HIKVISION(SZ:002415) SINOLINK SECURITIES·2024-10-27 11:11Investment Rating - The report maintains a "Buy" rating for Hikvision, with expected revenue growth of 6.9%/11.8%/13.3% for 2024-2026 [1]. Core Views - The company reported a revenue of 649.91 billion RMB for the first three quarters of 2024, a year-on-year increase of 6.06%, while net profit attributable to shareholders decreased by 8.40% to 81.08 billion RMB [1]. - The domestic market demand is relatively weak, while the overseas market remains stable, leading to a slowdown in revenue growth [1]. - The gross margin and expense ratio have remained stable, indicating strong competitive and management capabilities [1]. - There are expectations for demand recovery, with internal cost optimization and a potential increase in business opportunities in emerging overseas markets [1]. Summary by Sections Financial Performance - Revenue for Q3 2024 was 237.82 billion RMB, a slight increase of 0.33% year-on-year, while net profit for the same period was 30.44 billion RMB, down 13.37% [1]. - Gross margins for the first three quarters and Q3 were 44.76% and 44.25%, respectively, showing a minor decline [1]. - R&D, sales, management, and financial expense ratios for the first three quarters were 13.44%, 13.37%, 3.48%, and -0.20%, respectively [1]. Market Outlook - There is an anticipated improvement in domestic market demand, with the acceleration of special bond issuance expected to positively impact the PBG sub-sectors [1]. - The EBG sector is seeing active digitalization demand aimed at cost reduction and efficiency improvement [1]. - The SMBG sector is expected to benefit from reduced overall industry inventory, enhancing business development flexibility [1]. - Emerging overseas markets show good growth potential, with non-video business segments growing faster [1]. Revenue and Profit Forecast - The revenue forecasts for 2024, 2025, and 2026 are adjusted to 954.9 billion RMB, 1,067.5 billion RMB, and 1,209.2 billion RMB, respectively [1]. - The net profit forecasts for the same years are 141.2 billion RMB, 173.2 billion RMB, and 206.8 billion RMB, reflecting growth rates of 0.07%, 22.68%, and 19.41% [1].