Hangzhou Hikvision Digital Technology Co., Ltd.
2023 Annual Report
April 20, 2024
Hikvision 2023 Annual Report
To Shareholders
The business performance of Hikvision kept improving on a quarterly basis in 2023. Despite the
uneven performance of the Company’s five business groups-PBG, EBG, SMBG, overseas main
business and the innovative business, greater stability in the operation has been achieved by Hikvision,
in a complex and volatile business environment.
Regardless of our performance, Hikvision has resolutely increased investment in research and
development as we have always believed in long-term efforts. Over the past eight years, Hikvision
has gradually expanded perception technology from visible light to centimeter wave, millimeter wave,
far-infrared, medium wave infrared, shortwave infrared, ultraviolet and X-ray, as well as to infrasound
wave, acoustic wave, and ultrasonic wave. By combining perception with AI technologies, we have
gradually built and improved our AIoT technology system, launched and improved the products and
solutions, which contributed to the business growth. The survellience business is currently one of the
business directions of the Company's AIoT strategy. We have enhanced our competitiveness in the
survellience industry by increasing non-visible light detector product lines or integrating multiple
detector product lines. Scenario-based digitalization, especially scenario-based digitalization for
enterprises, is another direction of our AIoT strategy. Hikvision has launched some product lines in
this field and is becoming an OT (Operational Technology) manufacturer. Looking digital
transformation of various businesses. We seek to become a partner of varied businesses in their digital
transformation journey by continuously improving our internal operational mechanisms and
optimizing our operational processes. We believe that digital transformation of businesses is a long
process that provides immense potential for our future business growth.
Hikvision has applied AI technology to various perception products and combined AI with big
data technologies for use in system solutions. While exploring and developing industrial large models
and industrial large multimodal models, we will continue to develop industry software to provide
more suitable products and system solutions for users.
Hikvision is committed to the internationalization strategy. Although severely suppressed in
some countries, the Company has been increasing investment in overseas markets, resulting in
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Hikvision 2023 Annual Report
continuous growth of our international business. We will further increase investment in overseas
marketing and enhance our competitiveness in those markets.
Being customer-centric and creating value for customers are always Hikvision's original
aspiration and core values. We stay dedicated to being open, transparent, and honest towards
customers, shareholders, and employees.
Our sincere gratitude goes to all shareholders for your commitment to Hikvision and for your
trust in the management team!
See far, go further!
Board of Directors of Hangzhou Hikvision Digital Technology Co., Ltd.
April, 2024
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Hikvision 2023 Annual Report
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management
guarantee that the information presented in this report is true, accurate and complete without false
records, misleading statements or material omissions, and will undertake individual and joint legal
liabilities.
Chen Zongnian, the Company's legal representative, Jin Yan, the person in charge of the
accounting work, and Zhan Junhua, the person in charge of accounting department (accounting
supervisor) hereby declare and warrant that the financial statements in this annual report are true,
accurate and complete.
All directors of the Company have attended the board meeting to review this report.
The profit distribution proposal passed upon deliberation at the meeting of the Board of Directors
is set out as follows: Board of Directors based on the Company’s current total share capital of
9,330,600,931 shares, the Company proposed to distribute cash dividend of RMB9 (tax inclusive) per
each 10 shares to all shareholders, bonus share and share distribution from capital reserve is nil.
Note:
This document is a translated version of the Chinese version 2023 Annual Report ("2023 年年度报
告"), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2023 Annual Report may be obtained at www.cninfo.com.cn.
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Hikvision 2023 Annual Report
Please read the full annual report and pay particular attention to the following risk factors:
1) Geopolitical risks: Global geopolitical uncertainty remains acute as the political landscape is being
fragmented and reshaped, and local wars continue. In recent years, the Company has continuously strengthened
our risk control and response capabilities, and flexibly adjusted resources based on business opportunities.
However, our operations in some countries and regions may be adversely affected should geopolitical
environment continues to deteriorate.
2) Global economic downside risks: In addition to slower growth and entrenched currency oversupply in some
major economies, different regions across the world develop at different rates, presenting a hidden risk that is
difficult to eliminate. The Company disperses the risk of operating in a single region with a wide business
layout and conducts business based on the actual situation of various countries and regions. However, the
Company's business will be impacted if another global economic recession arises
3) Risks of domestic economic structural transformation: The infrastructure and real estate markets in China
continue to undergo adjustments. The exports of some commodities are restricted by trade protection policies
of destination countries, and the advantage of a large labor force is weakened. The Chinese economy is in a
process of transformation of development mode and alternation of new and old driving forces. The Company
empowers the digital transformation of the economy and society with AIoT technologies and products,
promoting new developments in productivity. However, economic transformation cannot be achieved
overnight, and structural pressure and resistance will persist for a long time. Any problems that occur during
the process will still affect the Company's business operations.
4) Supply chain risks: The integrity of the global supply system is undermined by geopolitics, and the timeliness
of the supply chain is affected by business cycles. The Company strives to develop a diversified supply network
and adjust inventory properly. However, our business stability may be affected if the supply chain is seriously
interrupted.
5) Technology upgrading risks: With the rapid development of AI, big data, IoT and other technologies,
technological applications are iterating quickly. The Company has some strength in technology fields such as
IoT perception, AI, and big data, and keeps growing through business practices. However, if we cannot closely
track the updates and changes of cutting-edge technologies and maintain business innovation and expansion,
the uncertainty of the Company's future development will increase.
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Hikvision 2023 Annual Report
6) Risks of internal management: The Company's continual business expansion and development of new
products and business services add complexity to internal management, posing new challenges to our
management capabilities. The Company accumulates management experience through the development of
systems and procedures with a focus on talent cultivation and construction. However, the Company's operations
will be adversely affected if our management capabilities cannot keep up with the business expansion.
7) Legal and compliance risks: The world's multilateral trading system is greatly impacted by politics, and
business activities are required to comply with the complex laws and regulations of various regions. The
Company has constantly strengthened the legal compliance system since countries around the world have
stricter requirements for data supervision and legal compliance capabilities. However, the Company's
operations will be adversely affected if our legal compliance capabilities cannot keep up with the requirements.
8) Risks of exchange rate fluctuations: The Company operates in multiple countries and regions, where
transactions are mainly settled in non-RMB currencies. Although the Company uses appropriate financial
instruments to reduce risks, exchange rate fluctuations will affect our financial performance due to the foreign
currency exposure arising from sales, procurement, and financing.
9) Financial risks caused by customers' reduced ability to pay: The flow of funds in commercial transactions
is affected by the economic environment. The Company has accumulated some cash reserves due to our sound
collection mechanism and stable business operations, and our financing costs are low. However, if the overall
liquidity risk of the market increases, the Company's operations will be adversely affected as our payment
collection maybe delayed.
10) Risks of cybersecurity: The Company has always emphasized cybersecurity and taken active measures to
enhance the security of our products and systems. However, computer viruses, malicious software, hacker
attacks and other security incidents that deliberately attempt to damage the Company's systems or products
may take place, causing potential cybersecurity issues.
11) Risks of intellectual property (IP) rights: The Company has maintained considerable investment in R&D,
and made significant technological achievements. We have also implemented robust IP protection measures.
However, the risk of IP disputes and infringement still exists.
The above-mentioned alerts do not include all the potential risks for the Company. Investors are advised to invest
with caution.
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Hikvision 2023 Annual Report
CONTENTS
To Shareholders .................................................................................................................................................. 1
Section I Important Notes, Contents and Definitions ...................................................................................... 3
Section II Corporate Profile & Key Financial Data......................................................................................... 9
Section III Management Discussion and Analysis ......................................................................................... 16
Section IV Corporate Governance ................................................................................................................ 148
Section V Environmental and Social Responsibility .................................................................................... 183
Section VI Significant Events ......................................................................................................................... 184
Section VII Changes in Shares and Information about Shareholders ....................................................... 207
Section VIII Information of Preferred Shares ............................................................................................. 223
Section IX Bonds ............................................................................................................................................. 224
Section X Financial Report ............................................................................................................................ 225
Section XI Documents Available for Reference ........................................................................................... 385
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Hikvision 2023 Annual Report
Definitions
Term Definition
Reporting Period From January 1, 2023 to December 31, 2023
Articles of Associations Articles of Associations for Hangzhou Hikvision Digital Technology Co., Ltd
Hikvision, the Company, our
Hangzhou Hikvision Digital Technology Co., Ltd.
Company, the Group
CETC China Electronics Technology Group Ltd., the actual controller of the Company
CETHIK CETHIK Group Co., Ltd. Controlling Shareholder of the Company
EZVIZ, EZVIZ Network Hangzhou EZVIZ Network Co., Ltd.(According to the context, also refers to the
corresponding business)
HikRobot, Robotic business Hangzhou Hikrobot Technology Co., Ltd. (According to the context, also refers to
the corresponding business)
HikAuto, Auto electronics Hangzhou Hikauto Technology Ltd. (According to the context, also refers to the
business corresponding business)
HikMicro, Micro Sensing, Hangzhou Hikmicro Sensing Technology Ltd. (According to the context, also refers
Thermal imaging business to the corresponding business)
HikSemi, HikStorage, Wuhan Hikstorage Technology Ltd. (According to the context, also refers to the
Storage business corresponding business)
HikImaging Hangzhou Hikimaging Technology Ltd. (According to the context, also refers to the
corresponding business)
HikFire Hangzhou Hikfire Technology Ltd. (According to the context, also refers to the
corresponding business)
HikRayin,Rayin, Hangzhou Rayin Technology Ltd. (According to the context, also refers to the
HikSecurityCheck corresponding business)
Chengdu Science and Located in Chengdu, Sichuan Province, the planned use is for R&D, office space
Technology Park and supporting facilities, etc.
Xi’an Science and Located in Xi'an, Shaanxi Province, the planned use is for R&D, office space and
Technology Park supporting facilities, etc.
Wuhan Intelligence Industry Located in Wuhan, Hubei Province, the planned use is for production plants,
Park warehouses and supporting facilities, etc.
EZVIZ Intelligent
Located in Chongqing, the planned use is for production plants, warehouses and
Manufacturing (Chongqing)
supporting facilities, etc.
Base
Shijiazhuang Science and Located in Shijiazhuang, Hebei Province, the planned use is for R&D, office space
Technology Park and supporting facilities, etc.
Hikvision Global Located in Hangzhou City, Zhejiang Province, the planned use is for warehousing
Warehousing and Logistics and logistics buildings and supporting buildings, etc.
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Hikvision 2023 Annual Report
Term Definition
Center
Industrialization Base of
Located in Hangzhou, Zhejiang Province, the planned use is for office, R&D sites
Infrared Thermal Imaging
and supporting facilities, etc.
Products
HikRobot Product
Located in Hangzhou, Zhejiang Province, the planned use is for office, R&D sites
Industrialization Base
and supporting facilities, etc.
Construction Project
HikRobot Intelligent
Located in Hangzhou, Zhejiang Province, the planned use is for factory buildings,
Manufacturing (Tonglu)
comprehensive office buildings and supporting facilities, etc.
Base Project
A long investment cycle, business prospects uncertain, has the high risk and
uncertainty, in need for direct or indirect investment in exploration, in order for the
Company to timely enter into new areas of business. Initially disclosed in
Announcement about Management Measures for Core Staff Investment in
Innovative Business
Innovative Business (www.cninfo.com.cn).
In this report, innovative business also refers to EZVIZ, HikRobot, HikAuto,
HikMicro, HikSemi, HikImaging, HikFire, Rayin and their related business or
products.
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Hikvision 2023 Annual Report
Section II Corporate Profile & Key Financial Data
I. Corporate Information
Stock abbreviation HIKVISION Stock code 002415
Stock exchange where the shares of the Company
Shenzhen Stock Exchange
are listed
Name of the Company in Chinese 杭州海康威视数字技术股份有限公司
Abbr. of the Company name in Chinese 海康威视
Name of the Company in English (if any) HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO., LTD
Abbr. of the Company name in English (if any) HIKVISION
Legal representative Chen Zongnian
Registered address No. 555 Qianmo Road, Binjiang District, Hangzhou, Zhejiang Province
Postal code of Registered address 310051
The Company was listed on the Shenzhen Stock Exchange on May 28th 2010. The
original registered address was No. 36 MachengRoad, Xihu District, Hangzhou,
Changes in the Company's registered address
Zhejiang Province. In 2016, the Company's registered address was changed to No.
555 Qianmo Road, Binjiang District, Hangzhou, Zhejiang Province.
Business address No. 518 WuLianWang Street, Binjiang District, Hangzhou
Postal code of Business address 310051
Company website www.hikvision.com
E-mail market@hikvision.com; ir@hikvision.com
II. Contacts and Contact Information
Board Secretary Securities Affairs Representative
Name Huang Fanghong
No. 518 WuLianWang Street, Binjiang
Address
District, Hangzhou
Tel. 0571-88075998 ; 0571-89710492
Fax 0571-89986895
E-mail hikvision@hikvision.com
III. Information Disclosure and Place of the Report
The securities exchange website for the disclosure of the Annual
www.szse.cn
Report
Securities Times, China Securities Journal, Shanghai securities
Media and website for the disclosure of the Annual Report
Journal, www.cninfo.com.cn
Place where the Annual Report is available for inspection Office of the Board of Directors of the Company
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Hikvision 2023 Annual Report
IV. Company Registration and Alteration
Unified Social Credit Identifier 91330000733796106P
During the reporting period, there is no change in the Company's business
scope. The Company’s business scope covers: licensed items: production of
Class II and Class III radiation devices; sales of Class II and Class III radiation
devices; radioisotope production (except the radiopharmaceuticals for positron
emission computed tomography ); sales of Class II, Class III, Class IV and Class
V radioactive sources; engineering and construction activities; type II value-
added telecommunications services; online data processing and transaction
processing services (operating e-commerce); Internet information services;
general aviation services. (as for the items which by law are subject to approval,
business activities can be carried out only after having been approved by the
relevant departments, and the specific operation items are subject to the terms
of the approval). General items: manufacturing of digital video surveillance
systems; sales of digital video surveillance systems; manufacturing of security
equipment; sales of security equipment; manufacturing of IoT equipment; sales
of IoT equipment; manufacturing of intelligent unmanned aerial drones; sales
of intelligent unmanned aerial drones; manufacturing of computer software and
hardware and peripherals; wholesale of computer software and hardware and
auxiliary equipment; manufacturing of communication equipment; sales of
communication equipment; manufacturing of network equipment; sales of
network equipment; manufacturing of display devices; sales of display devices;
Changes in principle business activities since the
manufacturing of intelligent mobile equipment; sales of intelligent mobile
Company was listed (if any)
equipment; manufacturing of auto parts and accessories; wholesale of auto parts
and accessories; manufacturing of electric signal appliances and devices; sales
of electric signal appliances and devices; manufacturing of mechanical and
electrical equipment; sales of mechanical and electrical equipment;
manufacturing of special labor protective supplies; sales of special labor
protective supplies; production of commercial password products; sales of
electronic products; sales of digital cultural and creative technological
equipment; technical services, technical development, technical consultation,
technical knowledge exchange, technology transfer and technology promotion;
software development; development of network and information security
software; information system integration services; computer system services;
research and development of IoT technologies; IoT technology services; IoT
application services; big data services; data processing and storage support
services; security system monitoring services; security technology defense
system’s design and construction services; electronic and mechanical
equipment maintenance (excluding special equipment); parking lot services;
digital cultural and creative content application services; environmental
protection monitoring; business training (excluding education and vocational
training that require licensing); import and export of goods; import and export
of technology (Except for items which by law are subject to approval, the
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Hikvision 2023 Annual Report
Company can determine and carry out operational activities in accordance with
the law by virtue of its business license).
Changes of controlling shareholders of the
No change during the reporting period
Company (if any)
V. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm Deloitte Touche Tohmatsu Certified Public Accountants LLP
Business address of the accounting firm 30F Bund Center 222 Yan An Road East Shanghai
Name of accountants for writing signature Chen Yan, Liu Ying
Sponsor institution engaged by the Company to continuously perform its supervisory function during the Reporting
Period
□ Applicable √ Inapplicable
Financial advisor engaged by the Company to perform the duties of continuous supervision during the reporting
period
√ Applicable □ Inapplicable
Office Address of Financial Name of the lead
Name of Financial Advisor Supervision Period
Advisor financial advisor
The remaining period of the first year
27th & 28th Floors, Tower 2, of listing of Hangzhou Ezviz Network
China International Capital China World Tower, No.1 Co., Ltd., a subsidiary under the control
Wang Jian; Liu Jia
Corporation Limited Jianguomen Outer Street, of the Company, and the following
Chaoyang District, Beijing. complete fiscal year.（From December
28, 2022 to December 31, 2023）
VI. Key Accounting Data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
√ Yes □ No
Reasons for retrospective adjustment or restatement of previous accounting data
√ Changes in accounting policies
Unit: RMB
YoY Change
2022
(%)
2023 2021
Before the After the After the
adjustment adjustment adjustment
Revenue (RMB) 89,339,856,855.68 83,166,321,681.14 83,166,321,681.14 7.42% 81,420,053,539.27
Net profit attributable to shareholders
14,107,621,359.66 12,837,342,061.07 12,837,704,462.49 9.89% 16,800,411,032.05
of the Company (RMB)
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Hikvision 2023 Annual Report
YoY Change
2022
(%)
2023 2021
Before the After the After the
adjustment adjustment adjustment
Net profit attributable to shareholders
of the Company excluding non- 13,665,962,325.65 12,330,695,878.62 12,331,058,280.04 10.83% 16,444,723,630.97
recurring gains and losses (RMB)
Net cash flows from operating 16,623,254,305.92 10,164,135,382.38 10,164,135,382.38 63.55% 12,708,524,686.99
Basic earnings per share (RMB/share) 1.520 1.370 1.370 10.95% 1.810
Diluted earnings per share 1.520 1.370 1.370 10.95% 1.806
Weighted average ROE 19.64% 19.62% 19.62% 0.02% 28.99%
YoY Change
At December 31, 2022
At December 31, (%) At December 31,
2023 Before the After the After the 2021
adjustment adjustment adjustment
Total assets (RMB) 138,848,007,548.55 119,233,282,761.47 119,234,833,850.69 16.45% 103,864,543,195.18
Net assets attributable to shareholders
76,354,265,540.14 68,389,154,548.76 68,389,337,524.32 11.65% 63,460,886,665.26
of the Company (RMB)
Reasons for changes in accounting policies and situations of correction of accounting errors:
The Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for Business Enterprises
(the "Interpretation No. 16") on November 30, 2022. The scope of the initial recognition exemption for
deferred income tax in the Accounting Standards for Business Enterprises No. 18-Income Tax was revised.
Making it clear that the provisions on exemption of initial recognition of deferred income tax liabilities and
deferred income tax assets in Accounting Standards for Business Enterprises No. 18-Income Taxes shall not
be applied if a single transaction is not a business combination, that affects neither accounting profit nor
taxable income (or deductible loss) when the transaction occurs, and that initially recognized assets and
liabilities result in equal taxable temporary differences and deductible temporary differences. This provision
is effective as of January 1, 2023 and may be implemented in advance. The Group implemented this
requirement from January 1, 2023, adopted the retrospective adjustment method for accounting treatment,
and restated the financial statements for the comparative period.
The Company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years is
negative, and the audit report of the most recent year shows that there is uncertainty about the Company's ability to
continue operations
□ Yes √ No
Net profit before and after deducting extraordinary gains and losses is negative
□ Yes √ No
The total share capital of the Company as of the previous trading day of the annual report disclosure:
The total share capital of the Company as of the previous trading day of the annual report disclosure 9,330,600,931
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Hikvision 2023 Annual Report
(share)
Fully diluted earnings per share calculated with the latest share capital
Fully diluted earnings per share (RMB/share) calculated with the latest share capital 1.512
VII. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in the Financial Report of Net Profits and Net Assets According to the Disclosure of
International Financial Reporting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of International
Financial Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in the Financial Report of Net Profits and Net Assets According to the Disclosure of Overseas
Accounting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards in the reporting period.
3. Explanation of the Differences in Accounting Data under Domestic and Overseas Accounting Standards
□ Applicable √ Inapplicable
VIII. Key Quarterly Financial Indicators
Unit：RMB
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Revenue (RMB) 16,201,189,412.53 21,369,596,985.36 23,704,377,795.74 28,064,692,662.05
Net profit attributable to shareholders of the
1,811,255,388.03 3,526,612,628.85 3,513,299,100.33 5,256,454,242.45
Company
Net profit attributable to shareholders of the
Company excluding non-recurring gains 1,554,094,332.67 3,482,034,300.29 3,425,870,315.02 5,203,963,377.67
and losses
Net cash flows from operating activities -3,285,523,507.64 4,311,914,370.44 4,887,462,618.15 10,709,400,824.97
Whether there is significant difference between the above individual or aggregate financial indicators and that of
what disclosed in the quarterly report, half-year report
□ Yes √ No
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Inapplicable
Unit：RMB
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Hikvision 2023 Annual Report
Item 2023 2022 2021
Profits or losses from disposal of non-current assets (including the
-10,507,192.80 -18,617,582.10 26,069,469.18
write-off for the impairment provision of assets)
The government subsidies included in the current profits and losses
(excluding the government subsidy that are closely related to the
Company's normal business operations, in line with national
518,953,527.79 726,269,569.92 576,619,421.07
policies and regulations, enjoyed in accordance with the
determined standards, and have a continuous impact on the
Company's profit and loss)
The investment cost of the Company to obtain subsidiaries,
associates and joint ventures is less than the income generated by
- - 1,163,932.96
the fair value of the investee's identifiable net assets when the
investment is obtained
Profits and losses attributed to change in fair value for derivative
financial assets, derivative financial liabilities and other non-
current financial assets; and investment gains and losses from
disposal of derivative financial assets, derivative financial -67,516,075.30 -99,112,871.09 75,408,081.63
liabilities, and receivables financing, excluding the effective
hedging business related to the regular business operation of the
Company.
Investment gains and losses on disposal of subsidiaries and other
- 3,550,851.71 -169,184,641.43
business units
Gains and losses from a business combination achieved in stages
116,433,610.45 - -
not under common control
Other non-operating income and expenditures except the items
69,942,462.96 72,446,008.81 -1,471,007.77
mentioned above
Other profit or loss items that meet the definition of non-recurring
1,106,664.51 - -
profit or loss
Less: Impact of income tax 64,745,616.43 74,392,826.66 29,930,824.64
Impact of the minority interests (after tax) 122,008,347.17 103,496,968.14 122,987,029.92
Total 441,659,034.01 506,646,182.45 355,687,401.08
Details of other gain/loss items that meet the definition of non-recurring gains and losses:
□ Applicable √ Inapplicable
The Company did not have other gain/ loss items that meet the definition of non-recurring gains and losses.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the as a recurrent gain/loss item
□ Applicable √ Inapplicable
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Hikvision 2023 Annual Report
The Company did not classify an item as a non-recurring gain/loss according to the into a recurrent gain/loss item.
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Hikvision 2023 Annual Report
Section III Management Discussion and Analysis
I. The Industry Situation and Main Business of the Company during the Reporting Period
1. Business Overview
With the rapid development of AI, big data, and IoT technologies, digitalization has accelerated its penetration
into various industries and fields, creating new industries and business models, and giving birth to a group of digital-
era giants in retail, media, entertainment, local life, and other fields. Major countries around the world have
introduced strategies and plans to promote the accelerated application of digital technologies. In 2016, the Chinese
government proposed to promote the deep integration of information technology and economic and social
development, and, for the first time, introduced the concept of "Digital China" in the Outline of the 13th Five-Year
Plan for National Economic and Social Development. In 2021, "Digital China" was identified as one of the
important national strategies in the 14th Five-Year Plan and 2035 Vision Goals of China.
As digitization and digital transformation continue to unfold, data has become a new production factor. A vast
majority of companies built around the physical world (which can be referred to as non-digital native companies),
especially manufacturing companies, have conducted a large amount of IT work, but the lack of core data required
for digital transformation of their core business processes and the data-based products and solutions for intelligent
control and decision-making remains the biggest pain point for these companies.
The digitization of physical world scenarios is the fundamental unit of digital transformation. "Signals" are
widely present in the physical world and a variety of perceptual capabilities are needed to collect multi-dimensional
and multi-type data and enable them to be mapped in the digital world. The demand for digital transformation is
personalized and highly fragmented. Different industries and even different participants within the same industry
vary in their demands for digital transformation. Only by deeply integrating technology and user needs can we truly
solve the digital transformation problems in specific scenarios and empower business with digital technology.
Hikvision's comprehensive perception capabilities facilitate acquisition of richer data. By focusing on
video perception, Hikvision has built a comprehensive perception system that encompasses electromagnetic waves
such as visible light, infrared, radar, and X-ray, mechanical waves such as sound waves and ultrasound, as well as
various physical sensing technologies. At present, the Company has tens of thousands of IoT perception products,
covering multiple categories including front-end cameras, audios and sensors, enabling comprehensive aggregation
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Hikvision 2023 Annual Report
of images, sound, vibration, temperature, and other multi-dimensional data.
Hikvision's diverse digital technology further unlocks data value. With our profound expertise in cloud
computing, big data and AI as well as deep understanding of AIoT, the Company has launched a capability
architecture "integrating cloud and edge, IoT and information network, digitalization and intelligence". Meanwhile,
the Company continues to improve our data processing and analysis capabilities by increasing investment and
accumulation in basic computing power and large model construction. Recently, we have innovatively launched the
Guanlan large model that promotes the wider value fulfilment of AI.
Hikvision leverages a deep understanding of the industry to meet the application needs of personalized
scenarios. Currently, the Company has covered over 500 segmented scenarios in nearly 90 sub-industries across
over 10 main industries, and continues to expand our presence in many fields related to production, life, and social
governance. With the establishment of lower-level distribution channels and long-term communication and
cooperation with industry customers, the Company has gained profound industry understanding and user insights,
enabling us to better meet the personalized and customized digital transformation needs of downstream customers.
Faced with the unstoppable trend of digital transformation, Hikvision will help businesses to consolidate their
data foundation for digital transformation through our comprehensive perception technologies and more innovative
digital technologies, respond to the highly customized digital transformation needs of various industries through
richer product portfolios and stronger platform capabilities, and accelerate the large-scale implementation of digital
transformation through wider channel coverage and a more open partner ecosystem, thus enabling convenient and
efficient government services, quality and efficiency improvement of business operations, and an intelligent and
healthy life for the people.
2. Technology System
With more than 20 years of innovation and experience, Hikvision has developed IoT perception, artificial
intelligence, and big data technology systems that support the product development and application implementation.
Using visible light as the technology foundation, the Company has created a business logic that comprises video
signal acquisition, processing, and application. We have continuously developed perception technologies to expand
these business services and established the business model of data acquisition, processing, and application with the
support of artificial intelligence and big data. The three complementary technologies are combined to improve
Hikvision's business, continuously promoting the commercial realization of technology, and facilitating the
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Hikvision 2023 Annual Report
Company's implementation of the business cycle of technology-product-market-technology.
2.1 IoT Perception
With video technology as the starting point, Hikvision has been committed to developing perception
technologies and improving our IoT perception capabilities. With more than 20 years of technological expertise, the
Company has grown to cover the fields of electromagnetic and mechanical waves, as well as other physical sensing
technologies such as temperature, humidity, pressure, and magnetism.
In the field of electromagnetic waves, Hikvision's perception technology has covered long waves from visible
light to near-infrared, mid-infrared, far-infrared and millimeter waves, as well as short waves such as ultraviolet
light and X-ray. Our profound know-how in signal processing, computer vision, large model, and multi-dimensional
perception integration technologies has promoted the application of digital technology in a range of industries
including food, medical, logistics, power, transportation, and manufacturing.
In the area of mechanical waves, Hikvision has achieved perception of sound that extends from audible to
ultrasonic frequencies, and developed microphone array, sound classification, industrial auscultation, ultrasonic
non-destructive detection, and ultrasound measurement technologies, which have been widely applied in scenarios
such as horn detection, high-voltage discharge detection, high-pressure gas leakage detection, belt fault monitoring,
motor fault monitoring, and component quality inspection.
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In other physical sensing sectors, Hikvision developed force, electrical, and magnetic sensing technologies.
Utilizing multi-dimensional sensing devices such as pressure, flow, and temperature sensors, the Company is
helping businesses to achieve automated control of production, improve production efficiency, and advance their
process of digitalization.
With an extensive perception capacity and multi-dimensional perception integration capabilities, Hikvision has
built an underlying technology platform that supports our growing innovative applications in the field of scenario-
based digitization to meet the sensing and perception needs of different fragmented scenarios. For instance, in the
energy field, the visible and ultraviolet lights, and thermal imaging integration technology is used to provide fault
diagnosis and detection for high-voltage power facilities, greatly improving the efficiency of power inspection. In
the industrial sector, audio and video integration technologies are utilized to provide fault monitoring and diagnosis
for production equipment, enabling predictive maintenance in unmanned scenarios. In the environment industry,
real-time visual monitoring of water level changes is achieved by integrating video perception and millimeter-wave
radar perception, thus enhancing intelligent management of water environments.
2.2 Artificial Intelligence
As early as 2006, Hikvision began to develop AI technology by building an algorithm team. After years of
continuous investment and R&D innovation, the Company has gained extensive experience in the AI field. Since
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2016, Hikvision has won championships in over 30 international academic competitions related to AI. In 2019, our
open AI platform was awarded the title of National Artificial Intelligence Innovation and Entrepreneurship Platform
by the Ministry of Science and Technology. In 2021, considering the rapid development of AI technology and the
practical demand for AI application in digital scenarios, Hikvision began to launch a R&D project for a large pre-
trained model. Subsequently, the Company innovatively introduced the Hikvision Guanlan Large Model with a
three-tier architecture comprising large foundation model, large industry model, and task model. The large
foundation model has massive data and knowledge and is characterized by a large number of parameters, high
generalization ability, and excellent performance. The large industry model uses industry data for further pre-
training and fine-tuning on the basis of the large foundation model, and possesses expert-level capabilities in specific
fields. The task model focuses on specific scenarios or business services and is an important way to implement the
capabilities of the large model.
The Guanlan Large Model offers four advantages: extensive modal data, professional industry capabilities,
high deployment cost-effectiveness, and flexible and efficient application, promoting the implementation of AI:
Extensive modal data: The construction of large model applications requires high-quality training data. The
Guanlan Large Model can be widely integrated with extensive high-quality multi-modal data from fields such as
electromagnetic waves, mechanical waves, and other sensing technologies, and has comprehensive IoT perception
capabilities.
Professional industry capabilities: The Guanlan Large Model transforms Hikvision's practical experience of
more than 10 main industries, nearly 90 sub-industries, and over 500 scenarios into industry application capabilities,
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having a profound understanding of specific industries.
High cost-effectiveness of deployment: The Guanlan Large Model effectively reduces performance costs
through innovative hardware deployment technology, and utilizes cloud edge deployment solutions to efficiently
meet different scenario requirements, building a high cost-effective application model.
Flexible and efficient application: The Guanlan Large Model provides technical support for open AI
platforms and enables opening the inferencing capabilities to meet the fragmented, diverse, and personalized
algorithm application needs.
2.3 Software and Big Data
Hikvision utilizes big data technology to organically integrate
human society, physical systems, and information systems,
enhancing information interoperability and decision-making
intelligence in social production activities and people's life. The
AIoT field has enormous data with a low information density as there
are a large amount of unstructured data. To address the issue,
Hikvision leverages big data technologies such as data collection,
storage, processing, analysis, governance, security, and application to build a big data infrastructure and develop a
complete set of big data technology systems, further unleashing the value of AIoT data. Our key big data
technologies include:
Big data storage and computing technologies: These technologies use an open architecture that integrates
multi-source heterogeneous storage methods such as relational databases, NoSQL databases, and data libraries,
support multi-modal computing frameworks such as batch processing and streaming computing, and are equipped
with management technologies such as multi-tenant, user authentication, and refined monitoring. In terms of storage
and computing acceleration, Hikvision has developed aggregative encoding, adaptive compression and other storage
technologies for objects and relations, and built a computing engine that adapts to complex algorithms, enabling
second-level spatiotemporal retrieval and robust relationship inference, which can support the computing of billion-
scale graphed data.
Big data mining technology: By integrating AI, knowledge, and data, Hikvision has developed intelligent
technologies in graph mining, time series prediction, and intelligent decision-making. In terms of graph mining, the
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Company has developed knowledge construction, representation, and inference techniques that are designed to solve
multi-dimensional data fusion, relationship computing, node classification and other problems, and can be applied
in security risk control, intelligent recommendation and other scenarios. In the field of time series prediction, a deep
learning-based series prediction method has been improved to address the difficulties of unstable data trends and
complex spatial relationships among multiple variables, enhancing prediction accuracy in multiple tasks such as
traffic flow prediction, travel time estimation, and congestion warning. As for intelligent decision-making, progress
has been made in areas such as operations optimization, deep combinatorial optimization, and reinforcement
learning, which have been applied to intelligent supply chain scheduling, production optimization, intelligent
control of traffic lights, and other scenarios.
Big data application technology: Hikvision takes advantage of the big data collection, governance, analysis,
and service capabilities powered by the IoT-information network integration data resource platform to provide big
data application services for various industries. During this process, a set of industry business data models have
been built, managed based on the model library, and can be replicated and optimized in other similar application
scenarios.
In an attempt to quickly satisfy fragmented market demand, Hikvision has completed the transformation from
developing customized software to implementing the unified software technology architecture over a period of three
years. Based on the unified software technology architecture, the Company has developed a software and hardware
product system that integrates software and hardware, cloud and edge, IoT and information network, as well as
digitalization and intelligence. Hikvision's unified software technology architecture supports a component-based
way for software development. Currently, the Company has more than 4,200 components in our software component
library, an increase of more than 14 times compared to 2018. On average, each reusable component is integrated
with 18.3 product models, and each product model is reused in 80.3 reusable components. The vast software
component library and high component reuse rate greatly reduce the development and maintenance costs for users,
helping to achieve agile development and rapid iteration of software applications in different industries.
3. Product System
AIoT products are the bridge between the physical and digital worlds, the carrier of intelligent algorithms, and
the fulcrum for creating digital transformation application solutions. To meet the needs of typical applications of
digital transformation, Hikvision has quickly developed innovative and intelligent new products based on the
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existing hardware products of over 30,000 models.
3.1 New Digital Products
With long-standing technical expertise, extensive product engineering capabilities, and years of in-depth
understanding of the industry, Hikvision continues to launch new digital products that meet the digital
transformation needs of various industries. From a technical perspective, the Company has developed increasingly
diverse products based on different perception technologies that are able to perceive data on more "objects" (such
as water quality, raw material composition, equipment status, etc.), paving the way for data analysis and application
in different industries. From the perspective of application scenarios, the digital products launched by the Company
have covered a growing number of application scenarios from the digitization of auxiliary management to that of
core business processes, making digitization truly an important lever for government and corporate digital
transformation and upgrading.
3.1.1 A variety of perception products building the foundation of the digital world
Perception provides a foundation for creating a digital twin for the physical world. The acquisition of data on
objects requires the use of different perception methods. Hikvision has launched a variety of digital perception
products, making more data on objects easily accessible and building the foundation of the digital world.
1) Visible light perception
The deep integration of visible light and AI has enabled the evolution of cameras from being traditional video
surveillance terminals to AIoT terminals that connect the physical and digital worlds. The cameras, which make
things from visible, clear, to be understood, are no longer limited to surveillance, but have been applied in a wider
range of fields, which opens the space of intelligent application.
