Hikvision

Hangzhou Hikvision Digital Technology Co., Ltd., often shortened to Hikvision, is a Chinese partially state-owned manufacturer and supplier of video surveillance equipment for civilian and military purposes, headquartered in Hangzhou, Zhejiang.[2][3] Its controlling shares are owned by the Chinese government.[1] Due to its involvement in alleged human rights violation and national security concerns, the company has been placed under sanctions from the U.S. government and is prevented from receiving U.S. government contracts.[4]

Hangzhou Hikvision Digital Technology Co., Ltd.
TypePublic company
State-owned enterprise
SZSE: 002415
IndustryVideo surveillance
Founded2001 (2001)
Founder
HeadquartersHangzhou, Zhejiang, China
Area served
Worldwide
Key people
Gong Hongjia(vice-chairman)
Chen Zongnian(chairman)
Hu Yangzhong(director)
ProductsCCTV and Network Surveillance Systems
BrandsEzviz
Revenue CN¥41.905 billion (2017)
CN¥10.443 billion (2017)
CN¥09.411 billion (2017)
Total assets CN¥51.571 billion (2017)
Total equity CN¥30.358 billion (2017)
Owner
Chinese Central Government
(via China Electronics Technology Group)		(41.55%)
Gong Hongjia and related parties(17.09%)
Hu Yangzhon and related parties(7.07%)
Number of employees
26,330 (2017)
Parent
CET HIK Group(direct)
China Electronics Technology Group(indirect)
SASAC(ultimate)
Chinese name
Simplified Chinese杭州海康威视数字技术股份有限公司
Traditional Chinese杭州海康威視數字技術股份有限公司
Literal meaningHangzhou Hikvision Digital Technology. Company Limited by Shares
Alternative Chinese name
Simplified Chinese海康威视
Traditional Chinese海康威視
Literal meaningHIK–vision[note 1]
Footnotes / references
in a consolidated basis (net assets and net profit excluding minority interests); in Chinese Accounting Standards[1]

History

Hikvision was founded in 2001 by Zhejiang HIK Information Technology Co., Ltd. (Chinese: 浙江海康信息技术股份有限公司) with the company having a 51% stake and Gong Hongjia (龚虹嘉) a 13.4% stake. Hikvision is an IoT solution provider with video surveillance market as its core competency.[5] It devotes 8% of its annual revenue to research and development with 40,403 employees.[6]

Hikvision has been listed on the Shenzhen Stock Exchange since 2010. The company provides surveillance products to the global market via more than "2,400 partners in 155 countries and regions",[7] and has its presence in 18 locations around the world.[8]

In October 2016, the company concluded a deal to use Movidius' computer vision technology.[9]

Market

In June 2019, Hikvision was ranked 800th in the 2019 edition of Forbes Global 2000.[10] As of 16 November 2016, Hikvision was also a constituent of the SZSE 100 Index, a blue chip index of the Shenzhen Stock Exchange, as well as the pan-China indexes CSI 300 Index, FTSE China A50 Index and Hang Seng China 50 Index. In December 2020, Hikvision was removed from FTSE Russell.[11]

Shareholders
As of 31 December 2017

Hikvision was owned by China Electronics Technology HIK Group Co., Ltd. (HIK Group, 中电海康集团有限公司), a wholly owned subsidiary of China Electronics Technology Group, which has a 39.59% stake.[1]:82 China Electronics Technology Group is a state-run enterprise that is owned and supervised by the State-owned Assets Supervision and Administration Commission of the State Council. China Electronics Technology Group holds an additional 1.96% stake of Hikvision via its 52nd research institute (中国电子科技集团公司第五十二研究所).[1]:82 The Chairman of Hikvision, Chen Zongnian (陈宗年), is also the chairman and the Party Committee Secretary of HIK Group, and Head of the aforementioned research institute.[1]:92

The firm's largest individual shareholder is Vice Chairman Gong Hongjia with a 13.4% stake.[12] The third largest shareholder is a private equity fund (新疆威讯投资管理有限合伙企业; Xīnjiāng Wēixùn) which has a 7.09% stake,[1]:82 which is associated with current Hikvision general manager Hu Yangzhong.[1]:82 According to previous filing, "Xinjian Weixun" was also associated with Liu Xiang (刘翔),[13]:57 former director (from 2015 to March 2018) and former deputy general manager of Hikvision, current deputy general manager of HIK Group, chairman of sister listed company Phenix Optical (SSE: 600071).[1]:92

The fourth largest shareholder is another private equity fund (新普康投资有限合伙企业) which had a 2.08% stake.[1]:92 The fund was partly owned by Gong's wife Chen Chunmei (陈春梅) and aforementioned Hu Yangzhong.[1]:83 Hu Yangzhong also owned an additional 1.33% stake personally.[1]:82 To sum up, those shareholders owned a combined 65.71% stake. Lastly, Hong Kong Securities Clearing Company owned 9.77%,[1]:82 which was the nominees of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.

