Hikvision has released its official 2016 financial results and, as preliminary reports from the company indicated, 2016 was a year of “solid growth”. Highlights include total revenues of $4.6 billion, a 26%increase in net profits and plans to establish an R&D Centre in Montreal as well as a dedicated Research Institute located in California’s Silicon Valley.
Calling these highlights “concrete results and commitments upon which integrator partners can depend”, Jeffrey He (president of Hikvision USA Inc and Hikvision Canada Inc) also explained the significance of the latest financials by stating: “The results show tremendous topline growth, but it’s important to note the bottom line growth as well. Overall revenue increased by 26.32% year-over-year from $3.6 billion (RMB ¥25.2 billion) in 2015 to $4.6 billion (RMB ¥31.9 billion) in 2016. Our gross profit margin was 41.58%. That’s a 1.42% increase over the 2015 gross profit margin of 40.16%. Our net profits were up 26.46% at $1.0 billion (RMB ¥7.4 billion) in 2016 compared to $841 million (RMB ¥5.8 billion) in 2015. The CAGR from 2010 (at the time of the IPO) to 2016 is 44%.”
What were the important factors contributing to Hikvision’s growth statistics? According to Jeffrey He, one of Hikvision’s core competencies is R&D: “Our growth is a direct result of our R&D technology innovation capability, our secure products, growth in overseas markets including North America and our continuous efforts to optimise operating quality and efficiency. Hikvision typically reinvests about 7% to 8% of overall revenue into R&D. In 2016, the business invested $348 million (RMB ¥2.4billion) or 7.62% of overall revenue in R&D. The 2016 R&D investment was 41.26% higher than the 2015 investment of $249 million (RMB ¥1.72 billion).”