ******* ownership *********, *** ********* reveal. ***** **'* * private *******, **** ** RaySharp's *** ***** ************ are ********** *****-********** ** have * ***** *****-***** component:

  • ******* ********* ********* *************** **% ** ******** and ** **** *** largest *** *********** ***********. In ****, **% ** Lianzhong ********* ** ********** owned ** *** *****-***** Assets *********** *** ************** Commission (*****) ** ***** Province, * ******** *****-***** company.
  • ********'* ****** *** ****** largest ************,********* ********** ******* *******(**** **.**% *********)****** **(*.**% *********) *** **** state-owned ********** ******** ********** the ********* ********** ******’* Government.
  • ********'* *******-******* ***********, ****** VC, ** **** ********** as *****-***** *** **** 4.6% ** ********.
  • *** **** ** ******** is ***** ** * mixture ** ******* *********: VCs, *** **********, ***** investment ********, ***.

***********, **** ***** ***** 41% ** ********'* ****** are ********** ***** ** the ******* **********. **************, that ** ****** ******* the **** ********** ** Hikvision **** ******* ** *** ******* government.******** *** ********* **** have * ***** ****** in ******,*****, *** ********* *** state ****** **** **** about **% ** ********* and (*** ********* *********) about **% ** ********.

*******, *** ********* ***** the "****** **********" ** RaySharp ** * ******* PRC ******* ***** ** Lin (徐进), *** ** RaySharp's ******** *** ***** representative. ********'* *** ****** states ****, ******** *** indirectly, ** *** *********** controls ***** **% ** RaySharp's ******. **** ** mainly ******* *** *********** 55% ***** ** ********* Yongsheng, ** ***** ** is *** ********* ********. Xu *** **** ******** owns ***** *.*% ** RaySharp's ******.

RaySharp **********: *** *******, ******* ******

  • **** ******* *** *****$140 *******; profit of about $8.7 *******
  • **** ******* *** *****$136 *******; profit about $11 *******
  • **** ******* *** *****$80 *******; profit about $5 *******
  • **** ******* *** *****$62 *******; profit of about $3 *******
  • **** ******* *** *****$47 *******; profit of about$1.5 *******

** *** ** ****, revenue ****** ********* **** 2017-2018 ***** ******* ********, leading ** * ***** profit ******. ********'* ****** margins, ** **** ***** 6% **** ****, *** much ***** **** ****** like*********,***** *** * **% margin, ********(***** **%). ********** ********* ********'* *** ********* * ******* (*** 'Failed ***' ******* ***** in **** ****.)

******** ********* **** ***** 2016 ** ***** ** this ***** ***** ** RaySharp's ****** *** *********** (which ** ** ***** of **,*** ***):

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****-**** **** *** ***** on ********'********* *** ***********:

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RaySharp **** *******

***** ******* ** ** far ********'* ******* ******. In ****, ** **** up **** **% ** RaySharp's *****, ** **** $105 *******, ********* ** its ****** *** ******:

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*** **** ** ********'* sales *** ****** ******* split ******* **** *** Europe, **** ***** **% each. ********'* ******** ***** are **** ***, ******** around *-*% **** *** past *** *****.

RaySharp **** *********: ***** *********

********'* *** ********* ** 2018 ****:

*** ******* *** *** conversions ** *** ******** chart *****, ** **,*** RMB **********:

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*** *** ***** ****** shows **** ***** ** RaySharp's ***** ****** **** company's ****** *********. **** means ***** ** ** far ********'* **** ********* customer, ************ ****** **% of ***** *****.

RaySharp ******* ********

********'* ******* ****** ****** ******* ** low-end** *******/****, ** **** ******************/****, ******* ** ****, * ******* ******* mix *** ************ **** in *** *** ******. They ***** **** ********* varifocal ****** *** ****, though *** **** ** the ******* **** ** fixed ****. ************, **** claim ********* *** **** "**** ********" ** **** ******, though **** ** * distinct ********.

RaySharp *** *********

** ****, ********'* *** two ********* **** ***** HK, * ********** ** Swann ** **** **** drives ****, *** ****** HiSilicon, *****'* ******* *** producer. ***** *** ********* made ** ****** **% of ********'* ***** ********* purchases, ** ***** $** million, **** **** ****** about ** ***** *****.

** *****, ******** ***** its * *** *********, but ** ****. *** other ***** ********* **** smaller *** *********** *************. Those **** ********* **** up ***** **% ** RaySharp's ***** *********.