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For example, by focusing on improving quality and efficiency in manufacturing and other sectors, the Company
has launched a series of new innovative products for different scenarios based on visible light and AI:
Production line camera series: In terms of monitoring daily production processes, the Company has launched
a production line camera series. With a miniaturized design, these cameras can flexibly adapt to the production line
scenarios, and observe key production processes at close range, making production status visualized and problem
tracing justifiable. As for the scenarios of production workstations and packing workstations, the Company has
developed a binocular traceability camera. With the large-depth-of-field imaging technology, the camera is able to
provide a panoramic view of the packaging process and detailed information on labels, ensuring clear identification
of sheets and barcodes.
Platform cameras: These cameras, equipped with deep learning-based intelligent recognition algorithms, are
used for intelligent recognition of parking spaces, car doors, carriage loading status, etc., to improve logistics,
transportation and management efficiency, achieve automated detection of loading in logistics, and enhance
management efficiency for platforms.
Inspection camera series: The Company has launched track inspection cameras specifically for the scenarios
of power generation rooms and distribution rooms. These cameras can be used with an IoT sensing module and
optionally with partial discharge detection, temperature measurement, and environmental sensing modules as
needed to meet the inspection needs of different scenarios. They can also be used with obstacle avoidance
technology to conduct safety inspections. The inspection plans can be customized to improve the efficiency of
remote inspections.
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Macro camera series: Some problems exist in the observation of utility meters, production quality control
and other scenarios that require close observation, such as unclear focus, and interference from fill light reflection.
Our macro camera series use technologies of automatically focus and polarize to achieve all-weather color imaging.
Low-temperature-resistant camera series: As for cold chain scenarios, Hikvision has launched low-
temperature-resistant cameras that use technologies such as window heating to ensure stable operation at
temperatures as low as minus 60 ℃ without fogging the lenses. These cameras can be used with multi-dimensional
sensors, such as temperature and humidity sensors, to facilitate managers in monitoring changes in the warehouse
environment in real-time and achieve visual supervision of the entire cold chain transportation process.
High-temperature-resistant camera series: In high-temperature production scenarios such as metallurgy,
hazardous waste, petrochemical, and glass production, ordinary cameras are easily affected by noise and dark
current, resulting in a significant decrease in imaging quality. Hikvision's high-temperature-resistant camera series
can meet application needs even in high-temperature environments through technologies such as air cooling, water
cooling, and semiconductor cooling.
Anti-vibration and anti-shake camera series: In industries such as steel, industrial and commercial
enterprises, equipment manufacturing, logistics transportation, where heavy machinery is controlled automatically
and remotely, cameras are often used for real-time assistance during the operation process. Due to long-term
vibration in the installation scenarios, the cameras may produce unclear images, and even face the potential risk of
falling off during long-term operation. Hikvision's anti-vibration and anti-shake camera series feature rigid anti-
vibration, and scientific counterweight design, reducing the impact of vibration and ensuring stable and in-focus
images. Moreover, as high latency can seriously affect equipment control accuracy and endanger production safety,
Hikvision has integrated the entire chain from cameras, high-speed storage and computing, to real-time flow display,
which can meet the real-time remote-control needs.
PDA product series: Combining deep learning-based barcode/character recognition technology with imaging
technology and AI capabilities, Hikvision has launched multiple series of PDA products equipped with professional
scanners including full display, button, medical, and printing. In addition, by innovating product design as per
scenario requirements, Hikvision has launched multiple mobile intelligent data terminals, including DPM PDA,
cold chain PDA, and medical PDA for pressure ulcer treatment, based on the existing products. These terminals
provide data collection, scenario-based intelligent recognition, and analysis capabilities for manufacturing, express
logistics, retail & e-commerce, medical and health, public services and other industries, helping to achieve lean
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management of data collection.
2) Sound wave perception
As sound waves are caused by mechanical vibrations, detecting changes in the waveform and intensity of sound
waves can reflect vibration status of various mechanical equipment, thereby determining the equipment status as
normal or abnormal. Sound wave perception technologies and products are widely used in the industrial field.
Hikvision is able to design and produce acoustic devices by building a professional acoustic algorithm team, and
has developed a wide range of acoustic sensing products in the audible sound and ultrasound fields.
Sound-vibration-temperature monitoring product series: These products can simultaneously collect data
on the voice, vibration, and temperature of machines, and upload them in real-time. By analyzing long-term multi-
dimensional data, they can monitor, diagnose, and predict equipment faults, monitor the operating status of pumps,
motors, fans, belts, and other machines in real-time, and warn of abnormal faults. They also provide predictive
operation and maintenance services for equipment.
Industrial auscultation microphone series: These microphones can detect abnormal noise in the production
process of various motors, pumps, and compressors by collecting information on the voiceprints of machines using
bone conduction sensors, and comparing them with AI voiceprints. They have expanded their applications from
equipment operation and maintenance to quality inspection of abnormal noise in automotive electric components
and household appliance motors due to their ability to quickly identify workpiece faults with sound.
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Audiovisual instrument: The Company's online audiovisual instrument features a combination of 64
microphone arrays and camera lenses, and locates sound within the monitored target frequency band using sound
source localization algorithms. By visualizing sound through color cloud images, the instrument displays the
distribution of sound sources in the field of view, and quickly determines the location of partial discharge, gas
leakage, and abnormal equipment noise. It can be used for real-time online monitoring of important equipment in
indoor and outdoor scenarios such as substations, distribution cabinets, compressors, factory pipe galleries, and
valve rooms. Furthermore, the Company has introduced a handheld audiovisual camera and developed an explosion-
proof version, which is lightweight and portable, and can serve as an effective supplement to corporate inspections
by performing predictive maintenance, and quickly locating problem points.
3) Laser perception
Laser perception technology uses laser to perceive and measure various external physical quantities through
different media such as optical fibers and air. It has the advantages of good anti-interference, high sensitivity, long
distance transmission, and high accuracy. With distributed positioning optical fiber products as the starting point,
Hikvision continues to build our ability to develop core laser devices and optical-related embedded software, and
gradually improves the family of laser sensing products.
Distributed positioning optical fiber: This type of optical fiber optimizes performance using the HIK-DAS
patented acoustic detection algorithm and is characterized by long distance transmission, high accuracy, and anti-
interference. These products can accurately locate abnormal vibrations that occur around the perimeters, pipelines,
etc. in real-time, improving the efficiency of security protection. The application of Hikvision's distributed
positioning optical fiber products is becoming increasingly widespread, with benchmark application cases in
perimeter protection across various industries such as general and higher education, petroleum and petrochemical,
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energy and electricity, railway transportation, cultural museums and scenic spots. There are also multiple trial
projects where these products are used in the prevention of external damage to the communication networks of
operators, and the buried oil and gas pipelines.
Distributed positioning optical fiber for temperature measurement: This type of fiber can accurately
measure the temperature at various positions along the direction of fiber laying and locate points with abnormal
temperatures. A host covers tens of kilometers, achieving sub-meter level fault location and maintaining the health
of cables, belts, and other equipment. In addition to the 10/20/30 km general model, the specialized intrinsic safety
model is used for fire temperature measurement of belts and power cables in coal mines where heavy equipment
transportation is inconvenient. The 2.5 km economical short-distance optical fiber for temperature measurement is
more suitable for scenarios such as energy storage cabinets and distribution cabinets that do not have high distance
requirements. At the Asian Games Hangzhou, the distributed positioning optical fiber for temperature measurement
was used for real-time monitoring 7/24, helping to ensure electricity safety during the games.
4) Spectral perception
As objects have their own unique spectral characteristics, spectra are unique and distinct fingerprints of objects.
Spectral analysis of different objects helps us to gain more information about their composition. Hikvision's spectral
sensing product family combines spectral technology and AI algorithms to qualitatively and quantitatively monitor
the composition and changes in substances such as gases, water quality, and vegetation. These products are widely
used in safety monitoring of petrochemical parks, quality control in production processes, ecological environment
protection, crop growth monitoring and other sectors.
Water environment monitoring: Traditional sampling monitoring methods have problems such as low data
timeliness and secondary pollution due to chemical reagents. Our hyperspectral water quality monitoring instrument
integrates hyperspectral, liquid level radar, and visible light cameras. The instrument can collect 11 key water quality
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parameters including chlorophyll, permanganate index and transparency in seconds. When used with a monitoring
platform, it can obtain information on the trend of water quality changes in a timely manner, and warn of abnormal
conditions, helping to maintain a long-term clean water environment.
Gas monitoring: To address the difficulty in detecting and locating gas leaks in petroleum, chemical, natural
gas and other industries, Hikvision has launched a series of gas monitoring products that can analyze a single gas
or hundreds of gases, meeting the needs of various gas monitoring scenarios. For example, our gas cloud imaging
telemetry device, which operates based on the principle of spectral absorption, can observe the distribution of VOC
masses in space in real-time. The device solves the problem of monitoring VOC leaks under traditional detection
modes by making previously invisible VOCs "visible". The hyperspectral Fourier gas telemetry instrument uses the
fingerprint spectrum of gas in different wavelength bands to remotely detect gas clouds, which can detect more than
490 toxic and harmful gas substances such as methane and ethylene. The device can overlay spectra and RGB
images to visually display the distribution and diffusion trend of gas concentration. It continuously generates
sequence diagrams for gas monitoring, and monitors the distribution of gas concentration throughout the day,
achieving rapid and accurate quantitative analysis of sudden air pollution gases.
Vegetation monitoring: The multispectral vegetation monitoring instrument collects high-precision spectral
data on the vegetation in real-time, and quickly converts them into multiple vegetation parameters that provide
information on vegetation growth status, thus conducting intelligent health checks on the vegetation regardless of
weather. The instrument conducts all-weather, real-time and high-frequency monitoring of all kinds of vegetation
from tens of thousands of acres of agricultural land and forestry to a single plant, helping to provide visual
information on the growth trend of vegetation and promoting the digital upgrading of agriculture and forestry.
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5) Location perception
The problem of insufficient accuracy with traditional area positioning technologies such as Wi-Fi, RFID and
Bluetooth has given birth to ultra-wideband (UWB) positioning, which provides a wide spectrum range, and low
spectrum power, and is not affected by signal stability or spatial attenuation. Hikvision's UWB products utilize
wireless radio frequency positioning technology to achieve centimeter-level accurate ranging, suitable for high-
precision positioning of personnel, vehicles, and materials. On the basis of centimeter-level precise positioning, our
UWB products combines personnel, space, and videos on our visual management platform to monitor, in real-time,
the status of personnel, goods dynamics, and production progress in specific areas. These products are applied in
indoor and outdoor scenarios such as digital factories, tunnel corridors, warehousing and logistics, energy and
chemical hazardous operations, ensuring the safety of personnel and materials, and improving management and
operational efficiency.
6) Millimeter wave perception
Millimeter wave radars accurately measure target distance, velocity, angle and other data in real-time, and offer
high accuracy, good stability, strong all-weather adaptability and other advantages. By leveraging technological
innovation, Hikvision has expanded our millimeter wave radar line through the launch of a full range of product
lines for industrial fields, including one-dimensional level measurement, two-dimensional plane scanning, three-
dimensional stereo imaging, and 4D obstacle avoidance. These products are widely used in nearly 500 industrial
process scenarios, as well as intelligent operation scenarios for production tools (large operating machinery) across
14 industries, including cement, metallurgy, petrochemical, chemicals, food processing, and pharmaceuticals.
Radar level meters
High-frequency millimeter wave radar level meters: These level meters are mainly used for solid and liquid
level measurement in industrial scenarios. They are characterized by small size, small beam angle, large bandwidth,
and high ranging accuracy. In addition, with a 3° beam angle and a maximum measurement accuracy of 1 mm, they
can measure different materials in a non-contact, continuous, accurate, and stable manner. Furthermore, as the high
temperature, high pressure, and high dust environments during the production process can bring uncertainty to level
measurement, the Company has released a full range of high-frequency millimeter wave level meters for high
temperature, high pressure, corrosive, and explosion-proof conditions. With more accurate and stable level
measurement, these products help users fully explore the possibility of production process optimization and achieve
more efficient and intelligent digital production.
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Imaging radars
Hikvision has introduced multiple millimeter wave volume imaging radars for different application scenarios
such as silos, tanks, and yards in industrial production processes:
Scanning imaging radars: Mainly used in large sheds and yards for storing materials in cement, coal,
metallurgy, and chemical and other industries. These radars scan the surface of the material pile in real-time, and
detect the coordinates of the material points. Through backend point cloud data processing, they are able to scan the
target contour and perform calculus calculations, ultimately achieving accurate presentation of the material shape
and precise measurement of the target volume. A single radar has a detection radius of 50 meters, and multiple
radars can splice data together in the backend.
Silo imaging radars: Designed specifically for enclosed environments such as silos and tanks. These radars
can perform real-time 360° scanning of materials under complex working conditions such as heavy dust, high
temperature, and adhesion in silos and tanks. They offer a number of features including static target detection within
a spatial range, point cloud data output, spatial scanning imaging, volume and weight calculation output. In addition,
they are not affected by harsh environments such as rainwater, dust, and light, and can be automatically and digitally
managed to improve utilization and safety. At Huaxin Cement, this series of products allows for intelligent material
discharge, which ensures that the aggregate particle size ratio meets the requirements, and improves the stability of
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aggregate quality by 60%, thus driving the digital transformation and upgrading of this century-old company.
Cross-section imaging radars: Mainly used for imaging in mobile scenarios, such as moving vehicles, cranes,
gantry cranes, scrapers and other machinery, and often equipped with track robots for operations. These radars have
significant advantages in all-weather scenarios such as dust, water mist, rain and snow. With a detection radius of
up to 100 meters, they can scan the shape and contour of the material pile in real-time. This information can be used
with position information of the machinery to obtain the volume of the material pile through point cloud data
processing. These products help to precisely control mechanical grabbing and retrieval, facilitating more efficient
and safer mechanical operations.
Obstacle avoidance radars
Accidents are sometimes caused by collisions during the operation of large construction machinery such as
overhead cranes, cranes, gantry cranes, stackers and reclaimers, ship loaders, and scrapers. Obstacle detection has
always been a top priority for companies in safety production supervision. Mechanical obstacle avoidance is mainly
divided into three types: obstacle avoidance between large moving machines and people, obstacle avoidance
between machines, and obstacle avoidance during operations. Hikvision has launched corresponding millimeter
wave radars for all three scenarios.
4D obstacle avoidance radars: Installed on mechanical support legs, these radars are mainly used for obstacle
avoidance between large moving machines and people by detecting obstacles in real-time within 20 meters ahead
at a horizontal angle of 120 degrees, and a vertical angle of 60 degrees.
Location radars: These radars are installed in the upper middle area of machinery and mainly used for obstacle
avoidance between machines in enclosed areas within a detection range of over 500 meters at a horizontal angle of
60 degrees, and a vertical angle of 20 degrees. These radars effectively solve the problem of poor environmental
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adaptability caused by the unique path in traditional laser ranging and infrared detection solutions in these scenarios.
They also have independent emission and reception forms and provide greatly improved anti-interference and
stability.
Scanning obstacle avoidance radars: These radars scan at a horizontal angle of 330 degrees and within a
radius of 100 meters, which can be extended to 150 meters, and have a refresh rate of 10 Hz. They are mainly used
for large-scale, all-weather obstacle avoidance during operations of stackers and reclaimers, ship loaders, coke
pushers, coal loading trucks, coke blocking trucks, and coke quenching trucks, etc.
7) Infrared perception
Infrared thermal imaging technology offers many advantages such as all-weather operation, wide coverage,
non-contact temperature measurement, and real-time monitoring. It can detect and image the surface temperature
distribution of objects. Combining infrared thermal imaging technology with MEMS technology, the Company has
built a comprehensive perception network for businesses that covers production safety, production control and
production efficiency improvement, helping them with digital transformation.
Panoramic photoelectric turntable: With regard to the monitoring needs of large scenarios, traditional
camera solutions have longer inspection times and are difficult to directly generate panoramic images. Our
panoramic photoelectric turntable features the fast-steering mirror technology that ensures clear imaging without
trailing during high-speed operation. It scans the target by rotating 360° down to 2.4 s per revolution, and generates
a visual panoramic splicing image using infrared thermal imaging. A single device is able to quickly control the
overall situation. The turntable can quickly detect small targets when used with our self-developed small target
detection algorithm, and can also be connected to a thermal imaging PTZ camera, which allows users to view and
verify details by zooming in the targets. Additionally, the product provides clear imaging even at night,
compensating for the disadvantage of visible light. It is widely used in many scenarios such as oil fields, ports, and
key area boundaries to facilitate high-altitude panoramic protection for companies.
Thermal imaging-based fire prevention product series: Thermal imaging can be used to quickly locate fire
sources and warn of flames through temperature sensing. This series of products is designed to meet the indoor and
outdoor fire protection needs. Taking corporate safety production as an example, these products are used to develop
a high-precision fire protection system based on thermal imaging applications, which responds quickly to accurately
detect fire points and prevent potential hazards. These products warn of flames through thermal imaging monitoring
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and analyze data with a multi-algorithm engine to reduce false alarms, and make alarms more accurate and alarm
handling more efficient, minimizing losses, and warning of fire for companies.
Multispectral fire detector series: This series is designed for fire scenarios such as fires in factories,
warehouses, traffic tunnels, and laboratories. These detectors innovatively integrate spectral technology, thermal
imaging technology, and AI algorithms. Compared with single fire detection technology, the fusion of several
technologies allows second-level synchronous identification of temperature, flames, smoke, and other elements,
thus recognizing fire hazards more accurately and intelligently through multiple verifications. A 0.1 square-meter
fire panel can detect and locate abnormal temperatures, flames, and smoke within a distance of up to 150 meters,
helping to detect and handle fire hazards in advance. In addition, these products can provide reliable support for
decision-making in digital fire protection command and scheduling through dual verification of infrared
spectroscopy and visual videos.
Thermal imaging-based ultra-high temperature cameras: Ordinary cameras cannot work properly in high-
temperature operation scenarios. However, with a wide temperature measurement range of 0–1,800 ℃ and a -
20–200 ℃ circulating refrigeration system, our thermal imaging-based ultra-high temperature cameras can meet
the vast majority of high-temperature production scenarios. Equipped with the self-cleaning technology for
germanium windows, these cameras allow precise and sensitive temperature detection and presentation of clear
thermal images even in dusty environments. The devices are widely used in many industries such as steel,
automotive, liquor, electronic manufacturing, and food, providing real-time monitoring of operational processes to
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ensure quality inspection of production processes and products for businesses.
Visual colorimetric infrared thermometer: The thermometer determines the temperature of an object by
measuring the ratio of energy at two different wavelengths. It provides higher accuracy in temperature measurement
than monochromatic thermometers by eliminating environmental influences such as water vapor, dust, changes in
target size, partial occlusion, and changes in emissivity. The equipment can accurately measure the temperature of
the target at high temperatures ranging from 600 ℃ to 3,200 ℃ , and is widely used in various industrial
applications such as steel rolling, forging, casting, kilns, heat treatment, induction heating, and monocrystalline
silicon. It helps businesses effectively control production, reduce energy waste, and improve product quality.
Thermal imaging-based dual spectrum temperature measurement camera: With a small size and large
field of view, the product can perform real-time temperature monitoring in any weather and even in narrow and
enclosed areas that are difficult to cover by daily manual inspections. The camera supports single/dual light and is
available in wired and wireless transmission versions. It can be used with various sensors and gateways to analyze
the temperature change trend and quickly locate and warn of high-temperature hazard points. The product is suitable
for use in cabinet temperature measurement, indoor fire prevention, equipment monitoring, and other scenarios,
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helping to ensure corporate electrical safety.
A full range of thermal imaging-based temperature measurement products: By utilizing the characteristics
of thermal imaging-based visual temperature measurement, the Company has developed two major categories of
products: online and handheld. Both of these products meet the required accuracy of ± 2 ℃ and are widely used
in multiple scenarios such as power temperature measurement, industrial inspection, temperature sensing, and
electronic inspection. The products can be paired with analyzer, HikMicro Vision app and other software to provide
predictive maintenance of devices and improve production stability for businesses.
8) X-ray perception
X-rays can detect objects without causing any damage to them due to their strong penetration ability, allowing
users to see the internal features and defects of the objects through image processing. In response to the demand for
perspective inspection in industrial production, the Company leverages our strong expertise in X-ray perception, AI
and equipment IoT to continuously launch new X-ray perception products that are available in offline or online and
flat or 3D formats and focus on three business services: electronic manufacturing inspection, food and drug
inspection, and industrial flaw detection.
Offline/online fully automatic AXI equipment: Used for quality control in electronic and electrical
manufacturing processes, and for defect detection of PCBA, LED, semiconductor components, IGBT modules, die-
casting components, precision structural components, connectors and other related devices. With the next-
generation Raytina image enhancement engine, the equipment enables clearer X-ray imaging and better presentation
of image details, making it easier for staff to troubleshoot problems. Compared to traditional methods, the use of AI
detection algorithms allows the equipment to automatically identify defects and perform high-precision detection
in complex processes with image brightness changes and background interference, greatly reducing the false alarm
rate with traditional manual sampling and improving the defect detection efficiency of electronic production
enterprises. The offline version is suitable for production scenarios with multiple small batches and full quantity
inspection. The online version can be directly connected to the production line, allowing for automatic full line
detection.
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Second-generation intelligent electronic material counting machine: The machine is applied in SMT left-
over materials counting and warehouse inventory processes. With an AI recognition algorithm, it can solve the
problem of inability to effectively count irregularly shaped and packaged materials as with traditional algorithms,
and detects materials with an accuracy of over 99.99%, and a scanning recognition rate of 99.9%. Moreover, it
supports automatic counting and is able to count materials in as short as 8 seconds per time. The machine can rapidly
and accurately count a large variety of electronic materials, and supports automatic loading and unloading and data
connection to MES, greatly improving the efficiency of leftover materials counting, effectively saving enterprise
costs, and enhancing digital production.
Intelligent foreign object/defect detection system: Faced with the challenges of multiple background
interferences, small foreign objects, and complex defects in the field of food and drug detection, the Company has
optimized our product detection capabilities by greatly improving detection accuracy from 0.4 mm to 0.1 mm,
effectively ensuring detection speed without compromising accuracy. On a high-speed bottle production line (>600
bottles/minute), this system can accurately detect and remove defective products in real-time, greatly improving the
production and testing capabilities of users, reducing defect rates, and enhancing their product quality, market
competitiveness, and brand satisfaction.
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Industrial flaw detection equipment: The Company has released the RN570 series of industrial flaw
detection equipment. By combining precision X-ray and image processing technologies with AI algorithms, the
equipment can clearly present the internal condition of castings, perform non-destructive defect detection on
electronic products, and send alarms for various defects automatically. Currently, the equipment has been used in
the new energy vehicle industry, including tires, castings/wheels, electromechanical components, providing an
efficient defect detection method and helping to improve the process quality of electronic products for users.
9) UV perception
When electrical discharge occurs with high-voltage equipment, corona, flashover, or arc may occur depending
on the strength of the electric field. The surrounding air is broken down and ionized, and the emitted spectrum
mainly falls in the ultraviolet light band. The wavelength range below 300 nm is referred to as the solar blind band.
The ultraviolet signal in solar blind area the generated by the discharge is received by a UV monitor and processed
by overlaying it with visible light images to determine the position and intensity of the corona.
UV corona online monitoring instrument: To address the safety hazards that weak discharge poses to the
transmission system, the Company has launched the UV corona online monitoring instrument. Through the multi-
dimensional integration of UV detection, visible light imaging, and thermal imaging-based temperature
measurement technologies, the instrument can accurately locate corona discharge at difficult-to-detect positions in
a non-contact manner from a long distance, improving the detection rate of high-voltage equipment and line faults,
and preventing any potential circuit risks.
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3.1.2 Use of professional products in business services to create more value
1) Digital products for applications ranging from auxiliary management to core business
Hikvision has always focused on digital business services. In the past, the Company provided digital products
and services mainly for auxiliary management in security-fire protection integration, park management, and other
scenarios. Today, as our technical capabilities continue to improve, the Company has developed digital products
that help to solve core pain points of users in an increasing number of core business scenarios, such as production
and operation, quality inspection, equipment status monitoring, safety production, and environmental factor
monitoring. The company has laid out digital products to help solve the core pain points of users, achieve scenario
digitalization, equipment digitalization, environment digitalization, and operation digitalization, and create more
value for thousands of industries.
Improving production and operational efficiency, and optimizing management processes
Production is a central part of corporate operations and the key to ensuring sustainable and stable development
of enterprises. The production and operation services focus on the organization, coordination, and control of core
production factors in the production process, mainly including equipment, personnel, and logistics operations.
Hikvision has launched a series of intelligent perception products to help enterprises monitor and manage the
operation of various production factors in real-time, ensuring the stable and efficient operation of production
systems.
Managers from manufacturing companies need to gain timely information about the on-site operation of key
production line nodes, but it is difficult for traditional manual methods to provide real-time and visual on-site data.
Hikvision's production line series cameras feature a miniaturized design and can flexibly adapt to the production
line scenarios. With the high-frame-rate image acquisition technology, these cameras can clearly record the live
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scene in narrow spaces on the production line, and observe key production processes at close range, making
production status visual and problem tracing justifiable. This system has been implemented in the production
process of LED products at Hikvision's intelligent manufacturing base. Each product has been assigned a special
identification code, so that users can scan the code to obtain a video of the key production processes of the product
and understand how it is manufactured.
In terms of the management of production materials, these materials are usually attached QR codes, barcodes
and model labels to facilitate the inbound, outbound, sorting, inventory, and traceability operations. The scanning
PDA series products launched by Hikvision can help corporate users timely and accurately collect and manage
goods data, further improving their production efficiency and capabilities. These products supervise the counting
and inventory of incoming materials during the inbound and outbound processes, control and manage various
production processes through production line traceability using PDA, and provide timely information on inventory
status during the inventory counting process, which allows users to address insufficient or excess inventory in a
timely manner. Moreover, these PDA products can be used for anti-counterfeiting management of manufactured
products through effective traceability, allowing users to promptly respond to and solve any possible product
problems.
In the manufacturing and distribution industry, mobile robots are an important driving force for automation
and intelligence. By focusing on internal logistics, the Company has continuously optimized and iterated products
in four hardware product series: Latent LMR, Conveyor/Heavy-duty CMR/HMR, Forklift FMR, and Cargo To You
(CTU). Additionally, the Company leverages two software platforms, RCS (robot control system) and iWMS
(intelligent warehouse management system), to provide professional intelligent logistics solutions that allow for
efficient handling of various materials in different scenarios. These solutions cover automotive, new energy, 3C
electronics, pharmaceuticals and healthcare, e-commerce & retail, and other industry segments, reducing
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operational costs in logistics, and improving logistics efficiency and management quality for users.
In terms of logistics scheduling process, the utilization efficiency of platforms directly affects the efficiency of
goods circulation, thereby indirectly affecting the sales revenue of enterprises. Some common problems exist in the
management of platforms, such as improper parking of loading and unloading trucks on the platform, excessive
working hours, non-standard working processes, and unsupervised operations. The platform cameras launched by
Hikvision are based on video technology and AI algorithms. They can automatically identify information on vehicles
working at the platform, the number of operators, and the real-time loading rate of vehicles, helping platform
dispatchers to reasonably schedule logistics vehicles by efficiently matching platform resources with loading and
unloading needs, and improving the utilization and management efficiency of the platform.
Businesses are burdened with high costs of handling customer complaints as difficulties in accountability
attribution, long processing times, and other problems often occur in the handling of abnormal returns from buyers
(such as empty packages, missing items, and wrong goods) in the after-sales scenario of customer complaints in the
e-commerce industry. Hikvision's sheets camera with large depth of field, binocular traceability camera, and
traceable packing machine series can clearly capture the waybill information in each step and record a video of the
process. Furthermore, these cameras can be used with corporate order systems to quickly provide video evidence,
thus helping businesses to quickly complete accountability attribution, gain recognition from e-commerce platforms,
and maintain a good customer experience. The comprehensive processing time for customer complaints can be
reduced by more than 90%.
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Intelligent quality inspection enhances the core competitiveness of businesses
As product quality is the lifeline of an enterprise, quality improvement is a means to enhance its core
competitiveness. Combining multi-dimensional perception technology and professional AI algorithms, Hikvision
has launched a rich range of digital products for quality inspection of raw materials, semi-finished and finished
products in the production process, helping enterprises improve their quality inspection process and efficiency.
Foreign object detection is one of the important inspection items for products related to human health, such as
food, drugs, and cosmetics. To address quality risks such as presence of foreign objects and insufficient filling
volume, non-destructive and efficient quality inspection methods are key means of product quality management.
By integrating the X-ray image enhancement technology and an AI algorithm for foreign object monitoring,
Hikvision has introduced a series of products for X-ray-based foreign object and defect detection. The products can
quickly identify quality problems such as internal foreign objects, abnormal morphology and filling volumes, and
can deformation, helping enterprises to steadily improve production and quality.
Casting is one of the basic techniques in modern mechanical manufacturing industry. The presence of defects
such as small holes and cracks in iron/aluminum castings during the manufacturing process have some impact on
the overall tightness and quality of the castings. Traditional quality inspection methods are often used for surface
defect detection, while internal defect detection methods are often destructive. Hikvision has released an industrial
flaw detection series of products by integrating the X-ray imaging technology with AI algorithms. The products can
clearly present the internal condition of castings, detect defects such as cracks, bubbles, or looseness inside metal
workpieces, and provide non-destructive defect detection, helping users to efficiently detect defects and improve
product quality in industrial production scenarios.
To meet the demand for automated quality inspection of components in the manufacturing industry, the
Company has launched an industrial auscultation microphone series. By collecting voiceprint information of
machine through bone conduction sensors and comparing them with AI voiceprint models, these microphones can
detect abnormal noise in the production process of various motors, pumps, and compressors, and intelligently
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determine whether the sound of the workpiece is normal or abnormal. Traditional quality inspection methods are
based on manual listening. As workers vary in experience and the parameters are difficult to quantify, it is difficult
to ensure timeliness and accuracy, and trace the detection process. Our industrial auscultation microphones are able
to detect abnormal sound without disrupting the original production arrangements. They can be used to inspect each
workpiece instead of inspecting them randomly, and trace workpiece problems. The quality inspection results can
be integrated into the MES, making quality inspection more efficient, accurate, and standardized. These products
can be used for quality inspection of abnormal noise in automotive electric components and household appliance
motors.
Machine vision, as the core of industrial sensing, is the eye of robots and automation equipment, and is also
one of the key drivers for digital and intelligent production. In addition to developing and optimizing our product
lines around 2D vision, intelligent ID, and 3D vision, Hikvision has leveraged the VM (VisionMaster) algorithm
software platform to achieve various applications such as positioning, measurement, identification, and defect
detection, improving production flexibility and product quality. With regard to industrial quality inspection, the
Company continues to introduce perception cameras and AI detection algorithms to better capture and accurately
detect various defects in the industrial production process. For example, in response to the needs of wafer detection
and hidden crack detection, the Company has launched a new SWIR shortwave infrared industrial camera with a
greatly expanded range of spectral imaging. To meet the demand for defect detection of objects with high surface
reflectivity and transparent materials, the Company has launched a new high-speed line scanning 2.5D vision system.
The Company has introduced multiple series of laser profilers and VM-3D algorithm software platforms for
applications such as welding seam and point inspection in the lithium battery industry, pin inspection in the
automotive parts industry, and silicon wafer thickness measurement in the photovoltaic industry. In addition, the
Company has released more than 10 AI detection algorithm tools to help partners efficiently respond to various
defect detection needs and drive the rapid development of the industry.
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Accurate monitoring of equipment status to ensure stable operation
The stable operation of equipment is a key element in guaranteeing smooth production of enterprises. By
leveraging our multi-dimensional perception capabilities, Hikvision comprehensively monitors and collects data on
equipment operation status from various perception dimensions such as temperature, sound, and vibration.
Moreover, our intelligent analysis capabilities enable us to timely detect equipment abnormalities and assign
relevant personnel to quickly address the problems.
It is difficult to collect real-time data with traditional manual inspection methods for online operation and
maintenance of equipment in industries such as steel and wind power. Furthermore, the difficulty in operation and
maintenance is increased by environmental characteristics of these industries such as high temperature and wide
geographical distribution. Therefore, fault detection and resolution require a large amount of time. Hikvision's
sound-vibration-temperature monitoring series products can simultaneously collect data on the voiceprint, vibration
mechanism, and temperature of machines, and upload them in real-time. By analyzing long-term multi-dimensional
data, they can monitor, diagnose, and predict equipment faults, monitor the operating status of pumps, motors, fans,
belts, distribution cabinets, and other machines in real-time, and warn of abnormal faults. They also provide
predictive operation and maintenance services for equipment, effectively improving operation and maintenance
efficiency.
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During the equipment and facility inspection operations in the power industry, people often rely on the readings
of various meters to determine the abnormal status of equipment. However, some problems such as unclear focus
and interference from fill light reflection exist in the scenario of close-range observation such as meters. The macro
meter camera provided by Hikvision features an integrated structural design, automatic focus and polarized fill light,
and can read meters at close range. When used with an auxiliary platform for power operation inspection and an
intelligent analysis host, it enables remote intelligent meter reading and online meter inspection, helping to improve
quality and efficiency, and reduce risks.
The stable operation of production areas such as distribution rooms, production equipment rooms, and relay
rooms provides the foundation for the safe and efficient operation of enterprises. However, some problems exist
with the manual operation and maintenance approaches, including heavy workload, high personnel costs, human
inspection risks and hazards, and even the presence of missed and wrong detections. Hikvision's track inspection
camera series can be used with an IoT sensing module and optionally with partial discharge detection, temperature
measurement, and environmental sensing modules as needed to meet the inspection needs of different scenarios.
They can also be used with obstacle avoidance technology to conduct safety inspections. Staff can remotely
configure inspection plans as needed to meet the personalized needs of different users and perform all-weather
inspections.
In industrial pipe galleries and pipeline inspection scenarios, gas leakage inside pipelines can cause energy loss
and even safety hazards, which can easily lead to safety accidents if not handled in a timely manner. Hikvision has
launched an audiovisual instrument that combines microphone arrays and camera components, and locates gas
leakage points using sound source localization algorithm. By visualizing sound source locations through color cloud
images, the instrument displays the distribution of sound sources in the field of view. This can reduce energy waste
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caused by pipeline leaks, avoid potential risks of personnel or property damage due to delayed detection, and ensure
the safety of pipeline transportation.
Improving hazard detection capabilities to ensure safety production
Safety production is an indispensable part of production management for organizations. Hikvision endeavors
to help companies build comprehensive safety management capabilities through comprehensive monitoring of
unsafe behaviors of people, unsafe states of objects, and unsafe factors of the environment to effectively prevent
safety risks, improve hazard detection capabilities, and reduce safety accidents.
There is a risk of leakage of industrial materials such as liquefied gas and alkanes during the production
operations in petrochemical facility and tank areas, which may cause fire accidents if exposed to open flames.
However, as these gases are transparent and colorless, it is difficult to detect gas leaks in a timely manner. Hikvision
has developed a multispectral gas cloud imaging camera by utilizing multispectral technology and based on the
principle of unique spectral absorption peaks for hydrocarbon media. The camera can timely detect leaks in
hydrocarbon gas media such as ethylene and methane, and visually display the leak points. By monitoring and
warning of gas leaks in real-time, it can facilitate and guide maintenance operations, and provide reference for
emergency evacuation due to gas leaks.
