Hikvision, established in Hangzhong in 2001, is dedicated to provide cutting edge video surveillance solution in the last decade. After less than 20 years development, Hikvison surpassed the western companies and become the Top video surveillance solution providers globally. In my opinion, Hikvision well represents the rapid growth of these great Chinese companies, which are focusing on innovation, value creation for customers, embracing the global market and continuing to create wealth for shareholders.
In this post, I will introduce Hikvison and analyze Hikvison business mainly from 4 aspects: Business Prospect, Business Moat, Management Team, Financial Analysis. Most of the data and facts in this post are from Hikvision annual report
As I have discussed in the “Maslow’s hierarchy of needs“, security is perpetual need for human being. Especially, we are now entering in the information age, and enjoying the prosperity brought by globalization and long time peace, people are concerning their physical safety and wealth safety. Video surveillance is a mandatory technology to reduce criminal and protect people safety in current society, while in the future, as video will be powered by AI, AI combined with each industry will transform our life entirely.
As Hikvison annual report mentioned:
Hikvision’s performance drivers are mainly derived from industry growth and technical expansion. On the one hand, the increase of various instability factors has led to the increasing attention to security and stability around the world as a comprehensive social problem. Enhancing the ability of security defense, public security, and comprehensive management has become a prerequisite of the social development. The traditional security industry gained constant growth due to increasing demands of governments, enterprises and families for security products, as well as the upgrading demands from the existing market. On the other hand, video-related technological innovation, cloud computing, big data, artificial intelligence, and biological recognition technologies have been further upgraded, leading to innovative products with fast-changing features, advanced shapes and innovative functions, as well as application demands that are gradually subdivided and deepening. The traditional security industry is still undergoing the transition of network and HD, and revolution of intelligence is on the way. The traditional security industry continues to expand towards security, visualization and big data, and the future industry is not limited by the form of traditional security. Under the progress of video image content recognition technology, video will gradually release the potential power as the natural container of massive data and information and will be applied in many other industries.
As a provider of Internet of Things (IoT) solutions and data operation service based on the video, Hikvision provides security, visual management and big data services to customers around the world. Hikvision has the core technologies of audio and video encoding, video image processing, and audio and video data storage, as well as forward-looking technologies such as cloud computing, big data, and deep learning. It provides professional segmentation products, Intelligent Visual Management (IVM) solutions and big data services to industries, including Public Security, Transportation, Judicial System, Education and Healthcare, Financial Institutions, Energy, as well as Intelligent Building. In addition to the video surveillance industry, Hikvision extended its business to smart home, industrial automation and automotive electronics industries based on video technology to explore potential for sustainable development
Main Business Products:
After engaging in the security industry for many years, the Company has rich experience in technologies, products and solutions and possesses full range of products from the front end (perception), transmission, storage, and display control to the integrated management platform and provides “one-stop” overall solution for multi-level security needs of governments, enterprises, families and individual users.
Video Security Products based on AI:
With the experience in video technology applications and the capabilities to integrate products and systems, the Company quickly commercialized deep learning and video big data technology advantages into products, forming an advanced intelligent product family from capturing to processing, embedded intelligent analysis technology from the front-end to back-end products, and big data application platform.
Intelligent camera series such as “DeepInview”, “Divine Captor”, People and Identification Matching (人证 对比) , and “DeepInmind” series intelligent NVR, with embedded deep learning algorithm, have more accurate big data induction capabilities than human brains, and can extract multiple feature information of people, vehicles and objects and detect events in complex environments;
“Blade” vehicle feature structured server, “Falcon” video cloud structured server, “Divine Captor” traffic incident detection server, “Hikface” face analysis server and other GPU array video cloud structured server products enable efficient structured processing of massive video and image data;
Hikvision big data server applies the high-speed data bus and memory computing framework, which is better than the traditional Hadoop framework, combining with the video cloud structured server. It achieves million-level message sending and receiving, 100 billion-level data searching in seconds, and billion-level image searching by image in seconds, and the massive structured video data can be effectively applied to provide efficient retrieval, and provides efficient retrieval, analysis, in-depth application, statistic and other big data services.
Hikvision now stands in the forefront of industry reform and captures opportunities brought by deep learning for the industry, and integrates video perception, deep learning, cloud computing, big data technology with users’ business needs, to give an new connotation of the four levels of IoT-“pereption, transmission, understand and application” (感、传、知、用), promotes the upgrade of the industry as a whole, and embraces the arrival of video artificial intelligence (AI) era.
In 2016 the Company also saw the initial implementation of Management Measures for Core Staff Co-investment in Innovative Business (核心员工跟投创新业务管理办法), along with three new business ventures: 1) EZVIZ Network Company (萤石网络公司), converted to a Smart Home business; 2) Robotics Technology Company launched, focusing on industrial automation; and 3) Automotive Technology Company emerged, focused on intelligent automobile developments. These three entrepreneurial innovative subsidiaries, co-founded by internal staffs, created exciting new opportunities for further growth of the Company. Based on the long-term effective mechanism of “risk-sharing and benefit-sharing” for internally co-founded innovative enterprises, the innovative businesses are expected to drive the Company beyond the industrial life-cycle and maintain a long-term sustainable healthy development of the Company.
As the world moving towards prosperity and globalization fast, sophisticated security technologies are needed to protect people safety, including physical, health, wealth, and so on. On the one hand, Hikvision is dedicated to provide the comprehensive security technology to meet the society growing security needs, on the other hand, the AI technology and the innovative business that Hikvision has developed will has further impact to better our world and generate more streams of revenue in the future.