Fidelity International is also a major investor in Hikvision.[14]

Ezviz office in Hangzhou

Controversies

Alleged attempts to conceal government ownership

IPVM.com has criticized Hikvision for allegedly obscuring its Chinese government ownership.[15] Jeffrey He, president of Hikvision North America had criticized the online blogger site for allegedly seeking financial gain.[16]

Alan West, in an interview published by The Times (and re-published by The Australian), suggested that Hikvision's ownership raised ethical and security concerns when it came to the usage of Hikvision's products by the British government.[2]

Involvement in Xinjiang re-education camps

In January 2019, the U.S. government began considering whether it should sanction Hikvision, which The Nation described as having "provided thousands of cameras that monitor mosques, schools, and concentration camps in Xinjiang."[17][18]

The U.S. government banned Hikvision from receiving government contracts in August 2019 due to security concerns.[19][20] In October 2019, Hikvision was formally placed on the Entity List by the U.S. government for its role in surveillance of Uyghurs in Xinjiang and of other ethnic and religious minorities in China.[4][21]

In response to the bans and sanctions, Hikvision hired lobbyists including former senator David Vitter.[22]

U.S. investment prohibition

In November 2020, U.S. President Donald Trump issued an executive order prohibiting any American company or individual from owning shares in companies that the United States Department of Defense has listed as having links to the People's Liberation Army, which included Hikvision.[23][24]

The Joe Biden inaugural committee returned a $500 donation to former U.S. Senator Barbara Boxer (D-CA) after she registered as a foreign agent for Hikvision on January 12, 2021.[25]

Notes
  1. See also in the wiktionary for the individual meaning of the character 威 and 視; 威視 itself have no meaning other than a compound word that is phonetically similar to vision.

References
  1. 2017 Annual Report. Hikvision. 21 April 2018. Retrieved 11 September 2018 – via Shenzhen Stock Exchange website.
  2. "China funded Hikvision's CCTV with eyes across globe". The Australian. 17 September 2016. Retrieved 16 November 2016.
  3. Allen-Ebrahimian, Bethany (2020-06-24). "Defense Department produces list of Chinese military-linked companies, 20 years after mandate". Axios. Retrieved 2020-06-24.
  4. Shepardson, David (2019-10-07). "U.S. puts Hikvision, Chinese security bureaus on economic blacklist". Reuters. Retrieved 2019-10-07.
  5. 首次公开发行股票招股说明书摘要 [Prospectus] (PDF) (in Chinese). Hikvision. 13 May 2010. Retrieved 16 November 2016 – via China Electronics Technology Group website.
  6. "About Hikvision". Bloomberg.
  7. "About Hikvision". Hikvision. Retrieved 12 March 2017.
  8. "Global Operations". Hikvision. Retrieved 12 March 2017.
  10. "Hikvision on the Forbes Global 2000 List". Forbes. June 2019. Retrieved 28 August 2019.
  11. Kerber, Ross; Alper, Alexandra (2020-12-05). "FTSE Russell to drop eight Chinese firms after U.S. blacklisting". Reuters. Retrieved 2020-12-05.
  12. "One of China's richest men named in Hikvision securities probe". Reuters. 14 Nov 2019.
  13. 2015年年度报告 [2015 Annual Report] (PDF) (in Chinese). Hikvision. 9 April 2016. Retrieved 15 November 2016 – via Shenzhen Stock Exchange.
  14. "Investor defends backing blacklisted Chinese firm". BBC News. 2019-12-23. Retrieved 2019-12-24.
  15. "Hikvision And The Chinese Government". IPVM. 2015-12-07. Retrieved 2016-10-07.
  16. Karantzoulidis, Steve (2017-02-17). "Hikvision President Chats With SSI About Cybersecurity, Privacy Concerns". www.securitysales.com. Retrieved 2017-04-05.
  17. "How the Left Should Respond to Ethnic Cleansing in China". The Nation. 15 January 2019. Archived from the original on 2020-02-17. The United States has considered sanctioning the Chinese surveillance giant Hikvision, which has provided thousands of cameras that monitor mosques, schools, and concentration camps in Xinjiang.
  18. "China Undercover".
  19. Lohr, Steve (7 August 2019). "U.S. Moves to Ban Huawei From Government Contracts". New York Times. Retrieved 10 August 2019. The prohibition was mandated by Congress...And it extends to other Chinese companies...including the telecom equipment maker ZTE and Hikvision, which develops facial-recognition technology
  20. John S. McCain National Defense Authorization Act for Fiscal Year 2019, section 889(f)(3)(B), accessed 3 January 2020
  21. "Addition of Certain Entities to the Entity List". Federal Register. 2019-10-09. Retrieved 2020-01-03.
  22. Allen-Ebrahimian, Bethany (October 29, 2019). "What a lobbyist's remarks behind closed doors tell you about Chinese money in Washington". The Washington Post (Opinion). Archived from the original on 2020-02-17. Retrieved October 30, 2019.
  23. Chen, Shawna (November 12, 2020). "Trump bans Americans from investing in 31 companies with links to Chinese military". Axios. Retrieved November 12, 2020.
  24. Pamuk, Humeyra; Alper, Alexandra; Ali, Idrees (2020-11-12). "Trump bans U.S. investments in firms linked to Chinese military". Reuters. Retrieved 2020-11-12.
  25. Evans, Zachary (January 12, 2021). "Biden Returns Donation from Dem Ex-Senator Who Registered as Foreign Agent for China". news.yahoo.com. National Review. Retrieved January 12, 2021.
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