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In the power industry, high-voltage equipment and lines may experience insulation performance degradation,
structural defects, surface contamination, and increased humidity during long-term use, leading to corona discharge
and even equipment and transmission line failures in serious cases, resulting in large-scale power outages. To
address the safety hazards that weak discharge poses to the transmission system, Hikvision has launched the UV
corona online monitoring instrument. Through the multi-dimensional integration of UV detection, visible light
imaging, and thermal imaging-based temperature measurement technologies, the instrument can accurately locate
corona discharge at difficult-to-detect positions in a non-contact manner from a long distance, improving the
detection rate of high-voltage equipment and line faults, and preventing any potential circuit risks.
Unsafe behavior of people has always been a pain point in the safety production management of power
generation enterprises. By utilizing the UWB positioning technology, Hikvision has introduced positioning base
stations, tags, and systems to provide functions such as visual display of personnel positions, rapid playback of
historical movements, and timely warn of personnel approaching or entering dangerous areas. In addition, the
positioning technology can be combined with video surveillance and 3D technology, as well as the two-ticket
management process to enhance the real-time, interactive, and proactive site safety control, and improve safety
management of power enterprises.
Real-time perception of environmental factors to provide technical support for decision-making
Real-time and high-frequency monitoring of environmental factors enables managers to timely understand the
on-site conditions, and handle any problems in a more prompt and effective manner. Hikvision uses multi-
dimensional perception technology to intelligently monitor various environmental factors, providing decision-
making support for scientific management of government and business departments.
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Water is the source of life that humans rely on for survival and development. Traditional water quality
monitoring mainly uses chemical methods, which have problems such as low monitoring frequency, high
construction and operation costs, fewer monitoring spots, large blind areas, and secondary pollution, making it
difficult to achieve refined management of water quality in rivers and lakes. To meet the demand for monitoring
surface water quality of lakes, reservoirs, watersheds and drinking water sources, the Company has launched a
hyperspectral water quality monitoring instrument, which integrates hyperspectral, liquid level radar, and visible
light cameras. The instrument can collect 11 key water quality parameters including chlorophyll, permanganate
index and transparency in less than 1 second. When used with a monitoring platform, it can obtain information on
the trend of water quality changes in a timely manner, and warn of abnormal conditions, helping to maintain a long-
term clean water environment.
In addition to water quality, Hikvision's intelligent perception technology can also be used in multi-dimensional
monitoring of water. During the peak period of rainy season, rivers and lakes with developed water systems are key
areas for flood control, and water level is the core indicator reflecting the water regime of rivers and lakes. The
Company has launched a ball camera for water level observation specifically for water level monitoring scenarios
such as rivers, reservoirs, and culverts. The ball camera integrates video perception technology and millimeter wave
radar technology to achieve all-weather, high-precision, non-contact, and visual water level monitoring. Our radar
flowmeter also features an integrated design and measures the surface flow velocity and level of water in real-time
based on the principle of Doppler radar velocity measurement. The flowmeter works stably all day with a millimeter-
level monitoring accuracy, providing decision-making support for flood control and prevention.
Minor geological changes are often difficult to observe with the naked eye, but they can pose long-term safety
hazards and even trigger geological disasters. The Company has launched a displacement observation ball camera
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specifically for scenarios such as reservoirs, dams, mines, iron towers and bridges where displacement, tilting, and
settlement are likely to happen. Through the integration of GNSS and video technologies, this product improves the
perception efficiency of displacement, settlement and other factors that may cause geological disasters, and provides
millimeter-level accuracy in displacement change monitoring and remote video inspections. It is designed to provide
long-term all-weather monitoring trends, helping to ensure geological safety.
2) Specialized products with strong environmental adaptability
Data collection in complex scenarios relies on the comprehensive product innovation capabilities in the process
of implementing digital applications. A sensing device that can better adapt to complex and ever-changing special
environments is more useful in collecting higher-quality data to improve the effectiveness of practical applications.
At present, the Company has launched a series of specialized products with strong environmental adaptability for
different special scenarios, such as low illumination, short and far distance, vibration, dirty, flammable and explosive,
no electricity or network connection, humid and corrosive, ultra-high and low temperature scenarios.
The Company has introduced a series of products for high-temperature scenarios including an endoscopic
furnace flame observation camera and a high-temperature high-brightness camera. The endoscopic furnace flame
observation camera is deployed in high-temperature and dusty heating furnaces, where it can accurately measure
the real-time temperature inside the furnace even at a maximum temperature of 2,000℃. Moreover, it can timely
control and adjust the working status of the heating furnace, ensuring product quality, and controlling material scrap.
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The Company has launched a low-temperature-resistant cold chain cameras for the low-temperature scenarios.
The cameras use technologies such as window heating to ensure stable operation at temperatures as low as minus
60 ℃ without fogging the lenses. These cameras can be used with multi-dimensional sensors, such as temperature
and humidity sensors, to facilitate managers in monitoring changes in the warehouse environment in real-time and
achieve visual supervision of the entire cold chain transportation process.
In industrial remote-control scenarios, there is a problem of high end-to-end latency (hundreds of milliseconds
or even seconds) with conventional video monitoring systems. Remote high-latency monitoring may cause
misoperations and accidents. To address the problem, the Company has launched a series of low latency products.
These products can achieve a minimum end-to-end latency of 70 ms by optimizing the entire video encoding chain
from on-site cameras to centralized control centers, thus improving the security of centralized control, and
facilitating production collaboration.
As for flammable and explosive energy operation scenarios, the Company has launched explosion-proof
mobile wearables, portables, and violation detection products by combining our technical capabilities of explosion-
proof design with a rich product system based on different scenarios, explosion-proof requirements, and functional
requirements. Taking our Zone 1 explosion-proof portable ball camera as an example, we've selected new materials
and innovated explosion-proof design to reduce its weight by 60% and its size by 30%. Moreover, we've added new
functions such as intercom and gas detection to improve the product's functional adaptability, user experience, and
safety in energy scenarios. The camera is designed to meet the needs of video recording and supervision during
special operation processes, as well as remote command and scheduling in emergency scenarios.
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The Company has developed a dedicated crane camera for use in crane operation scenarios with obvious
vibration and a large amount of dust and water vapor. The camera features an anti-vibration and anti-shake structural
design that effectively reduces the impact of mechanical vibration on images. With a professional dust penetration
algorithm, the camera can remove interference from dust and water vapor to generate clear and stable video images.
It is also equipped with an intelligent lifting tool tracking algorithm that ensures the video images are always focused
on the lifting tool and the object being lifted, providing visual, clear, and real-time operation video images for crane
dispatchers and ensuring the safety of crane operations.
3.2 Hardware Product Family: Comprehensive Edge Node Perception + Edge Domain Scenario Intelligence
+ Central Intelligent Storage and Computing
In addition to launching new digital products, Hikvision has continuously promoted technological innovation
and breakthroughs in different product areas such as edge nodes, edge domains, and cloud centers, and strengthened
our product innovation capabilities to better meet the needs of customers in various industries.
3.2.1 Edge node products: comprehensive perception and growing product mix
In terms of perception products, Hikvision has constructed a diverse and competitive product matrix that
provides solid support for numerous industry applications by consolidating our technological advantages and
improving our IoT perception capabilities.
1) Front-end cameras
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Hikvision continues to optimize optical systems, image algorithms, environmental adaptation, transmission
encoding and other multi-dimensional technological architectures with a focus on video perception technology,
bringing about innovation in optical technology, and comprehensively enhancing imaging quality and scenario
adaptation. At the product level, Hikvision leads the evolution from unidirectional single cameras to panoramic
detail and then to multi-directional multi-cameras, so that a single camera can solve perspective loss, data
inefficiency, difficulty in intelligent calling and other problems in practical applications, making video data more
comprehensive, effective, and easier to use. The Company continues to improve AIoT video perception capabilities,
and expand video perception boundaries, fields of view and scenarios to build comprehensive perception capabilities
that meet business needs in various scenarios and under different conditions.
Focusing on optical imaging technology and inclusive AI-ISP
By consolidating our core technology foundation in video perception and leveraging our ColorVu and
DarkFighter technologies in optical systems, Hikvision has made breakthroughs in close range and ultra telephoto
imaging, expanded the sight distance, and innovatively developed anti-vibration self-locking lenses that accelerate
the zoom speed and improve the stability of the lens. To improve the imaging quality in low light environments, the
Company has comprehensively upgraded AI-ISP image processing technology, and optimized intelligent scenario-
based image recognition that enables clear detail restoration. To reduce the difficulty of later-stage camera operation
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and maintenance, we have made more efforts in scenario design, and used harmonic drive and auto-correction
techniques to ensure that PTZ and dome cameras do not deviate in the long term. Moreover, self-cleaning and anti-
spider web technologies have been adopted to keep the lens clean and reduce daily maintenance costs.
Leading the trend of multi-directional multi-cameras and improving scenario adaptation
To further solve the problem of cameras’ universality in different scenarios, Hikvision has comprehensively
improved the practicality of video perception data and innovatively released a series of multi-directional multi-
cameras, so that a single device allows free multi-perspective visibility, multi-directional adjustment, and flexible
applications in multiple scenarios. Large aperture, panoramic depth, AI-ISP, and DarkFighter technologies have
been used to improve imaging quality and ensure the quality of origin data. A range of functions including remote
adjustment, algorithm switching without downtime, energy consumption monitoring, and intelligent data capture
and statistics enable quick deployment and use, and efficient operation and maintenance of the cameras. Front-end
and back-end collaboration and domain-end large model application allow faster use of the intelligent cameras and
make it easier to use the data.
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Improving product applications in different scenarios and building comprehensive perception capabilities
AIoT has diverse application scenarios. Hikvision has expanded product categories and developed a series of
products that better meet the needs of the specific scenarios and environments to address poor imaging quality and
other problems in different industry scenarios and environments.
A range of dirt-proof and self-cleaning products have been introduced for use in the wild, reservoirs, factory
areas, and other scenarios that are prone to insect nets, dust, and oil stains. For example, the anti-spider web camera
is designed to prevent attraction of mosquitoes and other insects and spider web formation on the lens, which affects
imaging. The manual maintenance costs of outdoor cameras are systematically reduced through an array of gentle
supplementary light that decreases insect attraction, an innovative design of horizontal mirror and lamp separation
that reduces insect interference with the lens, and a smooth front cover that prevents spider web formation.
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Wildlife cameras create a network on their own and coordinate their behaviors through layered protocols and
distributed algorithms in remote nature reserves that are rarely visited by humans, and not covered by public
networks. After the power is on, these devices can quickly and automatically form an independent network,
achieving real-time transmission of high-definition image data in areas without public networks. They provide a
more efficient monitoring tool for biodiversity conservation.
With regard to elevator operation and safety management, Hikvision has upgraded and released a lineup of
cameras for elevator health monitoring, which not only supervise the safety management of electric scooters, but
also monitor the daily operation and maintenance of elevators. These cameras feature a TOF design that prevents
the lenses from being blocked and are equipped with built-in multi-dimensional sensors that can intelligently
determine the elevator speed, and daily status of door opening and closing, parking floors, etc., providing data
support for elevator health testing, and facilitating the upgrade of elevator maintenance from responsive to predictive
maintenance.
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As for near and far object observation scenarios, a series of ultra telephoto cameras that can clearly see faraway
targets have been introduced for application at urban high points, and in coastal areas, the forests for fire prevention,
and other scenarios that require long-distance observation; a series of micro cameras that can quickly focus havs
been launched to allow close-range metered snap shots, observation of cracks in cultural relics sites, and defect
detection in production lines, etc.
In terms of extreme temperatures, corrosion, no electricity or network connection and other special scenarios,
Hikvision has released a series of temperature-resistant cameras that can work properly at temperatures as low as -
60 ℃ and as high as 2,000 ℃, a series of cameras that are resistant to corrosive substances by the seaside or in
environments involving sulfuric acid, formic acid, and acetic acid, and a series of solar energy cameras that operate
with electricity generated from light in environments without electricity.
2) Smart traffic and mobile devices
Smart traffic products: Hikvision has continuously iterated our capture system series based on the new light
pollution standards, developed and classified capture systems, and contributed to the improvement of light pollution
problems. As for multi-dimensional perception products, long and short focus dual-image sensor technologies are
integrated to achieve applications in super-resolution and ultra depth of field scenarios. By combining radars, ETC,
RFID, and videos, the Company has introduced a series of multi-dimensional perception products to improve the
target capture rate and accuracy, and meet the needs of new business scenarios, which are widely used in the field
of traffic management.
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In the field of intelligent signal control systems, Hikvision takes advantage of our own products across the
supply chain to integrate and apply perception data and signal control algorithms, enabling radar-video assisted
vehicle detectors to accurately collect traffic parameters. Combining the radar-video assisted multi-modal large
model with millimeter-wave radars and high-definition cameras, the Company has acquired millions of segments
of radar-video assisted perception, and constructed the radar-video assisted integrated large model that
simultaneously perceives spatial physical information and semantic image information. This model is capable of
ultra-long-distance perception and the detection of vehicle flow trajectories with a precision of more than 95%.
Compared with the vision or single-mode radar models, the radar-video assisted multi-modal large model provides
a deeper understanding of the physical world by extracting effective information from multi-dimensional signals
and exploring the potential relationships among different modal information, so that the radar-video assisted
products can deliver unparalleled performance at day and night and in rainy and foggy environments, and are used
at a large scale. Meanwhile, in contrast to the traditional radar-video assisted products that have a shorter detection
distance in the algorithm scheme, our new products featuring the radar-video assisted multi-modal large model are
two times more powerful in perceiving targets. Hikvision's radar-video assisted all-in-one devices, equipped with
ultra-long-range radars and multi-lens long and short focus videos, are capable of high-precision detection of ultra-
long-range vehicles and traffic trajectories. With a breakthrough performance in detection distance, these radar-
video assisted fusion products can significantly reduce the construction costs of intelligent signal control systems
and digital roads, and improve the ability to manage traffic congestion and ensure traffic safety.
Hikvision is also actively conducting research on the basic models of intelligent signal control algorithms,
promoting the intelligent development of the industry's signal control systems. The Company has completed the
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development of control algorithms based on traffic knowledge and AI technology, as well as consultation algorithms
based on traffic knowledge graph and field of view graph technologies. Furthermore, based on the perception data
from radar-video assisted vehicle detectors, we have implemented an AI-assisted high-order signal timing control
optimization algorithm. For example, the algorithm can intelligently divide the daily traffic volumes of a particular
intersection into morning and evening peak hours, off-peak hours, and other time periods based on its historical
traffic flow, and generate a traffic release plan for each time period that supports dynamic generation. It can also
accurately predict the next cycle of traffic based on historical traffic and real-time traffic of the day, so as to provide
more precise solutions in case of sudden changes in traffic volumes (start/end of a peak period).
The Company continues to enhance comprehensive road management and control capabilities by promoting
the construction of digital roads. Our safety warning product series integrates all-weather traffic safety detection
and risk warning, and is designed to strengthen traffic order management and road safety risk prevention and control,
providing safety warnings for traffic participants, and addressing road hazards.
Entrance and exit parking products: Hikvision has improved intelligent video and unmanned product
solutions, helping customers and users to increase operational management and service efficiency. Through the
launch and iteration of products such as the Guardian Series, Roadside Series, and automotive charging stations, the
Company has expanded our business scope and customer services, and strengthened the intensive, intelligent and
digital capabilities of our products and systems and our ability to continuously provide customers with
comprehensive products and solutions for segmented scenarios including vehicle entrances and exits, parking lots,
roadside parking, and parking spaces for new energy vehicles. In addition, Hikvision continues to expand our
channel coverage and service capabilities, further improving the reputation of our products in the market and the
service experience for users. By investing in the R&D capabilities of a full range of products, we have expanded
our urban parking business, helping to improve urban parking efficiency and the people's parking experience.
Mobile terminals: Hikvision focuses on industrial wearables and portables, handheld PDAs and other sectors.
The Company leverages miniaturization, low power consumption and explosion-proof technologies to launch a
series of industrial wearable and portable products, facilitating mobile visual management in mobile law
enforcement, safety production, construction site inspection, financial services and other scenarios. In the field of
handheld PDAs, the Company continues to improve and innovate mobile intelligent data products by combining
deep learning-based barcode/character recognition technologies with imaging technology and AI capabilities,
developing more scenario-based business models.
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3) Access control, intercom and alarm products
Hikvision conducts research on perception detection and identity recognition for various scenarios and spaces,
with a focus on technological innovation and product development for people- and object-based business
applications. The Company continues to explore product applications for segmented scenarios and has developed
solutions for a range of scenarios, including access control, attendance, visitor management, elevator control,
financial checkout, inventory management, building intercom, smart medical and elderly care, entrance and exit
management, intrusion alarm, and perimeter prevention.
Hikvision's access control products, represented by MinMoe, are a result of the research and integration of
multi-modal and other basic technologies that are used to create digital and intelligent identity recognition and
permission control-related products. The Company has established two sets of access control product systems, wired
and wireless, covering a full range of scenarios. In an effort to create industry-specific solutions and products, we
have introduced a series of new products such as explosion-proof, violence-proof, and national security products,
providing customers with more diverse solutions.
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Hikvision's visual intercom products feature the two-wire communication technology and optimized mobile
applications, and are characterized by easy usability, deployment, and maintenance. They are designed to create a
multi-level product array, and adapt to different building intercom scenarios. Hikvision continues to promote bus
technologies and integrate multiple subsystems such as smart homes, intrusion alarms, and elevator control,
providing customers with one-stop application solutions for residential control scenarios. On the basis of building
intercom product solutions, the Company continues to explore industry application scenarios, including common
intercom scenarios, and integrate radar, infrared and other detection technologies, gradually incubating related
business ideas such as smart medical and elderly care.
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Hikvision's turnstile products consistently serve customers and users with continuous technological innovation.
On the R&D end, these products feature an integrated design that combines advanced technologies including self-
developed LiDAR, multi-modal recognition, digital debugging, operation and maintenance, and are designed for
easier use during installation, debugging, use, operation and maintenance stages, bringing value to customers. On
the manufacturing end, the entire assembly line from raw materials to finished products is automated to efficiently
improve product quality.
Hikvision's alarm products continue to make breakthroughs in infrared, microwave, sound wave, and vibration
and other detection technologies, further improving the wireless and hybrid intrusion alarm ecosystems. Our high-
speed BUS technology is speed-adaptive and enables flexible topology; our RF technology features lower power
consumption, a longer communication distance, and higher data efficiency. By integrating indoor intrusion and
outdoor perimeter fence, and CCTV systems, Hikvision provides a one-stop solution package for scenario
applications, delivering more valuable services to customers. The Company continues to improve cloud service
applications by providing professional and easy-to-use application tools that allow more convenient access to, more
efficient management, and easier operation and maintenance of cloud services.
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4) Interactive audio products
Over the course of three years, Hikvision has built independent product R&D capabilities covering all
processes of the interactive audio field. The Company has developed three product systems: security audio,
broadcasting audio, and professional audio, leading the audio industry towards an array-based, intelligent networked
future. We provide pleasant, easily adjustable and manageable system solutions for sound capture and reinforcement
that are widely used in different scenarios such as conference rooms, lecture halls, venues, and campuses, bringing
higher quality sound, more comfortable speeches, and smoother communication.
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Array-based - Precise sound capture and reinforcement bring higher definition quality: As speakers need
to hold microphones or stand close to desktop microphones in traditional large conferences and other sound capture
scenarios, the microphones are largely affected by the distance and environment, and likely to produce unstable
sound quality. Combining multi-beam and algorithm technologies, Hikvision's sound capture array can effectively
shield noise, suppress interference, and capture sound precisely over long distances across multiple areas. Just one
of the 128mic ceiling array microphones released by Hikvision can cover a space of 100 square meters, freeing up
users' hands through seamless sound reinforcement. On the other hand, heterogeneous array square microphones
increase the sound capture distance while ensuring sound quality and volume, allowing speakers to speak clearly
and stably without leaning forward. They are suitable for middle- to high-end conference rooms, lecture halls, and
more.
With regard to sound reinforcement, multiple individual speakers are installed together in traditional sound
reinforcement scenarios, which can easily lead to reverberation, uneven listening experience for the front and rear
listeners, and other problems. Hikvision's source linear array-based sound column uses a combination of multiple
speaker arrays and a constant beamwidth beamforming algorithm to make the sound field beam adjustable and
controllable, creating an even sound field for both the front and rear listeners. Moreover, sound waves emitted from
the column surfaces are more effective in suppressing whistling and have a more stable output. The sound beams
can accurately reach the target audience, reducing noise and echoes, and producing clearer sound quality. The remote
sound-field beams are adjustable, eliminating the need for on-site adjustment of the installation angle, making the
sound column more harmonious with the environment and more aesthetically pleasing.
Networked - Audio effects are remote adjustable for more convenient management: Unlike networked
videos, which have brought revolutionary changes to the entire security monitoring industry, networked audios are
currently in their early days, but represent an inevitable trend. An analog audio system requires a large amount of
wiring, complicated deployment, and can easily cause interference with sound quality. However, a networked audio
system connects all audio devices with only one Ethernet cable, allowing for simplified wiring, convenient
expansion, and extended space, and further improves sound quality by eliminating the need for multiple analog-to-
digital conversions. Hikvision's 8000 series networked professional audio system is entirely networked from sound
capture to processing and to playback, and transmits audio data in milliseconds by implementing the AES67
transmission protocol. With the system, different speakers can synchronize in nanoseconds, and capture and enhance
sound without delay or acoustic differences, producing audio effects that can be conveniently managed through
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remote online precise adjustment.
Intelligent - Sound quality is further improved using AI algorithms: With the support of AI algorithms,
audio products can now be optimized with software algorithms instead of hardware and devices alone, thus
overcoming hardware bottlenecks, further improving sound quality, and significantly reducing system costs.
Hikvision's 8000 series networked professional audio system comprehensively utilizes AI in signal processing,
audio playback, and sound tuning to enhance product capabilities.
AI-based noise reduction: With hundreds of noise models, the system automatically filters out non-stationary
noise such as mouse clicks and keyboard typing, as well as stationary noise such as air conditioning and equipment
sounds in conference scenarios, making the sound quality clearer;
AI-based sound source localization: The system supports beams in 8 areas, and gives priority to capturing
the voice of the main speaker if multiple people speak simultaneously. It focuses on the position of the main speaker
in real-time and automatically shields interference outside the beam area, clearly capturing the sound of the main
speaker even though he/she walks around;
AI-based device detection: The system monitors the real-time operation status of equipment and
automatically triggers alarms in case of abnormal conditions;
AI-based sound field calibration: The system automatically detects parameters such as echo delay,
environmental reverberation, and noise reduction level, and enables one-click debugging by automatically adjusting
to the optimal configuration parameters.
After continuous efforts, Hikvision has improved our capabilities in independent R&D of audio products. The
Company has a professional acoustic product R&D team and several automated assembly, testing, and packaging
production lines, which empower us with design and production capacity across the industry chain from acoustic
design and algorithm development to manufacturing. With multiple globally-leading RMB 10 million-level acoustic
laboratories certified by Ceprei and SGS, we have established a complete set of acoustic evaluation systems for
basic acoustic/speech/noise testing, standard acoustic certification testing, etc. We possess professional acoustic
testing capabilities including objective evaluation, subjective listening, and precise evaluation and testing for
industry-specific scenarios.
3.2.2 Edge domain products: Building a domain-end brain through intelligent upgrades and IoT acceleration
Hikvision's customer-centric edge domain products are continuously upgraded for use in different industry
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scenarios by utilizing large model and other AI technologies, creating value for customers. Moreover, these products
have accelerated the integration of intelligence and IoT, achieving the aggregation, parsing, and comprehensive
domain-end application of multi-dimensional perception data.
1) Integrated devices for intelligent applications
Hikvision DeepinMind NVR - A core product for edge domain: In 2023, Hikvision kept enriching and
expanding the DeepinMind NVR product mix by deeply understanding user needs and optimizing product design,
which were widely applied in various industries.
In response to the demand for high-definition and long-term storage, Hikvision has released a high-density
series of NVRs, leading the industry towards high-definition storage. The Company has intensified efforts in
inclusive AI and gradually achieved the application of comprehensive inclusive AI in general NVR products.
Hikvision is committed to building a domain-end brain in the era of AIoT. The Company has launched a new
5.0 system architecture for domain-end products, which has six capabilities: perceptual access, domain-end
management, fusion and aggregation, multi-dimensional storage, edge computing, and intelligent applications.
Facing the future, we have established the cornerstone of AIoT product solutions, continuously improving the
competitiveness of our products. In terms of algorithms, Hikvision has conducted in-depth research on visual large
model technology and transformed it into products. Meanwhile, the use of algorithm orchestration, computing
power virtualization and other strategies have significantly improved the performance and accuracy of algorithms,
allowing AI to truly create value for customers. Believing in open cooperation, the Company has continuously
enriched the algorithm models and capabilities of our open AI platform, and upgraded and iterated HEOP hardware
openness capabilities to rapidly expand algorithms and applications, and establish extensive cooperation.
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AIoT gateway - Multi-dimensional data fusion products: AIoT perception data are rich and diverse.
Hikvision's domain-end AIoT products integrate videos, sensor data, and AI, and support data aggregation,
processing, and application. These products can be easily and intelligently networked and controlled by our
customers, which cover industries and scenarios including energy grid, agricultural applications, water conservancy
and affairs, computer rooms, energy consumption, industrial IoT, and financial services, achieving a closed loop of
multi-dimensional perception data application and creating value for customers with data.
2) Smart displays and video conference products
Hikvision's smart displays and video conference products focus on conference and educational scenarios. With
improvements in display control, operating systems, touch interaction, audio and video processing, and AI
recognition technologies in digital era, Hikvision has launched intelligent interactive terminals and software systems.
The IoT media data in conference rooms, classrooms, and other spaces are integrated through display viewing, audio
and video interaction, touch interaction, and other means to provide professional intelligent scenario-based solutions
for customers.
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Smart displays - The use of smart displays in conference scenarios can comprehensively enhance the
participation experience: With the continuous iteration of WonderOS and the launch of connected displays,
conference tablets can be seamlessly connected with mobile phones, computers, audio and video accessories to
share resources, making screen projection and interaction more convenient, and conference operations more
efficient. Powered by intelligent audio and video processing algorithms, conference tablets can display human
images clearly with excellent sound capture and noise reduction effects, and track the speaker more accurately,
making remote conferences as immersive as offline ones. Hikvision has launched our flagship audio and video
conference tablet, which comes with built-in SIP/323 and cloud conference capabilities, and can be used with
mainstream MCU conference platforms. By iterating products for teaching scenarios, the Company has created a
complete set of educational product solutions that include flagship, traffic, and basic smart blackboards and all-in-
one devices, as well as push-pull and memory blackboards. Additionally, dual-screen smart blackboards and all-in-
one devices have been introduced to enrich smart product solutions for higher education seminar, remote and lecture
classrooms, and regular classrooms.
Video conference products: In 2023, Hikvision comprehensively enhanced the audio and video effects of our
video conference system using AI capabilities. The product supports the intelligent window mode, and provides
independent conference screens, allowing each participant in the conference room to enjoy a front row experience.
By combining AI audio-based deep learning technology, the product has been upgraded with intelligent noise
reduction, echo cancellation, and reverberation removal algorithms that enable automatic elimination of hundreds
of types of noise and improve the clarity and restoration of conference sound.
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Conference management software: As the value of platforms further increases, Hikvision has improved the
equipment control and maintenance capabilities of our conference management software apart from business
meeting needs. The software is designed to control, in a real-time and comprehensive manner, various displays,
audio enhancement devices, control and sensing devices, video conference equipment, etc. in the conference room.
It timely detects equipment abnormalities, and remotely debugs any problems and upgrades configurations, reducing
the workload of IT operation and maintenance personnel. Moreover, the software explores conference data, analyzes
conference results from multiple dimensions such as organizational departments, conference rooms, and individuals,
and provides a visual display of space utilization and conference duration, assisting management personnel in
decision-making and boosting efficiency with digital technology
3) PCs
Hikvision has developed security PCs by combining traditional IoT with the characteristics of security
applications and video application requirements. This product series is equipped with our self-developed graphics
decoding card and other technologies that enhance video decoding and output capabilities. These PCs are
preinstalled with various business application software, which can be used conveniently on startup, providing robust
decoding, high stability, and greater professionalism.
Hikvision's PCs feature multiple platform architecture technologies and a range of components made of self-
developed materials such as storage media, displays, output display cards, and motherboards. These products are
available in different formats including desktops, laptops and all-in-one computers and support desktop cloud
solutions in different modes such as VOI1 and VDI2. They are usable, user-friendly, and reliable, suitable for office
applications, education and teaching, business practices, specific business support, and other scenarios.
4) Network products
Hikvision's network products are designed to provide scenario-based monitoring network solutions for security
IP. Our products come in different types including switching, routing, wireless, and all optical. The access capacity
of a single core switch has been increased to 10,000 4-megapixel front-end devices.
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In 2023, we focused on promoting the centralized and unified management of IT + IoT terminals in the network
of small and medium-sized businesses. Leveraging the Company's IoT perception capabilities at the front and back
ends, we used a globally visible topology view to help users quickly discover, locate, and solve network-related
problems, reducing the difficulties of network operation and maintenance. The switches represented by the light
network management series are more suitable solutions for network access needs in IoT scenarios.
Based on their unified management capability of IT + IoT networks, Hikvision's network products are
expanding to a wider corporate park network, helping users to build a safe, reliable, and intelligent network.
3.2.3 Cloud center products: Creating an IoT-information network base and providing a variety of solutions
With the rapid development of cloud, AI and other technologies, high-performance and more secure IT
infrastructure becomes essential. By integrating servers, storage, network transmission, and PCs, Hikvision has
established a complete set of IT products that cover from the center to the edge of "computing - storage -
transmission - end", providing comprehensive, secure, available, and advanced IT infrastructure for IoT.
1) General computing products
After more than ten years of development, Hikvision has built a complete server product system that
encompasses different specifications such as single channel, dual channel, multi-channel, and high-density, and
different product forms such as workstations, tower servers, rack servers, edge servers. Our diverse and robust
portfolio of servers adequately meets the market demand.
2) Intelligent computing products
Hikvision has built a rich and highly competitive product system of intelligent servers that are fully compatible
with mainstream CPU and GPU products from home and abroad. These products not only meet the general needs
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of information market, but also provide a solid and reliable infrastructure for intelligent computing centers, cloud
computing and big data. They are suitable for professional application scenarios in government, internet, energy,
finance, operators and other industries, providing a high-performance, and highly reliable and secure infrastructure
for these industries.
3) Central storage products
Hikvision has a wide range of central storage products, including controller architecture, server architecture,
and other product systems, which meet the needs of various business scenarios. In 2023, in response to the new
demand for high definition and ultra-long-duration storage, the Company launched new products including ultra-
high-density series and ultra-long-duration series to meet the video storage needs of users. At the same time, by
combining existing products with SSD and HDD technologies, the Company has built a new hardware system, and
upgraded software for the development of new system capabilities.
Hikvision has introduced a fully symmetrical architecture for cloud storage products that significantly
improves performance and makes storage systems more secure and robust, establishing our leadership in the field
of cloud storage. Moreover, in the era of AIoT, massive data are generated every day in addition to large volumes
of high-definition video data. By leveraging our powerful video streaming storage capabilities, and advanced
technologies such as storage layering, virtualization, and modeling, Hikvision has actively developed multi-
dimensional IoT data storage capabilities and released a series of integrated storage products that suit the
comprehensive storage needs of various industries.
Hikvision continues to iterate the entire family of general storage products that cover SAN, NAS, and object
storage. These products have server and controller architectures, and support the most advanced technologies in the
industry such as SDS3 and HCI4. Based on distributed storage technology, the Company has developed mixed
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application capabilities for industry-specific and B/C-end services in terms of private and public cloud solutions. In
recent years, to meet different needs for warm, hot and cool scenarios, Hikvision has developed a range of solutions
and products including single device applications, clustered distributed solutions, high availability with no
downtime throughout the year, and upgrades with minute-level downtime. These products are widely used in various
industries and play a valuable role in office OA, database hosting, production management, IDC data center
construction, and other areas. For many years, they have been among the best in the sales ranking of domestic IP
storage products in IDCs.
4) Large screen displays and control products
Hikvision's display products are powered by video processing, image restoration, image enhancement, ultra-
high-resolution display, and intelligent interaction technologies, and widely used in monitoring centers, command
centers, and pan-conference/exhibition scenarios. The Company continues to introduce Mini LED, COB, and
energy-saving series products by building two development and production bases in Tonglu and Wuhan. We focus
on core LED manufacturing processes and standardize quality control to improve product quality, and shorten the
manufacturing process. Furthermore, the Company has expanded application scenarios in the fields of specialized
and commercial displays with an emphasis on better color consistency and higher resolution, providing cost-
effective display products and solutions.
For business scenarios such as command centers, monitoring centers, and conference displays, Hikvision has
launched the third-generation integrated video platform, splicing controller, and LED control system, further
improving the display effects and adaptability of LED screens, and enhancing the efficiency of command,
scheduling and business display applications. The third-generation integrated video platform features a new high-
speed bus system architecture, and is able to process high frame rate, high bit depth, wide color gamut, and high
dynamic video data in real-time. With Hikvision's robust video technology, the platform can assure lossless display
of video images. For the conference display scenarios, the third-generation splicing controller adopts full-link high-
definition audio and video, intelligent interaction, IoT perception, and 3D display technologies, providing users with
a delicate and immersive interactive experience.
3.3 Software Product Family: Software Platforms + Intelligent Algorithms + Data Models + Business Services
Hikvision's software product family is composed of software platforms, intelligent algorithms, data models
and business services.
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3.3.1 Software platforms: Basic platforms + general platforms + industry-specific platforms
Basic software platforms: Hikvision continues to improve our basic software in four categories: storage and
computing, IoT, intelligence, and data. Our storage and computing software includes cloud computing and cloud
storage platforms, providing pooling service capabilities for basic running environment in different application
scenarios. Our AI software includes algorithm libraries, resource management and scheduling platforms, open AI
platforms, perception fusion and empowerment platforms, open intelligent application platforms, and other related
products, providing intelligent algorithm training and operation, intelligent service orchestration and publishing,
intelligent application development and reuse capabilities for intelligent application scenarios. Our big data software
includes model libraries, basic big data platforms, IoT-information network integration data resource platforms,
data integration software, data mining software, knowledge graph software, spatiotemporal intelligence software,
BI visualization analysis platforms and other related products, providing data model management, data aggregation
governance, data storage and computing analysis, open data service, and data visualization application capabilities
for data application scenarios.
General software platforms: Hikvision provides general software functions across multiple industries,
including comprehensive security software, regulatory and command software, ARVR software, and four-
dimensional spatiotemporal operating environment. For instance, our general software platforms in the category of
visual command include comprehensive security management, integrated drone management, video and audio
integration and application, cafeteria consumption management, and digital building management platforms.
Industry-specific software platforms: Hikvision, serving over 80 sub-industries, has gradually built 126
industry-specific software platforms. Taking the transportation industry as an example, we provide a smart station
platform for rail transit, a comprehensive law enforcement platform for transportation administration, an integrated
monitoring platform for smart highways, a comprehensive management platform for highway speeding, a dynamic
supervision platform for ships, a digital management platform for ports, an integrated management platform for
airport security, and a comprehensive monitoring platform for transportation operations.
