HikVision - stop China before it's too late
The media portal A & S annually ranks the 50 largest publicly available global companies in the technical security systems market.
For the first time, the rating was headed by HikVision, a Chinese manufacturer of video surveillance systems, with a result of $ 3.5 billion, back in 2010, the company occupied only 5th place with a result of $ 564 million.
What allowed HikVision, founded in 2001 with a staff of 30 people, to become the undisputed industry leader in 14 years?
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Let's begin to understand what is the company HikVision Digital Technology. Unlike Honeywell, which they pressed, and which produces - video surveillance systems, access control systems, security systems, building automation systems, HikVision produces only video surveillance systems, at least as a company producing video surveillance systems, they appear in the rating, and this is how HikVision is well known in international markets.
HikVision today has 35 branches in China and 21 foreign branches, with a total of more than 18,000 employees working at HikVision.
It occupies 1098 place in the global list of Forbes - 2000 largest companies in the world.
In May 2010, they held an IPO on the Shenzhen Stock Exchange (Shenzhen Stock Exchange - SZSE), at the end of the first trading day, Hikvision had a total valuation of 6 billion US dollars. The current cost is certainly higher.
Tell me where your money comes from, and I will tell you who you are. 3.5 billion US dollars is a significant figure let's try to figure out what is behind it.
Compared to 2014, Hikvision's revenue increased by 47%, most of its turnover, namely, 73.7% comes from the domestic market of China.
Sales in the Chinese market grew by 43%, helped by the expansion of the company into the segment of small and medium-sized enterprises.
International sales rose 57%, increasing their contribution to revenue to 26.3%. According to the international rating agency Moody's.
If there is something more interesting than revenue, it is a net profit, and here, too, is not without records.
HikViision's net profit (net margins) is approximately 25%, which is much higher than any publicly available manufacturer of video surveillance systems. A good rate of net profit for the manufacturer of video surveillance systems is considered 10-15%.
The range of products offered by HikVision in China is much wider than what is offered in foreign markets. In China, in addition to video surveillance systems, they offer access control systems, security alarms, video analytics.
In addition, the company acts not only as a manufacturer, but also as a contractor in the implementation of safety projects, that is, it receives money not only from the sale of equipment, but also for services. These are mainly large government orders.
In 2010, HikVision announced their participation as the general contractor of a security system for the city of Chongqing, the entire project was estimated at $ 800 million. This news provides a rough understanding of the structure of turnover and the approximate influence of government orders on revenue.
But their participation in the project of a video surveillance and video analytics system called as many as the Chinese Skynet, HikVision did not announce. But judging by what the British Daily Mail writes, the project is incomparably more ambitious, is implemented in partnership with Nvidia .
It is important to note that such a significant increase in revenue in China, even despite government projects, indicates that HikVision is winning the competition within China.
In November 2015, China State Bank China Development Bank approved a credit line for HikVision in the amount of $ 3.1 billion, funding will be provided from 2015–2019.
And industry media did not even have time to decipher how much that 3.1 billion dollars is the largest financing in the industry of video surveillance systems.
As in August 2016, HikVision announced a new credit line in the amount of $ 3 billion from Exim Bank of China, which, as you understand, is also a government one.
The $ 6.1 billion financing is huge, even when compared with the size of the entire industry.
The entire global video surveillance market (including China) is ~ 16 billion US dollars,
6.1 billion US dollars is a huge amount of money, which can only indicate one thing that HikVision is not going to stop there.
If you have already started to come up with the question, why did the Chinese state banks become so generous, so there is a definite answer to it.
HikVision is 41.88% owned by the Chinese government.
This is almost a detective story, many English-speaking sources say that they had long tried to hide their belonging to the Chinese government HikVision, but they could not conceal the sewing in a bag. Now we have an official message .
Everything becomes clear if you look who are China Electronics Technology HIK Group Co., Ltd. (CETHIK) and CETC No.52, both are part of the state-owned enterprise CETC .