RaySharp *****: *** *** *******

******** ****** **** ***** 80% ** *** ******* comes **** ******* ******* and ********* ********* ** large ************ ************ *** re-brand *** ******** *** sell *** ***** ***** to ****** **** ******, Sam’s ****, **** ***, Fry's ***********, **** *****, Lowe's, *** ****** ******* Tools - ** *** end **** *** ****** physically ***** ** ***** stores ** ******** ****** kits. *** **** ** RaySharp's ***** ** ******** to *********** **********.

Night *** ***** *******

******** ** ******** ** an ***** ******* **** a ******* ***** *****,***** ***********, **** * ******** intended ******** *** ********, * **** *****, FL ***********, ** ****** in *** ****** *** filing.

******** ****** **** ***** sued **** ** ******* 2019 ** ******** ***** over * ******** **** shipment ** ***** ***-******* cameras. *****, * ******** Night *** *****, **** the ****** ** ***** Owl's ********* **** ** China *** ******* ******** was ******** *** *********. RaySharp ****** ****; *** case ** *******.

***** *** ******** ********'* version ** ******. ** February, ***** ******** * ********* *** ****** ******** of ******* ******* ***** over *** ********, ***** caused *********** ******, ******* it ***** ********** ***** to **** *** *** 'Night ***' ********* ** China. **** **** ** ongoing ** ****, *** RaySharp ** *** * party ** **.

Failed ****

******** *** ********* ******* times ** **** ** the ******** ***** ********'*************. ******* *** ****** reporting/revenue ************ **** ********'* main ***** ********, ** it ** ***** ** attract *******, **-****** **** companies.

*******, ******** *** ****** twice, ***** ** **** when ************* ***********, **** **** year **** ********'* *** application *** ******** ** regulators, ************** *********** ******:

*** ********** *** ***** volume ** **** ** significantly ****** **** **** in ****, [***] *** materials [***********] *** *** inventory ** *** ************, and *** ******* ********* balance ** ********* *** same

****** *** ********* ******, the ******'* ***** ** major ********* **** ** Hanwha ******* ********** *************

********** ********-********* ********* ** the **** ******** **** higher ***** ****** *******

[***** ** *] ***** difference ******* ******** ***** revenue *** ******* **** during *** ********* ******

**'* ***** ****** ****, separately,******** *** ***** $*** for *** **********,*** ******* ** *** customs ** ****.

Chinese ***** *********** ***** ********

***** *** **********'* *********,************* * ******* ************************* ********* ***** ********'* sales ********, *********** **** sales ****** ** **** to ******* *********.

*** ******** ******** *** unit **** *** **** price *** ********'* ******** and ***** *** ******** had ******* ****** **** while ***** *********. *** articles ********* **** ******** used **** ******** ** boost *** ******* ** it ***** **** **** for *** ***. ***, inevitably, **** **** ** one ** *** ***** gross ****** ******* ** the ********, ******* ********* from **********.

** *** *** ******* Raysharp *** ******* *** margins ******** *** *** to ********* ********** *****, but *** ******** ****** that *** *** **** to ** *** **** because ********'* ********** ***** were ******* *** ** the ****** ** *** industry.

New ***: ***** **** *****?

*** *****, ******** ** attempting ** ***,****** *** * ***** time ** **** **. *** ********** **** not ********* ***. ** the **** ******* ** any *****, ** **** take **** ******, ******** over * ****, ** know ******* **** ******* is **********. **** ****, RaySharp ***** *** ** IPO ** **** **** and *** ******** ******** in ********* ****.

Cybersecurity ******

** ******** ****, ******** researchers ***** **** ** to **,*** ******** **** had * ******** *************: "a ****-*****, ************ ******** for *** *******-********** **** in ***** ******** -- the **** *******",******* ********** *** ****. (**** discussed *** ************.)

*** ************* *** ** bad** *** ****** "**" - *** worst ******** ***** - by**-****, **** ** *** US **********'* ************* ********.

Hanwha ********: ** **** *** ******** *** ******** ****

**** ******* *** ** Hanwha ******* ***** ***** use ** ******** *** products, ****** ***** *** cybersecurity ***** - **** was ***** ******** *********:

****** ******* ******** ******** as ** *** ******** for *** ***/*** ******** products ****. ***** ** releasing ******** *** ******** to *** ******, ****** Techwin ******** ******** ******** verification ********** ** ****** the **** ** ********* security ********* **** ******** products ** ******** ********. This ******** ************ ******* a ******** ********* *** vulnerability ****** ***** ****** coding *****.