3.3.2 Intelligent algorithms: General algorithms + industry-specific algorithms
Matching hardware design and improving general algorithm capabilities: In response to intelligent
scenario demands, Hikvision has optimized the AI effects of multi-dimensional perception devices by leveraging
new technological capabilities. For example, our intelligent dual-spectrum firework recognition device is designed
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to address any misrecognition caused by water mist and clouds. The device features multi-algorithm engine
optimization technology that enhances its ability to resist interference from water mist and clouds, and spatial
coordinate conversion technology that enables it to geographically locate the mist and clouds. Our intelligent
millimeter-wave radar recognition device optimizes AI signal processing to perform better in fall and sign detection
compared to traditional signal processing. Our hyperspectral water quality testing device, combined with a drone,
is able to conduct measurements in a non-hovering state, and gains a real-time understanding of water quality
changes and trends in the form of heat maps.
Hikvision uses multi-dimensional perception technology to optimize industry-specific algorithms:
(1) Soil and water protection: hyperspectral water quality testing, infrared sediment content monitoring, gas
monitoring with a radar flow meter or acoustic imaging device, atmospheric particle detection with a quantum
LiDAR, raindrop impact detection using electrical sensing, remote sensing-based image analysis of illegal
construction events;
(2) Hazard investigation: thermal imaging-based fire point monitoring and positioning in combination with
visible light-based smoke detection, optical fiber-based temperature measurement, and fire exit blockage detection;
(3) Urban governance: analysis of crowd gathering, vehicle congestion and other abnormal events with high-
altitude images from inspection drones; analysis of roadside stall business, road waterlogging and other abnormal
events with low-altitude images from mobile vehicle-mounted cameras; water level detection using a water level
sensor in the manhole cover;
(4) Public security supervision: analysis of climbing over railings, delivering goods through barriers and other
abnormal behaviors using key point detection technology; dangerous area entry detection and high-altitude throwing
using thermal imaging; analysis of people falling to the ground, and other abnormal events using images from a law
enforcement recorder.
Innovation in algorithm applications based on large models: from large visual models to large multimodal
models, from large model technology to innovative applications of large models. 1) Algorithm optimization: The
analysis results of the end-side small model are filtered twice by the center-side large model to ensure accurate
output while minimizing resource consumption. For example, in the scenario of a chemical park, false alarms of
smoking and making phone calls can be reduced by more than 80%. 2) Innovation in intelligent applications: The
original video structuring level is improved by utilizing the image understanding ability of the CV large model. For
example, analyzing the full information of images allows for intelligent view search. 3) Project delivery efficiency
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improvement: The generalization ability of large models is utilized to automatically segment images, extract label
elements of a scene, and accelerate the efficiency of algorithm development and implementation. For example, the
universal segmentation ability of large-scale models is used to quickly divide the scenes and associate each scene
with applicable algorithms. The target detection ability of large-scale models is used with parameter fine-tuning to
quickly incubate new algorithms, and complete the fast validation of new scenario algorithms with the Zero to One
strategy.
3.3.3 Data models: Industry data library governance models + professional business application models
Hikvision provides big data application services for various industries based on the big data collection,
governance, analysis, and service capabilities provided by the IoT-information network integration data resource
platform, and has accumulated a number of industry business data models in the process. These data models are
managed through a model library and can be replicated and optimized in other similar application scenarios.
According to different usage scenarios, these models are divided into two categories by application scenario:
industry data library governance models and professional business application models.
(1) Industry data library governance models
The Company has formulated industry data library construction standards, and standardized the descriptions
of tables, fields and dictionaries in the data library, and data processing rules in compliance with national and
industry standards, and policy documents. These standards and rules pave the way for the construction of industry
data libraries. Examples of these models include data library governance models for the transportation industry and
data library governance models for the emergency industry.
(2) Professional business application models
Using the transportation sector as an example, Hikvision has provided a highway traffic situation fusion model,
a highway congestion warning model, a highway vehicle trajectory restoration model, an urban road traffic operation
evaluation and diagnosis model, an urban road traffic tracing analysis model, an urban road traffic short-term
prediction model, a changeable lane feature research, judgment and control model for urban roads, a tidal lane
feature research, judgment and control model for urban roads, a high-precision real-time online traffic flow
simulation model, an urban road traffic indicator model, a real-time target vehicle trajectory prediction model, a
subway station flow prediction model, a bus priority signal control model, a bus passenger flow OD analysis model,
a bus operation shift analysis model, an dynamic risk identification model for operating vehicles, an illegal operating
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vehicle analysis model, a research and judgment model for shuttle buses recruiting passengers outside the station, a
parking point detection model for vehicles transporting hazardous chemicals, a time-space analysis, research and
judgment model for fake-licensed vehicles, a racketeering car analysis model, a high-frequency path analysis model
for oversized vehicles, a safety risk management and control model for driving behaviors, a warning analysis model
for drivers deprived of their driving license, a traffic safety code assignment model for drivers, and a risky section
mining model based on active safety data.
3.3.4 Business services: System operation and maintenance + Data engineering + business operations
By focusing on users' application needs, Hikvision explores the transformation from being a product and
system supplier to being a service provider for certain business services.
System operation and maintenance services: Hikvision provides system operation and maintenance services
to some industry users. For systems and equipment that have exceeded the warranty period, the operation and
maintenance team will offer professional system operation and maintenance services.
Data engineering services: Hikvision delivers data engineering services including IoT resources management,
and integration of data collection, management and services.
Business operations services: Hikvision offers over 10 business operation services based on the internet
operation platform and our private deployment methods. Among them, urban parking operation services have been
adopted in more than 400 cities, and their coverage scope is expanding. The number of cities using our signal timing
services is gradually increasing. The user base of business operation platforms for fire protection operation, smart
community operation, safety risk monitoring and warning, and comprehensive monitoring of low-grade highways
is also increasing.
4. Business Layout
The data collected by IoT is a new production factor in the digital world. The IoT data can be used to promote
the iterative development of existing technologies and tools, improve the quality and efficiency of labor and labor
processes, explore the deep value of nature, and achieve more sustainable benefits by utilizing capital. This
facilitates the replacement of old production factors and the penetration of digital capabilities into every aspect of
global transformation, thereby promoting the transformation and upgrading of production, life, and governance
models.
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Hikvision has been serving for various domestic and international industries for many years, providing over
300 solutions in 54 sub-industries across 9 industries related to enterprises and institutions, and over 200 solutions
in 35 sub-industries across 5 industries related to public services. The Company has gained extensive and in-depth
practical experience in the process of promoting socio-economic transformation and upgrading. Our business layout
will be described below by taking typical applications and industry scenarios as examples.
4.1 Facilitating the digital transformation of production management
As a clear development trend of the digital economy, industrial digitization helps to improve quality and
efficiency and reduce costs for Chinese and international companies, thereby enabling them to achieve sustainable
and high-quality development. It is not only a requirement of the times, but also a huge industrial opportunity.
Hikvision is concentrating efforts on the core production areas of businesses by creating six digital product
series including "control and execution", "detection and measurement", "production and operation", "equipment
status", "safety production" and "security-fire protection integration". Moreover, the Company focuses on
developing AIoT solutions powered by operation technology (OT) to continuously strengthen our intelligent
perception capabilities, and help organizations to build efficient production and operation management systems. By
promoting the integration of OT with IT (Information Technology) and DT (Data Technology), we strive to create
enterprise-level IT applications in business directions such as large enterprise chain, smart parks, safety management,
and equipment management.
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1) Control and execution series
By applying the multi-dimensional intelligent perception technology to frontline production scenarios,
Hikvision helps organizations to strengthen their capabilities of monitoring the production process, timely identify
any abnormal situations in production and scheduling activities, and build safe and reliable systematic capabilities
in remote monitoring and auxiliary execution.
The overhead crane is a common piece of lifting equipment, and the efficiency and safety of overhead crane
operations is greatly affected by the scheduling ability of site operators. However, dust, noise, overhead crane
vibration, and equipment obstruction can all interfere with on-site scheduling operations. Hikvision has developed
a dedicated camera for the overhead crane scenarios. The camera features a patented structural design that
effectively reduces the impact of mechanical vibration on the image. With a professional dust penetration algorithm,
the camera is able to generate clear and stable video images in extremely low-visibility environments. It is also
equipped with an intelligent lifting tool tracking algorithm that ensures the images are always focused on the lifting
tool and the object being lifted, providing visual, clear, and real-time operation images for crane dispatchers and
ensuring safe and efficient crane operations.
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Heating furnaces are widely used in the combustion process of metals and materials. To ensure that the
combustion process in the furnace meets the process requirements, it is necessary to know the temperature inside
the furnace in real-time. However, the traditional method of manual observation through opening holes on the
furnace wall is limited in accuracy and poses safety risks. Hikvision's endoscopic furnace flame observation camera
can reach into the heating furnace for precise temperature measurement and real-time monitoring of the flame
dynamics inside the furnace, making it perfect for high-temperature and high-dust environments. When the
temperature inside the furnace becomes abnormal, the operator can adjust the working status of the heating furnace
in a timely manner to ensure product quality and avoid material scrap.
The flying shear is an important device for cutting metal billets in steel, paper and other companies. The fixed
length cutting process requires the flying shear to adjust its working status in real-time based on the movement
speed of the rolled piece to ensure that the fixed length of the workpiece meets the specifications. Hikvision has
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developed a laser Doppler measurement instrument based on the Doppler effect, which can quickly and accurately
measure the movement speed of plates, bars, and pipes in a non-contact manner. The instrument allows the flying
shear to adjust its operating parameters in real-time to precisely cut rolled parts, ensuring product quality.
These solutions have been implemented in a variety of industries, including metallurgy, manufacturing,
petrochemicals, and power, serving Baowu Steel Group, Urumqi Petrochemical Company and other users.
2) Detection and measurement series
Material inventory counting and product quality inspection during the production process are of paramount
significance in ensuring production continuity and product quality. Hikvision combines multi-dimensional
perception technology and professional AI algorithms to build intelligent perception capabilities for product quality
inspection and material inventory counting scenarios of enterprises, helping them improve quality inspection
efficiency and material management.
In the automotive parts manufacturing industry, friction stir welding technology is widely used in the
production and processing of battery cold plates, motor shells, heaters, packing boxes, and other components.
Traditional quality inspection methods can only detect surface defects such as shrinkage, porosity, and slag inclusion
that may occur in welded components, while internal defects require destructive sampling. By combining ultrasonic
technology and AI algorithms, Hikvision has launched an industrial flaw detection series of products, which can
perform non-destructive defect detection on key internal parts of welded components and automatically identify
welding defects.
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Material inventory counting helps companies understand the dynamics of production materials and ensure
smooth production operations. Manual inventory counting is slow and costly when dealing with massive amounts
of materials of different shapes, sizes and types, and is inaccurate when dealing with irregularly stacked materials
such as aggregate and ores. By integrating video, radar and other technologies, Hikvision has created an intelligent
inventory counting solution that is suitable for high-temperature and high-dust working environments. The solution
allows accurate measurement of the volume of irregularly stacked materials, and assists warehouse management
personnel in quickly and accurately collecting inventory data, thus improving inventory efficiency, and achieving
scientific material management.
Foreign object detection is one of the important inspection items for products such as food, drugs, and
cosmetics. To address quality risks such as presence of foreign objects and insufficient filling volume, non-
destructive and efficient quality inspection methods are key means of product quality management. By integrating
the X-ray image enhancement technology and an AI algorithm for foreign object monitoring, Hikvision has
introduced a series of products for X-ray-based foreign object and defect detection. The products can quickly
identify quality problems such as internal foreign objects, abnormal morphology and filling volumes, and can
deformation, helping to steadily improve production and quality.
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These solutions have been implemented in a variety of industries, including manufacturing, cement, food,
pharmaceutical, and new energy, serving Huaxin Cement, Xiduoduo and other users.
3) Production and operation series
The production and operation services focus on the organization, coordination, and control of core production
factors in the production process, mainly including equipment, personnel, and logistics operations. Hikvision has
launched a series of intelligent perception products to help enterprises monitor and manage the operation of various
production factors in real-time, ensuring the stable and efficient operation of production systems.
Managers from manufacturing companies need to gain timely information about the operation of key nodes of
the production line in the daily line maintenance, line replacement design, troubleshooting, and capacity ramp-up
scenarios, but it is difficult for traditional manual methods to provide real-time and visual on-site data. Hikvision's
production line series cameras can be deployed in narrow spaces on the production line due to a unique compact
structural design. With the high-frame-rate image acquisition technology, these cameras can clearly record the live
images, achieving traceability of production line problems and providing strong support for on-site production line
management.
Businesses are burdened with high costs of handling customer complaints as difficulties in accountability
attribution, long processing times, and other problems often occur in the handling of abnormal returns from buyers
(such as empty packages, missing items, and wrong goods) in the after-sales scenario of customer complaints in the
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e-commerce industry. To address these pain points, Hikvision has launched large depth of field single camera,
binocular traceability camera, and traceable packing machine series. These cameras can clearly capture the waybill
information in each step and record a video of the process. Furthermore, they can be used with corporate order
systems to quickly provide video evidence, thus helping businesses to quickly complete accountability attribution,
gain recognition from e-commerce platforms, and maintain a good customer experience. The comprehensive
processing time for customer complaints can be reduced by more than 90%.
The DPM (Direct Part Mark) technology can directly mark the surface of components through engraving,
stippling, inkjet printing, and other methods. The technology is commonly used for tracking and tracing mechanical
components, electronic devices, instruments and other products. However, it is difficult for traditional scanning
equipment to effectively recognize DPMs as their clarity can be affected by the reflective properties of metal.
Therefore, Hikvision has developed a DPM version of PDA products, which can reduce interference from metal
reflection through a surface fill light source design. These products can be used with professional scanners equipped
with deep learning algorithms to capture ultra-clear images of DPMs and rapidly scan and recognize them.
These solutions have been implemented in a variety of industries, including automotive, electronics and
logistics, serving Pingyuan Filter, Apower, Excellent Fashion Garment (Hangzhou), and other users.
4) Equipment status series
The stable operation of equipment is a key element in guaranteeing smooth production of enterprises. By
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leveraging our multi-dimensional perception capabilities, Hikvision comprehensively detects and maintains data on
equipment operation status from various perception dimensions such as temperature, sound, and vibration.
Moreover, our intelligent analysis capabilities enable us to timely detect equipment abnormalities and assign
relevant personnel to quickly address the problems.
In industrial pipe galleries and pipeline inspection scenarios, gas leakage inside pipelines can cause energy loss
and even safety hazards, which can easily lead to safety accidents if not handled in a timely manner. Hikvision has
launched an audiovisual instrument that combines microphone arrays and camera components, and locates gas
leakage points using sound source localization algorithm. By visualizing sound source locations through color cloud
images, the instrument displays the distribution of sound sources in the field of view. This can reduce energy waste
caused by pipeline leaks, avoid potential risks of personnel or property damage due to delayed detection, and ensure
the safety of pipeline transportation.
The daily power inspection work includes regular inspections of various meters in order to detect relevant
hazards in advance. In recent years, State Grid Corporation of China has been accelerating the application of "dual-
replacement" (remote intelligent inspection replacing on-site manual routine inspection, and one-key sequential
control operation replacing conventional switching operation) technologies. For these application scenarios,
Hikvision has developed a series of macro meter cameras. This series features an integrated structural design, and
allows the users to see the dial pointer and scale clearly up close. When used with an auxiliary platform for power
operation inspection and an intelligent analysis host, these cameras enable remote intelligent meter reading and
online meter inspection, helping to improve quality and efficiency and reduce risks.
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Sound is an important indicator of the health status of equipment. Traditional equipment maintenance methods
require on-site "auscultation" of the equipment by maintenance personnel, who rely on personal experience to
analyze the sound and determine the equipment's health status. Hikvision has launched an industrial auscultation
instrument. Through a bone conduction or ultrasonic sound capture device, the instrument can monitor key
equipment such as transformers, switchgear, and circuit breakers 24 hours a day online. Moreover, by analyzing
fault voiceprint data with AI algorithms, the instrument allows real-time detection and warning of faults of various
equipment, and provides monitoring curves throughout the equipment lifecycle to operation and inspection
personnel, offering support for operation and inspection decision-making.
Belt conveyors are widely used in material transportation scenarios in industries such as coal mines, steel,
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cement, and power generation. The safe and stable operation of belts is crucial for production. As an important
component of the belt, the roller is installed in large quantities and is prone to wear, which may cause accidents such
as belt fires in severe cases. Hikvision has developed an optical fiber auscultation device to meet the needs for real-
time monitoring of belt rollers. Multiple sets of optical fiber detectors are laid along the belt to collect data on roller
operation, enabling long-distance and multi-point monitoring of belt operation, and effectively reducing the
frequency of on-site manual inspections.
These solutions have been implemented in a variety of industries, including power, chemical, new energy, steel,
pharmaceutical, and mining, serving Nanjing Steel, the Asian Games Hangzhou Stadium and other users.
5) Safety production series
Safety production is an indispensable part of production management for organizations. Hikvision endeavors
to help companies build comprehensive safety management capabilities through comprehensive monitoring of
unsafe behaviors of people, unsafe states of objects, and unsafe factors of the environment to effectively prevent
safety risks, improve hazard detection capabilities, and reduce safety accidents.
There is a risk of leakage of industrial materials such as liquefied gas and alkanes during the production
operations in petrochemical facility and tank areas, which may cause fire accidents if exposed to open flames. As
these gases are transparent and colorless, it is difficult to detect gas leaks in a timely manner. However, Hikvision
has developed a multispectral gas cloud imaging camera by utilizing multispectral technology and based on the
principle of unique spectral absorption peaks for hydrocarbon media. The camera can timely detect leaks in
hydrocarbon gas media such as ethylene and methane, and visually display the leak points. By monitoring and
warning of gas leaks in real-time, it can facilitate and guide maintenance operations, and provide reference for
emergency evacuation due to gas leaks.
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Unsafe behavior of people has always been a pain point in the safety production management of power
generation enterprises, such as non-standardized operations, inadequate supervision of outsourced personnel, and
difficulty in confirming whether an employee is on duty. By utilizing the UWB positioning technology, Hikvision
has introduced positioning base stations, tags, and systems to provide functions such as visual display of personnel
positions, rapid playback of historical movements, and timely warn of personnel approaching or entering dangerous
areas. In addition, the positioning technology can be combined with video surveillance and 3D modeling technology,
as well as the two-ticket management process to enhance the real-time, interactive, and proactive site safety control,
and improve safety management of power enterprises.
In addition, Hikvision has developed a risk classification and control system module that is designed to create
an online risk classification and control process for businesses that meets safety regulations. The module defines
risk units based on the operational activities, equipment and facilities, and production processes of an organization,
identifies hazardous and harmful factors, and generates a list of these factors. Three built-in risk assessment models,
LS, LEC, and MES, are used to automatically calculate risk values and levels, generate a risk classification and
control list and a risk notification card, and construct a dynamic four-color risk distribution map for the organization.
The map visually displays the overall safety situation of the organization, paving the way for intelligent monitoring
and control of hazards.
Finally, as the last crucial step, emergency command plays an indispensable role in the safety production
management of organizations. Hikvision's emergency command solution combines integrated communication
capabilities with digital means such as structured contingency plans, data graphs and walls, and AR to assist users
in developing an emergency command capability system for monitoring and warning, prevention and preparation,
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response and rescue, recovery and reconstruction. Our solution allows efficient information exchange and visual
scheduling management of safety accidents, thereby facilitating scientific decision-making and helping enterprises
improve a closed-loop system of safety production management.
These solutions have been implemented in a variety of industries, including power, chemical, construction,
petroleum, new energy, and manufacturing, serving Shouguang Power Plant, Xin'ao Gas and other users.
6) Security-fire protection integration series
Security-fire protection integration can improve the efficiency of security and fire protection by integrating
security and fire protection resources. By leveraging AIoT technologies such as multispectral, thermal imaging, and
combustible gas detection, Hikvision accurately identifies core elements related to security and fire hazards to
enable early detection and handling of risks and hazards, reducing the probability of fire accidents, and enhancing
an organization's capacity for emergency handling of safety and fire accidents.
For the fire source monitoring scenarios, Hikvision's multispectral fire detectors integrate image processing,
temperature detection, and multi-band sensing fusion technologies to allow for temperature measurement and
alarming, fire point orientation and shape recognition in key areas, thus warning of fire at a very early stage and
shortening the response time for fire prevention and extinguishing.
In terms of smoke monitoring scenarios, Hikvision's visual smoke detectors combine smoke and temperature
detection with video monitoring capabilities to enable high temperature/smoke detection and alarming and video
recording in unmanned locations such as warehouses and high-temperature work areas, and support remote
verification of alarm information.
With regard to abnormal temperature monitoring scenarios, Hikvision uses temperature-measuring optical
fibers to measure surface temperature of linear objects in narrow spaces, enabling abnormal temperature monitoring
of bus ducts, cables, distribution cabinets, and stereoscopic battery warehouses. This will help to warn of fire
accidents, prevent safety hazards, and ensure stable operation of important production equipment.
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These solutions have been implemented in a variety of industries, including energy, electronic appliances,
education, cultural tourism, and finance, serving Luzhou Laojiao, Han Energy Technology and other users.
4.2 Promoting the digital transformation of lifestyle
In recent years, digital technology has found applications in various aspects of social life, improving people's
experiences in clothing, food, housing and transportation, and enhancing their sense of gain and happiness.
Hikvision relentlessly explores new business opportunities for lifestyle improvement and upgrading, and
continuously innovates for digital life service application scenarios to promote the digital transformation of lifestyle.
In fields such as education and healthcare, Hikvision empowers traditional service facilities with digital
technology to improve the quality of public services. In sectors such as trade and commerce, finance, and real estate,
Hikvision helps users improve their operational management and enhance their corporate service capabilities. In
industries such as culture and tourism, Hikvision provides safe and comfortable digital services to create new
cultural and tourism experiences.
1) Education and teaching: Helping to digitize educational and teaching scenarios
As the digital transformation of education evolves, Hikvision actively promotes innovation in teaching
products to meet the needs for high-quality education development, and help schools build a safe and beautiful
environment and develop innovative education methods.
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As the teaching methods continue to diversify in universities and the number of intelligent devices continues
to grow in classrooms, there is a growing demand for unified management and control of equipment. Hikvision's
smart classroom solution is designed with a fully networked and minimalist architecture based on an intelligent
control engine. The solution is integrated with various systems to allow for fully automated and minimalist
applications. By providing automated operation and maintenance capabilities, the solution easily enables
interconnection and integration of various equipment and facilities in the classroom, creating a convenient and easy-
to-use smart teaching space for teachers and students.
In university laboratory scenarios, Hikvision provides digital products and applications with a focus on
experimental teaching services and experimental resource sharing. The Company provides analytical instruments
such as ultra-high performance liquid chromatography and gas chromatography for teaching and experimental
centers, as well as analysis and testing centers. These instruments utilize advanced analytical techniques to strictly
control data quality and ensure the accuracy and reliability of experimental results. To address the waste of resources
in experimental resource management, Hikvision uses smart laboratory doorplates to display real-time information
on laboratory reservation and the use of experimental resources, facilitating online reservations for teachers and
students, and improving the efficiency of experimental resource utilization.
With the Hik-Cloud general education platform, Hikvision has launched an all-in-one device (6000E) for
primary and secondary school campuses. The device features an innovative cloud-edge fusion architecture that
allows intelligent and integrated management of campuses. It can be connected to an education bureau's system to
comprehensively meet the needs of management of parents, schools, and the education bureau, achieving joint home
and school education and interconnection between the education bureau and schools. Furthermore, Hikvision
provides a high-quality digital teaching environment for teachers and students through intelligent products such as
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class displays, electronic class plates, and smart integrated sports machines.
Hikvision builds a new digital infrastructure for education through AIoT technologies and products, and works
with numerous partners including Ningbo University and the Education Bureau of Sucheng District, Suqian City to
create a new perspective on high-quality education and promote the high-quality development of education.
2) Smart healthcare: Helping to create a high-quality and efficient medical experience by focusing on
diagnosis and treatment scenarios
It is well known that the medical care process plays a very important role in patient diagnosis and treatment
process. Hikvision seeks to create a new nursing management model by focusing on improving nursing quality and
efficiency.
In clinical nursing, patients are prone to pressure injuries due to long-term bed rest. Hikvision provides wound
detection PDA that helps nurses measure the area of pressure ulcers and automatically records data into working
documents, achieving refined management of nursing quality. As for the patient monitoring scenarios, Hikvision
applies multiple kind of millimeter wave perception radar products to daily patient monitoring, which can quickly
identify risk events such as patient falls, and monitor the patient's breathing, heart rate, and body movement in real-
time, thereby improving monitoring management.
Additionally, to address the issue of inconsistent information during the surgical process, Hikvision uses video
terminals to achieve rapid interaction of various information, improving the efficiency of surgical information query
and doctor-nurse collaboration. In biological laboratories, intelligent visual products provide intelligent tools for
remote guidance and standardized management of operating areas. In the pre-hospital emergency scenarios, real-
time information transmission can be achieved through intelligent terminals, providing support for remote
consultation and pre-hospital and intra-hospital collaborative treatment, and improving pre-hospital medical
emergency capabilities.
Hikvision empowers patient-centered diagnosis and treatment services with digital technology, and works with
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customers such as the First Hospital of Ningbo University and Qilu Hospital of Shandong University to improve
the quality and efficiency of modern healthcare.
3) Trade and commerce: Building digital capabilities for marketing and supply chain scenarios
With the Hik-Cloud platform and the Guanlan Large Model, Hikvision provides highly cost-effective products
and solutions for trade and commercial enterprises in multiple aspects such as production, processing, logistics, and
sales, enhancing digital management and marketing capabilities, and helping enterprises reduce costs and increase
efficiency.
In the retail scenarios, Hikvision uses industry large models to perceive cashier violations and other behaviors
in real-time, strengthening the standardized management of stores. As for the catering scenarios, the Company
combines anti-oil cameras, unsupervised open fire work cameras, temperature and humidity sensors and other
equipment to ensure standardized kitchen operations. In business management, the Company assists businesses in
digital marketing through products such as commercial displays, audio broadcasting, customer flow analysis, and
live streaming cameras.
Hikvision provides products such as smart cold storage cameras, railway platform cameras, and packaging
traceability machine in the logistics part of the supply chain. These products help trade and commercial enterprises
establish a transparent, efficient, and collaborative supply chain network and build agile operation centers,
strengthening the management of core elements—people, vehicles, goods, and warehouses.
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Hikvision uses a variety of AIoT products to help trade and commercial enterprises build manageable marketing
and supply chain networks, continuously improving their digital operational capabilities. As of 2023, the number of
Hik-Cloud chain users and access devices has maintained rapid growth, with over 5 million access devices, serving
approximately 600,000 chain stores.
4) Financial services: Facilitating the digitalization of outlet services and customer management
Financial services continue to penetrate into every aspect of the economy and society, giving a strong impetus
to social development. Hikvision leverages technological advantages to assist financial institutions in strengthening
their management and service capabilities, thus better contributing to economic and social development.
In terms of the smart branches, Hikvision participates in the intelligent construction of virtual reception services,
interactive marketing, energy-conserving IoT central control systems. The Company is also actively promoting the
construction of themed and characteristic outlets such as agricultural assistance, and facilitating the orderly
management of theme-related content displayed on media devices such as information release screens, LED screens,
and smart screens based on the information release management platform, making financial services more
considerate and heart-warming.
The asset owners are generally found to be small, scattered, and weak in the asset mortgage process of
agricultural entities, which restricts the growth potential of agricultural users by leveraging financial services as
well as the in-depth development of the bank's agricultural services. Combining video and AI technologies and
multispectral vegetation monitoring devices, Hikvision helps customers quickly establish a closed loop system of
production, operations, and fund management by building capabilities for remote asset inventory counting, visual
abnormality warning, and intelligent growth detection in planting, breeding, and animal husbandry scenarios,
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thereby reducing the threshold for agricultural loans and promoting construction for rural revitalization.
At present, these solutions have served multiple first-tier branches of banks including Agricultural Bank of
China, Industrial and Commercial Bank of China, and China Construction Bank.
5) Real estate and property management: Focusing on digital solutions in core scenarios
Aiming to serve people's livelihoods through technology, Hikvision has launched a cloud-edge integration
architecture based on Hik-Cloud+6000C, which is a smart community and property solution powered by a digital
and intelligent application system that supports digital services such as property decoration, property management
services, and house operation and maintenance.
During the pre-construction phase of real estate, Hikvision integrates smart community spaces with smart home
technology to increase the technological premium of real estate projects. In the property management service stage,
Hikvision uses intelligent perception products to monitor and warn in real-time of high-altitude littering, electric
bikes entering the elevator, abnormal charging and other situations. AI property inspections enable the placement
and processing of online work orders and closed-loop service management, helping to improve the quality and
efficiency of property management services. Moreover, these inspections can be used to manage the charging and
operation of new energy vehicles to increase the revenue of property management companies. In the house operation
and maintenance stage, the Company assists in monitoring the status of dangerous buildings and enables intelligent
supervision and management.
Hikvision has been in the real estate industry for many years, and has established cooperation with Binjiang
Real Estate, CR Vanguard Life, Deji Commercial Group, Shanghai Construction and many other customers in the
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fields of community, property management, business management, and construction, creating a win-win situation.
6) Cultural and museum venues: Building digital preservation and exhibition of cultural relics
Hikvision utilizes digital technology to promote the inheritance of brilliant human civilization that has been
established over thousands of years. As for the scenarios of cultural relics and historical sites, Hikvision uses macro
cameras to observe cracks in stone carvings, providing accurate data on crack changes for researchers in cultural
relics protection and facilitating research on the protection of stone carvings. In terms of the scenarios of cultural
relic exhibition preparations, the Company uses laser radars to provide senseless protection for openly-exhibited
cultural relics, ensuring their safety. With regard to the cultural exhibition scenarios, the Company enhances the
interactivity and fun of the exhibition and makes the exhibits more vivid through various forms of LED screens,
creating an immersive experience for tourists. The use of digital protection enables cultural relics to be presented in
a more vibrant state to the public, allowing them to better experience and appreciate the beauty of culture.
Furthermore, at the entrance and exit of the museum, Hikvision's intelligent security machines and security
gates are used to conduct security checks on people and their bags and assist security inspectors in quickly
identifying prohibited items based on a deep learning algorithm, protecting the safety of both tourists and cultural
relics. At the entrance and exit of the exhibition hall, Hikvision's passenger flow cameras track the number of visitors
in each exhibition hall in real-time, assisting museum managers in guiding visitors in an orderly manner and
providing a comfortable environment for visitors.
These technologies have been used by many users including the Shanghai Museum, He'nan Museum, Luoyang
Longmen Grottoes, and China Animation Museum, facilitating the protection and inheritance of civilization.
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7) Tourist attractions: Empowering tourist attraction management and services with digitization
With the recovery of the tourism industry and changes in tourism consumption structure, the high-quality
requirements of tourists for tourism experience are driving the refinement of tourist attraction operation and
management. Hikvision drives innovative development of smart tourism by integrating digital technology into
tourist attractions.
As for daily management of tourist attractions, Hikvision uses passenger flow cameras to monitor and calculate
the number of people at ticket gates, waiting points, and various scenic areas in real-time, and to warn of exceeding
passenger flow limits. Hikvision's GNSS displacement observation dome cameras can be used to timely detect
geological disasters such as landslides, rockfalls, and collapses. Hikvision's water-level observation dome cameras
and hyperspectral water quality detection cameras can monitor the water level and quality in scenic areas in real-
time. Hikvision helps scenic area managers build intelligent perception and warning capabilities through digital
products, facilitating grid-based inspections in scenic areas. By creating a scenic area command center, the Company
integrates and analyzes multi-dimensional data to enhance scenic area management and emergency response
capabilities, ensuring a safe, orderly, and convenient tourist experience in the scenic area.
In addition, as for tourist service scenarios, Hikvision provides services such as pre-tour live streaming, self-
driving parking guidance, scenic spot information inquiry, and automatic attraction explanation. To address the
long wait time for buses during peak hours, the lack of information synchronization and other problems, the
Company integrates, analyzes, and processes data on tourist flow in the scenic area and at each station, and
vehicle operation trajectories to provide real-time information on vehicle arrival time, available parking spaces,
and reasonable and interesting travel routes for tourists, thereby enhancing the tourist experience in the scenic
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area.
These technical solutions have served many cultural and tourism organizations, including Mount Wuyi National
Park in Fujian, Datang Never Night City in Xi'an, and Yulong Snow Mountain in Lijiang, Yunnan.
4.3 Facilitating the digital transformation of governance methods
As the digital transformation of governance methods is inevitable in the digital age, the construction of digital
governments has picked up speed. With the growing use of IoT perception, AI, big data, and cloud computing
technologies in the construction of digital governments, the importance of digital and intelligent governance has
increasingly attracted attention, and improving digital and intelligent governance capabilities has become an
important component of digital government construction.
Combining AIoT technology with years of profound understanding of user needs in the public service field,
Hikvision continues our efforts in five industrial business areas, security, traffic, ecosystem, governance and
service. Moreover, the Company integrates product and technology capabilities to support the data and AI
governance of governments at municipal, county, town, village and community levels. With the philosophy of "AI
universal empowerment and deepening of data value", Hikvision has constantly expanded our product portfolio in
terms of "hardware, platforms, algorithms, models and services" and deeply integrated product and system
capabilities with a focus on the value fulfillment of solutions. Ultimately, the Company serves to empower digital
government transformation through the comprehensive expansion of intelligent businesses in public security,
transportation, urban governance, livelihood services, ecological and environmental protection, etc.
In response to the urgent need for digital government transformation, Hikvision continues to strengthen urban-
level basic capabilities of AIoT such as Perception Base, Intelligence Base, Data Base and Empowering
Platform. The Company intensifies efforts in various sectors and expands applications across industry segments,
developing and consolidating our industrial service capabilities.
Hikvision continues our efforts in different industry segments. By integrating our scenario-based AIoT
capabilities with strong expertise in image-data integration and our Guanlan Large Model's universal detection and
recognition capabilities, the Company provides localized end-to-end application solutions for users from various
industries, helping to expand scenario-based intelligent innovation applications and promoting a closed-loop
business process in these industries. As of today, the Company has sorted out more than 2,000 business scenarios,
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developed more than 250 industrial solutions and improved more than 500 intelligent industrial applications in smart
cities, public security, traffic management, urban governance, livelihood services, ecological and environmental
protection, and other sectors. All these efforts are aimed at optimizing government's operational mechanisms and
construction modes, and providing strong support for modernized urban governance.
Combining a profound understanding of each industry with years of experience, Hikvision has continuously
consolidated our service capabilities in AI engineering, data engineering, business operation and system operation
and maintenance. The Company has also established a nationwide professional service team to better serve users .
AI engineering services: Hikvision provides users with scenario-based AI engineering services, including
personalized algorithm training, tuning of intelligent algorithms, tuning of correlation clustering, tuning of
intelligent strategies, intelligent scenario arrangement, event analysis, research and judgment. The Company has
provided AI engineering services for more than 300 projects.
Data engineering services: Hikvision provides users with data engineering services involving multi-
dimensional perception data and business data, and optimizes data engineering delivery systems. With big data
governance tools such as the IoT-information network integration data resource platform, the Company provides
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data engineering services for users on demand, including IoT element governance implementation, data integration
implementation, data governance implementation, and data model implementation. We have provided data
engineering services for more than 300 projects.
Business operation services: Hikvision has increasingly expanded the scope of business operation services
that are provided based on Internet operation platforms, and these services have covered a number of fields including
comprehensive urban operations, urban parking management, firefighting management, community security
management, security inspection management, and intelligent management of garbage classification.
System operation and maintenance services: Hikvision provides users with comprehensive operation and
maintenance services covering equipment, systems, and services, including daily inspection of software and
hardware, fault repair, active monitoring, technical guidance, major project support, software updates and upgrades,
and regular customer service reports, etc. The Company has provided system operation and maintenance services
for 291 projects.
