Hangzhou Hikvision Digital Technology (002415) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB41.21 billion, up 9.68% year-over-year; net profit attributable to shareholders was RMB5.06 billion, down 5.13% year-over-year.

• Net profit excluding non-recurring items rose 4.11% year-over-year to RMB5.24 billion.

• Innovative business revenue grew 26.13% year-over-year to RMB10.33 billion, accounting for 25.06% of total revenue.

• R&D investment increased 7.81% year-over-year to RMB5.70 billion.

• Domestic market demand was weak; overseas markets stable but faced regional conflicts and trade frictions.

Financial highlights

• Operating costs rose 9.95% year-over-year to RMB22.64 billion.

• Gross margin for AIoT products and services was 45.05%, down 0.14 percentage points year-over-year.

• Basic and diluted EPS were RMB0.539, down from RMB0.568 in H1 2023.

• Net cash flows from operating activities were negative RMB189.64 million, compared to positive RMB1.03 billion in H1 2023.

• Total assets at June 30, 2024 were RMB127.79 billion, down 7.97% from December 31, 2023.

Outlook and guidance

• The company will continue to invest in R&D and product innovation to maintain competitiveness.

• Focus remains on scenario-based digitalization and strengthening compliance and risk management.

• No interim dividend, bonus shares, or capital reserve distribution planned for H1 2024.