**** **** ******* ***** assurances, ***** *** ****** code ***** **** ********, some **** ***** *******. Generally ********, *************** *** also ****** *** ******** - *** ************ ** ***** ************ Cybersecurity *************** *** ********.

*********

******** *** ****** ************ popular ** *** **** as ****** *** ********* Hikvision *** ***** **** marketed **** *** **** of ***** ******* ********.

************, ***** *** ** current ***** ************ ** RaySharp, ****** ******* ******* ************* ** *********/***** *********.

***** *** **** *********** ** ***** ****** sanctions** *** **** **************** ***** ** ********. **** ******** *** any ***** ******** ******** projects, ** **** *********** China ****** ********, *** couldn't **** ***, ********* a ******** *********** ****** ********** **** ************ ** China.

*****

** *** ***********, ******** stated **** *********** ***** to *** ******** ******* the **-***** ***** ***, the **** ************* ** its *** * ******* (who *********** ****** ***** quarters ** ***** ******* in ****), *** ********* profit *******.

** ********, ******** ********'* IPO **** *** ******* this, *** *******'* ***** use ** ****** ********* equipment *** ****** ** to ***** *********** ********* on *** *** ** government ********** *** ******** of *** **** ***. As *****, ********* ** RaySharp's ****** ******* ********. (For ****, ********* ********* ******* ******** Tens ** ******** ** Western *** ************* ******** *** ***** House ******** ***** ** Hikvision / ***** ******* Blacklist).

False **** ******

** ********,******** ******* ******* "**** *************" for *** "***** ********" that ** ****** **** German ********* ********** *********. ** **** *** reported,** ******* *** ** GDPR ************ *** **** ****** states **** **** ******* do *** ****** *********.

******** ******* ** *** the "***** *** ** south *****" ** ******* the ************* *** *** surveillance ********, ***** *** be **** *** ** not ************ ******** ***** most *****'* ***** ************ manufacturers *** ** *******/******** China.******************* ****** ********* *** Rheinland's '*************' ****** ********.

** ** ****, ******* GDPR ************ *** ****** in ***** ************ *** other *******, **** ********* firms **** *** ********* capitalizing ** *********' ***** of *** **** ***********.

Comments (9)

is it possible that the erstwhile FLIR/Dahua SMB line was actually RaySharp?

Agree
Disagree
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Funny

No, only Dahua, prior to the acquisition of Lorex by Dahua. Now FLIR has no relations with any Chinese manufacturer.  

Agree
Disagree
Informative
Unhelpful
Funny

No, only Dahua, prior to the acquisition of Lorex by Dahua...

ok, but even before the acquisition of Lorex by Dahua, the three were linked.

I’m confused about where Lorex product was/is actually made, do you know?

Agree
Disagree
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Funny

Mainly Dahua/Raysharp/Taiwanese manufacturer. FLIR branded – only Dahua. 

Agree
Disagree
Informative
Unhelpful
Funny

No, adding to the other responses, you can tell by revenue. For example, Lorex bought less than $20 million of Raysharp products in 2018 while their revenue was way over $100 million, showing that Raysharp was a minority supplier to FLIR SMB / consumer.

Agree
Disagree
Informative
Unhelpful
Funny

raysharp corporate office employs some...

...shady characters.

 

Agree
Disagree
Informative
Unhelpful
Funny: 12

UPDATE: Raysharp has announced its intention to "establish a subsidiary in Thailand for the production and sales of security video surveillance products", planning to invest "no more than 20 million RMB" (about $2.81 million). The plan "still needs to be submitted to the shareholders meeting for consideration".

Additionally, Raysharp has disclosed its half-year 2019 results, showing a 1.08% decrease in revenue year-on-year to around $60 million, with profits at $5.9 million (a 16% increase). Swann now makes up 44% percent of Raysharp's revenue, compared to 38% for 2018.

Agree
Disagree
Informative: 3
Unhelpful
Funny

China should do the same thing to all the companies related to US goverment

Agree
Disagree
Informative
Unhelpful
Funny

China should do the same thing to all the companies related to US goverment

who do you have in mind?

the post office? amtrak?

Agree
Disagree
Informative
Unhelpful
Funny: 2
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