Hikvision continues to strengthen product and service integration, and comprehensively enhance our system
engineering service capabilities, including planning and design, survey and governance, engineering construction,
and system integration, covering scientific deployment of perception devices, intelligent analysis and correlation of
perception data, and deep integration of IoT-information network data. The Company also continuously strengthens
project management in the construction of complex systems, enhances project management capabilities in various
stages such as initiation, planning, execution, monitoring, and closure, and collaborates with integration customers
to provide users with a closed loop process for the project.
While deepening our understanding of business services in public security, transportation, urban governance,
livelihood services, ecological and environmental protection and other fields, Hikvision strives to build the
capabilities of the "Perception Base, Intelligence Base and Data Base" for cities with a focus on perception,
intelligence and data. In addition, the Company has continuously expanded smart industrial services through the
Fusion of Perceptions Empowering Platform. We are committed to making cities smarter, society safer,
transportation more convenient, governance more refined, services more targeted, and the ecological environment
more livable.
1) Smarter cities
In the field of smart cities, Hikvision focuses on governance with perception data and empowerment with
data and AI. The Company has optimized the urban AIoT perception system, promoted an organic integration of
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multi-source data, and created an AIoT application ecosystem with the goal of empowering urban governance with
data and AI. Utilizing IoT, AI, big data and other technologies, the Company has established a governance network
featured by multi-dimensional perception, intelligent research and judgment, and efficient collaboration, assisting
in developing an efficient, accurate, and intelligent urban digital governance system that makes the city smarter.
Hikvision continues to optimize the Fusion of Perceptions Empowering Platform. Guided by the core
philosophy of "resource co-construction, video sharing, algorithm co-management, capacity sharing, computing
power integration, and event co-governance," the Company cultivates unified resource networking, catalog
governance, intelligent analysis, strategic efficiency enhancement, fusion and exploration, and open sharing
capabilities for cities to meet the needs of intelligent perception and fusion applications across industries and
departments, comprehensively enhancing the co-construction and sharing of urban IoT perception resources.
In terms of digital villages, Hikvision provides a management platform for digital villages, which enables
digital planting, rural smart tourism and other applications for multiple scenarios including rural industries,
ecological protection, rural governance, and rural services, empowering the digital transformation of rural industries.
The platform allows management of straw burning prohibition, intelligent farmland protection, and water
environment monitoring, enabling intelligent perception and warning of rural ecological environment elements, and
helping to improve the rural living environment. It is also used for multi-dimensional rural archiving, rural drowning
prevention, rural fire management and other applications, helping to improve the comprehensive governance
capacity of rural areas. In addition, the platform provides intelligent elderly care, digital radio, village affairs
disclosure and other applications that help to improve rural service capabilities.
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Furthermore, Hikvision provides comprehensive and diverse solutions for city managers at all levels. For
example, in the field of smart towns, Hikvision provides a management platform for smart towns, which enables
comprehensive management of waste trucks, smart store management, smart management of construction sites, and
other applications for multiple scenarios such as public management, safety construction, public services, ecological
protection, and comprehensive law enforcement, helping to improve the efficiency of public management. The
platform provides fire safety management, emergency assistance for residents, drowning prevention supervision
and other applications, helping to improve safety construction. It also offers home-based elderly care services, self-
service government services, information release services and other applications, helping to improve the capacity
of serving the people. Moreover, the platform is used for forest fire monitoring and management, smart flood control
supervision, smart river and lake supervision and other applications, helping to strengthen ecological environment
protection capabilities. The platform also allows management of law enforcement teams, management of objects of
law enforcement, electronic evidence management and other applications, helping to enhance comprehensive law
enforcement capabilities at the grassroots level. As for smart communities, Hikvision provides a comprehensive
management platform for smart communities, which enables supervision of high-altitude littering, fire passages and
non-motor vehicles and other applications for multiple applications such as community governance, community
safety and community services to timely identify various abnormal risks and hazards, helping to improve the
efficiency of community governance. The platform is used for intelligent supervision of pedestrian and vehicle
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transportation, community fire protection, and manhole covers and other applications, expanding the measures of
safety prevention and helping to improve community safety management. The platform also provides smart property
services, community-based elderly care services, mobile welfare services and other applications, helping to improve
the happiness of community residents.
2) Safer societies
In the public safety domain, by following the core development path of "perception + intelligence", Hikvision
is committed to providing comprehensive "video-image intelligence-based" solutions and products. The Company
deeply explores and expands application scenarios by focusing on the core capability of "video-image intelligence"
to consolidate and expand our position in urban public safety.
For instance, with regard to the security for the Asian Games Hangzhou, Hikvision has built the Intelligence
and Data Bases by focusing on game security to enable AIoT, image and data fusion, data-assisted decision-making,
venue digital twins, intelligent assisted warning, multi-party collaborative consultation, remote visual command and
other capabilities. The Company has provided comprehensive, three-dimensional, and intelligent solutions and
product systems in event command and scheduling, opening and closing ceremony support, Asian Games Village
management, traffic support, social control, moat defense, torch relay, marathons, and other aspects.
In terms of road traffic safety, Hikvision provides system capabilities for traffic safety hazard research and
judgment, diagnosis and management, large truck control, and non-motor vehicle control. The Company accurately
determines the road traffic safety situation and comprehensively analyzes the causes of safety risks to enable refined
hazard management in multiple scenarios and comprehensive safety control of large trucks and non-motor vehicles,
helping to improve the management of road traffic safety.
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Taking the management and control of large trucks as an example, Hikvision provides Internet permit
application, police platform permit approval and other applications for scenarios such as the handling of large truck
passes, identification of illegal acts, warning of dangerous acts, visit-based publicity and education to quickly and
efficiently complete the application and review of permits, and prevent high-risk trucks from getting on the road.
The Company enables identification of illegal acts of large trucks such as running red lights, driving on prohibited
lanes, carrying passengers in the truck compartment, modification and speeding, helping to investigate and deal
with illegal activities related to large trucks and prevent traffic accidents. The Company timely reminds drivers of
safe driving by warning of dangerous behaviors such as fatigue driving, making phone calls, lane departure, and
approaching other vehicles. The Company also provides enterprise operation and examination forms, visit-based
enterprise publicity and education and other applications, comprehensively evaluates high-risk enterprises, vehicles,
and drivers, and conducts targeted visits and education, facilitating joint efforts of the police and enterprises to
eliminate accident hazards.
In emergency management, Hikvision has built a comprehensive application platform for emergency
management by using our AIoT perception, intelligence and data bases, and four-dimensional spatiotemporal
operating environment, which enables various emergency management applications for scenarios such as
production safety, natural disasters emergency management, command and rescue.
Hikvision provides a comprehensive supervision platform for safety production, which enables IoT access,
risk monitoring, intelligent warning, hierarchical push and other applications to meet the needs of supervising
hazardous chemicals, fireworks and firecrackers, non-coal mines, tailings ponds, and various industrial and trade
enterprises. The platform also provides special operation management applications for key high-risk scenarios such
as open fire work and limited space operations, helping to improve comprehensive supervision capabilities for safety
production. The Company offers a comprehensive monitoring and warning platform for natural disaster risks, which
enables disaster risk monitoring, comprehensive risk assessment, disaster warning, disaster situation analysis and
other applications for various natural disaster scenarios such as forest and grassland fires, typhoons and floods, and
geological disasters, helping to improve the monitoring and warning capabilities of natural disasters. The Company
also provides an emergency command platform, which offers full-process emergency command and dispatch
capabilities for various unexpected accidents and disasters, including duty fulfillment, event reporting, plan
management, collaborative consultation, command and dispatch, summarization and evaluation and other core
applications. The platform also enables specialized research and judgment applications for specific disasters such
as hazardous chemical accidents, forest fires, and urban waterlogging, helping to improve emergency command and
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rescue capabilities.
3) More convenient transportation
By combining IoT perception technology with industry scenarios, Hikvision provides the industry with refined
perception, big data-based scientific decision-making control and other capabilities in areas such as digitalization
of transportation infrastructure, traffic operation guarantee, traffic management organization, hub passenger and
freight flow, traffic and travel, ensuring the safe and efficient operation of transportation.
Taking traffic signal control in the field of traffic management organization as an example, Hikvision
provides a smart platform for traffic signal control, which offers single-point induction control, single-point adaptive
control and other control capabilities for single-point signal control intersection scenarios to solve the problem of
unreasonable signal timing plans at intersections. The platform provides dynamic green waves, static green waves,
and other control capabilities for signal control of urban trunk lines, enabling vehicles to pass through green lights
all the way and improving the overall efficiency of trunk line traffic. It offers regional coordination and control
capabilities for intersection linkage control scenarios to achieve optimal overall traffic efficiency in the region.
Moreover, the platform provides anti-overflow planning and control capabilities for queue overflow scenarios to
effectively prevent queue overflow at intersections, and offers variable lane control capabilities for uneven traffic
flow distribution at intersections to intelligently allocate lane resources, and alleviate lane congestion.
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In addition, Hikvision can provide complete and diverse solutions for traffic management services in different
fields. For example, in the field of highway transportation, Hikvision fully combines IoT perception technology
with industry scenarios to provide safe and efficient monitoring capabilities for super highways as well as bridges,
slopes, tunnels, service areas/stations, construction sites, toll stations, mountainous sections, and sections with poor
visibility on ordinary national and provincial roads. The Company also provides abnormality detection and data
analysis capabilities for highway events and weather, visual industry supervision capabilities for engineering
construction and industry management, as well as AI road fault inspection and other auxiliary equipment and road
surface maintenance decision-making systems for daily maintenance inspections. The Company has provided end-
to-end services for thousands of users in this area. With regard to port management, combining multi-dimensional
perception and AI algorithms with production safety management needs of the port area, Hikvision provides
scenario-based intelligent warning and effective supervision of elements related to "people, vehicles, goods,
machines, and environment" in the production process. By utilizing various perception methods such as video, radar,
and thermal imaging, the Company improves the overall perception and monitoring capabilities for safety
production scenarios. Moreover, the Company offers 25 intelligent algorithms in 4 categories that provide more
comprehensive production hazard investigation, tracking, and disposal capabilities for port safety management
departments, helping ports to gain full information on overall safety hazards. In terms of railway transportation
and rail transit, Hikvision provides comprehensive monitoring and detection in scenarios such as railway stations
and hubs, freight yards, power substations, train carriages, railway lines, and railway overpass bridges and culverts
through multi-dimensional perception technology, serving 18 railway administration groups and hundreds of high-
speed railway station hubs across China, and providing supporting services for railway travel. Hikvision's
technologies have been applied to public safety precautions, smart operation, intelligent operation and maintenance,
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digital service, smart stations and other scenarios in over 100 urban rail transit lines in the country, providing support
and guarantee for the safe, efficient and smooth operation of urban rail transit and creating a safer and more
comfortable ride experience for citizens.
4) More refined governance
Using urban operation management as an example, Hikvision offers a smart urban management platform
that provides intelligent inspection of urban appearance, management of general sanitation of the store entrance
area, urban waterlogging monitoring, urban illegal construction monitoring, command and dispatch, operation and
monitoring centers and other applications through urban management dome cameras, urban management panoramic
PTZ cameras, intelligent analysis servers and other devices. The platform provides warning and algorithmic
scheduling capabilities for nearly 70 types of violations ranging, helping to create a clean, tidy and orderly urban
environment.
Additionally, Hikvision can provide comprehensive and diverse solutions for different types of urban
governance activities. For instance, in the field of municipal supervision, Hikvision provides a smart municipal
supervision platform with a focus on scenarios such as pipeline blockage, waterlogging, and gas leakage. The
platform enables municipal facility operation monitoring, pipeline visualization modeling, emergency command
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and dispatch, and other applications through the use of underground liquid level and flow sensors, intelligent
monitoring terminals for manhole covers, dome cameras for water level observation, combustible gas detectors in
enclosed spaces and other devices. The platform also provides a management process that integrates problem
collection, dispatch and disposal, feedback and evaluation, providing support for the closed-loop supervision of
municipal facilities. In terms of environmental sanitation supervision, Hikvision provides a smart environmental
sanitation platform with a focus on scenarios such as sanitation worker and vehicle operation, garbage collection
and transportation, station management, and garbage classification. The platform allows worker and vehicle
operation supervision, garbage collection and transportation management, garbage classification management,
station operation supervision and other applications through the use of intelligent vehicle terminals, garbage
classification cameras, intelligent analysis supercomputers and other devices, facilitating refined supervision of
urban appearance and environmental sanitation. As for comprehensive law enforcement, Hikvision provides a
comprehensive management platform for mobile law enforcement with a focus on law enforcement event collection,
law enforcement process recording, law enforcement command and dispatch and other scenarios. The platform
allows off-site collection of law enforcement events, management of objects of law enforcement, command and
dispatch, electronic evidence management, intelligent review and closure of cases and other applications through
the use of law enforcement recorders, law enforcement case terminals, collection stations and other devices, helping
to improve the effectiveness of comprehensive law enforcement.
5) More targeted services
Hikvision utilizes industry software platforms such as a comprehensive management platform for smart
government halls, an online supervision platform for market supervision, a smart elderly care platform and a
management platform for urban parking operations to provide complete solutions for government services, market
supervision, smart elderly care, smart parking and other business fields, helping to provide more targeted services.
For example, in the field of market supervision, Hikvision has built an online market supervision platform
for catering enterprises, elevators, agricultural markets and other segmented scenarios through the use of elevator
health monitoring cameras, elevator safety gateways, anti-oil cameras, kitchen inspection super brains and other
products, facilitating refined supervision services.
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Hikvision provides an online supervision application for catering, which intelligently analyzes the wearing of
catering staff, shipstandardized operations and other aspects, and provides visible, perceptible, and accessible
production process services for users and the public, helping to create a safer and more hygienic and standardized
catering environment. The Company also provides an online elevator supervision application, which enables
elevator fault supervision services, elevator maintenance and quality supervision services, and annual elevator
inspection supervision services, helping to upgrade elevator operation services. The application also provides
elevator video inspection and other services to help improve the safe operation of elevators.
Moreover, as for smart elderly care, Hikvision provides a smart elderly care platform with a focus on
institutional elderly care, elderly nursing, service supervision and other scenarios. The platform enables smart
nursing, everything about elderly care in one diagram, safety warning services and other applications through the
use of smart elderly care all-in-one machines, elderly care alarm boxes, fall detection radars, smart nursing terminals
and other devices, promoting the intelligent transformation of elderly care services. In the area of smart parking,
Hikvision provides a management platform for urban parking operations with a focus on roadside parking, off-road
closed parking lots and other scenarios. The platform allows resource management, operation management,
customer service management, financial management, operation and maintenance management, public services and
other urban parking business applications through the use of parking space detection cameras, radar-video assisted
parking posts, geomagnetic instruments, entrance and exit control equipment and other devices, providing
professional parking operations services and promoting more efficient and convenient parking experience.
6) A more livable ecological environment
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With the help of video, radar, thermal imaging, hyperspectral and other multi-dimensional perception and
intelligent analysis technologies, Hikvision strives to build an ecological monitoring, management and service
system for natural resources, ecological environment, meteorology and other business services, creating a more
livable ecological environment.
For example, in the field of smart water conservancy, Hikvision has built a digital twin platform for water
conservancy by providing AIoT perception, data base construction, intelligent analysis, simulation, computing
support and other capabilities for rivers and lakes, water conservancy projects and other scenarios, helping water
conservancy users across the country to implement scenario-based applications.
Hikvision provides an intelligent management platform for river and lake management and protection, which
intelligently detects the four violations related to rivers and lakes, such as illegal sand excavation, shoreline
destruction and garbage stacking, helping to improve the long-term protection and dynamic control of rivers and
lakes. A comprehensive monitoring and management platform for water conservancy projects is set up to achieve
safety monitoring and warning of dams, embankments, water gates, pumping stations and other projects, safety
monitoring and warning of mechanical and electrical equipment status, rainwater monitoring and warning,
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intelligent inspection, contingency plan management, control center diagram and other applications, thus obtaining
real-time updates on safe project operation and protecting water conservancy projects during floods. A monitoring
and warning platform for mountain torrents and a command and scheduling platform for water disaster prevention
are provided to offer dynamic monitoring and warning of mountain torrents, GIS scheduling, conference scheduling,
video scheduling and other functions, and realize "full access for one system, full connectivity of one network, full
display on one screen," ensuring easy access to flood information at the front-line level as well as vertical linkage
and horizontal coordination of flood control command and scheduling. An irrigation area management and
application platform is provided to offer applications such as water measurement management and irrigation area
safety inspection, facilitating the renovation and modernization of irrigation areas. An intelligent management
platform for water plant safety is created to achieve intelligent inspection of water plants, safety management of
secondary water supply pump houses, ensuring safe production of water plants and pump houses.
As the construction of digital economy, society and governments gains speed, IoT perception, AI, big data and
other technologies continue to find applications in cities and industries, gradually fulfilling their value. The
application of ubiquitous security has expanded from public security to security control needs in various fields
including public areas, municipal administration, transportation, resources, and production in a broader sense.
Its application in a single industry has been gradually brought to a new level with growing demand for integration
and empowerment based on all scenarios, all weathers and all-round perception. The picture of a smart city is
increasingly clearer, transforming from "all operations via one network" to "unified management via one
network", from "Internet +" to "intelligent +", and from "scenario intelligence to "industry intelligence."
With a user-centered approach, Hikvision seeks to work with partners in the AIoT sector such as research
institutes, product providers, algorithm vendors, independent software developers, system integrators and product
distributors to create a closed-loop ecosystem that covers the entire value chain from technology, products to
solutions and services by understanding the value preferences and core needs of users. Moreover, the Company will
continue to upgrade the products, systems and services, while providing high-quality technologies, products and
services to industrial users in the public service field.
4.4 Promoting the digital transformation of domestic distribution systems and overseas marketing networks,
and driving the digital development of commercial users at all levels
In the digital era, Hikvision continues to create digital marketing tools. With these tools, the Company helps
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more than 10,000 primary and tens of thousands of secondary distribution agents at home and abroad, as well as
millions of engineering contractors, installation companies, small integrators and other customers and partners
covered by this distribution network to overcome development bottlenecks, improve their ability to survive in a
volatile business environment, and build long-term competitiveness. By leveraging the multi-level coverage
capabilities of our domestic and foreign partners, end-users at all levels can benefit from Hikvision's AIoT products
and solutions, laying a solid foundation for digital development.
4.4.1 Domestic channels: Enhancing the service capabilities of the industry and promoting the digital
transformation of small and medium-sized enterprises
Hikvision continues to expand our channel ecosystem by accelerating the transformation from a traditional
distribution service model to a solution model. The Company collaborates with ecosystem partners to build a digital
system for the value chain that brings marketing, stores and services online. Moreover, the system encourages more
industry professionals and devices to get online and offers online AIoT capabilities for ecosystem partners and
online scenario capabilities for users. With the system, the Company provides low-cost, lightweight, tailor-made
and precise solutions and services for various SMEs.
1) Capacity building: Developing an intelligent cloud-edge system to promote the implementation of
intelligent business services
By leveraging our Hikvision SMBG E-commerce, Hikvision SMBG HikLink and Easy to Debug platform,
Hikvision connects and empowers distributors, engineering contractors, and industrial workers to reach and serve
SME users through digital marketing, service crowdsourcing, online devices and other means, thus creating a
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collaborative network for the AIoT industry, and promoting the prosperity, transformation and upgrading of the
industry.
Hikvision SMBG HikLink: This is an AIoT cloud platform that serves SME users. The platform mainly
provides general product capabilities such as video, access control, attendance, visual intercom, visitor, broadcasting,
and network management, as well as alarm, fire protection, information release, and OA approval. In collaboration
with ecosystem partners, Hikvision provides scenario-based solutions for self-built houses, communities, factories,
schools, construction sites, parks, breeding farms, and entertainment venues, and offers innovative services
including 4G with no power or network access and intelligent reminders, thus achieving unmanned operations, cost
reduction and efficiency improvement, and facilitating the digital and intelligent transformation of SMEs.
Based on people and vehicle detection algorithm, Hikvision has developed more intelligent scenario algorithms,
and built an intelligent business platform that integrates intelligent hardware, cloud visual model and services. The
Company also collaborates with ecosystem partners to create more vertical scenario applications, promoting
intelligent inclusiveness.
Hikvision SMBG E-commerce: This is an industrial digital empowerment platform that mainly serves
distributors, engineering contractors, service providers, and industrial workers. Currently, it has served over a
million security professionals.
The platform offers a product and solution showroom, enables customers to search information on Hikvision's
full range of products and solutions, and provides a VR display of scenario-based solutions. The platform helps
customers with digital marketing as it provides structured marketing materials for products and solutions, supports
customers in live streaming marketing through a new media matrix including TikTok, Kuaishou and Video Account,
and enables them to build private marketing networks and obtain sales leads. Moreover, with the platform, users
can experience digital stores or assign orders at the cloud business service plaza with products and services delivered
at the engineering contractors/service providers/stores offline, thus reducing customer acquisition costs, and
improving industrial synergy efficiency.
Easy to Debug: This is a professional and simple debugging tool for installation companies. It is used to
improve debugging efficiency by reducing service difficulties with tooling. Over the past year, the number of service
providers using this tool has increased rapidly. Moreover, an order matching tool is provided to improve pre-sales
efficiency, lower employment barriers, and promote flexible employment.
2) Business direction: Arming practitioners with digital capabilities and improving quality and efficiency
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for SME users using digital solutions
Promoting the digital transformation of security practitioners and enhancing their service capabilities
Hikvision SMBG E-commerce facilitates practitioners in content marketing and service support through the
order matching tool, product information, solution showroom, service squares and other sections during pre-sales,
mid-sales, and post-sales stages.
The Easy to Debug platform offers configuration and debugging functions for various professional devices and
is a job assistant that reduces the threshold for employment. It has served hundreds of thousands of service providers,
with key functions used over a million times. Furthermore, it helps practitioners maintain user relations and build a
good reputation through maintenance services.
Looking ahead, Hikvision will work with partners to provide more competitive solutions, while establishing
connection with SME users to facilitate their digital transformation. An IoT system will be established to unlock
more possibilities.
Facilitating digital transformation of SMEs through the provision of one-stop solutions and services
With long-term investment and R&D efforts in AIoT, Hikvision has achieved rapid growth in commercial
displays, parking, access control, audio, conference tablets, fire protection, alarm, network and other non-video
business services in addition to maintaining stable growth in video business and supporting products. By expanding
professional channels and building a nationwide service network, the Company provides customers with diversified
product choices and timely and professional local services.
In response to the demand of SMEs for lightweight and easy-to-use products and systems, Hikvision has
created Hikvision SMBG HikLink, an AIoT cloud platform that provides small and quality solutions and
standardized services to promote the digital transformation of SMEs in a more convenient, efficient, and economical
manner. Hikvision SMBG HikLink integrates multi-terminal capabilities, and expands multiple light intelligent
algorithms. In collaboration with ecosystem partners, the platform has created multiple vertical small scenario
applications and solutions, which have been implemented nationwide. The number of access devices and users of
the platform maintained high growth throughout the year.
In order to better meet the demand of users for one-stop security and intelligent application solutions, the
Company has developed digital store business based on solution marketing to offer scenario-based, structured, and
online solutions and attract online traffic through full-touch aggregation. Along with nationwide partners, the
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Company actively explores new media e-commerce and live streaming channels while leveraging the experience,
service, and systematic delivery capabilities of offline terminal stores to enhance lead conversion rate, facilitate
efficient consultation, experience, and purchase for users, connect users online, and continuously provide services.
4.4.2 Overseas layout: Continuously improving the international marketing system and building an open
international cooperation ecosystem
Hikvision's international business has evolved from its initial foreign trade model to localized sales via regional
centers, and now to localized marketing through a global network of sales and service channels and the
implementation of the "one policy for one country" strategy. By 2023, the Company has set up 80 branch offices in
the international market including Hong Kong, Macau and Taiwan regions of China, providing localized services
to more than 150 countries and regions. Hikvision is strategically positioned in overseas markets as a leading global
provider of AIoT products and solutions.
1) Development of international marketing capabilities and systems
Guided by the "one policy for one country" strategy, Hikvision continues to promote localization strategy with
a greater focus on the cultivation of digital precision marketing capabilities, expansion of multiple channels,
development of lower-tier markets, and the improvement of global operational service capabilities.
For the video business, the Company focuses on developing lower-level city-based markets. Efforts are being
made to further develop existing channels in tier 1 and 2 cities by focusing on the introduction and repurchase of
strategic products through secondary channels, and to develop new channels in tier 3 and 4 cities by focusing on the
coverage and transformation of secondary channels. In countries where the business development is relatively
mature, in addition to optimizing customer structure and consolidating channel foundation, the focus of marketing
is gradually shifting towards the coverage of and effective impact on the installation companies, with a greater
emphasis on effective promotion on the demand side.
On the basis of consolidating our video business, the Company has been actively seeking a second growth
curve in overseas markets in recent years. For non-video business, there has been a significant improvement in
product strength. While maintaining and re-using existing channels, the Company is accelerating the development
of new professional channels. In 2023, a breakthrough was made in the development of new channels. For example,
the Company has continued to expand the market share of our access control and intercom products in multiple
countries, establishing a leading position in these markets. Our LED and interactive screen products have been
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introduced to and highly recognized by users in many countries in the Middle East and Europe, achieving rapid
sales growth.
The Company continues to promote the construction of localized operational capabilities. In terms of overseas
warehousing operations, the Company has effectively optimized the local delivery chain and responded quickly to
customer needs by accelerating inventory turnover in overseas warehouses, visualizing local order delivery times,
and optimizing warehousing and distribution. With regard to after-sales service, in 2023, the Company focused on
delegating repair capabilities to lower-level markets and providing replacement instead of repair services for some
products. Over 100 authorized service customers were added throughout the year, and customer satisfaction was
significantly improved regarding to after-sales response and problem-solving.
2) Establishing international ecological cooperation through product technology openness and
collaborative resource openness
As a leader in the AIoT industry, Hikvision has always been committed to developing an international
ecological cooperation plan through open products, technologies and resources that meets the diverse and
personalized scenario-based needs of various industries. In 2023, the Company's international business achieved
significant results in both product technology openness and collaborative resource openness.
At the level of product technology openness, the Company has transformed from video surveillance integration
to key AI data integration, and systematic software integration has also become the mainstream integration method
overseas. The multi-level and multi-faceted integration methods provide flexible integration solutions and optimized
user experience.
At the level of collaborative resource openness, the Company's Technology Partner Portal has continuously
expanded its business to provide comprehensive technical support and services for partners. As of 2023, more than
11,000 overseas partners have registered and obtained integrating resources on the platform, learned about open
technology, and engaged in collaborative business. Through regular online and offline activities, the Company
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strengthens communication and exchange with partners, shares the latest technological trends and success cases,
and creates a favorable environment for ecological cooperation.
With the advancement of the global digital wave, the Company will continue to enhance our marketing network,
and expand our openness capabilities with a focus on vertical markets overseas. As AIoT technology and scenario-
based solutions propel us forward, we are looking to empower all industries and help users improve operational and
management efficiency.
4.5 Cultivating new growth curves for innovative business services, and exploring new technologies, products,
and formats for AIoT
Hikvision's continuous efforts in technical reserves and expanding business scope provide a good environment
for innovative business development. Both our main and innovative business services revolve around the clear
business direction of AIoT, but they also differ in technology construction, product development, and business
layout, supporting and promoting each other, and jointly empowering the digital transformation of the economy and
society.
Currently, our innovative business services include EZVIZ Network, HikRobot, HikMicro, HikAuto, HikSemi,
HikFire, Rayin and HikImaging. More new innovative business units are being explored, incubated, and cultivated.
The solid growth of these innovative business services has continuously injected new impetus into the long-term
sustainable development of the Company.
After nearly a decade of thoughtful operations, EZVIZ Network has built "EZVIZ", a leading brand in high-
quality smart home. With a vision to becoming a trusted provider of smart home and IoT cloud platform
services, EZVIZ Network has developed smart home and IoT cloud platform services as its two main business
services and built its core competitiveness. Today, EZVIZ Network has grown into one of the few AIoT companies
in the industry with complete vertical service capabilities including hardware design, R&D, manufacturing, and IoT
cloud platform services.
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Combining visual perception, AI and navigation control technologies, HikRobot focuses on industrial IoT, smart
logistics and intelligent manufacturing with solid algorithm accumulation, strong software and hardware
development capabilities, and a complete marketing system. HikRobot continues to invest in mobile robots and
machine vision to improve quality, reduce costs, and increase efficiency and promote the digital and intelligent
transformation of manufacturing and logistics.
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Combining infrared thermal imaging technology with MEMS technology, HikMicro provides core
components, detectors, modules, infrared thermal imaging products and overall solutions to the world. The
company's products are widely used in industrial, outdoor, integrated, and smart IoT fields. By focusing on
temperatures, HikMicro is developing multi-dimensional technology and product solutions, expanding the
boundaries of human perception.
HikAuto has grown into a leading company in intelligent driving sensors in China thanks to its leading
domestic market share in vehicle-mounted cameras and millimeter-wave radars, as well as its mass production of
mature ultrasonic radars. HikAuto endeavors to make traffic safer and transportation more efficient by providing
full stack sensor solutions for different levels of intelligent driving systems of the vehicle, which have covered
more than 10 commercial and aftermarket industries.
HikSemi is committed to providing worldwide users with professional overall storage solutions, with a focus
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on industrial control, data center, video surveillance, consumer-end customers and other application
scenarios. With complete design, development and manufacturing capabilities, the Company operates four
product lines: solid-state hard disks, front-end storage, embedded storage and flash memory application.
HikSemi continues to provide consumers with safe and reliable storage devices, systems, and solutions, striving to
become a leading provider of overall storage solutions in China.
HikFire's business services cover traditional fire protection, smart fire protection, and fire protection platforms.
By leveraging cloud computing, big data, and AI technologies, HikFire has developed a full range of multi-
dimensional perception, ubiquitous IoT, as well as intelligent and visual security-fire protection integration products
and solutions with a focus on six fire perception elements, including smoke, temperatures, gases, fire, water,
and electricity. The company aims to strongly promote the construction of urban fire protection IoT, optimize
the integrated management of corporate security and fire protection, and improve home fire safety.
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Rayin is focusing on X-ray imaging technologies, dedicated to becoming a leading technology R&D,
manufacturing, sales and leasing services provider of invisible light detection equipment. The company has the
ability to independently produce security inspection machines, security doors, industrial X-ray equipment, and
a full range of supporting products. With long-standing expertise in X-ray technology, AI, equipment IoT, etc., Rayin
keeps enabling technology and creating value for smart security inspection and intelligent industrial
manufacturing and other fields.
HikImaging, rooted in the medical technology industry, is committed to the research and application of multi-
dimensional perception, intelligent analysis, video/audio transmission, computing and display control and other
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related technologies in medical scenarios. The company provides rigid endoscopes, electronic endoscopes,
operation video management, and other products and solutions for customers in the medical device industry,
working with customers to promote the digital and intelligent transformation of the surgical and clinical scenarios.
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II. Analysis of Core Competitiveness
AIoT is an industry where the Company sees potential for long-term development. Combining multi-
dimensional perception with AI and big data, we have created tens of thousands of products from detectors to system
solutions that cover more than 500 scenarios across over 90 sub-sectors in over 10 industries. These technologies,
products and consumer needs promote one another through continuous changes, updates and iterations, becoming
a competitive driver of Hikvision's technological innovation.
Demands in the AIoT industry has always been fragmented and scenario-based. How to meet personalized
demands and create scenario-based solutions while maximizing business economies of scale is a challenge that is
faced by all industry participants. Hikvision has established and consistently improved the operating mechanism
and organizational systems to adapt to the fragmented demands, and has continuously promoted the refinement and
optimization of baseline products and standardized business services while meeting personalized demands.
Digital transformation has exerted a profound impact on retail, media, entertainment, local life and other sectors,
and created a group of giants in the digital era. As digital transformation advances, the demand for quality and
efficiency improvement and costs reduction has become increasingly prominent in traditional industries.
Digitization is a primary way to meet these needs. With strong technological expertise and profound industry
understanding, Hikvision is rapidly expanding digital transformation business services.
1. Continuously investing in R&D to build a comprehensive technology and product mix
Since our establishment, Hikvision has always focused on technological innovation, and developed a product
system including detectors, modules, devices and systems through the combination and integration of common
technologies (hardware technology, process materials, embedded software, system-level software development, big
data technology, network security, etc.) and scenario-based application technologies. As an AIoT company,
perception technology has been our long-term focus. The Company has gradually expanded perception technology
from visible light to infrared, X-ray, millimeter wave and other fields, explored audible sound, ultrasonic and other
fields, continuously developed perception methods such as temperature, humidity, pressure and magnetism, and
further expanded the fusion of multi-dimensional perception applications. In addition, combining strong expertise
in technology fields such as cloud computing, big data, and AI with a deep understanding of AIoT, the Company
has formed a complete system ranging from perception to intelligent perception and cognition, from products to
solutions, and from data to applications. By leveraging our technical capabilities and engineering thinking, we've
continuously improved our implementation capabilities, technologies, products, and solutions in projects, and
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created a circular iterative system that connects R&D to the market and vice versa.
Hikvision continues to invest in R&D with a cumulative investment of RMB 41.32 billion in R&D over the
past five years. In addition to the research institute, hardware product R&D center, and software product R&D
center at the Hangzhou headquarters, the Company has also established a number of local R&D centers at home
and abroad, which have formed a headquarters-centered multi-level R&D system. The Company will continue to
maintain heavy R&D investment, strengthen and consolidate our foundation of AIoT technology, and expanded our
AIoT devices. We will also take advantage of digital transformation to consolidate our market position in the field
of AIoT.
During the reporting period, by leveraging our technical expertise and industry understanding, Hikvision
rapidly promoted the R&D of new digital products, and developed a large number of multi-dimensional perception
and audio products that solved the core pain points of users and were suitable for various typical application
scenarios. The launch of these digital products will accelerate the advancement of Hikvision's AIoT strategy and
further expand the proportion of corporate business services in our business structure.
2. Continuously improving domestic and foreign marketing networks and gaining insight into customer
needs
The Company is committed to building a comprehensive marketing system covering the world that quickly
responds to customer needs. In China, the Company has developed a city-centered marketing network. As of 2023,
the Company has established 32 provincial-level business centers, and more than 300 city-level branches and offices
under the business centers, forming a hierarchical city-based marketing system. At the same time, the Company has
expanded industry scenario applications for domestic business services by differentiating users into public business
groups, enterprise business groups, and small and medium-sized enterprises business groups. Overseas, the
Company has continuously promoted the process of localization and implemented the strategy of "one policy for
one country". As of 2023, we have set up 80 branches, subsidiaries and offices in the international market including
Hong Kong, Macau and Taiwan regions of China, establishing a presence in more than 150 major countries and
regions worldwide.
In terms of services, the Company has a three-level vertical service system including Hangzhou Global
Technical Support and Service Center, Business Center Technical Service Department, and Authorized Customer
Service Station, which ensures global and local quality services. In China, we have set up 32 provincial-level
technical service departments and 300 municipal service outlets, and established cooperation with more than 3000
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important partners and authorized service providers. Overseas, the Company focuses on extending authorized
maintenance capabilities and providing replacement services instead of repair services for some products. By
accelerating inventory turnover in overseas warehouses, visualizing the delivery times of local orders, and
optimizing warehousing and distribution, we have effectively optimized the local delivery chain to respond quickly
to customer needs.
