Hikvision's net profit for the first quarter of 2024 was 1,916 billion yuan, up 5.78% year on year; net profit of 2023 was 14.1 billion yuan, up 9.89% year on year, and plans to pay 10 to 9 yuan.
On the evening of April 19, Hikvision, the “leader in security”, released the Q1 quarterly report and the 2023 annual report with standard unqualified audit opinions.
The annual report shows that in 2023, Hikvision's total revenue increased 7.42% year-on-year to 89.340 billion yuan. Net profit attributable to mother increased 9.89% year over year to $14.108 billion. On the same day, Hikang announced that it will distribute a cash dividend of 9 yuan (tax included) to all shareholders for every 10 shares, no bonus shares, and no capital increase from capital reserves.
In the Q1 quarter, Hikvision's total revenue increased 9.98% year over year to 17.818 billion yuan. Net profit attributable to mother increased 5.78% year over year to $1,916 billion. On the same day, it was announced that a cash dividend of 9 yuan (tax included) will be distributed to all shareholders for every 10 shares.
2023 revenue increased 7.42% year over year, and Q1 was 9.98%
In terms of revenue, Hikvision's total revenue in 2023 was 89.340 billion yuan, ranking 91st in the A-share ranking. In comparison, the revenue of its counterpart, Laoer Dahua Co., Ltd. was 32.22 billion yuan. (Of the 5365 A-share listed companies, a total of 82 companies had total revenue greater than 100 billion yuan; a total of 135 companies greater than 50 billion; and a total of 489 companies greater than 10 billion yuan).
Revenue growth in 2023 was 7.42% year over year, up from 2022 data.
Looking at the composition of the company's revenue in 2023, by industry, intelligent IoT products and services accounted for 100% of revenue, an increase of 7.42% over the previous year.
By product, the main business products and services accounted for 76.99% of revenue, an increase of 4.41% over the previous year. Innovative services accounted for 20.77%, an increase of 23.11% over the previous year. Construction projects accounted for 2.25% of the main business, a year-on-year decline of 9.7%.
By region, domestic business accounted for 67.58% of revenue, an increase of 6.12% over the previous year. Overseas business accounted for 32.42% of revenue, an increase of 10.25% over the previous year.
Therefore, innovative services are the main reason driving the company's revenue growth. Among innovative services, the robotics business and the automotive electronics business grew most significantly. Meanwhile, Haikang's main construction project is in a downward phase.
Huachuang Securities believes that innovative business has become a powerful engine for Hikvision's sustainable development. AI helps digital technology companies transform and build a global technology leader integrating software and hardware.
Everbright Securities pointed out that Hikvision is continuously improving the application level of artificial intelligence technology. Currently, the company has a video sensing national next-generation artificial intelligence open innovation platform, and has released the “Guanlan” model, which enhances the ability of AI to be implemented and applied in various industries. With the continuous emergence of AI application scenarios and the continuous accumulation and opening of Hikvision's AI capabilities, the number of enterprise users of the open AI platform has rapidly increased to more than 20,000 as of June 2023.
Haikang pointed out that the company lays out intelligent IoT to strengthen innovative business. Continued investment in AI has brought substantial improvements to Hikvision's product development, algorithm development, and solution development.
In the past five years, Hikvision's total revenue has been increasing steadily, but the revenue growth rate has declined in the past 2 years, below 10%, which is consistent with the security industry moving from a growth period to a mature period.
Net profit to mother increased 9.89% year-on-year in 2023, compared to 5.78% in Q1
In terms of profit, in 2023, Haikang's net profit to mother was 14.108 billion yuan, an increase of 9.89% over the previous year. In comparison, Dahua Co., Ltd. was 7.362 billion yuan. Achieved deducted non-net profit of 13.666 billion yuan, an increase of 10.83% over the previous year. Basic earnings per share were 1.52 yuan/share, up 10.95% year over year.
In addition, by industry, the gross margin of intelligent IoT products and services was 44.44%, an increase of 2.15% over the previous year.
By product, the gross margin of main products and services was 46.34%, an increase of 2.6% over the previous year. Innovative services were 39.63%, up 1.08% year over year. The main construction project was 23.78%, a year-on-year decline of 0.96%.
By region, the gross margin of the domestic business was 43.81%, an increase of 1.98% over the previous year. Overseas business was 45.74%, up 2.46% year over year.
Therefore, the 2.6% year-on-year increase in main products and services was the main reason driving the company's gross margin growth. The 2.46% year-on-year increase in overseas business also boosted the company's gross profit margin. At the same time, the profits of Haikang's main construction projects are under pressure.
Looking at the past five years, Hikvision's gross margin has been above 40%, and the fluctuation is very small. The gross margin is high and stable, which indicates that its products are competitive in the market.
In addition, Hikvision announced that it will distribute a cash dividend of 9 yuan (tax included) to all shareholders for every 10 shares, no bonus shares, and no capital increase from capital reserves. The above plan paid a total cash dividend of 8.398 billion yuan, and the remaining undistributed profit was carried over to the next year.
Looking forward to the future, Hikvision stated in its financial report:
1. Industry trends: IoT perception, artificial intelligence, and big data are the core technologies of the intelligent IoT industry and the key drivers of digital transformation. The development of the intelligent IoT industry will drive the development of thousands of industries, bringing unprecedented changes to society and the economy in the process of promoting the digital transformation of more business scenarios. The company has deep technology accumulation and pioneering advantage in the field of intelligent IoT, and has core capabilities in digital transformation. The company is confident to seize the opportunities brought by digital transformation and work with partners to help the digital transformation of the whole society.
2. Company development strategy: Hikvision is committed to serving multi-dimensional perception, artificial intelligence, and big data technology to thousands of industries, leading the new future of intelligent IoT: using comprehensive sensing technology to help people and objects better connect and build the foundation of the intelligent world; making intelligence within reach with rich intelligent products, insight and meeting diverse needs; and building a convenient, efficient and secure intelligent world with innovative intelligent IoT applications to help everyone enjoy a better future.
According to Flush data, as of April 19, 2024, a total of 26 institutions predicted Hikvision's 2024 annual results within 6 months; forecasted earnings of 1.81 yuan per share in 2024, an increase of 19.08% over the previous year, and predicted net profit of 16.890 billion yuan in 2024, an increase of 19.72% over the previous year.