Financial Performance - The company achieved total revenue of CNY 37.26 billion in the first half of 2022, representing a year-on-year growth of 9.90%[19]. - The net profit attributable to shareholders was CNY 5.76 billion, a decrease of 11.14% compared to the same period last year[19]. - Research and development investment reached CNY 4.68 billion, an increase of 20.56% year-on-year[20]. - The company's innovative business generated revenue of CNY 7.01 billion, growing by 25.62% and accounting for 18.81% of total revenue[23]. - The basic earnings per share were CNY 0.608, down 12.52% from the previous year[12]. - The total assets at the end of the reporting period were CNY 104.89 billion, reflecting a 0.99% increase from the end of the previous year[12]. - The weighted average return on equity decreased to 8.81%, down 2.81% from the previous year[12]. - The company's operating revenue for the reporting period was ¥37,257,516,590.62, representing a year-on-year increase of 9.90% compared to ¥33,902,098,368.10 in the same period last year[24]. - Operating costs increased to ¥21,182,955,700.93, up 16.36% from ¥18,205,195,764.46, primarily due to the growth in operating revenue[24]. - The net cash flow from operating activities was CNY -2.16 billion, a decline of 209.97% compared to the previous year[12]. Investment and R&D - The company has a strong focus on R&D, maintaining significant investment to protect its intellectual property and mitigate related risks[4]. - Research and development investment rose by 20.56% to ¥4,675,061,688.81, compared to ¥3,877,769,884.09 in the previous year, indicating a continued commitment to R&D[24]. - The company plans to continue focusing on technological innovation and expanding its product line to ensure sustainable development[20]. Market and Operational Challenges - The company operates in over 150 countries and regions, facing risks from global economic fluctuations and geopolitical uncertainties[2]. - The company emphasizes the importance of supply chain stability amidst global commodity price volatility and logistical constraints[3]. - The company acknowledges the potential impact of the COVID-19 pandemic on its business operations and economic environment[2]. - The company is aware of the risks associated with currency fluctuations due to its operations in multiple foreign currencies[3]. - The company faces challenges in internal management complexity as it continues to expand its business and workforce[4]. - The company is navigating a complex legal and regulatory environment, particularly regarding data compliance across different jurisdictions[3]. - The company is actively addressing external challenges and maintaining stable operations despite market uncertainties[21]. Shareholder and Equity Information - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the reporting period[1]. - The company held two shareholder meetings during the reporting period, with participation rates of 65.62% and 67.38% respectively, approving multiple proposals including the 2021 restricted stock plan[46]. - The company completed the grant of 97,402,605 restricted shares under the 2021 Restricted Stock Plan, representing 1.04% of the total share capital before the grant, with 9,738 recipients[49]. - As of the end of the reporting period, the total number of restricted shares granted but not yet unlocked was 133,022,558 shares, accounting for 1.41% of the total share capital[50]. - The largest shareholder, China Electronics HIK Group Co., Ltd., holds 36.08% of the shares, amounting to 3,403,879,509 shares[89]. - The second-largest shareholder, Gong Hongjia, holds 10.20% of the shares, totaling 962,504,814 shares[89]. - The company reported a total of 257,536,601 restricted shares at the end of the reporting period, after accounting for the shares released from restrictions[85]. Financial Liabilities and Guarantees - The company reported a total of 145,000.00 in revenue for the period ending April 16, 2022, with no significant events occurring during the reporting period[70]. - The company approved a total guarantee amount of 2,200,000.00 during the reporting period, with actual guarantees amounting to 873,595.15[71]. - The company has a guarantee amount of CNY 107.2 million for Hikvision Singapore Pte. Ltd., with an actual guarantee amount of CNY 46.53 million[68]. - The company has a guarantee amount of CNY 37 million for Urumqi Haishi Xin'an Electronic Technology Co., with an actual guarantee amount of CNY 22.79 million[68]. - The company has a guarantee amount of CNY 29 million for Luopu Haishi Dingxin Electronic Technology Co., with an actual guarantee amount of CNY 21.44 million[68]. - The company has a guarantee amount of CNY 45 million for Hangzhou Hikvision Electronics Co., with an actual guarantee amount of CNY 3.16 million[68]. - The company has a guarantee amount of CNY 30 million for Chongqing Hikvision Technology Co., with an actual guarantee amount of CNY 2.4 million[68]. Legal and Compliance - The company is navigating a complex legal and regulatory environment, particularly regarding data compliance across different jurisdictions[3]. - There were no significant environmental protection issues reported, and the company is not listed as a key pollutant discharge unit[52]. - The company reported no major litigation or arbitration matters during the reporting period[55]. - The financial report for the half-year period has not been audited[53]. - There were no violations regarding external guarantees during the reporting period[53]. Future Plans and Strategic Initiatives - The company plans to invest 1.16610 billion in the construction of a product industrialization base for Hikvision Robotics, approved on January 18, 2022[75]. - The company also approved an investment of 1.28018 billion for the construction of an infrared thermal imaging product industrialization base on January 18, 2022[76]. - The company initiated the preparatory work for the domestic listing of its subsidiary, Hikvision Robotics, with plans for an IPO on the Shenzhen Stock Exchange[79]. - The company is progressing with the spin-off of its subsidiary, Yingshi Network, for a listing on the Sci-Tech Innovation Board, with the application for IPO submitted on December 13, 2021[80]. Accounting and Financial Reporting - The financial statements were prepared based on the assumption of going concern, with no significant doubts about the company's ability to continue operations[116]. - The company follows the accrual basis of accounting, with financial statements prepared in accordance with enterprise accounting standards, reflecting the financial position as of June 30, 2022[117]. - The company recognizes goodwill in business combinations when the acquisition cost exceeds the fair value of identifiable net assets acquired[119]. - The company’s consolidated financial statements include the results of subsidiaries from the date control is obtained until control is lost[120]. - The company recognizes and measures identifiable assets and liabilities at fair value on the acquisition date in business combinations[119]. - The company assesses expected credit losses for financial assets measured at amortized cost and those classified as fair value through other comprehensive income, recognizing loss provisions based on expected credit losses[137].

