The $12 Billion Video Surveillance Manufacturer

By: John Honovich, Published on Apr 15, 2014

What video surveillance manufacturer is worth a staggering $12 billion USD?

How about Avigilon? Avigilon is growing very fast and, impressively, has broken a billion dollar valuation, but is still worth only 1/10th of this behemoth.

Axis? Getting warmer but still way off. Axis valuation is close to double that of Avigilon's, at $2 billion USD, but still not anywhere close to this manufacturer.

**** ***** ************ ************ is ***** * ********** $12 ******* ***?

*** ***** ********? ******** is ******* **** **** and, ************, ********* * ******* ****** valuation, *** ** ***** worth **** */**** ** **** behemoth.

****? ******* ****** *** still *** ***. **** valuation ** ***** ** double that ** ********'*, ** $2 ******* ***, *** still *** ******** ***** to **** ************.


*** $** ******* ***** surveillance ************ ** ********* [link ** ****** *********], whose****** ****************** **** $** ******* in **** ** ****. Hikvision, ****** ** *** alone.

******* ****, ***** [**** no ****** *********], *** a****** **************** $*.* ******* ***.

Hikvision *** ***** ****** ***** *** *******

**** ** *** ********* now **** ************ ******* levels *** ****** ************ growth *****:

*****, **** ** *****, the '*******' ** *** two:

** * *****, ***** has **** **** **** than $*** ******* ** close ** $* *******. They *** ******* ** an ****** **** ** 50%+. ****, ***** *** profitability ********** ** ** a ******** **%, *** higher **** *** ************ industry **** ** ~**%.

***, **** ** *********:

** * *****, ********* has **** **** **** over * **** ******* to *********** *** *******. They *** ******* ** annual **** ** **% plus **** **** ***** grew ******* ** **** than $*** ******* (** put **** ** ***********, that ** *** ********** of * ********'*). ****, their *** ************* ** almost ** ********** ** believe **% (*.*., *** higher **** ******'*).

Drivers *** ******

***********, *** **** ****** of ******* *** ****** for **** ********* ** the ******** ***** ******, where **** ********* ******** ~**% of ***** *******. *** it ***** ************* **** mega **** / ********** projects **** **** **** huge ********** ** *********. This **** ****** ******** payment *** *********** ******** / *****, ******* ** against '**** ****' *************. ****, the ******** ******* *** long ***** **** ******** to ***** ** **** surveillance *******.

*******, ******* *******, **** companies *** ***** ***** experience, ********* *** ***** to ****** ****** ********** where **** *** ******** some ** *** ***** expensive ************ ******** ** the ******. *** **** the ******* ************ ******'* innovation '*****, ** ** easier *** **** *** them ** **** *****.

Comments (21)

Good to read this.. Uniview could be the next one.

Thanks for the point about Uniview. Anyone have any color on them? I know they spend a fair amount of money to have a big booth next to Axis at ISC West 2014.

What's their plan / approach for the Western markets?

The only thing I heard is about its investor, the Bain Capital.

We have been a Bosch/Radionics dealer for 20+ years (primarily with intrusion and a little video), we've installed many video systems from Bosch over the years and have been disappointed each time.

Last September a Hikvision rep came by and asked us to start selling their products. My first thought was, HIK! Vision? WTF! I thought it was some kind of joke. But then I saw the price point and build quality of the Cameras, NVRs and apps/software.

We have been very pleased with the systems. I've sold 20+ hikvision NVR's (have one small system going in as we speak), with very few problems. Some of the older firmware was kind of sketchy but they seem to have all of my major problems ironed out and have added features that I and others have requested quickly. I have virtually abandoned Bosch and Axis with few exceptions, I had one camera that died shortly after install but they sent out a replacement the same day.

We've installed these systems in homes, fuel stations, small transportation hubs and large retail stores. The customers who are looking for a simple solution without analytic support love this system, its no surprise to me that Hikvision is growing. Personally I am a huge advocate but we will see if they can continue to gain momentum and build their brand in the US market. The surveillance industry is a relatively small world and anyone can come out ahead. Relatively speaking a $2B (revenue) company isn't that big.

Good feedback. Hikvision has and continues to be the OEM for many of the big American 'brands' / conglomerates so it will be interesting to see how that plays out with them now facing head to head.

Not too far behind is Flir at just under $5B in market cap and I believe last year they were #2. What is interesting is that both Zhejiang Dahua Technology Co Ltd and Hangzhou Hikvision Digital Technology Co Ltd have dropped dramatically, almost to half their value in the past 6 months and are on a downward spiral. What do you think is attributing to their rapid decline?

But can you go by revenue & market cap to define their significance in security. If that was our main measure the clearly Sony with 19B market cap would be higher than than Dahua and Hikvision and they make surveillance cameras and their sensors and components are used by other camera manufacturers.

