The highest growth rate is 20%, and Hikvision releases its third quarterly report

On October 18, 2025, Hikvision released its third quarter report for 2025, delivering a report card with stable revenue improvement and accelerated profit growth. In the first three quarters, the company achieved operating income of approximately 65.7 billion yuan, a year-on-year increase of 1.2%, demonstrating the stability of its business fundamentals against the background of pressure on the domestic economy; net profit attributable to the parent company was approximately 9.3 billion yuan, a year-on-year increase of 15%, and profit growth significantly outperformed revenue growth. In a single quarter, revenue in the third quarter was approximately 23.9 billion yuan, a year-on-year increase of 0.7%; net profit attributable to the parent company reached 3.66 billion yuan, a significant increase of 20% year-on-year, and gross profit margin climbed to 45.37%, a year-on-year increase of 0.61 percentage points and three consecutive quarters of month-on-month growth. Behind this performance is Hikvision's precise layout in terms of product structure optimization, overseas market expansion, and innovative business breakthroughs, which also reflects its transformation from scale expansion to quality improvement in the AI + industry wave.​

Performance highlights: Gross profit margin has risen for three consecutive years, and profitability continues to increase

The most eye-catching thing about Hikvision's third-quarter results is the significant improvement in profitability. The gross profit margin of 45.37% not only hit a recent high, but also achieved month-on-month growth for three consecutive quarters. This trend is driven by two factors: on the one hand, the proportion of high-margin AI solutions continues to increase, and the company has expanded AI model technology. Deeply integrated into security monitoring, smart transportation, industrial testing and other products, the light, intelligent and easy-to-deploy solutions launched not only meet customers 'digital transformation needs, but also drive overall profitability due to high added value of technology; On the other hand, the effectiveness of cost control has gradually emerged. Through supply chain optimization, production efficiency improvement and divestiture of non-core businesses, the company has effectively reduced operating costs. The net sales margin in the first three quarters reached 15.59%, an increase of 1.33 percentage points year-on-year, and profitability has steadily increased.​

From the perspective of business logic, this trend of slight increase in revenue and high increase in profits marks that Hikvision has gotten rid of its dependence on traditional security hardware for growth based on price and has shifted to a high-quality development path driven by technology + structural optimization. For example, in the field of smart transportation, the AI violation identification system launched by the company not only sells at a higher price than traditional monitoring equipment, but also achieves long-term benefits through data services; in industrial scenarios, product quality inspection solutions based on AI vision help manufacturing companies reduce costs and increase efficiency, but also bring higher profit margins to Hikvision.​

Regional layout: Domestic adjustments are effective, overseas becomes the main engine of growth

Faced with the complexity of the domestic economic environment, Hikvision has achieved a balance of domestic stabilization and overseas breakthroughs through differentiated layout of regional businesses.​

Domestic market: SMBG business bottomed out and rebounded, accurately capturing industry demand

In the domestic market, Hikvision actively adjusts its organizational structure and resource allocation, focusing on industries that highlight the needs of the government and enterprises. In response to the previous decline in the small and medium-sized enterprise business (SMBG) due to inventory pressure and market competition, the company used measures such as de-stocking through dealer channels and optimizing operating models to narrow the year-on-year decline in SMBG revenue to single digits in the third quarter. Gross profit and segment profits after deduction of non-profit both achieved year-on-year positive growth, marking that the business has gradually stepped out of the adjustment period.​

Specifically, the company's layout in industries such as transportation, electricity, petrochemical and coal, and smart commerce has achieved remarkable results: in the field of smart transportation, it participates in the construction of urban transportation brains in many places across the country, providing integrated solutions from monitoring equipment to data analysis; In the energy industry, special AI equipment developed for power inspection and coal mine safety has received a large number of orders due to its strong adaptability and high stability; in the field of smart commerce, the introduction of passenger flow analysis systems and intelligent cash register equipment has helped offline stores improve operational efficiency and become an important growth point for domestic business. The company said that it will continue to launch more lightweight smart products in the future, and cooperate with dealers to go deep into the district and county markets to build a dual support for domestic business in sinking markets + sub-industries.​

Overseas markets: Emerging markets grow by more than 20%, localized production hedges risks

Overseas business has become the core engine of Hikvision's growth. In the first three quarters, overseas revenue reached 15.425 billion yuan, a year-on-year increase of 8.78%, and its proportion in total revenue increased to 36.89%, effectively hedging the downturn in the domestic traditional security market. Among them, emerging markets such as Southeast Asia, the Middle East, and Africa have performed particularly well, with a growth rate of more than 20%. Due to strong demand for infrastructure construction and a late start in digital transformation, these regions have provided high-tech monitoring equipment, access control systems, and commercial display products. Provide a broad space.​

