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Hikvision reports increase in Q3 profits, warns loss of overseas clients

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Hikvision reports increase in Q3 profits, warns loss of overseas clients

China's surveillance camera provider Hangzhou Hikvision Digital Technology Co. Ltd. reported a total operating income of 15.92 billion yuan in the third quarter, up from 12.93 billion yuan in the year-ago period, according to an Oct. 18 earnings release.

Hikvision's net profit attributable to owners of the parent company was 3.81 billion yuan in the third quarter, or 40 fen per share, compared to 3.25 billion yuan in the same period of 2018, or 35 fen per share. The S&P Global Market Intelligence earnings per share consensus for the third quarter was 40 fen on a GAAP basis.

On an Oct. 18 earnings call, Hikvision said the company may lose some overseas customers due to the U.S. entity list, which came into effect earlier this month, Bloomberg News reported.

The U.S. Department of Commerce made 28 additions to its entity list Oct. 7, which took effect Oct. 9. Hikvision and seven other Chinese companies are "enabling activities contrary to the foreign policy interests of the U.S.," the department claimed. The companies have been "implicated" in human rights violations taking place under China's high-technology surveillance of Uighurs, Kazakhs and other Muslim minority groups.

On the call, Hikvision executives said the company is large enough to withstand U.S. sanctions and develop its own technology in the longer term. Huang Fanghong, a senior vice president at the company, said China remains a rich source of revenue even though the U.S. business is shrinking, according to the Bloomberg News report.

The camera provider said earlier that its revenue will be impacted by the ban in the short term but its profits would be unchanged.

As of Oct. 18, US$1 was equivalent to 7.08 Chinese yuan.