Then if you go by security companies only, then Assa Abloy at close to $19B would be larger than Hikvision + Dahua. At least it would be a better investment as they are rising in value.

I am not saying that Hikvision and Dahua are the most 'significant' companies but they are, by market capitalization, among surveillance focused companies, by far, the biggest.

Comparing to Sony or Samsung or Panasonic is simply silly because only a fraction of what they do is in security / surveillance.

As for FLIR, only about 35% of their revenue is from their surveillance segment (see page 66 of their 2013 10K).

Ultimately, the point is less about how 'bad' other companies but how huge Hikvision and Dahua have gotten in short order.

"What is interesting is that both Zhejiang Dahua Technology Co Ltd and Hangzhou Hikvision Digital Technology Co Ltd have dropped dramatically, almost to half their value in the past 6 months and are on a downward spiral. "

-- This is interesting.. Any official data to support this?

Probably from the same place the author gets it's information from the stock exchange. Here's one link to Bloomberg, for the graph, just click on 1Y to see the valuation chart for the past year.

Hikvision quote

Dahua quote

And at the rate Avigilon has been declining over the last 3 months, they will be out of business by mid 2015.

This is silly.

Stocks go up and down.

Equally importantly, tech stocks have been trending downward recently.

Over the last 5 months, Axis is -20%, Dahua -36%, Hikvision -32%.

That said, over the last 12 months, Hikvision is up 18%, Dahua is up 7%, Axis is up 26%.

I do think eventually Hikvision and Dahua need to cool down and that they have real risk of being so heavily concentrated in mega Chinese government projects.

That said, the past year's trend shows net positive growth for all, hardly a sign of a 'downward spiral'.

At least it would be a better investment as they are rising in value.

Did you intend to say would have been a better investment as they have risen in value, or the copy as it stands?

I'm not a big investor other than retirement portfolio but I would tend to buy stock in a company that has sustained growth and losing 1/3 of you market cap in 6 months would be a red flag for me but some may see that opportunity, sort of bargain shopping. You can blame market conditions, but if that was so, why is the Shanghai Composite Index pretty much stable over the same time going up/down maybe 5% difference between today and 6 months ago. Look at it this way, our Dow Index is about 16K, if it dropped 1/3rd in 6 months to about 10K, some may call it a recession.

SSE (Shanghai Composite Index) is not heavily tech. Members include banks, utilities, shipping, insurance companies and the like. The Shenshen Stock Exchange (SZSE) is a bit more tech-heavy. It has been in a mild downtrend since the beginning of 2013. Still, China in general has not experienced the wide swings that the U.S. and European markets have (either up or down).

I'm taking your second answer as affirming your first. :)

Nothing of what you have said is out of line per se, it's just that the mixing of meat products with dairy products is, as Ari has caused me to learn, not kosher. In this case the blending of verfiable historical data (meat) with similar sounding yet actually forward looking statements (dairy) is not easily digested. Example:

Hikvision Digital Technology Co Ltd have dropped dramatically, almost to half their value in the past 6 months and are on a downward spiral

The first part up to the bold are verifiable, and the second would seem to be the same except for its subtle verb tense change to the present, which makes it unclear if you are just being inexact or prognosticating a continued downward arc. Along the same lines the statement:

At least it would be a better investment as they are rising in value.

leaves us wondering if the 'rising' has happened or will happen, and if the latter, that you are really indicating that we should long Assa and short Hikvision. Which now I'm assuming you are. I'm going 'all in' myself now. :)

My estimate of half was just a rough look at the chart showing a downturn since October, but a more precise look shows it's down about a 1/3rd, still not something I would consider for investment but I do like their cameras.

John, very interesting! Makes you really wonder where these two may be heading.

Just as an observation the 2013 "cost of goods sold" for Hikvision shows zero, thus showing a "gross profit" = "total revenues". The net income figure seems ok, though. Probably a typo in the excel spreadsheet... thanks Alberto

Alberto, Good eye! Thanks.

I copeid that from Businessweek's financial summary. I've now whited the gross profit part out because its missing the related COGS figure.

Good Read. Great Info.

Normally I would pass on both companies. Last quarter i got an value HIK 3MP didn’t think much to the quality of the camera or the build but it was definitely on sale for 160 bucks and I had to try it to see how bad it really was.

I would really like to see better chips and sharper images out of all CCTV manufactures.

All bets on their stock price and valuations aside, if they can continue to sell 3MP cameras at CDN$150 they will definitely grab market share. We have them testing right now, though they certainly are not an Axis or Samsung camera, they do give one pause at that price point. They are better than half the camera for half the price.