Perhaps this will be the difficulty that HikVision will face in the near future in international markets. In any case, in the UK, the Daily Mail and The Times ( once and twice ), and in the USA, Voice of America started to pay attention to it, and even came to dismantling cameras at the US embassy in Kabul.
The Chinese also seem to take this very seriously, as it is difficult for others to explain that they did not just react to this claim, but did it through the media.
Foreign turnover accounts for 26.3%, which in dollars equals $ 926 million, for comparison Axis takes the third place in revenue (including China) $ 773 million.
One of the main trends in the global market is a reduction in the price of equipment for video surveillance.
As an example, we can give the average price for an IP camera which in 2010 was $ 500, and in 2015 already $ 130.
The main trendsetters are naturally Chinese companies, led by HikVision, it was low prices that allowed them in such modest periods not only to gain significant overseas markets, but also to move to first - second place, depending on the country.
For example, in 2015, the EMEA region, for example, HikVision became No. 2 , in terms of revenue with a market share of 9.2%
The second important element of influence is the fact that foreign companies are forced to lower their price in order not to completely lose their position in the market, which naturally affects revenue, and, much more critically, profit.
Shares of the largest public companies in the world video surveillance market
In 2016, HikVision acquired the British company Pyronix, which produces security security systems. The terms of the transaction were not disclosed, experts estimate them in the range of $ 50 - $ 100 million US dollars.
I mentioned the terms of the deal, I didn’t mention it for the sake of it, it looks like it was just a warm-up, according to Jeffrey He, President of HikVision USA and HikVision Canada - $ 1.5 billion, this is exactly what HikVision intends to spend on investments outside of China.
In October 2016, the American company Movidius announced a deal with HikVision, a month before that, Intel, Senior Vice-President of Intel Josh Walden, announced the purchase of Movidius: ““ Computer vision will cause the Cambrian explosion in the world of computing ”
Movidius already supplies processors for Google and DJI.
Thanks to this deal, the next generation of HikVision smart cameras will use a processor - Myriad 2 vision processing unit (VPU), which will allow the use of deep neural networks, which in turn will enable the processor to process and analyze the image of the camcorder itself. This will drastically reduce the amount of information transmitted.
The development of Movidius will allow HikVision smart cameras to more accurately identify objects and reduce the number of false positives.
Perhaps, for completeness, I will add that Hikvision was not the only one who started with Movidius, at least two of the largest Chinese manufacturers Dahua and Uniview also announced their aspirations in the development of video analytics.
As soon as HikVision went to overseas markets, immediately began to appear messages about problems with security - with DVRs , mobile application and cloud service . And even on Habré, ESET NOD32 wrote in detail about the compromise of various network devices running Linux, including HikVision video recorders.
After one of these news, HikVision shares fell by 7.5%, in percentage terms, it seems a bit, but in dollar terms it is more than 1 billion dollars.
“It doesn’t happen to anyone” - you will say, and you will probably be right all the more so, in terms of the reaction, HikVision progresses from its complete absence to 15 days in which they were put in for the last time.
The company has developed its own H.264 + codec, which provides a significant 70-80% increase in the compression ratio compared to H.264, without loss of image quality.
And this is an impressive result, the H.264 + codec already supports almost all the equipment under the HikVision brand.
Represents three brands HikVision , HiWatch , and the recently appeared Ezviz . Represents only video surveillance and intercom systems.
Surveillance cameras (IP, HD-TVI ) - price from 2 120 rubles
Video recorders (IP, HD-TVI ) - prices from 5 990 rubles
Cameras with video analytics functions - prices from 7 990 rubles .
IVMS-4200 software - free
Client software for MAC OS X, Windows, iOS, Android for working with cameras and recorders.
Software iVMS-5200
Client - the server software iVMS — 5200, supports a hierarchical control scheme for cameras, recorders and other devices. The iVMS-5200 can easily interconnect several distributed video surveillance systems to centralize control and monitoring.
It is in the iVMS-5200 that you can fully utilize the capabilities of smart cameras with integrated video analytics. You can configure such Smart — functions like people counting, intrusion detection, face detection, sound change detection, area of ​​interest, auto-tracking, reaction to events, etc.