It is worth noting that Hikvision's product structure in overseas markets is shifting from focusing on security hardware to hardware + service collaboration. Non-video products such as smart access control and commercial display equipment are in strong demand, accounting for more than 30% of revenue in some emerging markets; at the same time, the company has promoted localized production in Canada and other places (the current output value of overseas factories accounts for only 0.3%. It is expected to gradually increase in the future), which not only reduces tariff costs and logistics losses, but also better handles geopolitical uncertainty, laying the foundation for long-term stable growth of overseas business. For example, in the Southeast Asian market, locally-produced access control equipment not only shortens the delivery cycle by 50%, but also quickly adjusts product functions according to local customer needs, significantly improving market competitiveness.​

Innovative business: The explosion of robots and automotive electronics opens up new space for growth

During the reporting period, Hikvision's innovation business segment performed well and became a new driving force for the company's growth. Its subsidiaries such as Haikang Robotics, Automotive Electronics, and Ruiying benefited from demand from industries such as automobiles, lithium batteries, electronics, and logistics, and achieved rapid growth in revenue. Some of their businesses grew at a growth rate of more than 30%, demonstrating strong market potential.​

In the field of robots, Haikang Robot's AGV(Automatic Guided Vehicle) and AMR(Autonomous Mobile Robot) products are widely used in lithium battery factories, electronic foundries, e-commerce warehouses, etc. with their technological advantages such as high-precision navigation and multi-machine collaboration. Scenes. With the acceleration of the global manufacturing automation replacement trend, especially the expansion of production in the domestic lithium battery industry and the intelligent upgrading of the logistics industry, Haikang Robot's order volume continues to grow and has become one of the major participants in the global AGV market.​

In the field of automotive electronics, the company focuses on two major directions: smart cockpits and autonomous driving: the sensing equipment such as on-board cameras and millimeter wave radars provided to car companies is rapidly available to meet the needs of L2-L3 autonomous driving; the developed intelligence The central control system integrates navigation, entertainment, vehicle monitoring and other functions, and has entered the supply chain of many new energy vehicle companies. As the penetration rate of new energy vehicles increases and the degree of intelligence deepens, the automotive electronics business is expected to become Hikvision's core growth pole in the next few years.​

In addition, the breakthrough of Ruiying's business in the field of industrial testing is also worthy of attention. The product defect detection system based on AI vision technology can be applied to high-precision manufacturing scenarios such as semiconductors, displays, and auto parts, helping companies improve product yields. Currently, it has served leading companies in the industry such as BOE and Ningde Times, demonstrating high profit., highly sticky business characteristics.​

Industry environment: Looking for opportunities under pressure, new momentum gathers to show resilience

Hikvision pointed out in the report that from January to August 2025, the growth rate of national fixed asset investment was only 0.5%, and budget expenditure increased by 3.1%. The economy is still facing certain pressure, which has also led to a slowdown in the growth of demand in the domestic traditional security market. However, in terms of structural opportunities, high-tech manufacturing grew by 9.5% year-on-year. Home appliances, servers, automobiles and other industries were active, with overall exports growing by 7.1%. Exports to ASEAN, Africa, Central Asia and other places grew rapidly, showing that Economic resilience and new momentum are gathering.​

For Hikvision, this environment of structural pressure and opportunities coexisting is both a challenge and a transformation opportunity. On the one hand, the sluggish demand for traditional security hardware has forced the company to accelerate technological innovation and business transformation; on the other hand, the popularization of AI technology, the rise of overseas emerging markets, and the advancement of manufacturing automation have provided the company with new growth space. As the company emphasized in the report, it will continue to increase investment in technologies related to the AI model, promote the implementation of products in thousands of industries, and, driven by the AI + industry policy, use technology to empower the real economy and seek more effective growth path.​

Future outlook: Dual-engine drive, transforming into an AIoT solution service provider

Judging from the third quarter report, Hikvision has clarified its dual-engine-driven growth strategy for overseas markets and innovative businesses. At the same time, it has focused on AI technology to promote the company's transformation from a security equipment supplier to an AIoT solution service provider. In the future, the company will continue to make efforts in three directions: First, deepen the application of AI technology, deeply integrate the AI model with industry scenarios, launch more plug-and-play intelligent solutions, and further increase the proportion of high-margin businesses; Second, accelerate the expansion of overseas markets, establish more localized service centers in emerging markets such as Southeast Asia, the Middle East, and Africa, and at the same time expand the production capacity of overseas factories and increase the proportion of localized production; Third, cultivate an innovative business ecosystem, integrate industrial chain resources through investment, cooperation, etc., and promote the large-scale development of robotics, automotive electronics, industrial testing and other businesses.​

For investors, if Hikvision's profit growth rate is higher than revenue growth rate continues, it will further enhance the company's valuation appeal; while the continued growth of overseas business and breakthroughs in innovative business will provide long-term growth. certainty. Against the background of the gradual recovery of the domestic economy and the continued increase of AI + industrial policies, Hikvision is expected to occupy a more favorable position in the new round of industrial transformation by relying on its technology accumulation and business layout, achieving the transition from scale leadership to value leadership."