HIKVISION(SZ:002415) ZHONGTAI SECURITIES·2024-08-21 03:00Investment Rating - The investment rating for Hikvision (002415.SZ) is "Buy" (maintained) with a market price of 26.71 CNY [1][7]. Core Views - The report indicates that Hikvision's EBG and innovative businesses are experiencing steady growth, although profits are under pressure due to expenses. The company achieved a revenue of 41.209 billion CNY in the first half of 2024, representing a year-on-year growth of 9.68%, while the net profit attributable to shareholders was 5.064 billion CNY, down 5.13% year-on-year [4][5]. Summary by Sections Financial Performance - For 2022A to 2026E, the projected operating revenue is expected to grow from 83.166 billion CNY in 2022 to 120.303 billion CNY in 2026, with a compound annual growth rate (CAGR) of approximately 10% [1]. - The net profit is forecasted to increase from 12.837 billion CNY in 2022 to 18.659 billion CNY in 2026, with a growth rate of 4% in 2024E and 14% in 2025E [1]. - The earnings per share (EPS) is expected to rise from 1.39 CNY in 2022 to 2.02 CNY in 2026 [1]. Business Segments - Domestic main business revenue for the first half of 2024 was 18.971 billion CNY, a slight decrease of 0.26% year-on-year, while the EBG segment achieved a revenue of 7.489 billion CNY, growing by 7.05% year-on-year [4]. - The overseas main business generated 11.441 billion CNY, reflecting a year-on-year increase of 15.46% [4]. - Innovative business revenue reached 10.328 billion CNY, marking a significant year-on-year growth of 26.13% [4]. Market Position - The company holds a total market capitalization of approximately 246.619 billion CNY, with a circulating market value of about 243.221 billion CNY [2]. - The report emphasizes the importance of technological innovation in driving down costs and improving efficiency in downstream sectors, which is expected to support stable growth for the company [5]. Valuation Metrics - The projected P/E ratio for 2024E is 17 times, decreasing to 13 times by 2026E, indicating a potential undervaluation as earnings grow [5][6]. - The P/B ratio is expected to decline from 3.6 in 2023A to 2.0 in 2026E, suggesting improving asset efficiency [1]. Analyst Insights - Analysts expect the company's performance to show a trend of lower growth in the first half of 2024, followed by a recovery in the latter half, driven by advancements in AI and digital transformation initiatives [5]. - The report maintains a "Buy" rating based on the expectation of a relative price increase of over 15% compared to benchmark indices within the next 6 to 12 months [7].