Price iVMS-5200
When using cameras Hikvision - the license for 64 channels is provided free of charge.
When used as storage NVR HikVision - a license for 256 channels is provided free of charge.
Under any other conditions, the iVMS-5200 will cost - 1,490 rubles per channel.
There are also network storages, monitors, IP intercoms, lenses and a bunch of accessories.
4 MP DS-2CD2042WD-I IP camera - price is 12 490 rubles
2 MP DS-2CD2622FWD-IS IP camera with a variofocal lens - price 18 990 rubles
2 MP IP dome camera DS-2CD2122FWD-IS - price 10 990 rubles
8-channel IP DVR DS — 7608NI — E2 / 8p - the price is 16 990 rubles
The 16-channel IP DS-7716NI-E4 / 16p video recorder - the price is 33,990 rubles
16-channel IP DVR HikVision DS-7616NI-E2 - the price is 15 990 rubles
* Popularity is estimated by Yandex WordStat.
On all equipment of a line 5 - a summer guarantee extends.
The budget brand has been produced since 2012, focused on small and medium-sized businesses, with a much smaller range. All equipment of the range is covered by a 2-year warranty.
Surveillance cameras (IP, HD-TVI ) - prices from 1 458 rubles
Video recorders (IP, HD-TVI ) - prices from 4 390 rubles
Software - HiWatch equipment is fully compatible with HikVision software.
Just a few months ago, they launched a third brand focused on end users, at the moment only video cameras are represented in the line.
Surveillance cameras - prices from 4 990 rubles .
After a very brief overview of the equipment and software provided by HikVision in Russia, it would be appropriate to note the obvious - they have achieved world hegemony not only by low prices.
Well, to finish the part dedicated to HikVision in Russia, I’ll say, HikVision has not only a representative office in Moscow, but also a whole network of regional representative offices - St. Petersburg, Kazan, Rostov-on-Don, Novosibirsk, Yekaterinburg, Vladivostok, Samara, Blagoveshchensk.
What is absolutely atypical for manufacturers of video surveillance systems, among the 33 manufacturers represented in the ranking, one can count those who have an office in Russia, and no one would have at least one regional office.
The starting point for the international expansion of Chinese companies is dominance in the domestic market.
Further more - who is leading in China, is leading in the world, at least in the segment of security systems it is. And that means the only way to squeeze Chinese companies from leading global positions is to shift them from leading positions inside China.
At the moment, no Western company has any significant sales in China.
And judging by the significant world events in the video surveillance market in 2016 - mainly consolidations and purchases, Western players have no illusions, and do not make significant attempts to expand to the Chinese market.
In the case of HikVision, the basis of their leadership is not just sales within China, but also giant government orders, to which judging by the fact that HikVision belongs to the Chinese government, there is no chance to break through, not only from foreign companies, but also from Chinese competitors HikVision.
The state defense of the domestic market is not a blatant fact, but it seems the Chinese government believes that this is not enough, and is taking steps to limit the access of non-Chinese companies to the markets of foreign countries.
In 2012, the Chinese government provides $ 240 million to Ecuador for the deployment of a security system
In 2016, a new loan, more than 100 million dollars already for Bolivia.
So, easily and naturally, any manufacturers other than Chinese, are turned off from the competition.
More than 11 years working with video surveillance systems, we realized one important thing.
It is right to choose the right equipment vendor, especially if you have to choose without having all the information. About HikVision now you know.
If you stop the choice on HikVision
I will say that you already understood, nobody knows about HikVision as much as we know.
We not only know, but also actively use this knowledge - when designing , installing and maintaining video surveillance systems, not only HikVision, by the way, so if anything, just whistle.
If in doubt
Especially come to us, we will tell you about our gold list of manufacturers, and then you will have plenty to choose from.
For the first time, the rating was headed by HikVision, a Chinese manufacturer of video surveillance systems, with a result of $ 3.5 billion, back in 2010, the company occupied only 5th place with a result of $ 564 million.
