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1. Evaporation of 40 billion in a day? Hikvision may face further sanctions, causing its stock price to plummet by 10%

In recent years, the United States has been eyeing Chinese technology companies with rapid growth momentum.

From Huawei to ZTE, the US government is afraid that the core technology will be acquired by the Chinese, or the secrets of the American people will be "leaked" through Made in China.

The US has never stopped imposing waves of sanctions on Chinese enterprises, and now it has reached the point of 'not letting go until it collapses'.

Well, another Chinese enterprise is going to suffer.

Moreover, this company has been sanctioned to varying degrees twice in the past few years.

The strictest sanctions have arrived?

Recently, the US has once again raised the so-called "human rights issue" and threatened to impose the strictest sanctions on Hikvision.

According to reports, the new round of sanctions is not just about increasing the difficulty of doing business with American companies. More importantly, it will also involve Hikvision's potential customer base worldwide.

Hikvision responded by stating that it has taken note of the relevant reports, which mentioned that possible sanctions need to be verified, but sanctions should be based on reliable evidence and due process, and hopes to receive fair and just treatment.

In addition, the statement also stated that Hikvision operates strictly in accordance with the laws and regulations of the countries where its business is located, follows internationally recognized business ethics and operating standards, and, like all leading technology companies worldwide, is committed to technology for good.

Friends familiar with Hikvision know that this is a company that specializes in video surveillance. It involves a wide range of fields, from finance, public security, telecommunications, transportation, justice, to education, electricity, water conservancy, military, and so on, which can be said to be all encompassing.

If we want to comprehensively introduce the services that this company can provide, it involves security products such as cameras/smart ball machines, optical transceivers, DVR/DVS/boards, network storage, video integrated platforms, and central management software.

Although the sanctions have not been finalized yet, just after the Financial Times reported, Hikvision's stock price has plummeted by 10%.

At present, the market value of Hikvision is 360.7 billion yuan, which is equivalent to a full drop of 40 billion yuan.

Such a large scale is due to the breadth of Hikvision's customer base. More than 150 countries and regions around the world, including the United States, are served by Hikvision.

The annual report shows that in 2021, Hikvision's overseas revenue was 21.985 billion yuan, a year-on-year increase of 24.23%, accounting for 27% of the total revenue.

Hikvision's revenue has also been increasing year by year, with a strong momentum. In the past decade, Hikvision's revenue has expanded by up to 11 times.

In 2021, the annual revenue was 81.42 billion yuan, a year-on-year increase of 28.21%; The net profit was 16.8 billion yuan, a year-on-year increase of 25.51%.

According to this increase, the annual revenue for 2022 is expected to exceed 100 billion yuan.

It seems that this sanction is a significant blow to Hikvision.

Previously subjected to two rounds of sanctions

In 2018, the US House of Representatives voted to pass a bill. The proposal stipulates that government agencies are prohibited from using technology manufactured by ZTE Corporation, and the Ministry of National Defense is prohibited from renewing contracts with suppliers who cooperate with Chinese companies.

And what we need to pay attention to is a supplementary proposal attached to this proposal, which is closely related to today's protagonist Hikvision.

The supplementary proposal proposes to prohibit the US federal government from purchasing certain Chinese made video surveillance equipment on the grounds of national security. Among them, there are Hainengda Communication, Hangzhou Hikvision Digital Technology Company, and Zhejiang Dahua Technology Company.

In 2018, Hikvision responded to this supplementary proposal. The general idea is that the accusations made by the proposer contain obvious subjective speculation and bias, and the company regrets this.

In 2019, one year later, the US government once again imposed restrictions on Hikvision's purchase of American technology.

According to reports at the time, this move was equivalent to adding Hikvision and to the US Department of Commerce's "Entity List". Afterwards, American companies may need to obtain government approval to supply components to Hikvision.

At that time, after the news was released, Hikvision's stock price also suffered a significant decline.