3. Continuously building a flexible manufacturing system to enhance supply chain stability
The AIoT market is fragmented due to the diversity and personalization of AIoT products. On the production
end, this market characteristic is manifested as the formation of large-scale customized manufacturing needs of
multiple small-lot orders. As an answer to this challenge, Hikvision has focused on continuously building a flexible
and efficient manufacturing system, and has used new technologies such as AI to enhance manufacturing
capabilities and improve lean production and automation. The Company operates domestic manufacturing bases in
Tonglu of Hangzhou, Chongqing and other places, orderly promotes the construction and expansion for new
manufacturing bases, and supports the global product supply through local factories in India, Brazil, and UK.
The Company has always been committed to establishing long-term and stable partnerships with suppliers,
helping them iteratively improve raw materials, components, etc. By leveraging our digital capabilities supported
by a smart supply chain we've developed over the years, we have empowered industry chain partners to build a
healthy supplier ecosystem, and enhance the overall stability of the industry's supply chain.
During the reporting period, Hikvision vigorously promoted the development of digital products for production
parks by verifying our own ideas through practice. By promoting innovative applications of automated, digital, and
intelligent technologies and products, we aim to improve supply quality, increase operational efficiency, and reduce
production costs.
4. Continuously promoting the evolution of the management system and improving the operating efficiency
As for business direction and goal setting, the Company has annually updated and applied the strategic planning
and annual business planning based on the BLM strategic planning methodology, facilitating effective
communication and alignment of each business and functional departments to ensure clear goals and division of
responsibilities. In terms of internal management, focusing on revolution of management, Hikvision has
implemented over 100 management reform initiatives each year to optimize resource layout and improve overall
capabilities. With regard to risk management, the Company has established a sound risk management system,
promoted the construction of a global compliance governance system, and continuously improved compliance risk
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management. Relying on the construction of an IT system, the Company has continuously optimized business
processes and improved efficiency of the business system. Furthermore, the Company continues to refine the digital
management capabilities in many aspects including promoting the identification and management of financial risks,
building a digital quality management system, improving internal control mechanisms, pursing the construction of
compliance systems, and protecting innovation achievements.
5. Continuously building a people-oriented organizational climate and uniting outstanding talents
Hikvision firmly believes that talent is an important driver for the sustainable development of organizations,
as well as the core competitive advantage for corporate development. Therefore, the Company recruits talent from
all around the world by adhering to the employment concept of "people-oriented, growing together with talents".
By improving the talent discovery and performance appraisal mechanism and identifying and assigning people
through a scientific approach, the Company has boosted the morale and creativity of employees to improve
organizational capabilities. Guided by our business strategy, the Company has built an agile and efficient
organization to ensure the supply of talent for key positions, continuously strengthening organizational capabilities,
and helping to achieve profitable business growth.
The comprehensive employee reward system has been formed, which consists of compensation and benefits,
equity incentives, innovative business co-investment and etc., further developing the distribution mechanism for
employees to participate in and benefit from the Company's growth. Employees participating in equity incentives
and co-investment can obtain long-term returns through their contributions to the Company's performance,
coordinating the long-term development of business with the continuous employee growth.
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III. Core Business Analysis
1. Overview
The concentrated outbreak of social demand during a certain period often accompanies the rise of a group of
enterprises. Looking back at the past two decades, Hikvision has taken advantage of the demand for social security
improvement and become a leading global security enterprise. Looking towards the future, the continuous
improvement of production efficiency is the key to enhancing competitiveness. As a traditional manufacturing
power, China considers enhancing the competitiveness of manufacturing enterprises as a top priority. Hikvision
continues to pave the way for business transformation by shifting our business positioning from security to AIoT,
aiming to fully apply AIoT technologies and products to all aspects of social life, thoroughly solve users' core pain
points from the dimensions of quality improvement, efficiency enhancement, and cost reduction, and help users
create more value.
In recent years, the global economy and politics have suffered from severe external turmoil such as anti-
globalization, public health event, inflation, and regional military conflicts. If Hikvision were a moving truck,
strategic transformation would be like replacing the engine of the moving truck, which was made even more difficult
by the exceptionally bumpy roads. Nevertheless, in 2023, Hikvision preliminarily completed the transformation of
our AIoT strategy, recording a total operating revenue of RMB 89.34 billion with a year-on-year increase of 7.42%,
and a net profit attributable to shareholders of the Company of RMB 14.11 billion with a year-on-year increase of
9.89%. We will continue to invest in research, production, and sales, firmly believing in stable and long-term
development.
1. Sustained investment in R&D to consolidate the innovation foundation for business transformation. After
more than a decade of development, Hikvision has accumulated significant expertise in multidimensional perception
and sensory fusion technologies, with a well-established scale in the research and development and application of
artificial intelligence. Sustained investment in AI has substantially improved our development of products,
algorithms and solutions. The iterative evolution of numerous technology sets has brought favorable clustering
effects to Hikvision's product development in terms of technology combination and aggregation. On the basis of
these efforts, Hikvision has rapidly promoted the innovation and R&D of digital products. In 2023, the Company
launched a large number of new products with vastly different functions and forms to adapt to new scenarios and
needs, laying the foundation for the implementation of our AIoT strategy.
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2. Continuous organizational change towards business objectives. In terms of the marketing, Hikvision has
established a unique marketing strategy with a focus on market expansion into lower-tier regions. The Company
has set up provincial-level business centers and city-level branches in China and implemented the strategy of "one
policy for one country" overseas to foster lower-level business organizations, making marketing activities closer to
users and responding quickly to their needs. In addition, Hikvision has promoted organizational change driven by
vertical industries to meet the business needs of industries represented by headquarters, branches, and chain
enterprises. Our marketing organizations have become more flexible and adaptable to the business environment.
Furthermore, guided by the business differentiation strategy, the Company has focused on key business services by
splitting our product lines, industry lines, and innovative business services. We have promoted moderate
independent operation and assessment, and continuously expanded and strengthened small product and industry
categories, facilitating organizational development towards business changes.
3. Continuously improving the flexibility of the supply chain and optimizing manufacturing costs. Compared
to the highly automated and scaled production lines of a single product category, the demand for multiple small
batches of multiple product categories has posed an enormous challenge to the production lines. Hikvision has long
been committed to building a flexible and efficient manufacturing system that continuously improves our
manufacturing capabilities by promoting factory automation and R&D automation, and using AI technology. Only
by solving the manufacturing problems can fragmented market demands be met quickly and with high quality. In
2023, Hikvision vigorously promoted the development of digital products for production parks by verifying our
own ideas through practice. By promoting innovative applications of automated, digital, and intelligent technologies
and products, we aim to improve supply quality, increase operational efficiency, and reduce production costs.
4. Expanding a presence in AIoT and strengthening innovative business services. In 2023, the Company's total
revenue from innovative business services was RMB 18.55 billion, accounting for 20.77% of our overall revenue.
EZVIZ Network, which was listed on the Science and Technology Innovation Board in 2022, has become one of
the few AIoT companies in the industry with complete vertical integration service capabilities, ranging from
hardware design, R&D, manufacturing to IoT cloud platforms. By focusing on industrial IoT, smart logistics, and
intelligent manufacturing, HikRobot has continuously invested in mobile robots and machine vision, and has
become a domestic leader in the two fields. It has submitted an IPO application to the SZSE ChiNext Market. Our
other innovative business services are in a period of rapid development, and their market competitiveness continues
to improve. Centralized or decentralized operations are performed for these business services to support the
Company's sustained and stable business growth, helping the Company achieve stable, long-term success.
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The trend of digital transformation has arrived, and AIoT is Hikvision's choice of the times. In 2023, we will
stick to our strategic positioning, firmly promote the Company's business transformation, and make positive
progress in the fields of technology system, product system, manufacturing system, marketing system, and
innovative business group, taking a solid step on the Company's strategic transformation and laying a good
foundation for steady progress in the future on the road of AIoT. The company will continue to consolidate the
technical foundation, enrich the product matrix, innovate intelligent applications, contribute to the digital
transformation of various fields of economy and society, and create tangible value for users.
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2. Revenue /cost of sales and services
1) Revenue structure
Unit：RMB
2023 2022
YoY Change
Proportion to Proportion to (%)
Amount Amount
revenue revenue
Revenue 89,339,856,855.68 100.00% 83,166,321,681.14 100.00% 7.42%
Classified by industry
AIoT products and services 89,339,856,855.68 100.00% 83,166,321,681.14 100.00% 7.42%
Classified by product
Products and services for
68,779,757,950.20 76.99% 65,873,570,961.21 79.21% 4.41%
main business (Note 1)
Constructions for main
2,007,188,913.81 2.25% 2,222,876,059.14 2.67% -9.70%
business
Subtotal 70,786,946,864.01 79.23% 68,096,447,020.35 81.88% 3.95%
Robotic business 4,940,495,688.57 5.53% 3,916,176,952.59 4.71% 26.16%
Smart home business 4,686,023,001.37 5.25% 4,077,290,933.03 4.90% 14.93%
Thermal imaging business 3,284,778,727.13 3.68% 2,790,033,744.03 3.35% 17.73%
Auto electronics business 2,706,680,020.16 3.03% 1,905,289,927.53 2.29% 42.06%
Storage business 1,931,387,706.41 2.16% 1,616,267,518.08 1.94% 19.50%
Other innovative businesses
1,003,544,848.03 1.12% 764,815,585.53 0.92% 31.21%
(Note 2)
Subtotal (Note 3) 18,552,909,991.67 20.77% 15,069,874,660.79 18.12% 23.11%
Classified by region
Domestic 60,372,251,251.28 67.58% 56,890,890,769.45 68.41% 6.12%
Overseas 28,967,605,604.40 32.42% 26,275,430,911.69 31.59% 10.25%
Note 1: Main business refers to the business parts other than the innovative businesses.
Note 2: Other innovative businesses include the products and services of the innovative business subsidiaries, such as HikFire, Rayin
and HikImaging. Same below.
Note 3: The data listed in the subtotals may differ slightly from the aggregated results of the relevant individual data due to rounding.
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Revenue structure
Unit: RMB 100mn
2023 2022 YoY Change (%) 2021
PBG 153.54 161.35 -4.84% 191.61
EBG 178.45 165.05 8.12% 166.29
Domestic main SMBG 126.79 124.97 1.46% 134.90
business
Other products and
services for main 9.32 9.27 0.54% 9.43
business
Overseas main Products and services
239.77 220.32 8.83% 189.26
business for main business
Innovative businesses 185.53 150.70 23.11% 122.71
Total 893.40 831.66 7.42% 814.20
Note 4: The operating income from domestic main business (including three major business groups in domestic and other products
and services for main business) and overseas main business only include Hikvision’s main business's products and services,
excluding revenue from innovative businesses.
Note 5: Innovative businesses' revenue includes its domestic and overseas revenue
2）Industries, products or regions accounting for more than 10% of the Company's revenue or operating
profit
√ Applicable □ Inapplicable
Unit: RMB
YoY Change YoY Change
Cost of sales and YoY Change
Revenue Gross margin (%) of operating (%) of gross
services (%) of revenue
cost margin
Classified by industry
AIoT products and
89,339,856,855.68 49,637,055,845.33 44.44% 7.42% 3.42% 2.15%
services
Classified by product
Products and
services for main 68,779,757,950.20 36,907,185,097.37 46.34% 4.41% -0.42% 2.60%
business
Constructions for
2,007,188,913.81 1,529,858,191.39 23.78% -9.70% -8.55% -0.96%
main business
Innovative
18,552,909,991.67 11,200,012,556.57 39.63% 23.11% 20.95% 1.08%
businesses
Subtotal 89,339,856,855.68 49,637,055,845.33 44.44% 7.42% 3.42% 2.15%
Classified by region
Domestic 60,372,251,251.28 33,920,287,429.21 43.81% 6.12% 2.50% 1.98%
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Hikvision 2023 Annual Report
YoY Change YoY Change
Cost of sales and YoY Change
Revenue Gross margin (%) of operating (%) of gross
services (%) of revenue
cost margin
Overseas 28,967,605,604.40 15,716,768,416.12 45.74% 10.25% 5.46% 2.46%
When the statistical caliber of the Company's main business data is adjusted during the reporting period, the
Company's main business data would be adjusted according to the end of the reporting period in the most recent
period.
□ Applicable √ Inapplicable
3）If revenue from physical products sales greater than revenue from providing services
√ Yes □ No
Industry Item Unit 2023 2022 YoY Change (%)
Sales volume Per unit 227,487,010 202,935,192 12.10%
AIoT products and
services
Output volume Per unit 240,073,553 207,698,031 15.59%
Explanation on why the related data varied by more than 30% on a YoY basis
□Applicable √Inapplicable
4) Fulfillment of signed significant sales contracts and procurement contracts by the reporting period
□ Applicable √Inapplicable
5) Cost of sales and services structure
Classified by industry
Unit: RMB
2023 2022
Proportion to Proportion to YoY Change
Industry Item
Amount cost of sales Amount cost of sales (%)
and services and services
AIoT products Cost of sales
49,637,055,845.33 100.00% 47,996,254,466.32 100.00% 3.42%
and services and services
Classified by product
Unit: RMB
2023 2022
Proportion to Proportion to YoY Change
Product Item
Amount cost of sales Amount cost of sales (%)
and services and services
Products and Cost of sales
services for main and services 36,907,185,097.37 74.35% 37,063,587,434.45 77.22% -0.42%
business
Constructions for Cost of sales
and services 1,529,858,191.39 3.08% 1,672,876,250.28 3.49% -8.55%
main business
Innovative Cost of sales
and services 11,200,012,556.57 22.56% 9,259,790,781.59 19.29% 20.95%
businesses
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Hikvision 2023 Annual Report
2023 2022
Proportion to Proportion to YoY Change
Product Item
Amount cost of sales Amount cost of sales (%)
and services and services
Cost of sales
Subtotal and services 49,637,055,845.33 100.00% 47,996,254,466.32 100.00% 3.42%
Note: The data listed in the subtotals may differ slightly from the aggregated results of the relevant individual data due to rounding.
6) Any change in consolidation scope during the reporting period
√Yes □ No
During the reporting period, the Company established three domestic subsidiaries, three overseas subsidiaries,
and acquired two subsidiaries. All of this result in changes in the scope of its consolidation scope. For details, please
refer to changes in the consolidation scope in Note (Ⅵ) to the financial statements.
7) Significant change or adjustment of the Company’s business, products or services during the reporting
period:
□ Applicable √ Inapplicable
8) Major customers and suppliers:
Sales to major customers of the Company
Sales to top five customers (RMB) 2,019,184,544.05
Total sales to top five customers as a percentage of the total sales for the year (%) 2.26%
Total sales to the related parties in top five customers as a percentage of the total
0.00%
sales for the year (%)
Information on top five customers
No. Name of Customer Sales Amount (RMB) Percentage of total sales for the year
1 First 663,582,455.14 0.74%
2 Second 505,858,674.52 0.57%
3 Third 294,396,573.73 0.33%
4 Fourth 288,396,578.78 0.32%
5 Fifth 266,950,261.88 0.30%
Total -- 2,019,184,544.05 2.26%
Other information of major customers
□Applicable √Inapplicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 7,384,910,178.70
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Total purchases from top five suppliers as a percentage of the total purchases for the year (%) 15.86%
Total purchases from the related parties in the top five suppliers as a percentage of the total
6.65%
purchases for the year (%)
Information on top five suppliers of the Company
No. Supplier Name Purchase Amount (RMB) Percentage of total purchase for the year
1 First 1,856,306,127.19 3.99%
2 Second 1,724,031,662.99 3.70%
3 Third 1,309,828,018.03 2.81%
4 Fourth 1,257,177,731.27 2.70%
5 Fifth 1,237,566,639.22 2.66%
Total -- 7,384,910,178.70 15.86%
Other information of major suppliers
□ Applicable √ Inapplicable
3. Expenses
Unit: RMB
YoY Change
2023 2022 Note of significant change
(%)
Continue to increase investment in domestic
Selling expenses 10,842,500,778.25 9,773,457,336.23 10.94%
and overseas marketing networks
Administrative expenses 2,769,731,410.40 2,642,113,372.00 4.83% No significant change
R&D expenses 11,392,948,404.47 9,814,444,260.55 16.08% Continue to increase R&D investment
Affected by foreign exchange rate fluctuations,
Financial expenses -749,780,213.12 -990,401,533.32 24.30%
foreign exchange income decreased
4. R&D Investment
√Applicable □Inapplicable
R&D personnel of the Company
2023 2022 Change Percentage
Number of R&D staff (ppl) 28,479 27,951 1.89%
R&D staff as percentage of Total
48.65% 47.96% 0.69%
headcount
Education structure of R&D staff - - -
Bachelor degree 17,502 17,376 0.73%
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Hikvision 2023 Annual Report
2023 2022 Change Percentage
Master’s degree 8,602 8,528 0.87%
Master’s degree or above 161 162 -0.62%
others 2,214 1,885 17.45%
Age composition of R&D staff - - -
Under 30 years old 14,967 16,442 -8.97%
30-40 years old 12,655 10,844 16.70%
Over 40 years old 857 665 28.87%
R&D investment of the Company
2023 2022 Change Percentage
Amount of R&D expenses (RMB) 11,392,948,404.47 9,814,444,260.55 16.08%
R&D expenses as a percentage of
12.75% 11.80% 0.95%
revenue
Capitalized R&D expenses (RMB) 0.00 0.00 0.00%
Capitalized R&D expenses as a
0.00% 0.00% 0.00%
percentage of R&D expenses
Reason and effect of significant change in the composition of the Company's R&D personnel
□ Applicable √ Inapplicable
Reason of significant change of total R&D expenses as a percentage of revenue as compared to last year
□ Applicable √ Inapplicable
Reason and explanation of its reasonableness of significant change of the capitalized R&D expenses
□ Applicable √ Inapplicable
5. Cash Flow
Unit: RMB
Item 2023 2022 YoY Change (%)
Subtotal of cash inflows from
99,392,055,313.32 92,669,076,379.69 7.25%
operating activities
Subtotal of cash outflows from
82,768,801,007.40 82,504,940,997.31 0.32%
operating activities
Net cash flows from operating
16,623,254,305.92 10,164,135,382.38 63.55%
activities
Subtotal of cash inflows from
4,907,512,153.30 7,422,373,113.52 -33.88%
investing activities
Subtotal of cash outflows from
8,894,812,143.31 11,147,754,175.76 -20.21%
investing activities
Net cash flows from investing
-3,987,299,990.01 -3,725,381,062.24 -7.03%
activities
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Hikvision 2023 Annual Report
Item 2023 2022 YoY Change (%)
Subtotal of cash inflows from
11,109,937,859.61 14,375,530,041.46 -22.72%
financing activities
Subtotal of cash outflows from
14,255,369,357.73 15,831,448,254.21 -9.96%
financing activities
Net cash flows from financing
-3,145,431,498.12 -1,455,918,212.75 -116.04%
activities
Net increase in cash and cash
9,603,887,833.13 5,211,446,085.37 84.28%
equivalents
Explanation of why the related data varied significantly on a YoY basis
√ Applicable □ Inapplicable
The main reason for the change in net cash flow from operating activities was the increase in sales collection during
the reporting period; the main reason for the change in net cash flow from investing activities was the purchase of
long-term assets during the reporting period; the main reason for the change in net cash flow from financing
activities was mainly due to the issuance of restricted shares and the listing of the subsidiary in the previous year,
and there were no such fundraising activities in the current period.
Explanation of reasons leading to the material difference between cash flow from operating activities during the
reporting period and net profit for the year
□ Applicable √ Inapplicable
IV. Non-core Business Analysis
□Applicable √Inapplicable
V. Analysis of Assets and Liabilities
1. Material changes of asset items
Unit：RMB
December 31, 2023 December 31, 2022
YoY
Percentage Percentage Change Note of significant change
Amount of total Amount of total (%)
assets assets
Increase in sales
Cash and bank balances 49,629,469,654.46 35.74% 40,011,863,999.94 33.56% 2.18%
collection
Accounts receivable 35,815,173,511.44 25.79% 29,906,294,410.40 25.08% 0.71% No significant change
Part of construction
projects met payment
Contract assets 1,173,312,415.20 0.85% 2,118,223,370.98 1.78% -0.93%
conditions transferred to
accounts receivable
Inventories 19,211,434,385.32 13.84% 18,998,222,978.81 15.93% -2.09% No significant change
Long-term equity
1,151,104,887.85 0.83% 1,252,033,513.41 1.05% -0.22% No significant change
investment
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December 31, 2023 December 31, 2022
YoY
Percentage Percentage Change Note of significant change
Amount of total Amount of total (%)
assets assets
Chengdu Science and
Technology Park Project,
Wuhan Smart Industrial
Fixed assets 11,508,302,317.75 8.29% 8,539,842,630.68 7.16% 1.13%
Park Project Phase I and
other projects were
transferred to fixed assets
Construction in process 4,307,651,074.46 3.10% 3,770,803,300.80 3.16% -0.06% No significant change
Right-of-use assets 521,061,396.66 0.38% 574,478,326.31 0.48% -0.10%
No significant change
Lease liabilities 344,005,866.13 0.25% 277,255,924.83 0.23% 0.02%
Contract liabilities 2,977,990,775.40 2.14% 2,644,496,508.36 2.22% -0.08% No significant change
Short-term borrowings 2,118,952,026.06 1.53% 3,343,071,972.89 2.80% -1.27%
Increase in demands for
Long-term borrowings 8,940,122,961.01 6.44% 7,522,315,341.60 6.31% 0.13% working capital
Non-current liabilities
5,814,660,214.96 4.19% 868,197,272.46 0.73% 3.46%
due within one year
High proportion of overseas assets
□ Applicable √ Inapplicable
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2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
Provision
Profit or loss from for decline
Cumulative fair Purchased
change in fair in value Sales during
Item Opening balance value changes amount during Other changes Closing balance
value during the during the the period
included in equity the period
period current
period
Financial assets
1. Derivative financial assets 12,807,438.36 -12,770,058.36 37,380.00
2. Other non-current financial assets 423,893,239.94 5,229,385.72 25,000,000.00 604,313.00 18,666,625.00 472,184,937.66
3. Receivables for financing 1,484,218,258.74 110,001,573.88 1,594,219,832.62
Subtotal of financial assets 1,920,918,937.04 -7,540,672.64 25,000,000.00 604,313.00 128,668,198.88 2,066,442,150.28
Financial liabilities 68,299,685.57 30,219,930.53 38,079,755.04
Whether there were any material changes on the measurement attributes of major assets of the Company during the reporting period:
□ Yes √ No
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Hikvision 2023 Annual Report
3. Assets right restrictions as of the end of the reporting period
Unit: RMB
Item Closing book value (RMB) Reasons for being restricted
Cash and bank balances 210,191,306.76 Various cash deposits and other restricted funds
Endorsed to suppliers, discounted to banks, and pledged for
Notes receivable 1,172,749,062.48
the issuance of the banker's acceptance
Receivables for financing 42,274,830.03 Pledge for issuance of bank’s acceptance bills
Accounts receivable 320,648,995.89 Pledge for long-term debts
Contract assets 129,223,004.39 Pledge for long-term debts
Fixed assets 79,633,944.01 Fixed assets leased out under operating leases
Intangible assets 37,374,930.65 Pledge and mortgage for long-term debts
Other non-current assets 1,500,999,221.99 Pledge for long-term debts
Total 3,493,095,296.20
VI. Investments
1. Overview
√Applicable □ Inapplicable
Investment in 2023 (RMB) Investment in 2022 (RMB) YoY (%)
4,935,643,770.15 4,686,051,570.44 5.33%
2. Significant equity investment during the current reporting period
□Applicable √Inapplicable
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3. Significant non-equity investment during the current reporting period
√ Applicable □ Inapplicable
Unit: RMB
Reasons
for not
Cumulative
Fixed reaching
Investment during amount of
Invest assets Project Source of Project planned Disclosure Date
Project name the current reporting investment by the Disclosure Index (if applicable)
method investme industry funds schedule progress (if applicable)
period end of the current
nt or not and
reporting period
expected
benefits
AIoT Announcement on Investment and
Chengdu Science and products Self- September 23, Construction of Chengdu Science
Self-built Yes 4,687,853.06 1,429,368,089.70 100.00% None
Technology Park Project and financing 2017 and Technology Park Project in
services Chengdu (No. 2017-033)
AIoT Announcement on Investment and
Xi’an Science and products Self- September 23, Construction of Xi’an Science and
Self-built Yes 679,169,622.18 1,189,310,650.73 73.29% None
Technology Park Project and financing 2017 Technology Park in Xi’an (No.
services 2017-031)
AIoT
Wuhan Intelligence Industry products Self-
Self-built Yes 597,753,883.32 960,249,154.48 100.00% None
Park Project (Phase I) and financing Announcement on Investment and
services September 23, Construction of Wuhan
AIoT 2017 Intelligence Industry Park in
Wuhan Intelligence Industry products Self- Wuhan (No. 2017-036)
Self-built Yes 1,698,562.38 5,671,116.16 0.37% None
Park Project (Phase II) and financing
services
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Hikvision 2023 Annual Report
Reasons
for not
Cumulative
Fixed reaching
Investment during amount of
Invest assets Project Source of Project planned Disclosure Date
Project name the current reporting investment by the Disclosure Index (if applicable)
method investme industry funds schedule progress (if applicable)
period end of the current
nt or not and
reporting period
expected
benefits
Announcement on the Investment
EZVIZ Intelligent AIoT Self- and Construction of EZVIZ
Manufacturing Chongqing products financing/ August 11, Intelligent Manufacturing
Self-built Yes 556,041,674.60 628,214,692.80 53.69% None
Base Project(Infrastructure and Raise 2021 (Chongqing) Base Project by
Part) services funds Holding Subsidiaries (No. 2021-
052)
AIoT
Shijiazhuang Science and
products Self-
Technology Park Project Self-built Yes 169,836,308.93 288,123,484.13 100.00% None
and financing Announcement on Investment and
(Phase I)
services March 22, Construction of Shijiazhuang
AIoT 2018 Science and Technology Park in
Shijiazhuang Science and
products Self- Shijiazhuang (No. 2018-016)
Technology Park Project Self-built Yes 153,547,142.02 276,247,602.73 61.57% None
and financing
(Phase II)
services
Announcement on the Investment
AIoT
Hikvision Global and Construction of Hikvision
products Self- January 19,
Warehousing Logistics Self-built Yes 84,761,013.93 106,599,361.06 100.00% None Global Warehousing and Logistics
and financing 2022
Center (Phase I) Center Project (No. 2022-010)
services
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Hikvision 2023 Annual Report
Reasons
for not
Cumulative
Fixed reaching
Investment during amount of
Invest assets Project Source of Project planned Disclosure Date
Project name the current reporting investment by the Disclosure Index (if applicable)
method investme industry funds schedule progress (if applicable)
period end of the current
nt or not and
reporting period
expected
benefits
Announcement on the Investment
AIoT and Construction of the
Industrialization Base of
products Self- January 19, Industrialization Base of Infrared
Infrared Thermal Imaging Self-built Yes 70,562,828.92 70,932,363.98 8.60% None
and financing 2022 Thermal Imaging Products by the
Products
services Holding Subsidiary (No. 2022-
008)
Announcement on the Investment
AIoT
HikRobot Product and Construction of HikRobot
products Self- January 19,
Industrialization Base Self-built Yes 61,041,691.51 61,417,606.81 6.06% None Product Industrialization Base
and financing 2022
Construction Project Construction Project by Holding
services
Subsidiary (No. 2022-007)
Announcement on the Investment
AIoT
HikRobot Intelligent and Construction of HikRobot
products Self- January 19,
Manufacturing (Tonglu) Self-built Yes 19,640,816.79 20,299,490.56 1.90% None Intelligent Manufacturing (Tonglu)
and financing 2022
Base Project Base Project by a Holding
services
Subsidiary (No. 2022-009)
Total -- -- -- 2,398,741,397.64 5,036,433,613.14 -- -- -- -- --
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Note: In accordance with the Company's Authorization Management System, new investments on fixed assets of Chengdu Science and Technology Park Project, Xi’an
Science and Technology Park Project, Wuhan Intelligence Industry Park Project, and Shijiazhuang Science and Technology Park Project were approved by the Strategy
Committee of the Board of Directors.
4. Financial asset investment
(1) Securities Investments
□ Applicable √ Inapplicable
There no such case in the reporting period.
(2) Derivatives Investments
√ Applicable □ Inapplicable
1) Derivative investments for hedging purposes during the reporting period
√ Applicable □ Inapplicable
Unit: 0,000 RMB
Gain or loss on Changes in Proportion of closing
Purchased amount Sold amount
Type of derivatives Initial investment Opening changes in fair value cumulative fair Closing investment amount to the
during the during the
investment amount amount during the reporting value included in amount Company’s net assets at the
reporting period reporting period
period equity end of the reporting period
Foreign exchange contract 235,153.63 235,153.63 1,744.99 0.00 611,695.94 0.00 176,133.92 2.31%
Total 235,153.63 235,153.63 1,744.99 0.00 611,695.94 0.00 176,133.92 2.31%
Accounting policies and specific accounting In accordance with the provisions of Accounting Standards for Business Enterprises (hereinafter referred to as "ASBE") No. 22 - Recognition
principles for hedging business during the reporting and Measurement of Financial Instruments, ASBE No. 24 - Hedge Accounting, ASBE No. 37 - Presentation of Financial Instruments and
period and explanations on whether there have been other relevant regulations and guides, the Company correspondingly conducted accounting and reporting for foreign exchange derivatives
significant changes from the previous reporting business carried out. The Company conducted initial and subsequent measurements on contracts of foreign exchange derivatives by held-
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Hikvision 2023 Annual Report
Gain or loss on Changes in Proportion of closing
Purchased amount Sold amount
Type of derivatives Initial investment Opening changes in fair value cumulative fair Closing investment amount to the
during the during the
investment amount amount during the reporting value included in amount Company’s net assets at the
reporting period reporting period
period equity end of the reporting period
period for-trading financial assets/ held-for-trading financial liabilities, and the fair value for held-for-trading financial assets and held-for-trading
financial liabilities is determined by financial institutions based on trading data of open market. There was no significant changes from the
previous reporting period.
Explanations on actual gain or loss during the
There was a total of RMB90.20 million actual losses during the reporting period.
reporting period
The Company's purpose was to avoid and prevent risks of exchange rate or interest rate fluctuations and prohibited any speculative
Explanations on the effect of hedging business actions, further improving the Company's ability to cope with risks of foreign exchange fluctuations, better avoiding and preventing risks
of foreign exchange rate and interest rate fluctuations, and enhancing its financial stability.
Capital source of derivatives investment The Company's own fund.
Risk analysis and control measures (including but
not limited to, market risk, liquidity risk, credit risk, For details of the risk analysis and control measures, please refer to the Announcement on Carrying out Foreign Exchange Hedging
operational risk, legal risk, etc.) of holding Business in 2023 (Announcement No. 2023-016) disclosed by the Company on April 15, 2023.
derivatives during the reporting period
Change of market price or fair value of invested
The Company recognized and measured the fair value of derivatives in accordance with the Accounting Standards for Business
derivatives during the reporting period; specific
Enterprises Article 22 - Recognition and Measurement of Financial Instruments. During the reporting period, a total of RMB17.45 million
methods, related assumptions and parameter setting
of gains from changes in fair value of derivatives were recognized, and the fair value is determined according to the exchange rate and
of the derivatives’ fair value analysis should be
interest rate provided by banks and other pricing service institutions, measured and recognized on a monthly basis.
disclosed
Prosecution (if applicable) None
Announcement date for approvals of derivatives
April 15, 2023
investment from the Board of Directors (if any)
Announcement date for approvals of derivatives
Inapplicable
investment from the general meeting of shareholders
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Hikvision 2023 Annual Report
Gain or loss on Changes in Proportion of closing
Purchased amount Sold amount
Type of derivatives Initial investment Opening changes in fair value cumulative fair Closing investment amount to the
during the during the
investment amount amount during the reporting value included in amount Company’s net assets at the
reporting period reporting period
period equity end of the reporting period
(if any)
The relevant approval procedures for the Company’s foreign exchange hedging business complies with the relevant national laws and
regulations and the relevant provisions of the Articles of Association. The Company has established a sound process for the organization,
business operation, and approval for conducting foreign exchange hedging business, and formulated the Foreign Exchange Hedging
Specific opinions on the Company’s derivatives Management System. The relevant internal control processes have been improved, and the targeted risk control measures taken by the
investments and risk control from independent Company are feasible and effective. The Company has issued a feasibility analysis report on the proposed foreign exchange hedging
directors business, and it is reasonable and feasible for the Company to carry out hedging business based on avoiding foreign exchange market
risks. Under the premise of ensuring normal production and operation, the Company conducts foreign exchange hedging business, which
enables the Company to avoid and prevent sharp exchange rate fluctuations and its adverse effects on the Company’s operations, and
contributes to controlling foreign exchange risks. There is no damage to the interests of the Company nor of its shareholders.
2) Derivative investments for speculative purposes during the reporting period
□Applicable √ Inapplicable
There is no derivative investments for speculative purposes during the reporting period.
5. Use of raised funds
□ Applicable √ Inapplicable
During the reporting period, there was no use of raised fund.
The details of the use of funds raised by EZVIZ Network, the Company's holding subsidiary, was disclosed on April 13, 2024 in Annual Report of Hangzhou EZVIZ
Network Co., Ltd Section Ⅵ (14) - Progress of the Use of Funds Raised on the website of Shanghai Stock Exchange ( www.sse.com.cn).
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Hikvision 2023 Annual Report
VII. Disposal of Significant Assets and Equity
1. Disposal of significant assets:
□ Applicable √ Inapplicable
There is no disposal of significant asset for the Company during the current reporting period.
2. Sale of significant equity:
□ Applicable √ Inapplicable
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Hikvision 2023 Annual Report
VIII. Analysis of Major Subsidiaries and Holding Companies
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Inapplicable
Equity acquisition and disposal
Company name Impact on overall production results
method during the reporting period
Wuhu Sensortech Intelligent Technology Ltd. and its
Transfer of equity in cash Business development
subsidiaries
Zhejiang Haishi Luyue Technology Ltd. Cash contribution Business development
LLC VIETNAM HIKVISION TECHNOLOGY
Cash contribution Expand overseas sales channels
COMPANY LIMITED
Shijiazhuang Haishi Digital Technology Ltd. Cash contribution Business development
Hikrobot Europe B.V. Cash contribution Expand overseas sales channels
Hikrobot Singapore Pte. Ltd. Cash contribution Expand overseas sales channels
Zhengzhou Hikvision Technology Ltd Cash contribution Business development
IX. Structural Entities Controlled by the Company
□ Applicable √ Inapplicable
X. Outlook for the Future Development of the Company
1. Development Trends for the Industry
IoT perception, AI, and big data are the core technologies of the AIoT industry and key drivers for digital
transformation. The development of the AIoT industry will drive various industries, and bring unprecedented
changes to the society and economy in the process of promoting digital transformation of more business scenarios.
The Company has long-standing technical expertise and first-mover advantage in the field of AIoT, and
possesses the core capabilities for digital transformation. We are confident in taking advantage of the opportunities
brought by digital transformation and working with partners to facilitate the digital transformation of the society.
2. Development Strategy of the Company
Hikvision is committed to serving various industries with IoT perception, AI, and big data technologies, leading
the future of AIoT. Through comprehensive perception technologies, we aim to help people better connect with the
world around them. With a wealth of intelligent products, we strive to identify and satisfy diverse demands by
delivering intelligence at your fingertips. Through innovative AIoT applications, we are dedicated to empowering
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Hikvision 2023 Annual Report
every individual to enjoy a better future by building an intelligent world that is more convenient, efficient and secure.