What allowed HikVision, founded in 2001 with a staff of 30 people, to become the undisputed industry leader in 14 years?
')
Let's begin to understand what is the company HikVision Digital Technology. Unlike Honeywell, which they pressed, and which produces - video surveillance systems, access control systems, security systems, building automation systems, HikVision produces only video surveillance systems, at least as a company producing video surveillance systems, they appear in the rating, and this is how HikVision is well known in international markets.
HikVision today has 35 branches in China and 21 foreign branches, with a total of more than 18,000 employees working at HikVision.
It occupies 1098 place in the global list of Forbes - 2000 largest companies in the world.
In May 2010, they held an IPO on the Shenzhen Stock Exchange (Shenzhen Stock Exchange - SZSE), at the end of the first trading day, Hikvision had a total valuation of 6 billion US dollars. The current cost is certainly higher.
Revenue
Tell me where your money comes from, and I will tell you who you are. 3.5 billion US dollars is a significant figure let's try to figure out what is behind it.
Compared to 2014, Hikvision's revenue increased by 47%, most of its turnover, namely, 73.7% comes from the domestic market of China.
Sales in the Chinese market grew by 43%, helped by the expansion of the company into the segment of small and medium-sized enterprises.
International sales rose 57%, increasing their contribution to revenue to 26.3%. According to the international rating agency Moody's.
If there is something more interesting than revenue, it is a net profit, and here, too, is not without records.
HikViision's net profit (net margins) is approximately 25%, which is much higher than any publicly available manufacturer of video surveillance systems. A good rate of net profit for the manufacturer of video surveillance systems is considered 10-15%.
HikVision in China
The range of products offered by HikVision in China is much wider than what is offered in foreign markets. In China, in addition to video surveillance systems, they offer access control systems, security alarms, video analytics.
In addition, the company acts not only as a manufacturer, but also as a contractor in the implementation of safety projects, that is, it receives money not only from the sale of equipment, but also for services. These are mainly large government orders.
In 2010, HikVision announced their participation as the general contractor of a security system for the city of Chongqing, the entire project was estimated at $ 800 million. This news provides a rough understanding of the structure of turnover and the approximate influence of government orders on revenue.
But their participation in the project of a video surveillance and video analytics system called as many as the Chinese Skynet, HikVision did not announce. But judging by what the British Daily Mail writes, the project is incomparably more ambitious, is implemented in partnership with Nvidia .
It is important to note that such a significant increase in revenue in China, even despite government projects, indicates that HikVision is winning the competition within China.
Financing
In November 2015, China State Bank China Development Bank approved a credit line for HikVision in the amount of $ 3.1 billion, funding will be provided from 2015–2019.
And industry media did not even have time to decipher how much that 3.1 billion dollars is the largest financing in the industry of video surveillance systems.
As in August 2016, HikVision announced a new credit line in the amount of $ 3 billion from Exim Bank of China, which, as you understand, is also a government one.
The $ 6.1 billion financing is huge, even when compared with the size of the entire industry.
The entire global video surveillance market (including China) is ~ 16 billion US dollars,
6.1 billion US dollars is a huge amount of money, which can only indicate one thing that HikVision is not going to stop there.
Ownership structure
If you have already started to come up with the question, why did the Chinese state banks become so generous, so there is a definite answer to it.
HikVision is 41.88% owned by the Chinese government.
This is almost a detective story, many English-speaking sources say that they had long tried to hide their belonging to the Chinese government HikVision, but they could not conceal the sewing in a bag. Now we have an official message .
Everything becomes clear if you look who are China Electronics Technology HIK Group Co., Ltd. (CETHIK) and CETC No.52, both are part of the state-owned enterprise CETC .
Perhaps this will be the difficulty that HikVision will face in the near future in international markets. In any case, in the UK, the Daily Mail and The Times ( once and twice ), and in the USA, Voice of America started to pay attention to it, and even came to dismantling cameras at the US embassy in Kabul.
