Hikvision: The United States controls high-performance chips, which greatly restricts the development of China's high-tech industry

Delivery time:

2022-11-03 13:58

Source: Aiji Micro APP

According to the news from www.jv.com, the newly released performance report shows that Hikvision achieved a total operating revenue of 59.722 billion yuan in the first three quarters, an increase of 7.36% over the same period of the previous year; The net profit attributable to shareholders of the listed company was 8.84 billion yuan, a year-on-year decrease of 19.38%. In the third quarter, the operating income was 22.464 billion yuan, a year-on-year increase of 3.39%, and the net profit attributable to shareholders of the listed company was 3.081 billion yuan, a year-on-year negative increase of 31.29%.

With regard to performance changes, Hikvision said in its recent survey that in the third quarter of 2022, the domestic epidemic prevention and fighting situation is still very serious, the economy is down and demand is weak; International conflicts are intensifying, hot wars are heating up in some regions, inflation is high in some countries, and the overall business environment is full of challenges and uncertainties. In the face of external business challenges, the company continued to adhere to the principle of stability, while constantly adjusting and adapting, trying to reduce the impact of external adverse factors, optimizing and improving internal management, and improving operational efficiency. The overall situation of the company was stable.

According to his further analysis, in the third quarter, domestic main businesses were greatly affected by the epidemic prevention and control, and some projects were delayed. The overall situation in the third quarter did not improve significantly, which was basically maintained compared with the second quarter. Among them, PBG was basically the same as the same period last year, and all business segments were basically balanced, with a slight negative growth. Among them, people's livelihood services and street, village and other grassroots governance business demand were better, and traffic management business grew steadily; The single digit negative growth of EBG, of which the overall downward impact of residential real estate and commercial real estate, the negative growth of smart buildings continues, and the growth of energy metallurgy industry is good. SMBG's sales in July August were poor, with a large income gap. In September, SMBG resumed positive growth, with a negative year-on-year growth of 21% in the third quarter. We believe that the liquidity of each region will be restored, the regional business will be promoted normally, and the overall business situation will be improved. In October, the market activity was slightly better, and it remains to be seen whether it constitutes a trend improvement.

Overseas business grew by 13% year-on-year in the third quarter, of which Europe and North America were greatly affected by inflation, with regional negative growth, which had a great impact on the overall overseas business. Latin America, Asia and other regions continued to maintain rapid growth. It is expected that the two-level differentiation of overseas business will continue in the future, and the regional distribution pattern of overseas income will change.

However, the innovation business grew 18% year on year in the third quarter, showing a good overall growth. Among them, fluorspar smart home business is directly affected by weak consumer demand, and other innovative businesses are growing.

Regarding the future performance outlook, Hikvision said that in terms of the epidemic environment, each local government has its own control policy, and our business development should be promoted under this background. In the fourth quarter of each year, it is the time for each business line of Haikang to sprint. At present, the company is still in a state of sprint in all directions. From the project side, the epidemic situation continues to bring some uncertainties. We originally expected that some projects would be implemented in the third quarter, but now there are delays. In the fourth quarter, we should seize the time to do our work and try our best to promote the implementation.

In the first half of next year, more projects will also help the business. What we should do now is to do our best and do what we can as soon as possible.

At the same time, Hikvision believes that the improvement of the economic situation should take the lead in the government, because the government will be more directly affected by policies. The issuance of various special bonds, to a certain extent, will boost the government's business. At present, many regions are also affected by the epidemic control, resulting in the delay of project implementation. However, judging from the growth rate of PBG in the third quarter, it has basically stabilized. We have high hopes for PBG. We look forward to some good changes as our work progresses.

In the survey, Hikvision also responded to the impact of the new regulations of the U.S. Department of Commerce, saying that the impact is relatively direct from the perspective of the semiconductor industry and practitioners of the semiconductor industry. The export control has many restrictions on high-performance chips, which I believe we can all understand. On the one hand, semiconductor practitioners need to understand the restrictions of the rules, and on the other hand, they need to consider how to adjust their business. For our intelligent Internet of Things industry, we are the users of chips, high-performance chips are one of the materials for us, and we should pay attention to the problems of subsequent applications.

In general, the number of high-performance chips applied in the security industry is relatively small, because the industrial implementation is practical and cost-effective. Mature manufacturing processes are the main choice of the industry. In the medium to long term, the control of high-performance chips in the United States is a big restriction on the development of China's high-tech industry, which needs time to digest; Some key technical points, as well as the supporting and upgrading of the industry as a whole, require technological breakthroughs and time. High performance chips are an important support for the development of science and technology. I believe the industry will work together.

In addition to the restrictions on high-performance chips, there are also direct product rules for 28 enterprises. Hikvision also expressed its concern: our compliance colleagues are communicating with relevant customers to provide them with some support in interpretation. For the sanctioned companies and upstream and downstream companies, it should take time to figure out the analysis rules and make corresponding adjustments in business, which we also keep observing.

For Haikang, from 2018 to now, we have experienced many challenges. Hikvision said that we are also at the forefront of the high-tech company camp. Over the past few years, we have become more and more familiar with the rules of the game that multinational enterprises should follow in the international market. First, keep the bottom line and achieve compliance as far as possible according to the compliance requirements of countries where businesses are located; Second, we believe that good communication is conducive to the promotion of a lot of work, so we should maintain communication with all parties; Third, for the development of high-tech industry, it is still necessary to constantly and timely adjust and respond to various environmental constraints. The adjustment and response of Haikang in recent years are relatively timely. One aspect of the adjustment and response is that the R&D expenses have increased rapidly, but this is necessary for our future development.

Hikvision also responded to the impact on AI computing power by saying that about the indirect impact of US sanctions, especially high-performance chips, we learned about the relevant information about half a month before the new regulations came out on October 7, when it said Nvidia GPU chips would be subject to some restrictions. Let's explain the product form of Haikang in the past years. Haikang does not focus on promoting products based on computing power. We enhance the competitiveness of our products by improving their performance and matching certain processing capacity. Our products containing GPU chips are very few. We mainly use these chips for algorithm training. Our consumption is not a long-term and continuous demand. Therefore, it is enough to have some stocks that can maintain some algorithm training needs, and the overall impact is small.

For medium - and long-term development, the new regulations on control issued by the United States on October 7 will restrict the sustainable development of China's AI industry from the perspective of computing power, which is a restriction on the entire high-tech industry, and Chinese enterprises are not immune. Therefore, this problem needs to be broken through in the medium and long term, and requires more efforts from industry participants.

In addition, some institutions noticed that the SMBG of Hikvision declined significantly in the third quarter and asked about the future inventory control strategy. In response, Hikvision said that the current status of SMBG inventory should be good. Because of the poor sales in July and August, on the one hand, it is related to the weak market demand; on the other hand, because the channel itself has inventory reserves, dealers do not purchase from Haikang, which means they are digesting inventory. After being digested in July and August, September has entered a positive state of sales. Although there was a relatively large negative growth in the third quarter, it is not necessarily a bad thing for the development of this industry. At present, the signals of national policies and various aspects of the industry are relatively clear, and the confidence of the market has slowly recovered. There is no need to worry about our channel inventory, and there is no special pressure.

The price control strategy is affected by the demand, and we have also adopted some promotion, increased rebate and other strategies to promote it. These are promoted according to business needs, and normal adjustments are made in combination with various aspects of the market.


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