HIKVISION(SZ:002415) Great Wall Securities·2025-08-05 10:44Investment Rating - The report maintains a "Buy" rating for Hikvision, expecting the stock price to outperform the industry index by over 15% in the next six months [5][17]. Core Insights - Hikvision's financial performance shows improvement in cash flow and gross margin, indicating a marginal enhancement in fundamentals despite short-term revenue growth challenges [3][2]. - The company has embraced AI technology, integrating it into most product lines, which is expected to drive future growth [3]. - The report forecasts revenue growth from 98 billion yuan in 2025 to 115.8 billion yuan in 2027, with net profit projected to increase from 13.3 billion yuan to 16.8 billion yuan during the same period [3]. Financial Summary - Revenue: Projected to grow from 89.34 billion yuan in 2023 to 115.84 billion yuan in 2027, with a CAGR of approximately 9.5% [1]. - Net Profit: Expected to decline from 14.11 billion yuan in 2023 to 11.98 billion yuan in 2024, before recovering to 16.8 billion yuan by 2027 [1]. - Gross Margin: Improved to 45.19% in the first half of 2025, reflecting a slight year-on-year increase [2]. - Cash Flow: Operating cash flow turned positive in the first half of 2025, amounting to 5.34 billion yuan, which is 94% of net profit [2]. - EPS: Expected to rise from 1.53 yuan in 2023 to 1.82 yuan in 2027 [1]. Business Performance - Domestic Business: The domestic business faces significant pressure, primarily due to a sharp decline in SMBG (Small and Medium Business Group) revenue [2]. - Innovation Business: Despite a slowdown, the innovation business grew by 13.92% year-on-year, contributing 28% to total revenue [2]. - AI Integration: The company has launched hundreds of AI model products, enhancing its competitive edge across various industries [3].