The Chinese also seem to take this very seriously, as it is difficult for others to explain that they did not just react to this claim, but did it through the media.
HikVision in the world
Foreign turnover accounts for 26.3%, which in dollars equals $ 926 million, for comparison Axis takes the third place in revenue (including China) $ 773 million.
One of the main trends in the global market is a reduction in the price of equipment for video surveillance.
As an example, we can give the average price for an IP camera which in 2010 was $ 500, and in 2015 already $ 130.
The main trendsetters are naturally Chinese companies, led by HikVision, it was low prices that allowed them in such modest periods not only to gain significant overseas markets, but also to move to first - second place, depending on the country.
For example, in 2015, the EMEA region, for example, HikVision became No. 2 , in terms of revenue with a market share of 9.2%
The second important element of influence is the fact that foreign companies are forced to lower their price in order not to completely lose their position in the market, which naturally affects revenue, and, much more critically, profit.
Shares of the largest public companies in the world video surveillance market
Investments
In 2016, HikVision acquired the British company Pyronix, which produces security security systems. The terms of the transaction were not disclosed, experts estimate them in the range of $ 50 - $ 100 million US dollars.
I mentioned the terms of the deal, I didn’t mention it for the sake of it, it looks like it was just a warm-up, according to Jeffrey He, President of HikVision USA and HikVision Canada - $ 1.5 billion, this is exactly what HikVision intends to spend on investments outside of China.
Neural networks
In October 2016, the American company Movidius announced a deal with HikVision, a month before that, Intel, Senior Vice-President of Intel Josh Walden, announced the purchase of Movidius: ““ Computer vision will cause the Cambrian explosion in the world of computing ”
Movidius already supplies processors for Google and DJI.
Thanks to this deal, the next generation of HikVision smart cameras will use a processor - Myriad 2 vision processing unit (VPU), which will allow the use of deep neural networks, which in turn will enable the processor to process and analyze the image of the camcorder itself. This will drastically reduce the amount of information transmitted.
The development of Movidius will allow HikVision smart cameras to more accurately identify objects and reduce the number of false positives.
Perhaps, for completeness, I will add that Hikvision was not the only one who started with Movidius, at least two of the largest Chinese manufacturers Dahua and Uniview also announced their aspirations in the development of video analytics.
Security issues
As soon as HikVision went to overseas markets, immediately began to appear messages about problems with security - with DVRs , mobile application and cloud service . And even on Habré, ESET NOD32 wrote in detail about the compromise of various network devices running Linux, including HikVision video recorders.
After one of these news, HikVision shares fell by 7.5%, in percentage terms, it seems a bit, but in dollar terms it is more than 1 billion dollars.
“It doesn’t happen to anyone” - you will say, and you will probably be right all the more so, in terms of the reaction, HikVision progresses from its complete absence to 15 days in which they were put in for the last time.
Smart Codec H.264 +
The company has developed its own H.264 + codec, which provides a significant 70-80% increase in the compression ratio compared to H.264, without loss of image quality.
And this is an impressive result, the H.264 + codec already supports almost all the equipment under the HikVision brand.
HikVision Digital Technology in Russia
Represents three brands HikVision , HiWatch , and the recently appeared Ezviz . Represents only video surveillance and intercom systems.
Hikvision
Surveillance cameras (IP, HD-TVI ) - price from 2 120 rubles
Video recorders (IP, HD-TVI ) - prices from 5 990 rubles
Cameras with video analytics functions - prices from 7 990 rubles .
IVMS-4200 software - free
Client software for MAC OS X, Windows, iOS, Android for working with cameras and recorders.
Software iVMS-5200
Client - the server software iVMS — 5200, supports a hierarchical control scheme for cameras, recorders and other devices. The iVMS-5200 can easily interconnect several distributed video surveillance systems to centralize control and monitoring.
It is in the iVMS-5200 that you can fully utilize the capabilities of smart cameras with integrated video analytics. You can configure such Smart — functions like people counting, intrusion detection, face detection, sound change detection, area of ​​interest, auto-tracking, reaction to events, etc.
