Yangtze River Business Daily News ● Yangtze River Business Daily reporter Shen Yourong
Transforming from an IT company to an OT (operational technology) company, Hikvision (002415.SZ), a world-renowned company, has promoted industrial transformation and upgrading.
According to the latest disclosed annual report, in 2023, Hikvision withstood various pressures and its operating performance became more stable. The company's operating income was close to 90 billion yuan, and the net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") was 14.1 billion yuan, which changed from a decrease to an increase year-on-year.
Hikvision said that the company's inventory, accounts receivable, operating cash flow and other indicators are in line with expectations.
Judging from the information disclosed in the annual report, one of the biggest changes is that Hikvision's positioning of the company has changed. Previously, the company positioned itself as an IT company, and today, the company calls it an OT company.
Hikvision adheres to technology-driven, and in 2023, the company's R&D investment will be about 11.4 billion yuan, exceeding the 10 billion mark for the first time. At the end of the period, the number of R&D personnel in the company was about 28,500, accounting for 48.65% of the total number of employees.
Hikvision continues to pay a high percentage of dividends. In 2023, the company plans to distribute cash dividends of 8.4 billion yuan, close to 60% of the company's net profit. In the past four years, the company's annual dividend rate has exceeded 50%.
Net profit decreased and increased to earn 14.1 billion
Withstanding various pressures, Hikvision has achieved steady growth.
On the evening of April 19, the annual report disclosed by Hikvision showed that in 2023, the company will achieve operating income of 89.340 billion yuan, a year-on-year increase of 7.42%. In 2022, the company's operating income will be 83.166 billion yuan, a year-on-year increase of 2.14%. In 2023, the company's operating income growth will accelerate.
In terms of net profit, in 2023, it will be 14.108 billion yuan, a year-on-year increase of 9.89%, and the net profit after deducting non-recurring gains and losses (hereinafter referred to as "non-net profit") will be 13.666 billion yuan, a year-on-year increase of 10.83%. In 2022, the company's net profit and non-net profit will be 12.837 billion yuan and 12.331 billion yuan respectively, a year-on-year decrease of 23.59% and 25.02%.
Hikvision is known as the "Moutai" of the security industry by the market, which is based on the judgment of the company's high growth.
Hikvision landed on the A-share market in May 2010, and from the perspective of operating performance data, from 2007 to 2021, the company's operating income and net profit continued to grow, with operating income and net profit of 81.420 billion yuan and 16.8 billion yuan in 2021, an increase of 67.7 times and 45 times respectively compared with 2007.
In 2023, the company's operating income and net profit will return to the growth track, second only to the level of 2021.
From the perspective of business segments, the development of the company's five business segments is different. PBG, a public service business group, achieved revenue of 15.354 billion yuan, a year-on-year decrease of 4.84%. The company explained that in the context of the overall decline in investment, transportation, traffic police and other industries achieved annual revenue growth. The EBG revenue of enterprises and institutions reached 17.845 billion yuan, an increase of 8.12% year-on-year, of which industrial and commercial enterprises, energy and metallurgy, education and teaching, financial services and other industries all achieved good growth. SMBG, a small and medium-sized enterprise business group, achieved revenue of 12.679 billion yuan, a year-on-year increase of 1.46%. The overseas main business revenue was 23.977 billion yuan, a year-on-year increase of 8.83%, and the growth rate increased quarter by quarter. The company completed the adjustment and merger of four overseas regions, and connected resources and strategies in some regions to form synergies. The company has accelerated its expansion in emerging market countries, and despite the impact, its overseas business has shown strong resilience. The overall revenue of innovative business was 18.553 billion yuan, a year-on-year increase of 23.11%.
At the end of 2023, the company's notes receivable, accounts receivable and inventory were 38.421 billion yuan and 19.211 billion yuan respectively, a year-on-year increase of 18.49% and 1.12%. Notes payable and accounts payable were 20.327 billion yuan, a year-on-year increase of 17.95%. The company's operating cash flow was 16.623 billion yuan, which was basically consistent with the net profit, a year-on-year increase of 63.55%.
In the first quarter of this year, Hikvision's operating performance continued to grow. The company's operating income and net profit were 17.818 billion yuan and 1.916 billion yuan respectively, a year-on-year increase of 9.98% and 5.78%, and the non-net profit was 1.760 billion yuan, a year-on-year increase of 13.27%.
The cumulative dividend is 58.4 billion yuan, and the dividend financing ratio is 17 times
The high growth rate makes Hikvision have the ability to continue to pay dividends, and the company is also continuing to distribute cash dividends to shareholders.
According to the profit distribution plan, in 2023, Hikvision plans to distribute a cash dividend of 9 yuan (tax included) to all shareholders for every 10 shares, and based on the company's current total share capital of 9.331 billion shares, it will distribute cash dividends of about 8.4 billion yuan, accounting for 59.52% of the net profit of the year.
A reporter from the Yangtze River Business Daily found that Hikvision has always insisted on a high proportion of cash dividends.
At the beginning of the listing, the company's annual dividend rate was close to 30%, more than 30% in 2013 and 2014, and the dividend rate exceeded 40% for the first time in 2015, at 48.53%. From 2016 to 2018, the company's annual dividend rates were 49.74%, 49.02%, and 49.41%, all of which were around 49%. Since 2019, the annual dividend rate has exceeded 50%. From 2019 to 2021, the company's cash dividends were 6.542 billion yuan, 7.475 billion yuan and 8.490 billion yuan respectively, and the dividend rates were 52.69%, 55.84% and 50.53% respectively. In 2022, the company's net profit will decline, and the annual dividend will be reduced to 6.555 billion yuan, with a dividend rate of 51.06%.
In 2023, the company's dividend rate will be close to 60% for the first time.
To sum up, since its listing, Hikvision has paid a cumulative cash dividend of about 58.408 billion yuan (including dividends made after listing in 2009 and dividends to be paid in 2023), accounting for 50.08% of the cumulative net profit (including 2009) of 116.708 billion yuan.
Hikvision only raised 3.4 billion yuan at the time of IPO, and did not carry out equity financing after listing, according to which the company's dividend financing ratio is as high as 17 times.
In line with the excellent distribution of cash dividends to shareholders, Hikvision's R&D investment has continued to increase.
In 2013, the company's R&D investment was 922 million yuan, less than 1 billion yuan, and after uninterrupted growth, it will reach 9.814 billion yuan in 2022 and 11.393 billion yuan in 2023. R&D investment in 2023 will increase by 16.08% year-on-year, which is higher than the growth rate of operating income, and the company's R&D investment is expensed.
By the end of 2023, Hikvision has about 28,500 R&D personnel, accounting for 48.65% of the total number of employees.
The relevant person in charge of Hikvision said at the performance briefing that in the past, the company did not dare to be classified as an IT company, and the applications and scenarios were more focused on the security field, but at the technical level, it was close to the IT company, and it may be included in the category of IT companies from the technical point of view. Nowadays, the company is doing intelligent IoT, security is one of the scenarios, and the technology required is not only video, but also radar, thermal imaging, audio, X-ray and so on. The company has become an OT company, applying perception technology to the scenarios of enterprise operation activities to solve problems in the scenarios.