3. Key Priorities in 2024
(1) Consolidate and enhance innovation advantages by focusing on products and technologies.
(2) Expand business scope and product categories by seizing the opportunities of digital transformation.
(3) Continuously implement the marketing strategy, and promote the construction of digital marketing capabilities
to ensure continuous business growth.
(4) Enhance manufacturing capabilities and build a flexible and smart supply chain to ensure supply security.
(5) Expand the scale of innovative business services, strengthen their competitiveness, and strive for a better
position in their respective markets.
(6) Promote the integration and mutual facilitation of the Company's organizational systems, and improve
operational efficiency.
XI. Reception of Activities including Research, Communication and Interviews during the
Report Period
√ Applicable □ Inapplicable
The main content of
Type of
Time of Location of Method of the discussion and Index of basic situation of the
reception Reception object
reception reception reception the information research
object
provided
Headquarters Investors The Company's
Performance Institutional CNINF, Investor Relations
meeting room including operations in 2022
April 15, 2023 result investors; Activity Record on April 15,
of the Tianhong Fund- and the first quarter
conference call individuals 2023
Company Chen Hao of 2023
Headquarters
April 17, 2023 Site research Investors The Company's CNINF, Investor Relations
meeting room Institutional
– May 19, and telephone including Huaxia operating conditions Activity Record: From April
of the investors
2023 communication Fund-Xu Heng and future prospects 17, 2023 – May 19, 2023
Company
Investors
Headquarters
May 25, 2023 Site Research including Caitong The Company's CNINF, Investor Relations
meeting room Institutional
– June 21, and telephone Assets operating conditions Activity Record: From May
of the investors
2023 communication Management- and future prospects 25, 2023 – June 21, 2023
Company
Miao Feng
June 28, 2023 Headquarters Site Research Investors The Company's CNINF, Investor Relations
Institutional
– July 19, meeting room and telephone including Guoxin operating conditions Activity Record: from June 28,
investors
2023 of the communication Securities-Ye Zi and future prospects 2023 – July 19, 2023
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Hikvision 2023 Annual Report
The main content of
Type of
Time of Location of Method of the discussion and Index of basic situation of the
reception Reception object
reception reception reception the information research
object
provided
Company
Headquarters
Performance Institutional Investors The Company's CNINF, Investor Relations
August 19, meeting room
result investors; including Fidelity operations in the Activity Record on August 19,
2023 of the
conference call individuals Fund-Liu Xuqing first half of 2023 2023
Company
Headquarters
Performance Institutional Investors The Company's CNINF, Investor Relations
October 21, meeting room
result investors; including Boshi operations in the Activity Record on October
2023 of the
conference call individuals Fund-Chen Wei third quarter of 2023 21, 2023
Company
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Hikvision 2023 Annual Report
Section IV Corporate Governance
I. Basic Situation of Corporate Governance
Since the inception of the Company, we have been strictly following relevant laws and regulations such as the
Company Law, Securities Law, Code of Corporate Governance of Listed Companies, Rules Governing the Listing
of Shares on Shenzhen Stock Exchange, and Shenzhen Stock Exchange Listed Companies Self-Regulatory
Supervision Guidelines No. 1 - Standardized Operation of Main Board Listed Companies as well as the requirements
of the regulations and regulatory documents of the regulatory authorities and continuously improving the "3+1"
corporate governance structure comprising shareholders’ meeting, the Board of Directors, the Board of Supervisors,
and the management taking into consideration the actual situation of the Company, and strictly follow the principle
of disclosing information in a true, accurate, complete, timely and impartial manner; we have also established and
improved internal management and control system, promoted the standardized operation of the Company and
ensured the legitimate rights and interests of the Company and investors. During the reporting period, the basic
details of corporate governance is as follows:
1. Shareholders and shareholders’ meeting
All shareholders of the Company have the equal status and full rights, especially small and medium
shareholders. During the reporting period, the Company held a total of 1 general meetings of shareholders, which
was convened by the Company's Board of Directors, and witnessed by lawyers on-site with legal opinions issued.
Proposals of general meetings of shareholders were reviewed in compliance with legal procedures to ensure that all
shareholders have the right to know, participate, and vote on major issues of the Company and to fully exercise their
legal rights.
2. The controlling shareholders and listed company
The Company’s controlling shareholders had no improper conduct and have never directly or indirectly
interfered with the Company’s decision-making and operating activities overriding shareholders’ meeting. There
are no such cases that controlling shareholders illegally occupy the Company's funds or the Company illegally
provides guarantees for controlling shareholders. The Company, with its own complete business system and
management capabilities, has been independent of controlling shareholders in terms of business, personnel, assets,
organizations, and finances. The Company's Board of Directors, Board of Supervisors and internal institutions has
been operating separately and major company decisions are made and implemented by the Company.
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Hikvision 2023 Annual Report
3. Directors and the Board of Directors
The Company's Board of Directors, operating in a normalized way, has exercised its authority invested by the
Articles of Association and relevant laws and regulations, and implemented the relevant decisions of the
shareholders’ meeting. The number and composition of the Company's Board of Directors comply with the
requirements of laws and regulations. There are four committees for strategy, audit, nomination, remuneration and
appraisal under it. Each committee has a clear division of labor, clear powers and responsibilities, and effective
operation. All directors of the Company have performed their duties with integrity, loyalty, diligence,
professionalism and due diligence, and earnestly safeguard the legitimate rights and interests of the Company and
shareholders with a view to the interests of the Company and shareholders. The independent directors of the
Company performed their duties independently and unaffected in accordance with the Measures for the
Administration of Independent Directors of Listed Companies and other relevant regulations, attended the
Company's Board of Directors and shareholders' general meetings, conducted special discussion and research on
related party transactions that should be disclosed and issued prior approval opinions. The special committee has
studied and deliberated on matters such as employing accounting firms and foreign exchange hedging, and has
played its due role in improving the Company's supervision mechanism, safeguarding the interests of the Company
and its shareholders, especially the shareholders of public shares, providing professional and objective suggestions
for the Company's operation and development, promoting the improvement of the decision-making level of the
board of directors, and ensuring the standardized operation of the Company.
During the reporting period, the Company convened 4 board meetings, reviewed and approved 29 proposals
including the Annual Report 2022 and its Summary, Proposal on Capital Increase and Introduction of Strategic
Investors for Wholly-Owned Subsidiary Shijiazhuang Sensortech Intelligent Technology Co., Ltd., Proposal on
Renewing the "Financial Services Agreement" and Related Party Transactions with China Electronics Technology
Finance Co., Ltd., etc.
4. Supervisors and Board of Supervisors
The Company's Board of Supervisors, operating in a normalized way, has exercised its authority invested by
the Articles of Association and relevant laws and regulations The number and composition of the Company’s Board
of Supervisors meet the requirements of laws and regulations; the Company’s supervisors have diligently performed
their duties and obligations, and carried out supervision and inspection functions being responsible to shareholders,
and supervised the Company’s financial status, operating conditions and related transactions, and the performance
of duties by directors and senior managers to fully protect the legal rights and interests of the Company and all
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Hikvision 2023 Annual Report
shareholders.
During the reporting period, the Company held 3 Board of Supervisors’ meetings, reviewed and approved 14
proposals including the Annual Report 2022 and its Summary, Proposal on the Change of Certain Accounting
Policies, etc.
5. Performance appraisal and incentive and restraint mechanism
The Company has established a complete performance appraisal system and remuneration system. The
appointment procedures for senior management personnel are open and transparent, and comply with relevant laws
and regulations. The remuneration and appraisal committee under the Company's Board of Directors is responsible
for performance appraisal of the Company's senior management at the end of the year to determine their
remuneration. To further set up and improve the Company’s incentive mechanism and strengthen the concept of
sustainable development of both the Company and employees, the Company has adopted a restricted share scheme
and the plan of core staff’s co-investment into innovation business to achieve its development strategy and business
objectives, and realize sustainable health development.
6. Information disclosure and transparency
The Company has strictly followed the relevant laws and regulations and the Information Disclosure
Management System to disclose relevant information truthfully, accurately, completely, timely and impartially, and
thoroughly implemented the Information Insider Management System to register insiders and file to further
standardize inside information management and to ensure that all shareholders and other stakeholders of the
Company have equal access to company information. During the reporting period, the Company disclosed 4 periodic
reports and 37 temporary announcements. The Company's information disclosure has been recognized by the
regulatory authorities: the Company has been rated as Level A by the Shenzhen Stock Exchange for 13 consecutive
years in the main board listed company information disclosure assessment.
7. Continue to improve the internal management system
In accordance with relevant laws and regulations of regulatory authorities such as the Company Law and the
Securities Law, requirements of normative documents and other internal management systems such as the Articles
of Association, the Rules of Procedure for the General Meeting of Shareholders, the Rules of Procedure for the
Board of Directors, the Authorization Management System, The Company continuously strengthened the internal
management, improved the governance structure, promoted the normative operation, and protected the legitimate
rights and interests of the Company and shareholders.
8. Investor relations activities
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Hikvision 2023 Annual Report
The Company has proactively organized result briefing conferences and investor research activities after the
disclosure of regular reports to actively listen to investors’ opinions and suggestions, and released the Investor
Relations Activity Record after the event to ensure fair access to company information by all investors. In daily
work, the Company has kept in touch with investors through multiple channels such as telephone, e-mail, and
irm.cninfo.com.cn to effectively interact and communicate with investors. The Company was awarded the "17th
Outstanding Digital Intelligence Enterprise of China's Listed Companies" in the 17th China’s Most Valuable Listed
Company Selection hosted by the Securities Times, the "2023 Best Practice Case of Corporate Governance" by the
China Association of Listed Companies, and the "Excellent Case of Corporate Social Responsibility Report in
Zhejiang Province" by the Zhejiang Federation of Industrial Economics and the Zhejiang State-owned Assets
Management Association.
Any significant incompliance for the laws, administrative regulations and the relevant regulatory documents
issued by China Securities Regulatory Commission in respect of the Company’s corporate governance:
□ Yes √ No
There is no significant incompliance for the laws, administrative regulations and the relevant regulatory
documents issued by China Securities Regulatory Commission in respect of the Company’s corporate governance.
II. Company’s Independence in Assets, Personnel, Finances, Organizations and Businesses
from Controlling Shareholders and Actual Controller
The Company is completely independent in business, personnel, assets, organizations, and finances from its
shareholders. The Company has established a sound internal control system, being capable of operating
independently with its complete and independent business.
1. Business independence: The Company has own production, purchases and sales systems, which are
completely independent from controlling shareholders. Therefore, there is no competition among the Company,
controlling shareholders, and related parties.
2. Personnel independence: The Company has independent personnel. The management has set up various
independent departments, including R&D, production, administration, finance and operation management
divisions, etc., and established complete management methods for labor, personnel, and salary management.
Personnel of the Company is independent from controlling shareholders, e.g. the chairman is elected through the
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Hikvision 2023 Annual Report
general meetings of the Board. In addition, the general manager, senior deputy general managers, CFO, the
secretary of the Board, and other senior management personnel of the Company are work full-time in the Company
and receive remuneration, and do not receive remuneration in the controlling shareholders, nor do they hold any
administrative positions other than directors and supervisors in the controlling shareholders. Directors, supervisors,
and senior management personnel are appointed through legal procedures strictly in accordance with relevant
regulations stipulated in Company Law and Articles of Association. There is no controlling shareholder illegal
intervention in the Company’s personnel decisions in general meetings of the Board or shareholders.
3. Asset Completeness: The property rights of assets are explicitly between the Company and the controlling
shareholders, and no assets, funds, or other resources owned by the Company are illegally and irregularly occupied
or controlled by the controlling shareholders. Assets of the Company are integrated, including complete property
rights of fixed assets for production, supporting assets for production, and intangible assets of patents, etc. The
Company has the full control and ownership of all assets.
4. Independence in organizations: The Company’s Board of Directors, Board of Supervisor, management
and other internal organizations operate independently, and each functional department is independent from
controlling shareholders in duty and personnel. There is no superior-subordinate relation between functional
departments of controlling shareholders and those of the Company, which would have an impact on the Company’s
independent operations.
5. Financial Independence: The Company has established an independent financial department, as well as a
sound and independent financial and accounting system. The Company makes financial decisions independently.
There is a standardized financial accounting system and a financial management system for the Company’s
branches and subsidiaries, and there is no controlling shareholder intervention in the Company’s financial and
accounting activities. The Company has maintained accounts with banks independently of and do not share any
bank account with our Controlling Shareholders. The Company has undertaken independent tax registration in
accordance with applicable laws, and paid tax independently.
III. Horizontal Competition
□ Applicable √ Inapplicable
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Hikvision 2023 Annual Report
IV. Annual General Meeting and Extraordinary General Meetings Convened during the
Reporting Period
1. General Meetings Convened during the Reporting Period
Proportion
of
Meeting Nature Convened Date Disclosure Date Resolution of the Meeting
participating
investors
14 proposals including the
2022 Annual Report and
Summary were reviewed
Annual General
2022 Annual General Meeting 67. 0703% May 9, 2023 May 10, 2023 and voted. For details,
Meeting
please refer to the
Company's announcement:
No. 2023-025.
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with Resumed
Voting Rights:
□ Applicable √ Inapplicable
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Hikvision 2023 Annual Report
V. Information about Directors, Supervisors, Senior Management
1. Basic Situation
Shares Other
increased increase or
Commencement Termination Shares held at the during
Shares decreased
decrease of
Shares held at
Reasons for increase or
Tenure
Name Title Gender Age of term of of term of beginning of the during the Period the end of the
status the shares decrease of shares
office office Period (Shares) (Shares) Period (Shares)
Period (Share)
(shares)
Chen March 4,
Chairman Incumbent Male 59 June 19, 2008 0 0 0 0 0 --
Zongnian 2024
March 4,
Qu Liyang Director Incumbent Male 60 March 7, 2018 15,750 0 0 0 15,750 --
2024
Wang March 4,
Director Incumbent Male 73 March 5, 2021 35,000 0 0 0 35,000 --
Qiuchao 2024
Director,
Hu General December 28, March 4, Increase of shares during
Incumbent Male 59 155,246,477 390,000 0 0 155,636,477
Yangzhong Manager 2001 2024 the Period
(CEO)
Director,
Standing
March 4, Increase of shares during
Wu Weiqi Deputy Incumbent Male 60 March 1, 2003 8,631,089 54,700 0 0 8,685,789
2024 the Period
General
Manager
Wu Independent March 4,
Incumbent Male 64 March 5, 2021 0 0 0 0 0 --
Xiaobo Director 2024
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Hikvision 2023 Annual Report
Shares Other
increased increase or
Commencement Termination Shares held at the during
Shares decreased
decrease of
Shares held at
Reasons for increase or
Tenure
Name Title Gender Age of term of of term of beginning of the during the Period the end of the
status the shares decrease of shares
office office Period (Shares) (Shares) Period (Shares)
Period (Share)
(shares)
Independent March 4,
Hu Ruimin Incumbent Male 60 March 5, 2021 0 0 0 0 0 --
Director 2024
Independent March 4,
Li Shuhua Incumbent Male 53 March 5, 2021 0 0 0 0 0 --
Director 2024
Guan Independent March 4,
Incumbent Male 47 March 5, 2021 0 0 0 0 0 --
Qingyou Director 2024
Hong Supervisor March 4,
Incumbent Male 58 March 5, 2021 0 0 0 0 0 --
Tianfeng Chairman 2024
March 4,
Xu Lirong Supervisor Incumbent Male 61 March 21, 2018 303,000 0 0 0 303,000 --
2024
Lu March 4,
Supervisor Incumbent Male 70 March 5, 2021 0 0 0 0 0 --
Jianzhong 2024
Senior
Deputy December 18, March 11,
He Hongli Incumbent Female 51 331,500 0 0 0 331,500 --
General 2005 2024
Manager
Senior
Cai Deputy March 11,
Incumbent Male 53 April 8, 2016 109,500 0 0 0 109,500 --
Changyang General 2024
Manager
Senior October 11, March 11, The third repurchase and
Xu Ximing Deputy Incumbent Male 51 287,000 0 0 -59,100 227,900
2016 2024 cancellation of the
General
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Hikvision 2023 Annual Report
Shares Other
increased increase or
Commencement Termination Shares held at the during
Shares decreased
decrease of
Shares held at
Reasons for increase or
Tenure
Name Title Gender Age of term of of term of beginning of the during the Period the end of the
status the shares decrease of shares
office office Period (Shares) (Shares) Period (Shares)
Period (Share)
(shares)
Manager Company's 2018 restricted
shares
The third repurchase and
Senior
Deputy October 11, March 11, cancellation of the
Bi Huijuan Incumbent Female 53 273,000 0 0 -36,900 236,100
General 2016 2024 Company's 2018 restricted
Manager
shares
The third repurchase and
Senior
Pu Deputy March 11, cancellation of the
Incumbent Male 47 March 21, 2018 385,900 0 0 -30,000 3555,900
Shiliang General 2024 Company's 2018 restricted
Manager
shares
Senior
Deputy March 11,
Jin Duo Incumbent Male 59 March 10, 2015 109,500 0 0 0 109,500 --
General 2024
Manager
Senior
Deputy The third repurchase and
General
March 11, cancellation of the
Jin Yan Manager, Incumbent Female 45 July 22, 2015 364,000 0 0 -33,000 331,000
2024 Company's 2018 restricted
Person in
charge of shares
finance
Senior The third repurchase and
Huang March 11,
Deputy Incumbent Female 42 April 8, 2016 482,500 0 0 -33,000 449,500 cancellation of the
Fanghong 2024
General Company's 2018 restricted
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Shares Other
increased increase or
Commencement Termination Shares held at the during
Shares decreased
decrease of
Shares held at
Reasons for increase or
Tenure
Name Title Gender Age of term of of term of beginning of the during the Period the end of the
status the shares decrease of shares
office office Period (Shares) (Shares) Period (Shares)
Period (Share)
(shares)
Manager, shares
Board
Secretary
Senior
Chen Deputy March 11,
Incumbent Male 53 March 21, 2018 0 0 0 0 0 --
Junke General 2024
Manager
Senior The third repurchase and
Deputy March 12, March 11, cancellation of the
Xu Peng Incumbent Male 48 147,244 0 0 -38,622 108,622
General 2021 2024 Company's 2018 restricted
Manager shares
The third repurchase and
Senior
cancellation of the
Guo Deputy March 12, March 11,
Incumbent Male 52 44,280 0 1,000 -22,140 21,140 Company's 2018 restricted
Xudong General 2021 2024
shares and reduction of
Manager
shares during the Period
Total -- -- -- -- -- -- 166,765,740 444,700 1,000 -252,762 166,956,678 --
Note: The number of shares held at the beginning of the period, shares increased during the period, shares decreased during the period, other increase or decrease of
shares, and shares held at the end of the period for directors, supervisors, and senior management personnel above are all shares directly held by them accordingly,
including restricted shares.
Any resignation of directors or supervisors and dismissals of senior management personnel during their term of office during the reporting period.
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Hikvision 2023 Annual Report
□Yes √No
Change of directors, supervisors and senior management personnel
□Applicable √Inapplicable
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2. Positions and Incumbency
1) Directors
Mr Chen Zongnian (陈宗年): Born in 1965, Chen holds a PhD of business administration and has served as deputy
general manager of Shenzhen Gao Ke Run Electronics, director and general manager of Zhejiang Haikang
Information Technology Co., Ltd. and Zhejiang Haikang Group Co., Ltd. He also served as an assistant of the head,
deputy head, and the head of 52nd Research Institute at China Electronics Technology Group Corporation
(hereinafter referred to as "52nd Research Institute"). Chen currently serves as the Chairman of China Electronics
Technology HIK Group Co., Ltd. (CETHIK), the Chairman of Phoenix Optics Co., Ltd. and the Chairman of the
Company.
Mr. Qu Liyang (屈力扬): Born in 1964, bachelor degree of engineering, researcher-level senior engineer. He
served as the director, deputy director, party secretary and deputy director of the 52nd Research Institute, and
Chairman of the Board of Supervisors of CETHIK. He is currently a member of the Strategy Committee of China
Electronic Technology Group Co., Ltd., director of the Science and Technology Innovation Committee of CETHIK,
and a director of the Company.
Mr. Wang Qiuchao (王秋潮): Born in 1951, master degree in law. Wang served as director of Zhejiang T&C Law
Firm (浙江天册律师事务所), Chairman of the Zhejiang Lawyers Association (浙江省律师协会) , vice-president
of the Zhejiang Law Society (浙江省法学会), and a supervisor of the Company. Wang currently serves as honorary
partner of Zhejiang T&C Law Firm, arbitrator of the China International Economic and Trade Arbitration
Commission (中国国际经济贸易仲裁委员会, "CIETAC") , an arbitrator of Shanghai International Arbitration
Center (上海国际仲裁中心) and Shenzhen International Economic and Trade Arbitration Commission (深圳国际
仲裁中心), and a director of the Company.
Mr. Hu Yangzhong (胡扬忠): Born in 1965, master degree of engineering, senior research engineer. He served as
an engineer of the 52nd Research Institute from June 1989 to December 2001. From December 2013 to April 2022,
he served as a director of CETHIK Group Co., Ltd. He has been appointed as a director of the Company and general
manager of the Company since December 2001. Hu currently serves as a director and the general manager of the
Company.
Mr. Wu Weiqi (邬伟琪): Born in 1964, bachelor degree of engineering, senior engineer. Wu held various positions
at the 52nd Research Institute, including technician, engineer associate, engineer and senior engineer, from July 1986
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Hikvision 2023 Annual Report
to December 2001. Since November 2001, He has been appointed as a deputy general manager, a standing deputy
general manager, and a director of Hikvision. Wu currently serves as a director and standing deputy general manager
of the Company.
Mr. Wu Xiaobo (吴晓波): Born in 1960, a PhD of business administration, Professor, Ph.D. Tutor. In February
1982, he joined the Energy Saving Office of the Ministry of Forestry, Zhejiang Energy Conservation Technology
Service Center, and joined the School of Management of Zhejiang University in July 1992, successively served as
an executive vice dean and dean. He is currently the Director of the Department of Social Sciences of Zhejiang
University, the director of the National Philosophy and Social Science Innovation Base - Research on Innovation
Management and Sustainable Competitiveness of Zhejiang University, the Chinese director of the Joint Research
Center for Global Manufacturing and Innovation Management of Zhejiang University-Cambridge University, the
co-director of the Ruihua Institute of Innovation Management, and an independent director of the Company.
Mr. Hu Ruimin (胡瑞敏): Born in 1964, a PhD in engineering, Second-level Professor, doctoral tutor, Luojia
distinguished scholar, recipient of Special Government Grants from the State Council, Senior Member of IEEE
(Institute of Electrical and Electronics Engineers), fellow of China Institute of Communications, distinguished
member of China Computer Federation. He has successively served as vice chairman of the Academic Committee
of Wuhan University, director of the National Multimedia Software Engineering Technology Research Center,
director of Hubei Provincial Key Laboratory of Multimedia Network Communication Engineering, First Executive
Dean of National Cyber Security College and Dean of School of Computer Science of Wuhan University. From
January 2010 to January 2016, he served as the first dean of Hikvision Research Institute. He is currently a professor
of Wuhan University and an independent director of the Company.
Mr. Li Shuhua (李树华)：Born in 1971, a PhD in accounting, postdoctoral fellow in finance and law, non-practicing
member of the China Institute of Certified Public Accountants, National-level candidates for the New Century
Hundreds and Thousands of Talents Project, National Leading Talents in Accounting, and National Leading Talents
in Shenzhen. He has successively served as deputy director of the Audit Division of the Accounting Department of
the China Securities Regulatory Commission (presiding), deputy director of the General Office (presiding), director
of the Financial and Budget Management Department and director of the General Office, a member of the Executive
Committee and Chief Financial Officer, Chief Risk Officer and Chief Compliance Officer of China Galaxy
Securities Co., Ltd. He concurrently served as a PE professor and master’s tutor at the National Accounting Institute
(Xiamen), Peking University, Shanghai Institute of Advanced Finance, Shanghai Jiaotong University, and Tsinghua
University. He is currently the Chairman of Changzhou NRB Corporation (常州光洋軸承股份有限公司), and an
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Hikvision 2023 Annual Report
independent director of the Company.
Mr. Guan Qingyou (管 清 友 ): Born in 1977, a holder of Ph.D. in economics, Young Economist. He has
successively served as the former vice president of Minsheng Securities and the president of the research institute;
He is currently the President and Chief Economist of the Institute of Finance, Vice President of the China Private
Economic Research Association, Professor of the School of Economics of Hainan University, Chief Economist of
Zhongguancun Private Equity & Venture Capital Association (ZVCA) and Guangdong Province Venture Capital
Association, and an independent director of the Company.
2) Supervisors
Mr. Hong Tianfeng (洪天峰): Born in 1966, master degree in engineering. Hong was an engineer in Nanjing
University of Posts and Telecommunication (南京邮电大学) from July 1990 to June 1993; He served as an
executive deputy general manager, chief executive of Operation and Delivery, chairman of investment decision
committee, and vice chairman of Huawei Technologies Co., Ltd. (华为技术有限公司) from July 1993 to September
2011. Hong has served as an independent director of the Company. Hong currently serves as an executive director
of Shanghai Fangguang Investment Management Co., Ltd. (上海方广投资管理有限公司), and supervisor of the
Company.
Mr. Lu Jianzhong (陆建忠): Born in 1954, holds bachelor degree in economics and CPA certificate. Lu served as
a lecturer and an associate professor of finance and accounting department at Shanghai Maritime University (上海
海事大学) from September 1986 to September 1997; he was a CPA and a partner of the auditing department of
PricewaterhouseCoopers, from October 1997 to June 2012; he was a chartered accountant of Shanghai De’an
Certified Public Accountants LLP (上海德安会计师事务所) from July 2012 to July 2013; he was a chartered
accountant of the Shanghai branch of PKF Daxin Certified Public Accountants LLP (大信会计师事务所上海分
所), from August 2013 to July 2014；he was a partner and a chartered accountant and a partner of Zhongxinghua
Certificated Public Accountants LLP (中兴华会计师事务所) from August 2014 to January 2016; he was a
chartered accountant of Dahua Certificated Public Accountants LLP (大华会计师事务所) from January 2016 to
December 2021. Lu has served as an independent director of Hikvision. Lu currently serves as a chartered
accountant of Zhongxinghua Certificated Public Accountants LLP Shanghai Branch, and a supervisor of the
Company.
Mr. Xu Lirong (徐礼荣): Born in 1963, master degree of engineering, senior engineer. In January 2002, he joined
Hikvision and served as manager of development division under the R&D center, secretary of the Board of Directors,
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Hikvision 2023 Annual Report
the person in charge of internal audit, and a deputy general manager of the Company. He is currently the employee
representative supervisor.
3) Senior Management Personnel
Mr. Hu Yangzhong (胡扬忠): Please refer to his profile in preceding part of the report.
Mr. Wu Weiqi (邬伟琪): Please refer to his profile in preceding part of the report.
Ms. He Hongli (何虹丽): Born in 1973, master degree in business administration. She joined Hikvision in
December 2001 and served as an assistant to the general manager and a deputy general manager. Ms. He currently
serves as a senior deputy general manager of the Company.
Mr. Cai Changyang (蔡昶阳): Born in 1971, bachelor degree in engineering. He joined Hikvision in 2004, and
held various positions of the Company, including general manager of Beijing branch, director for government and
enterprise corporation department, director of investment department, director of strategy and marketing department,
and a deputy general manager of the Company. Mr. Cai currently serves as senior deputy general manager of the
Company.
Mr. Xu Ximing (徐习明): Born in 1973, bachelor degree in engineering. From July 1996 to September 2016, he
held various positions in IBM, including engineer, department manager, director, partner of consulting service,
senior partner of consulting service, and a vice president. He joined Hikvision in September 2016, and served as a
deputy general manager of the Company. Mr. Xu currently serves as a senior deputy general manager of the
Company.
Ms. Bi Huijuan (毕会娟): Born in 1971, PhD in engineering, senior research engineer. From April 1999 to August
2016, she held various positions in the 15th Research Institute at China Electronics Technology Group Corporation
(CETC), including engineer, senior engineer, senior research engineer, head of R&D department, vice chief
engineer, and deputy director. She joined Hikvision in August 2016, and served as a deputy general manager of the
Company. Ms. Bi currently serves as a senior deputy general manager of the Company.
Mr. Pu Shiliang (浦世亮): Born in 1977, doctor of engineering, a senior engineer. He joined Hikvision in April
2006 and held various positions in the Company, including R&D engineer, R&D manager, R&D director, dean of
the R&D institute, and chief expert. He currently serves as a senior deputy general manager of the Company.
Mr. Jin Duo (金铎): Born in 1965, bachelor degree in engineering, a senior engineer. He served as a technician,
assistant to engineers, an engineer and a senior engineer of the 52nd Research Institute from July 1986 to June 2004.
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Hikvision 2023 Annual Report
He joined Hikvision in July 2004 and served as general manager of Hangzhou Branch, and a deputy general manager
of the Company. Mr. Jin currently serves as a senior deputy general manager of the Company.
Ms. Jin Yan (金艳): Born in 1979, master degree in management, an accountant. She joined Hikvision in 2004 and
held various positions at the Company, including financial manager, the general manager of the Financial
Management Center, and a deputy general manager and the person in charge of finance and accounting. Ms. Jin
currently serves as a senior deputy general manager and the person in charge of finance and accounting of the
Company.
Ms. Huang Fanghong (黄方红): Born in 1982, bachelor degree in law. She joined Hikvision in June 2009 and
held various positions at the Company including legal department manager, internal audit manager, internal control
director, and a deputy general manager and the board secretary. Ms. Huang currently serves as a senior deputy
general manager, and board secretary of the Company.
Mr. Chen Junke (陈军科): Born in 1971, bachelor degree in engineering, senior engineer. Chen held various
positions in the 52nd Research Institute from 1994 to 2001, including assistant engineer, engineer and senior engineer.
He joined the Company in 2001 and served as the technology director of the Digital Video Recorder (DVR) Division
of the Technology Management Center, general manager of supply chain management center, employee
representative supervisor. Chen currently serves as senior deputy general manager of the Company.
Mr. Xu Peng (徐鹏): Born in 1976, bachelor of engineering, senior engineer. From 1998 to 2004, he successively
served as an assistant engineer and engineer of 52nd Research Institute, and in 2004, he joined Hikvision, where he
served as camera research and development manager, research and development director, product director, general
manager of front-end product business, and deputy general manager of the Company. He is currently the senior
deputy general manager of the Company.
Mr. Guo Xudong (郭旭东): Born in 1972, bachelor of engineering. In July 2002, he joined Hikvision, and
successively served as general manager of Shenzhen Branch, marketing director of domestic marketing center and
deputy general manager of domestic marketing center. He is currently the senior deputy general manager of the
Company.
Position held in shareholders’ entities
√Applicable □ Inapplicable
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Hikvision 2023 Annual Report
Position in shareholders’ Commencement Termination of the Compensation and
Name Shareholder's entity term allowance from the
entities of the term
shareholders' entity
Chen China Electronics Chairman, Secretary of
November 2013 -- Y
Zongnian Technology HIK Group Ltd. Party Committee
China Electronics Member of Commission for
Xu Lirong December 2013 December 2023 N
Technology HIK Group Ltd. Discipline Inspection
China Electronics
Xu Lirong Supervisor December 2013 -- N
Technology HIK Group Ltd.
Positions held in other entities
√Applicable □ Inapplicable
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Cheng Zhejiang AIoT Technology
Legal representative May 2009 N
Zongnian Magazine
Cheng
Phoenix Optics Ltd. Chairman December 2019 N
Zongnian
Wang Qiuchao Zhejiang T&C Law Firm Partner June 1986 Y
Shanghai Kehui Value
Wang Qiuchao Director July 2009 N
Investment Management Ltd.
Yalongxing Investment
Wang Qiuchao Director February 2012 N
Development Ltd.
Independent
Wang Qiuchao Botsy Technology Co., Ltd June 2020 May 2023 Y
director
Hangzhou Pukang Equity
Wu Weiqi Investment Partnership Executive Partner April 2011 N
(Limited Partnership)
Wuhu Sensortech Intelligent
Wu Weiqi Director January 2017 February 2023 N
Technology Ltd.
Hangzhou Qianmo Tongzhou
Equity Investment December
Wu Weiqi Executive partner July 2021 N
Partnership (Limited 2022
Partnership)
Shanghai Yirui Management
Wu Xiaobo Director April 2004 N
Consultants Ltd.
Hangzhou Co-Rui Enterprise
Wu Xiaobo Director April 2011 N
Management Consulting Ltd.
Ningbo Industrial Internet
Wu Xiaobo Outside director May 2018 Y
Research Institute Ltd.
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Hikvision 2023 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Independent
Wu Xiaobo Eddy Co., Ltd. August 2018 Y
director
Zhongliang Holdings Group Independent
Wu Xiaobo June 2019 Y
Ltd. director
Ruihua Innovation
Wu Xiaobo Management Research Director November 2019 N
Institute (Hangzhou) Ltd.
Independent
Wu Xiaobo UCloud Technology Co., Ltd. June 2020 Y
director
Zhongtian Holding Group Independent
Wu Xiaobo July 2021 Y
Ltd. director
Xi'an ShaanGu Power Co., Independent
Li Shuhua May 2018 Y
Ltd. director
Luoyang Yuchuan Yuye Independent
Li Shuhua August 2018 Y
Group Co., Ltd. director
Changzhou Guangyang December
Li Shuhua Director & CEO August 2019 N
Holdings Ltd. 2022
Legal
Changzhou Guangyang
Li Shuhua representative, December 2022 N
Holdings Ltd.
Chairman, and CEO
Li Shuhua Changzhou NRB Co., Ltd. Chairman October 2019 Y
Li Shuhua Weihai Shiyi Electronics Ltd. Chairman December 2020 N
Independent
Li Shuhua Juzhengyuan Co., Ltd. December 2020 Y
director
CIMC-TianDa Holdings Independent
Li Shuhua May 2021 Y
Company Ltd. director
Guangdong Shengyi Independent
Li Shuhua October 2021 Y
Technology Co., Ltd. director
TianJin TianHai Precision
Li Shuhua Chairman December 2022 N
Forging Co., Ltd.
Independent
Li Shuhua Yingda Securities Co.,Ltd. July 2023 Y
director
Beijing Rushi Chengjin
Guan Qingyou Information Consulting CEO October 2016 N
Services Ltd.
Guan Qingyou Beijing Rushiwo Research Executive director December 2017 Y
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Hikvision 2023 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Information Consulting & CEO
Service Ltd.
Independent
Guan Qingyou Midea Group Co., Ltd. August 2018 Y
director
Beijing Xincai Zhibei
Guan Qingyou Supervisor October 2018 N
Information Technology Ltd.
Independent
Guan Qingyou South China Futures Co., Ltd. March 2019 Y
director
Shanxi International Trust Independent
Guan Qingyou July 2019 Y
Co., Ltd. director
Beijing Rushiwo Research
Executive director
Guan Qingyou Institute of Science and May 2020 N
& CEO
Technology Ltd.
Beijing Rushi Wancheng
Executive director
Guan Qingyou Technology Development June 2020 N
& CEO
Ltd.
Hainan Wuyongtang Executive director
Guan Qingyou July 2020 N
Information Technology Ltd. & CEO
Beijing Yaocen Yuanmu Executive director
Guan Qingyou July 2020 N
Information Technology Ltd. & CEO
Beijing Ruoan Jiatai Executive director
Guan Qingyou December 2020 N
Technology Ltd. r& CEO
Zhongchancheng Investment
Guan Qingyou Supervisor March 2021 N
(Shenzhen) Ltd.