You think they are half the camera of Axis or Samsung? We just replaced brand new underperforming Mobotix D15 cameras that cost about $1,200 each with Hikvision USA that cost $330 and money was not a factor in the decision. They are definately disrupting the established players. We replaced Axis top of the line PTZ at one customer with Dahua because of poor quality control of the Axis plastic domes and they couldn't be happier. I think it's a wakeup call to the status quo that quality can come from mainland China. I think it's cool you can get Hikvision in Canada a lot cheaper than what Hikvision USA charges.

We have talked to both HikVision and Dahua regarding OEM componets from them.

I'm very impress about their performance. They listen to us as a customer and do custom adaptations according to our specifications. And we are not a very big customer.

This is the opposite to what we experience from Japanese component suppliers. They are very interested in our business, but it seems that they have lost their agility.

Quality wise we do of course do internal validation of them all. Our experience is that HikVision has a very good build quality and that it's at least as good as Axix. In some cases better. The response time has also been incredebly short when we have requested componets.

From my point of view there is no doubt that both Dahua and HikVision will be in the forefront in the comming years. Political issues might halt them. As I understand, HikVision has som tight connections to the government in China. Dahua claims to be totaly privately operated.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Hikvision 2018 Revenue Tops $7 Billion USD But Growth Slows To Low on Feb 15, 2019
Hikvision's annual revenue topped $7 billion for the first time in 2018, although growth slowed sharply. In this post, we analyze the latest...
Dahua Posts Slowing But Strong Revenue Growth 2018 on Mar 04, 2019
Despite significant job cuts in China, Dahua's revenues grew more than 25% last year hitting a total of ~$3.5 billion USD, according to its latest...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...
Verkada Gets Half Billion Dollar Valuation on Apr 26, 2019
Last week, when we profiled Verkada (The Fastest Growing Video Surveillance Sales Organization Ever - Verkada), we predicted they would raise $40...
Hikvision USA Giving Free Cameras In Biggest Flash Sale on Jun 26, 2019
Hikvision redefined sales promotions in the US video surveillance market, starting at the end of 2015, with across the board discounts. Now,...
Vivotek Revenue Soars on Aug 05, 2019
Vivotek's revenue has soared so far in 2019, growing 45%. Inside this note, we examine import records and see who is driving Vivotek's growth...
In China, Foreign AI Companies Banned or Disadvantaged, Says Top China AI Company on Aug 28, 2019
Non-China (PRC) companies are prejudiced and unfairly targeted inside of the PRC's booming AI market, which not only denies them revenue inside of...
Resideo Stock Plunges 37%, CFO Ousted on Oct 23, 2019
The horrible year for the ADI / Honeywell Home spinout, Resideo, just got worse, with their stock plunging another 37% today. Not even a year...
NetPosa Revenue Plunges 90% 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...
Vivint Valuation Falls $1.5 Billion on Dec 19, 2019
Residential market struggles continue. Now, Vivint's valuation has fallen $1.5 billion in its impending merger. Inside this note, we examine...

Most Recent Industry Reports

Intersec 2020 Show Report on Jan 20, 2020
IPVM is in Dubai for Intersec, the Middle East's largest security conference. In this report, we cover the main booths and issues out of the...
Clearview AI Alarm - NY Times Report Says "Might End Privacy" on Jan 20, 2020
Over the weekend, the NY Times released a report titled "The Secretive Company That Might End Privacy as We Know It" about a company named...
Favorite Camera Manufacturer 2020 on Jan 20, 2020
The past 2 years of US bans and sanctions have shaken the video surveillance industry but what impact would this have on integrators' favorite...
Severely Impacted Mercury Security 2020 Leap Year Firmware Issue on Jan 17, 2020
One of the largest access controller manufacturers has a big problem: February 29th. Mercury Security, owned by HID, is alerting partners of the...
Apple Acquires, Loss For The Industry on Jan 16, 2020
Apple has acquired for $200 million, reports GeekWire. This is a loss for the video surveillance industry. stunned the industry...
Installation Course January 2020 - Last Chance on Jan 16, 2020
Thursday, January 16th is your last chance to register for the Winter 2020 Video Surveillance Installation Course. This is a unique installation...
Halo Smart Vape Detector Tested on Jan 16, 2020
The Halo Smart Sensor claims to detect vaping, including popular brand Juul and even THC vapes. But how well does it work in real world...
PRC Government Entity Now Controlling Shareholder of Infinova / March Networks on Jan 16, 2020
A PRC government entity is now the controlling shareholder of US security manufacturer Infinova as well as its wholly-owned subsidiary March...
Network Cabling for Video Surveillance on Jan 15, 2020
In this guide, we explain the fundamentals of network cabling for video surveillance networks, how they should be installed, and the differences in...
ONVIF [Un]Trashed Statement, Confirms Dahua and Hikvision Still Suspended on Jan 15, 2020
ONVIF has 'trashed' the suspension statement for Dahua, Hikvision, Huawei, etc. but confirms to IPVM that those companies are all still...