Financial Performance - In 2021, Hikvision's cumulative R&D investment reached CNY 35.4 billion, with a net profit attributable to shareholders of CNY 89.1 billion and total dividends distributed to shareholders amounting to CNY 43.2 billion since its IPO in 2010[2]. - The company reported a total revenue of 1.5 billion RMB for the year 2021, representing a year-over-year growth of 15%[12]. - The company's operating revenue for 2021 was ¥81,420,053,539.27, representing a year-over-year increase of 28.21% compared to ¥63,503,450,891.78 in 2020[18]. - The net profit attributable to shareholders for 2021 was ¥16,800,411,032.05, up 25.51% from ¥13,385,526,714.15 in 2020[18]. - The basic earnings per share for 2021 was ¥1.810, reflecting a 25.26% increase from ¥1.445 in 2020[18]. - The total assets at the end of 2021 amounted to ¥103,864,543,195.18, a 17.09% increase from ¥88,701,682,384.20 at the end of 2020[18]. - The net cash flow from operating activities for 2021 was ¥12,708,524,686.99, down 21.01% from ¥16,088,156,566.67 in 2020[18]. Research and Development - The proportion of R&D expenses to revenue increased from 7.62% in 2017 to 10.13% in 2021, indicating a consistent commitment to innovation[2]. - The company plans to continue increasing its R&D investment over the next decade to enhance customer value and shareholder returns[2]. - Research and development expenses increased by 30% in 2021, focusing on smart home technologies and robotics[15]. - In 2021, five of the company's innovative businesses generated over CNY 1 billion in revenue, with positive net profits, showcasing successful internal innovation initiatives[2]. Market Expansion and Global Presence - As of 2021, Hikvision operates in over 155 countries and regions, with 66 sales branches, 3 manufacturing plants, and 11 logistics centers established overseas[1]. - The company is expanding its market presence in Southeast Asia, with plans to open three new offices by the end of 2022[15]. - The company has established a strong system capability that includes system design, implementation, operation management, and service support[29]. - Hikvision's international business has maintained steady growth despite challenges from geopolitical issues and the global pandemic, focusing on meeting customer needs and optimizing internal operations[145]. Product Innovation and Technology - New product launches included advanced AI surveillance systems, contributing to a 25% increase in sales in the security segment[15]. - The company has initiated a new strategy to diversify its product offerings, including entry into the healthcare technology sector[15]. - Hikvision's AI open platform served over 8,000 enterprise users, generating 50,000 models and accumulating 4,000 implemented projects by the end of 2021[36]. - The company has developed a comprehensive product system that includes 5 categories of hardware and software products, enhancing its market competitiveness[29]. - Hikvision's focus on technology innovation has led to the expansion of its business into smart homes, digital enterprises, and smart cities[28]. Risk Management and Compliance - Hikvision faces several risks, including global pandemic impacts, economic downturns, geopolitical uncertainties, and supply chain disruptions, which could adversely affect its operations[5][6]. - The company emphasizes the importance of maintaining compliance with complex legal regulations across different countries, especially regarding data security[6]. Customer Engagement and User Experience - User data showed an increase in active users by 20% year-over-year, reaching 10 million users by the end of 2021[12]. - The company aims to enhance its product offerings through continuous innovation in sensing technologies and customized solutions for diverse market needs[26]. - Hikvision's intelligent application open platforms support various application scenarios, including edge node, edge domain, cloud center, and internet operations, facilitating developer collaboration and service integration[45][46]. Social Responsibility and Community Engagement - The company is committed to social responsibility, actively participating in grassroots governance and rural revitalization efforts[97]. - Hikvision focuses on rural revitalization by providing digital infrastructure and intelligent applications for production monitoring, ecological supervision, and grassroots governance, enhancing rural digital construction[100]. Digital Transformation and Smart Solutions - Hikvision's cloud-based SaaS service, Yunmou, has been applied in over 40,000 office locations, 280,000 retail stores, and 600,000 logistics nodes, serving 4.16 million community owners and 3.5 million students' parents, with a total of 2.5 million devices connected[125]. - The company is focused on digital transformation for various sectors, including government and small to medium enterprises, through tailored solutions[89]. - Hikvision's digital solutions are designed to create a comprehensive management loop, integrating various operational aspects from inspection planning to corrective actions[123]. Environmental Responsibility - The company emphasizes environmental responsibility and green manufacturing practices in its operations[156].