The Overlooked China-Backed Tech Stock That Keeps Compounding
Hong Kong tech stocks have led the recent rally, with names like Alibaba surging 75% year-to-date. Even traditionally defensive sectors like banks and telcos have delivered solid gains. Naturally, this rapid ascent raises the risk of a short-term pullback in H-shares. Meanwhile, A-shares have seen more moderate performance, making them appear more reasonably valued for investors at this juncture.
One such A-share to watch is Hangzhou Hikvision Digital Technology Co., Ltd. (“Hikvision”) (SHE: 002415). Hikvision is a Chinese state-owned enterprise and one of the world’s leading manufacturers and suppliers of CCTV systems and security cameras, renowned for its high-quality video compression hardware and software.
The company offers a wide range of security products, including IP cameras, HD analog cameras, analytics and management software, alarm systems, and other surveillance solutions.
Its cameras support both standalone closed-circuit setups using Digital Video Recorder (DVR) or Network Video Recorder (NVR) systems, as well as remote access via the Hik-Connect mobile app.
Hikvision generates revenue primarily from five categories of services:
Domestic (52% of revenue):
Project Business Group (17%): Handles large-scale, customized security solutions for complex client needs.
Enterprise Business Group (20%): Serves large organizations with integrated security systems.
Small and Medium Business Group (14%)
This group targets smaller businesses and organizations, providing simpler and more affordable security solutions.
Other products and services (1% )
Overseas (27%)
Innovative businesses (21%)