HIKVISION(002415) 花旗·2025-04-27 03:55Investment Rating - The investment rating for Hangzhou Hikvision Digital Technology is Neutral, with a target price adjusted to Rmb30 from Rmb33, reflecting a 5.7% expected return [4][21][22]. Core Insights - The company reported 4Q24 results that were in line with preliminary results, with a revenue decrease of 2% YoY to Rmb27.5 billion and a net profit decline of 26% YoY to Rmb3.9 billion [2][10]. - For 1Q25, revenue increased by 4% YoY to Rmb18.5 billion, although it was below expectations [1][11]. - Management plans to focus on higher-margin businesses and maintain strict control over operating expenses [8][21]. - There is an expectation of muted recovery in domestic business for FY25, while overseas and innovative business segments are anticipated to grow stronger [8][21]. Summary by Sections Financial Performance - 4Q24 revenue was Rmb27.5 billion, down 2% YoY, with a gross margin of 41%, down 1.9 percentage points YoY [2][10]. - 1Q25 revenue rose to Rmb18.5 billion, with a gross margin of 43.9%, down 0.8 percentage points [1][11]. - FY24 revenue for the PBG segment decreased by 12% YoY, while the innovation business grew by 21.2% YoY to Rmb22.5 billion [2][10]. Earnings Estimates - FY25-26 earnings estimates have been cut by 11-16% due to lower revenue and margin assumptions [9][13]. - The new revenue estimate for FY25 is Rmb98.986 billion, down 3.2% from the previous estimate [13][14]. Market Position and Strategy - Hikvision is the world's largest supplier of video surveillance products, focusing on innovation and expanding its overseas business [20][21]. - The company has ceased shipments to the US, which previously accounted for about 3-4% of sales, with limited expected impact on overall business [8][21]. Valuation Metrics - The target price of Rmb30 is based on a 20.2x NTM PE, which aligns with the company's 10-year historical average [4][22]. - Current market capitalization is Rmb261.946 billion [4].