Price iVMS-5200
When using cameras Hikvision - the license for 64 channels is provided free of charge.
When used as storage NVR HikVision - a license for 256 channels is provided free of charge.
Under any other conditions, the iVMS-5200 will cost - 1,490 rubles per channel.
There are also network storages, monitors, IP intercoms, lenses and a bunch of accessories.
The most popular HikVision equipment in Russia
4 MP DS-2CD2042WD-I IP camera - price is 12 490 rubles
2 MP DS-2CD2622FWD-IS IP camera with a variofocal lens - price 18 990 rubles
2 MP IP dome camera DS-2CD2122FWD-IS - price 10 990 rubles
8-channel IP DVR DS — 7608NI — E2 / 8p - the price is 16 990 rubles
The 16-channel IP DS-7716NI-E4 / 16p video recorder - the price is 33,990 rubles
16-channel IP DVR HikVision DS-7616NI-E2 - the price is 15 990 rubles
* Popularity is estimated by Yandex WordStat.
On all equipment of a line 5 - a summer guarantee extends.
Hiwatch
The budget brand has been produced since 2012, focused on small and medium-sized businesses, with a much smaller range. All equipment of the range is covered by a 2-year warranty.
Surveillance cameras (IP, HD-TVI ) - prices from 1 458 rubles
Video recorders (IP, HD-TVI ) - prices from 4 390 rubles
Software - HiWatch equipment is fully compatible with HikVision software.
Ezviz
Just a few months ago, they launched a third brand focused on end users, at the moment only video cameras are represented in the line.
Surveillance cameras - prices from 4 990 rubles .
After a very brief overview of the equipment and software provided by HikVision in Russia, it would be appropriate to note the obvious - they have achieved world hegemony not only by low prices.
Well, to finish the part dedicated to HikVision in Russia, I’ll say, HikVision has not only a representative office in Moscow, but also a whole network of regional representative offices - St. Petersburg, Kazan, Rostov-on-Don, Novosibirsk, Yekaterinburg, Vladivostok, Samara, Blagoveshchensk.
What is absolutely atypical for manufacturers of video surveillance systems, among the 33 manufacturers represented in the ranking, one can count those who have an office in Russia, and no one would have at least one regional office.
Summari
The starting point for the international expansion of Chinese companies is dominance in the domestic market.
Further more - who is leading in China, is leading in the world, at least in the segment of security systems it is. And that means the only way to squeeze Chinese companies from leading global positions is to shift them from leading positions inside China.
At the moment, no Western company has any significant sales in China.
And judging by the significant world events in the video surveillance market in 2016 - mainly consolidations and purchases, Western players have no illusions, and do not make significant attempts to expand to the Chinese market.
In the case of HikVision, the basis of their leadership is not just sales within China, but also giant government orders, to which judging by the fact that HikVision belongs to the Chinese government, there is no chance to break through, not only from foreign companies, but also from Chinese competitors HikVision.
The state defense of the domestic market is not a blatant fact, but it seems the Chinese government believes that this is not enough, and is taking steps to limit the access of non-Chinese companies to the markets of foreign countries.
In 2012, the Chinese government provides $ 240 million to Ecuador for the deployment of a security system
In 2016, a new loan, more than 100 million dollars already for Bolivia.
So, easily and naturally, any manufacturers other than Chinese, are turned off from the competition.
What are we writing for?
More than 11 years working with video surveillance systems, we realized one important thing.
It is right to choose the right equipment vendor, especially if you have to choose without having all the information. About HikVision now you know.
If you stop the choice on HikVision
I will say that you already understood, nobody knows about HikVision as much as we know.
We not only know, but also actively use this knowledge - when designing , installing and maintaining video surveillance systems, not only HikVision, by the way, so if anything, just whistle.
If in doubt
Especially come to us, we will tell you about our gold list of manufacturers, and then you will have plenty to choose from.
Source: https://habr.com/ru/post/318426/
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