2012 Security Industry Report

How to look at the development of the security industry? It is believed that the corporate report of listed companies can reveal the development characteristics and situation of the security industry. As a representative of a listed company, the development of companies such as Hikvision, Dahua, Dali, and Anjubao is, to some extent, a manifestation of the entire industry.

2012 Security Industry Features Summary I. Security is still in the sector's development boom period From the second half of 2011 to the first half of 2012, although the economic situation at home and abroad has stabilized, the security listed companies still achieve better results, and the overall outlook of the industry remains More bright. The total profit of several major listed companies in the industry has a good growth. Zhongwei Electronics’ profit increased by 32.76%, Hikvision's profit increased by 39.35%, and Dahua’s share increased profits by 75.40%.

Second, security front-end equipment growth is still rapid, Haikang, Daewoo low-end products to seize the second and third-tier manufacturers market Hikvision in the report pointed out that the main driving force in the second quarter is the front-end rapid growth and gross margins. In the first half of the year, front-end revenue reached 1.24 billion, an increase of 73% year-on-year. Dahua also pointed out that the front-end is the main reason for the rapid growth of the main business. The growth rate in the first half of the year was 99.23%. From May 2011, several major DVR giants of Haikang, Dahua and Hanbang have reduced the prices of some products, seized the market share of low-end products, and the purpose of expanding their market territory once again is obvious. Dahua shares even pointed out in the report that the launch of the company's new products will further erode the market share of the second and third line manufacturers, and the volume of mid-to-low-end products could be increased.

III. Limited growth of the security back-end by the board business Hikvision said in its report that the back-end business only grew by 6%, dragging down the overall sales growth. The back-end gross margin increased only 0.5% year-on-year. Zhongwei Electronics also pointed out that the company adjusted its strategic structure and moderately reduced its investment in digital hard disk recorder products. The sales revenue of digital hard disk recorders dropped by 65.21% over the same period of last year.

Fourth, the simple trend of the transition from the pure product provider to the overall solution provider of the “product system” is more obvious. From the report, we can see that since 2009, Hikvision began to move from a pure product provider to a “product system”. “The overall solution provider has transformed its business areas from embedded product development to overall security system solutions and product offerings, enabling companies to transform from initial single product sales to product, software platform, and solution sales. Integrated integrated solution provider. In the past two years, this process has been accelerating. In addition, Zhongwei Electronics, which was listed on the market in 2011, proposed to expand from a single transmission product to front-end acquisition and back-end storage, and strive to transform itself into an overall product supplier of video surveillance systems with its own characteristics. Guangdong Anjubao also proposed to be a provider of community security products as a whole solution provider.

V. Industry Science and Technology R&D Investment Continues Adding to the Ocean Convoy, Dahua, and Zhongwei Electronics all put forward the report that security video surveillance industry is a typical technology-intensive industry, and the industry replacement is also extremely rapid, along with market competition. Intensified and customer demand for product individuation continues to increase. New technologies and new products continue to emerge. Product technology content and continuous innovation capability are increasingly becoming the most important components of the core competitiveness of security video surveillance product suppliers. Only the technology is always in place. The frontier of innovation and the acceleration of the industrialization of R&D results can yield profits and sustained profitability higher than the industry average.

In the first half of 2012, Dahua’s R&D spending totaled 90,602,800 yuan, accounting for 6.99% of total operating revenue. The company received a total of 13 patents (including 8 patents for its subsidiaries), including 1 invention patent, 5 utility model patents, and 7 exterior design patents.

Zhongwei Electronics also pointed out that the company continued to strengthen its investment in R&D and innovation. Through technological innovation of its products, it optimized the production process and raised the technological level of its products. The average annual R&D investment accounted for more than 7% of its operating revenue.

Security listed companies analyze listed companies as representatives of advanced technologies and products in the security industry and industry development trends. Through the data in the Announcement of Listed Security Companies, we can conclude that the security listed companies and even the entire security industry in the first half of 2012 exhibited the following characteristics: : Security is still in a booming zone for the development of the industry. The growth of front-end equipment for security is still fast, and the growth of front-end equipment for security is still fast. The semi-annual report of listed companies has been announced for most of the year in 2012. Several semi-annual reports of listed companies with security as the main business have also been released. How did the security industry develop in the first half of 2012? The data in the corporate report is the most convincing. The following are the key points in the report of several listed security companies.

Hikvision's operating income was 2,818,679,482.49 yuan, an increase of 35.40% over the same period of the previous year, and realized a total profit of 846,603,921.37 yuan, an increase of 39.35% over the same period of last year. The company's front-end maintains high-speed growth and its gross margin improves. The second quarter of the company's main driving force is the rapid growth of the front-end and the increase in gross profit margin. In the first half of the year, the company’s front-end revenue reached 1.24 billion yuan, an increase of 73% year-on-year, and the back-end accelerated its withdrawal from the market due to the card business, which was only 6%. The front-end and back-end gross profit margins increased by 1.7 and 0.5 percentage points year-on-year respectively.

Zhejiang Dahua Company achieved a total operating income of 1,296.8800 million yuan, a year-on-year increase of 45.02%. The total profit realized was 256,164,000 yuan, a year-on-year increase of 75.40%. The front end is the main reason for the rapid growth of the main business. In the first half of the year, the year-on-year growth rate was 99.23%. The arrival of the HD era in the second half of the year will highlight the company’s technological advantages in the front end, and high-end IP cameras are expected to grow rapidly. Second, in the field of analog cameras, the introduction of new products will further erode the market share of second- and third-tier manufacturers.

Dali Technology: The company realized operating income of 94,780,400 yuan, an increase of 7.93% over the same period of last year. As the current labor costs, sales, finance and other expenses have increased to a certain extent, operating profit reached only 1,233,300 yuan, a drop of 56.75 from last year. %, benefiting from the company’s return on government VAT refunds and subsidies, the company’s final total profit was 8.78 million yuan, an increase of 30.83% over the same period of last year. The sales revenue of the company’s main product, infrared thermal imager, increased by 15.12% over the previous period. The proportion of the company's main business has reached 91.97%.

Zhongwei Electronics achieved total operating revenue of 72.07 million yuan, an increase of 21.06% year-on-year; the company's main operating profit was 23.61 million yuan, an increase of 35.07% year-on-year, faster than revenue growth; the company's main operating margin was 32.76%, higher than the previous year. The same period (29.36%) was 3.40 percentage points. The company’s main products are still the optical platforms and optical transceivers of transmission equipment, accounting for 88.72% of the main business revenue. The company is involved in the production and sales of front-end and back-end equipment. During the reporting period, the product category added two new categories of front-end equipment and back-end equipment. , respectively accounted for 8.95% and 1.01% of the main business income.

Anjubao achieved a total operating income of 108,121,875.73 yuan, a year-on-year increase of 20.03%; the company achieved an operating profit of 20,640,347.93, an increase of 18.41% over the same period of last year; its total profit was 25,058,856.61, an increase of 25.59% over the same period. The company further increased its investment in R&D, with particular emphasis on product innovation and product technology, design, etc. As of the end of the reporting period, the company invested a total of 8,572,527.50 yuan. The company's main products are still building-to-system and smart home systems, accounting for 94.75% of the main business revenue.