Growth ceiling is a topic frequently asked by leading companies in various industries. At the annual performance presentation meeting of Hangzhou Hikvision Digital Technology Co.Ltd(002415) ( Hangzhou Hikvision Digital Technology Co.Ltd(002415) . SZ), some investors raised this question again. Chairman Chen zongnian responded: “who says elephants can’t dance? I hope Hangzhou Hikvision Digital Technology Co.Ltd(002415) can dance better.”
After the adjustment period from 2019 to 2020, Hangzhou Hikvision Digital Technology Co.Ltd(002415) achieved double-digit growth again in 2021, and the revenue and net profit attributable to the parent company increased by 28.21% and 25.51% respectively year-on-year. In the first quarter of this year, the year-on-year growth rate of revenue was still 18.11%, but due to factors such as the epidemic, the year-on-year growth rate of net profit attributable to the parent decreased to 5.29%.
The epidemic disturbance is also the focus of current investors. In response, the management responded that the company’s business and market are scattered, and the overall impact of the epidemic is controllable.
Huang Fanghong, the Secretary of the board of directors, further said that the innovative business and overseas market are expected to maintain a high growth rate and contribute to the basic growth rate of the company. The company will strive to achieve good growth in the Chinese market by relying on its comparative advantages in technical products, business layout, production and supply. General manager Hu Yangzhong pointed out that the company’s business covers more than 150 countries and regions around the world. At present, the production and operation is stable and the impact of the epidemic is relatively controllable.
The financial Associated Press reporter noted that Hangzhou Hikvision Digital Technology Co.Ltd(002415) previously disclosed research minutes showed that the company’s business expectations for PBG (public service group) and EBG (Enterprise Group) were relatively optimistic, but it also said that SMBG (small and medium-sized enterprise group) was under relatively high pressure this year due to the obvious impact of the epidemic on small and medium-sized enterprises. In this regard, the company will expand its product line and strengthen the integration of industrial vertical Internet.
Over the past year, the problem of core shortage has intensified and has not been substantially alleviated. Under this background, Hangzhou Hikvision Digital Technology Co.Ltd(002415) has maintained a high inventory level. Huang Fanghong pointed out that under the background of unstable supply, a certain inventory is the support for the company to ensure the development of business.
Taking the automotive electronics business as an example, the company said: “in the past, it was very hard to do the front loading market because of the long import cycle. In the case of lack of core last year, it was an opportunity for Haikang automotive electronics, which grew very well last year.” According to the financial Associated Press reporter, is the so-called opportunity reflected in delivery capacity or product price? Hu Yangzhong did not respond directly, but only said that the high inventory has a certain impact in the short term. The rapid growth of automotive electronics is the result of continuous innovation and development in recent years.
According to the data, from 2019, the balance of Hangzhou Hikvision Digital Technology Co.Ltd(002415) book inventory jumped from less than 6 billion yuan to more than 10 billion yuan. By the end of 2021, the data further climbed to nearly 18 billion yuan, with a slight increase in the first quarter of this year.
Huge inventories also caused some investors to worry about inventory impairment. In this regard, Huang Fanghong replied that the company does not separately disclose the reserve status of specific materials, and it is not necessary to keep a high inventory of raw materials that can be obtained from the market at any time and have large price fluctuations.