Qingdao Rushiwo Research
Guan Qingyou Supervisor November 2021 N
Investment Management Ltd.
Shenzhen Jiuzhoutongyu
Guan Qingyou Supervisor January 2022 N
Technology Ltd.
Ucap Cloud Information Independent
Guan Qingyou September 2022 Y
Technology Co.,Ltd. director
Beijing Film Spectrum Independent
Guan Qingyou March 2019 January 2024 Y
Technology Co., Ltd. director
Shanghai Fangguang
Hong Tianfeng Executive director February 2012 Y
Investment Management Ltd.
Shenzhen Yunzhixun
Hong Tianfeng Director May 2014 N
Network Technology Ltd.
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Hikvision 2023 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Shenzhen Fangguang
Executive director
Hong Tianfeng Enterprise Management May 2016 N
& CEO
Consulting Ltd.
CETC Huayun Information
Hong Tianfeng Director March 2017 N
Technology Ltd.
Quanzhi Technology
Hong Tianfeng Director June2020 N
(Hangzhou) Ltd.
Shanghai Fangguang
Hong Tianfeng Enterprise Management Executive director November 2022 N
Consulting Ltd.
Nantong Fangjun Enterprise
Hong Tianfeng Supervisor March 2023 N
Management Co., Ltd.
Nantong Fangyuan Enterprise
Hong Tianfeng Executive director March 2023 N
Management Co., Ltd.
Sannuo Biology Sensor Co.,
Hong Tianfeng Director September 2013 January 2023 Y
Ltd.
Zhongwei Dahe Cloud
Hong Tianfeng Connection Network Director November 2016 October 2023 N
Technology Ltd.
Shenzhen YingFeiYuan December
Hong Tianfeng Director October 2017 N
Technology Ltd. 2023
Beijing ZhiZhangYi Sicence
Hong Tianfeng Director January 2018 June 2023 N
and Technology Ltd.
Shenzhen Chip and Semi- December
Hong Tianfeng Director February 2018 N
conductor Technology Ltd. 2023
Shanghai Daxian Intelligent
Hong Tianfeng Director June 2018 January 2024 N
Science and Technology Ltd.
Shanghai Fanglan Enterprise Executive Director
Hong Tianfeng March 2021 January 2024 N
Management Center & CEO
Huatai Baoxing Fund
Lu Jianzhong Director July 2016 Y
Management Ltd.
COSCO Maritime Transport Independent
Lu Jianzhong January 2018 Y
Development Co., Ltd. Director
Shanghai Xinnanyang Angli
Independent
Lu Jianzhong Education Technology Co., January 2019 Y
Director
Ltd.
167
Hikvision 2023 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Lu Jianzhong INESA (Group) Co., Ltd. Director December 2019 N
Shanghai Vico Precision Independent
Lu Jianzhong May 2021 Y
Mold &Plastics Co., Ltd. Director
BOMESC Offshore Independent
Lu Jianzhong December 2021 Y
Engineering Co., Ltd. Director
Zhongxinghua Certified
Chartered
Lu Jianzhong Public Accountants LLP January 2022 N
Accountant
(Shanghai Branch)
Independent
Lu Jianzhong Bank of Tianjin Co., Ltd. August 2022 Y
Director
Shenzhen Wangyu Security
Xu Ximing Service Science and Director November 2019 N
Technology Ltd.
Chengdu Guoshengtianfeng
Xu Ximing Director August 2020 N
Network Technology Ltd.
Hangzhou Confirmware
Xu Ximing Director August 2021 N
Technology Co., Ltd.
Zhejiang Haishi Huayue
Jin Duo Chairman January 2020 N
Digital Technology Ltd
Maxio Technology
Xu Peng Director December 2021 N
(Hangzhou) Co., Ltd.
Zhejiang Fast Line data
Guo Xudong fusion Information Director January 2021 N
Technology Co., Ltd.
Incumbent and off-office directors, supervisors and senior management personnel during the reporting period that
have been imposed administrative penalties by the CSRC during the last three years.
□ Applicable √ Inapplicable
3. Remuneration of Directors, Supervisors and Senior Management Personnel
The decision-making program, determination basis and actual remuneration payment of directors, supervisors and
senior management personnel:
The remuneration of directors, supervisors and senior management personnel will be received preliminarily by
the Remuneration and Appraisal Committee of the Board, among them, remuneration of independent directors
and external supervisors would be further reviewed and approved by general meeting of shareholders. As for those
directors (exclude independent directors), supervisors (exclude external supervisors) and senior management
personnel who receive remuneration from the Company directly, they will receive remuneration according to the
168
Hikvision 2023 Annual Report
Company’s current Salary System and Performance Appraisal Schemes.
Explanations on other situations.
□ Applicable √ Inapplicable
Remuneration of directors, supervisors and senior management personnel
Unit: RMB 0,000
Total remuneration Remuneration
Name Title Gender Age Tenure status from the Company from related
(RMB'0,000) parties (Y/N)
Chen Zongnian Chairman M 59 Incumbent 0 Y
Qu Liyang Director M 60 Incumbent 0 Y
Wang Qiuchao Director M 73 Incumbent 30.00 N
Hu Yangzhong Director, CEO M 59 Incumbent 300.93 N
Director, Standing Deputy
Wu Weiqi M 60 Incumbent 300.89 N
General Manager
Wu Xiaobo Independent Director M 64 Incumbent 30.00 N
Hu Ruimin Independent Director M 60 Incumbent 30.00 N
Li Shuhua Independent Director M 53 Incumbent 30.00 N
Guan Qingyou Independent Director M 47 Incumbent 30.00 N
Hong Tianfeng Supervisor Chairman M 58 Incumbent 20.00 N
Lu Jianzhong Supervisor M 70 Incumbent 20.00 N
Xu Lirong Supervisor M 61 Incumbent 147.86 N
Senior Deputy General
He Hongli F 51 Incumbent 290.37 N
Manager
Senior Deputy General
Cai Changyang M 53 Incumbent 265.57 N
Manager
Senior Deputy General
Xu Ximing M 51 Incumbent 416.43 N
Manager
Senior Deputy General
Bi Huijuan F 53 Incumbent 401.90 N
Manager
Senior Deputy General
Pu Shiliang M 47 Incumbent 301.49 N
Manager
Senior Deputy General
Jin duo M 59 Incumbent 290.94 N
Manager
Senior Deputy General
Jin Yan Manager, person in charge of F 45 Incumbent 262.26 N
finance and accounting
Senior Deputy General
Huang Fanghong Manager F 42 Incumbent 262.61 N
Board Secretary
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Hikvision 2023 Annual Report
Total remuneration Remuneration
Name Title Gender Age Tenure status from the Company from related
(RMB'0,000) parties (Y/N)
Senior Deputy General
Chen Junke M 53 Incumbent 262.55 N
Manager
Senior Deputy General
Xu Peng M 48 Incumbent 299.72 N
Manager
Senior Deputy General
Guo Xudong M 52 Incumbent 262.02 N
Manager
Total -- -- -- -- 4,255.54 --
Note 1: Directors (excluding independent directors), supervisors (excluding non-employee representative
supervisors) and senior managers who serve in the Company and receive remuneration with the numeration structure
composed of 50% of basic salary, 50% of bonuses linked to the Company's performance, and social insurance and
provident fund paid in accordance with the statutory proportion.
Note 2: During the reporting period, the remuneration of incumbent directors, supervisors and senior management
are the remuneration for the period in which they held their positions.
VI. Performance of Duties by Directors during the Reporting Period
1. The Board of Directors during the Reporting Period
Meeting Session Convening Date Disclosure Date Meeting Resolutions
1 proposals was considered and approved at the
meeting, Proposal on Capital Increase and
Introduction of Strategic Investors for
The 16th meeting of the 5th session
February 15, 2023 February 16, 2023 Wholly-Owned Subsidiary Shijiazhuang
of the Board
Sensortech Intelligent Technology Co.,
Ltd.. For details, please refer to the Company’s
announcement: No. 2023-004.
25 proposals were considered and approved at
The 17th meeting of the 5th session the meeting, including the 2022 Annual Report
April 13, 2023 April 15, 2023
of the Board and Its Summary. For details, please refer to the
Company’s announcement: No. 2023-010.
2 proposals were considered and approved at the
The 18th meeting of the 5th session meeting, including the 2023 Half Year Report
August 18, 2023 August 19, 2023
of the Board and Its Summary. For details, please refer to the
Company’s announcement: No. 2023-029
1 proposal was considered and approved at the
The 19th meeting of the 5th session
October 20, 2023 October 21, 2023 meeting, the 2023Q3 Report and Its Summary.
of the Board
For details, please refer to the Company’s
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Hikvision 2023 Annual Report
Meeting Session Convening Date Disclosure Date Meeting Resolutions
announcement: No. 2023-034
2. Attendance of Directors in Board Meetings and General Meetings
Attendance of directors in board meetings and general meetings
Presence of
Board meeting Board Board meeting Board meeting
independent
presence meeting presence by Board meeting Board meeting not attend in
directors in
Name of Director required in the presence telecom- presence through absence person for two
general
reporting on site communication a proxy (times) (times) consecutive
meetings
period (times) (times) (times) times
(times)
Chen Zongnian 4 1 3 0 0 N 1
Qu Liyang 4 1 3 0 0 N 1
Wang Qiuchao 4 1 3 0 0 N 1
Hu Yangzhong 4 1 3 0 0 N 1
Wu Weiqi 4 1 3 0 0 N 1
Wu Xiaobo 4 1 3 0 0 N 1
Hu Ruimin 4 1 3 0 0 N 1
Li Shuhua 4 1 3 0 0 N 1
Guan Qingyou 4 1 3 0 0 N 1
3. Objections from Directors on Related Issues of the Company
Were there any objections on related issues of the Company from directors?
□ Yes √ No
During the reporting period, there is no objections on related issues of the Company from directors.
4. Other Details about the Performance of Duties by Directors
Were there any suggestions from directors accepted by the Company?
√ Yes □ No
Details: During the Reporting Period, directors strictly followed related rules, regulations, including Company
Law, Rules Governing the Listing of Shares on Shenzhen Stock Exchange, Shenzhen Stock Exchange Listed
Companies Self-Regulatory Supervision Guidelines No. 1 - Standardized Operation of Main Board Listed
Companies and Articles of Association. They focused on the Company operation, carefully review the Company's
relevant meeting materials, reviewed and approved a number of board resolutions, and have no objection to all the
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Hikvision 2023 Annual Report
proposals; At the same time, the directors of the Company put forward relevant constructive suggestions based on
their professional abilities and the actual situation of the Company, which had a positive impact on the standardized
operation of the Company and fulfilled their duties as directors.
The Company’s independent directors strictly followed Measures for the Administration of Independent
Directors of Listed Companies and related rules/ regulations, carried out their duties, attended the board meeting
and the shareholders' general meetings, and issued prior approval opinions after conducting special discussion on
related transactions that should be disclosed. The special committee of in dependent directors studied and
deliberated matters such as hiring accounting firms and hedging foreign exchange. To improve the Company
supervisory systems and to protect the legal rights of the Company and shareholders, especially public shareholders
as a whole, independent directors provided professional and subjective advices, enhancing the board’s management
capability, ensuring the Company’s standardized operations. For details, please refer to Independent Directors’
2023 Debriefings disclosed on www.cninfo.com.cn.
VII. The Special Committees under the Board during the Reporting Period
Important
Number of
Committee Name Members Convening Date Meeting Content comments and
meetings held
suggestions
Reviewed and approved 7
Strategy Committee
Chen Zongnian proposals including the 2022 All expressed
of the 5th session of January 18, 2023 to
(convener), Wu 3 Annual Work Report of the concurring
the Board of October 31, 2023
Xiaobo, Hu Ruimin Strategy Committee of the opinions
Directors
Board of Directors
Reviewed and approved 13
Li Shuhua
Audit Committee of proposals including Proposal All expressed
(convener), Wang February 10, 2023 to
the 5th session of the 5 on 2023 Reappointment of concurring
Qiuchao, Guan October 20, 2023
Board of Directors Certificated Public opinions
Qingyou
Accountants LLP
Remuneration and Reviewed and approved 8
Appraisal Guan Qingyou proposals including the 2022 All expressed
March 3, 2023 to
Committee of the 5th (convener), Wu 4 Annual Report of the concurring
December 26, 2023
session of the Board Xiaobo, Wu Weiqi Remuneration and Appraisal opinions
of Directors Committee
Nomination
Hu Ruimin Reviewed and approved the All expressed
Committee of the 5th
(convener), Qu 1 13 April 2023 2022 Annual Report of the concurring
session of the Board
Liyang, Li shuhua Nomination Committee opinions
of Directors
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Hikvision 2023 Annual Report
VIII. Performance of Duties by the Supervisory Committee
Were there any risks to the Company identified by Board of Supervisors when performing its duties during the
reporting period?
□ Yes √ No
The Board of Supervisors has no objection to the supervision matters during the reporting period.
IX. Staff in the Company
1. Statistics of Employees, Professional Structure of the Staff, and Educational Background
Number of incumbent employees in the parent Company at the end of the reporting period 19,140
Number of incumbent employees in major subsidiaries at the end of the reporting period 39,404
Number of incumbent employees at the end of the reporting period 58,544
Number of employees receiving salaries in current period 58,544
Number of retired employees requiring the parent Company and its subsidiaries to bear costs 0
Professional structure
Tier Number of employees
Managerial personnel 962
Production staff 17,332
Sales staff 9,927
Technical staff 28,479
Financial staff 402
Administrative Staff 1,442
Total 58,544
Educational background
Education background Number of employees
Master and/or doctor/or above 10,971
Bachelor 28,890
Junior College (professional training) 6,131
Other 12,552
Total 58,544
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Hikvision 2023 Annual Report
2. Staff Remuneration Policy
Hikvision applies scientific talent cultivation methods, effective talent incentive mechanisms and fair
competition platforms to recruit talents, and continuously optimizes the talent structure. The Company provides
employees with remuneration packages which are competitive in the industry. In addition to endowment insurance,
medical insurance, unemployment insurance, employment injury insurance, maternity insurance and housing
provident funds, the Company also provides employees with the supplementary commercial insurance, special
allowances, and other benefits, and creates a fairer and more humanized working environment for each employee;
so that each employee is able to demonstrate his/her value, and create value to satisfy increasing demands for a good
life.
3. Staff Training Plans
The Company focuses on long-term development strategies and works for the goal of supporting business
development and people development. The Company has planned and implemented a set of training programs and
courses.
From 2020 to 2023, the Company committed to the twin strategies of "system construction" and "resource
construction", consolidating the system and resource base , enhancing the training system combined with leadership,
general skills, new employee orientation, business skills, and professional competence.
With respect to rapid changes in external business environment, the human resources department carried out
an agile and effective talent development model based on current implementation. On one hand, they worked with
business experts to timely summarize experiences, identifying typical scenarios of business development, learning
practical methodologies and skills, and implementing the large learning project that is a combination of theoretical
training and practical training. On the other hand, they designed learning map for key roles and positions based on
"721 learning rule" derived from Competency Model for Qualifications, and lunched an online learning system to
support talent development.
In 2024, the Company will further strengthen the talent development systems, providing talents for key
positions for business development, through better design and result of the talent development program and the
cultivation project of core business talents.
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Hikvision 2023 Annual Report
4. Labor Outsourcing
□ Applicable √ Inapplicable
X. Profit Distribution and Capitalization of Capital Reserves
Profit distribution policy in the reporting period, especially the formulation, implementation and adjustment of
cash dividend policy
√Applicable □Inapplicable
Special explanation of cash dividend policy
Whether it complies with the provisions of the Company's articles of association or the requirements of
Yes
the resolution of the shareholders' meeting:
Whether the dividend standard and dividend ratio are clear: Yes
Whether the relevant decision-making procedures and mechanisms are complete: Yes
Whether independent directors performed their duties and played their due roles: Yes
For companies with no cash dividend, disclose detailed reasons and further measures to improve Inapplicable
investment return for shareholders:
Whether minority shareholders have the opportunity to fully express their opinions and demands, and Yes
whether their legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, whether the conditions and procedures are
Inapplicable
compliant and transparent:
The 17th meeting of the 5th session of the Board of Directors of the Company reviewed and approved the 2022
Annual Profit Distribution Proposal, and was reviewed and approved by the Company's 2021 annual general
meeting: based on the Company’s current total share capital of 9,363,932,789 shares, the Company proposed to
distribute cash dividend of RMB 7 (tax inclusive) per each 10 shares to all shareholders, bonus share and share
distribution from capital reserve is nil. The date of record for this profit distribution is May 18, 2023, the ex-
rights/ex-dividend date is May 19, 2023, and the total cash dividends (tax inclusive) is RMB6,554,752,952.30.
The above-mentioned profit distribution policy conforms to the provisions of the Company's articles of
association and the review procedures, and fully protects the legitimate rights and interests of small and medium
investors, and the independent directors have expressed their agreement.
During the reporting period, the Company was profitable and the distributable profits to shareholders of the parent
company was positive, but the Company did not propose a cash dividend distribution plan.
□ Applicable √ Inapplicable
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Hikvision 2023 Annual Report
Profit distribution and capitalizing of capital reserves for the current reporting period
√ Applicable □ Inapplicable
Bonus issue per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax
9.00
inclusive)
Additional shares converted from capital reserves
0
for 10 shares (share)
Total capital shares as the basis for the distribution
9,330,600,931
proposal (share)
Total cash dividend (RMB) (tax inclusive) 8,397,540,837.90
Amount of cash dividends in other methods (such
0.00
as share repurchase) (RMB)
Total cash dividends (including other methods)
8,397,540,837.90
(RMB)
Distributable profits (RMB) 43,150,159,133.80
Percentage of cash dividends in the total
100.00%
distributed profit (%)
Cash dividend policy:
The Company is in the development stage and has a substantial plan of cash expenditure. In the current profit distribution, cash
dividends shall account for at least 20%.
Details about the plan for profit distribution and capitalizing capital reserves into share capital
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, in 2023, the parent company of the Company realized
net profit of RMB10,552,055,515.88, with no withdraowal of statutory surplus reserve, adding the undistributed profit of the parent
company at the beginning of the year of RMB 39,030,437,901.96, deducting the cash dividends of RMB6,554,752,952.30, adding
back RMB123,327,874.60 of the unpaid dividends for the repurchased restricted shares, as of December 31, 2023, the profits
distributable to shareholders of the parent company amounted to RMB43,150,159,133.80. As of December 31, 2023, the profits
distributable to shareholders in the consolidated statement were RMB57,136,620,244.01 (consolidated). To sum up, according to the
principle of "whichever is lower", the profits distributable to shareholders this year was RMB43,150,159,133.80.
Based agree on the Company’s current total share capital of 9,330,600,931 shares, the Company proposed to distribute cash dividend
of RMB9 (tax inclusive) per each 10 shares to all shareholders, bonus share and share distribution from capital reserve is nil. The
above scheme will distribute a total cash dividend of RMB8,397,540,837.90, and the remaining undistributed profits will be
transferred to the next year.
XI. The Implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or other
Incentive Plans
√Applicable □Inapplicable
1. Share Incentive
During the reporting period, the Company accomplished the repurchase and cancellation of the granted but
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Hikvision 2023 Annual Report
unvested restricted shares under the third unlocking period of the 2018 Restricted Share Incentive Scheme.
On 13th April 2023 and 9th May 2023, the17th Meeting of the 5th session of the Board of Directors and the 2022
annual shareholders’ general meeting, reviewed and approved the Proposal on the Unfulfilled Unlocking Conditions
for the Third Unlocking Period of the 2018 Restricted Share Plan and the Repurchase of Restricted Shares Granted
but Not Unlocked , as the Company performance did not meet the unlocking conditions for the third unlocking
period of the 2018 Restricted Stock Plan (Revised Draft), and agreed on the repurchase and cancellation of the
33,331,858 granted but not unlocked restricted shares of the 2018 Restricted Stock Plan. On 5th July 2023, the
Company completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities
Depository and Clearing Ltd. As a result, the Company's total share capital changes from 9,363,932,789 shares to
9,330,600,931 shares.
For details, please refer to the Proposal on the Unfulfilled Unlocking Conditions for the Third Unlocking Period
of the 2018 Restricted Share Plan and the Repurchase of Restricted Shares Granted but Not Unlocked (No. 2023-
021) published by the Company on www.cninfo.com.cn on April 15, 2023 and The Proposal of the Completed
Cancellation of the Restricted Shares that have been Granted but not yet Unlocked for the Third Uncloking Period
of the 2018 Restricted Plan (No. 2023-028) published by the Company on www.cninfo.com.cn on July 7, 2023.
At the end of the reporting period, the Company has a total amount of 97,402,605 granted but unvested shares,
accounting for 1.04%.
The Company performs accounting treatments related to restricted share incentive plans in accordance with
the requirements of Accounting Standards for Business Enterprises No. 11-Share Payments and other related
accounting standards. The cost of the shares granted by the 2021 Restricted Share Incentive Scheme is amortized
during the vesting period.
During the reporting period, the amortization cost of the Company's 2021 Restricted Share Incentive Scheme
had no significant impact on the Company's financial status and operating results. For details, please refer to
Financial Statement Note (XII)-Share-based Payment.
Equity incentives obtained by the directors and senior management of the Company
√Applicable □Inapplicable
Unit: Share
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Hikvision 2023 Annual Report
Price for
Restricted
Shares vested in Shares newly restricted Restricted
Shares held at
Name Title the current granted in the shares granted Shares held at
the beginning
period current period (RMB per period-end
of the period
share)
Hu Yangzhong Director, CEO 0 0 - - 0
Director, Standing Deputy
Wu Weiqi 0 0 - - 0
General Manager
Senior Deputy General
He Hongli 0 0 - - 0
Manager
Senior Deputy General
Cai Changyang 0 0 - - 0
Manager
Senior Deputy General
Xu Ximing 149,100 59,100 - - 90,000
Manager,
Senior Deputy General
Bi Huijuan 36,900 36,900 - - 0
Manager
Senior Deputy General
Pu Shiliang 120,000 30,000 - - 90,000
Manager
Senior Deputy General
Jin Duo 0 0 - - 0
Manager
Senior Deputy General
Jin Yan Manager, Person in 113,000 33,000 - - 80,000
Charge of Finance
Senior Deputy General
Huang Fanghong Manager, Secretary of the 113,000 33,000 - - 80,000
Board
Senior Deputy General
Chen Junke 0 0 - - 0
Manager
Senior Deputy General
Xu Peng 108,622 38,622 - - 70,000
Manager
Senior Deputy General
Guo Xudong 22,140 22,140 - - 0
Manager
Total -- 662,762 252,762 -- -- 410,000
Note:
(1) Persons listed above are grantees who are senior executives that are the Company’s incumbent senior
executives.
(2) During the reporting period, the third third unlocking plan of the 2018 Restricted Share Incentive Scheme
were repurchased and cancelled, of which 252,762 were repurchased and cancelled by senior executives.
Assessment and incentive mechanism for the senior management
The Company has established a fairly sophisticated mechanism on employees’ evaluation and incentive
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Hikvision 2023 Annual Report
restraint, and has established a fair and transparent appraisal and incentive mechanism on senior management
personnel and other various level management personnel and employees. The Company’s Board of Directors has
carried out annual appraisals of senior management members mainly based on annual target achievement index.
The Board is responsible for appraisals of the general manager on the general manager’s duty, capacity and
performance of operation; and the general manager carried out appraisals of other senior management members on
their operational management and implementation of relevant assignments. In 2023, senior management personnel
carried out their duties diligently with good performance. In the face of complex and changing business environment,
better of internal management, improve operating efficiency and continue to promote the steady development of the
Company.
2. The Implementation of Employee Stock Incentive Plan
□Applicable √Inapplicable
3. Other Incentive Plans
□Applicable √Inapplicable
XII. Construction and Implementation of Internal Control System during the Reporting Period
1. Construction and Implementation of Internal Control
The Company shall establish, improve and effectively implement internal control, further improve the
construction of internal control system and strengthen internal audit supervision in accordance with the Basic
Standard for Enterprise Internal Control, its associated Guidelines and other internal control supervision
requirements. The Board of Directors of the Company truthfully discloses the internal control evaluation report.
The Board of Supervisors supervises the establishment by the Board of Directors and its implementation of internal
control. The management is responsible for organizing and leading the daily internal controls of the Company.
The Audit Committee of the Company under the Board of Directors inspects and supervises the scientificity,
rationality, effectiveness and implementation of the Company's internal control system. At the same time, the Audit
Committee has organized special work meetings to follow up on the implementation of major matters by the
financial center and internal audit department, and puts forward relevant requirements on the normativeness of
internal control of the Company. The Company has set up an internal audit department under the Audit Committee
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Hikvision 2023 Annual Report
of the Board of Directors, which is equipped with full-time personnel to independently carry out internal audits,
supervise and inspect the effectiveness and rationality of internal control. The internal audit department is
accountable and reports to the Audit Committee and reports on their work regularly. The internal audit department
audits the risk profiles of the Company’s business areas according to an annual audit plan. It highlights internal
control defects and gives rational suggestions, and standardizes and supervises the operation and management of
the Company.
During the reporting period, the Company continuously strengthened its self-evaluation and self-improvement
on internal control. It continued to improve and thoroughly implement internal control in its departments and
strengthened the awareness of compliance management, to ensure the effective implementation of the internal
control system, improve the standard of the Company’s operations, and promote the healthy and sustainable
development of the Company. For more details, please refer to the 2023 Internal Control Self-Evaluation Report
disclosed by the Company on CNINFO website (www.cninfo.com.cn).
2. Any Significant Internal Control Deficiencies during the Reporting Period
□ Yes √ No
XIII. The Company's Management and Control of Subsidiaries during the Reporting Period
In strict adherence to the relevant laws and regulations such as the Authorization Management System and the
regulations and normative documents of regulatory authorities, the Company considers and approves proposals on
the acquisition and cancellation the registration of new subsidiaries, and exercises management powers over major
matters of the subsidiaries in accordance with the requirements regarding assets control over the subsidiaries and
the standard operations of the Company. At the same time, subsidiaries shall provide timely, complete and accurate
information to the Company such as operating results, financial position and operating prospects, so that the
Company can conduct scientific decision-making, supervision and coordination.
During the reporting period, the Company established two domestic subsidiaries and four overseas subsidiaries,
acquired one subsidiary, and liquidated and cancelled three subsidiaries. All of this result in changes in the scope of
its consolidation scope. For details, please refer to changes in the consolidation scope in Note (6) to the financial
statements.
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Hikvision 2023 Annual Report
XIV. Self-evaluation Report on Internal Control or Internal Control Audit Report
1. Self-evaluation Report on Internal Control
Disclosure date of full text of self-evaluation report on internal control April 20, 2024
Disclosure index of full text of self-evaluation report on internal control www.cninfo.com.cn
Proportion of assets evaluated in total assets 100.00%
Proportion of revenue evaluated in total revenue per consolidated financial statement 100.00%
Recognition standard of deficiencies
Nature Financial report level Non-financial report level
Significant deficiency:
A deficiency or a combination of deficiencies in internal control
may prevent significant errors in financial reports from being
identified or prevented, e.g.:
A. Invalid internal control environment; Internal control deficiencies at non-
B. Fraud of directors, supervisors and senior management financial report level are mainly identified
personnel on the financial report ; by the likelihood of occurrence and the
C. Significant errors identified by external auditors but not extent of impacts on operating effective in
identified during the Company is operating; business.
D. Invalid supervision of audit committee and internal audit
Significant deficiency: the high likelihood
system;
leading to significant reduction of working
E. Other deficiencies that may lead to the wrong judgement of
efficiency, or significant increase of
financial statement reporter.
uncertainty, or significant deviation from
Important deficiency: the expected target;
Qualitative criteria A deficiency or a combination of deficiencies in internal control Important deficiency: a higher likelihood
may prevent errors in financial report from being identified or leading to remarkable reduction of
prevented, although such deficiency is not significant, but working efficiency, or remarkable increase
require attention of the Board and Management, e.g.: of uncertainty, or remarkable deviation
A. Application of accounting policies does not follow the from the expected target;
enterprise accounting standard; Normal deficiency: a low likelihood
B. No internal control systems for fraud; leading to reduction of working efficiency,
C. No control systems or system not effective for unusual or or increase of uncertainty, or deviation
special transactions or no compensatory relevant control; from the expected target;
D. One or more deficiencies which prevent the preparation of
true and fair financial statements.
Normal deficiency: Not significant and not important
deficiency.
Significant deficiency: direct losses of
Significant deficiency: potential errors 5% or more of total
assets is 5% or more of total profits
profits
Important deficiency: direct losses of
Important deficiency: potential errors 2% or more but below
Quantitative criteria assets is2% or more but below 5% of total
5% of total profits
profits
Normal deficiency: potential errors is 2% or less of total
Normal deficiency: direct losses of assets
profits
is below 2% of total profits
Number of significant deficiencies in financial report level 0
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Hikvision 2023 Annual Report
Number of significant deficiencies in non-financial report level 0
Number of important deficiencies in financial report level 0
Number of important deficiencies in non-financial report level 0
2. Internal Control Audit Report
√Applicable □Inapplicable
Deliberation Opinion Paragraph in Internal Control Audit Report
We believe that Hangzhou Hikvision Digital Technology Co., Ltd. maintained effective internal control over financial reporting in
all material aspects as of December 31st 2023 in accordance with the Basic Standard for Enterprise Internal Control and other
related regulations.
Disclosure of internal control audit
Disclose
report
Disclosure date of the full text of
April 20, 2024
the internal control audit report
Disclosure index of full text of
www.cninfo.com.cn 2023 Internal Control Audit Report
internal control audit report
Internal control audit opinion Standard unqualified audit opinion
Whether there are material
No
weakness of non-financial report
Whether the accounting firm issued an internal control audit report with a non-standard opinion
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the self-evaluation report from
the Board of Directors
√ Yes □No
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Hikvision 2023 Annual Report
Section V Environmental and Social Responsibility
I. Significant Environmental Issues
Whether the Company or any of its subsidiaries should be categorized as a critical pollutant enterprises published
by environmental protection department
□Yes √No.
II. Social Responsibilities
For details, please refer to the Company’s 2023 Environment, Social and Governance Report disclosed on
CNINFO (www.cninfo.com.cn).
III. The Achievements of Poverty Alleviation and Rural Revitalization
During the reporting period, the Company did not conduct any targeted poverty alleviation and rural revitalization
work.
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Hikvision 2023 Annual Report
Section VI Significant Events
I. Performance of Commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, related parties, acquirers, and other related
parties for the commitments by the end of the reporting period.
√ Applicable □ Inapplicable
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
1. Commitments in non-competition within the industry: In the period as
controlling shareholders of the Hikvision, CETHIK and its controlling
subsidiaries (excluding Hikvision and its subsidiaries, the same below) will not
be engaged in such business that is competitive to Hikvision and its
subsidiaries directly or indirectly.
2. Commitments in decrease and regulation of transactions with related party:
Zhejiang Haikang Group Co., Ltd. (hereinafter referred to as Haikang Group
or actual controller) as the controlling shareholders of Hangzhou Hikvision
Commitments in Commitments Digital Technology Co., Ltd. (hereinafter referred to as "Hikvision" or "Listed
offering regarding horizontal Company") are committed as below for the transactions with Hikvision:
October 29, Strict
documents or CETHIK Group Co., Ltd. competition and (1) Haikang Group will not make use of the controlling power to offer more Long-term
2013 performance
shareholding related party favorable conditions to Hikvision than those to any independent third party in
alterations transactions any fair market transactions in the cooperation with Hikvision.
(2) Haikang Group will not make use of the controlling power to obtain the
prior right to complete the transaction with Hikvision.
(3) Haikang Group will not deal with Hikvision in not fair terms comparing to
the market prices to prejudice the Company’s interests.
For unavoidable related transactions, the Company will observe the
principles of justice and fairness to determine prices according to the market
on the basis of equality, voluntarily. The Company will obey the Articles of
Association and other regulatory documents related to the avoiding of issues
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Hikvision 2023 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
about related transactions. The related transactions will go through approval
procedures in accordance with related rules and complete legal procedures,
fulfilling the information disclosure obligations in respect to the related
transactions
3. Commitment to the maintenance of the independence of the listed Company
3.1 Commitment to Personnel Independence of the listed Company
(1) Commitment that our general manager, deputy general manager, chief
financial officer, secretary of the board and other members of senior
management shall not assume any positions other than directors and
supervisors or get any remuneration in CETHIK and/or any of its controlled
entities; (2) Commitment in keeping the management of labor, human
resources and issues related to remuneration of the listed Company
independent from that of CETHIK;
3.2 Commitment to the independence of the asset of the listed Company
(1) Commitment to independent and complete asset of the listed Company
(2) Commitment free of unlawful use of cash and asset of the listed Company
by the controlling shareholders
3.3 Commitment to financial independence of the listed Company
(1) Commitment to an independent finance department with a team and
accounting system;
(2) Commitment to a regulated, independent accounting system and financial
management system of the branches and subsidiaries
(3) Commitment to maintaining accounts with banks independently of and not
sharing any bank account with our controlling shareholders
(4) Commitment that the financial staff shall not assume any positions in
CETHIK
(5) Commitment to paying taxes independently according to the law;
(6) Commitment to implementing financial decisions independently
3.4 The Company has set up an independent organizational structure which
maintains its independent operations which is independent from that of
CETHIK.
3.5 Commitment to business Independence of the listed Company
(1) The Company has the asset, personnel, aptitude and management capability
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Hikvision 2023 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
for independent and complete business operation. The Company has the ability
to operate independently in the market.
(2) Commitment in independence in both business and operations
4. Regarding plans for the development and relevant commitment for the listed
Company, Haikang Group has committed as below for the subsequent
development of Hikvision according to the Securities Acts and relevant laws
and rules,
4.1 Currently the Company has no plan to change or make significant
adjustments for principal business in the next 12 months;
4.2 Currently the Company has no plan to sell, merge or operate with another
Company for the assets and business of the listed Company or its subsidiaries
in the next 12 months.
4.3 Currently the Company has no plan to alter the Board of the Directors and
senior management and no agreement with other shareholders about the
appointment and removal of the directors or senior management. The team of
Board of Directors and senior management will remain unchanged for the
foreseeable future.
4.4 Currently the Company has no plan to make significant changes to the
Articles of Association for the listed Company.
4.5 Currently the Company has no plan to make significant changes to the
existing employee recruitment for the listed Company.
4.6 Currently the Company has no plan to make significant changes for the
dividend distribution plan for the listed Company.
4.7 Currently the Company has no plan to make significant changes for
business and organizational structure for the listed Company.
Commitments in Hangzhou Weixun Equity Share restriction During Hu Yangzhong, Wu Weiqi, Jiang Haiqing, Zhou Zhiping, Xu Lirong, May 17, Strict
Long term
Initial Public Investment Partnership commitment Cai Dingguo, He Hongli, Zheng Yibo, Hu Dan, Jiang Yufeng, Liu Xiang, 2010 performance
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Hikvision 2023 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
Offering or re- (Limited Partnership) Wang Ruihong, Chen Junke’s tenure of the Company’s Board of Directors,
financing
supervisors and senior management personnel, the annual transfer of
Hikvision’s total shares should not exceed 25% of total number of shares held
under Weixun; within 6 months after abovementioned personnel’s demission,
should not transfer Hikvision’s shares held under Weixun.
During Hu Yangzhong, Wu Weiqi, Gong Hongjia’s tenure of the Company’s
Hangzhou Pukang Equity Board of Directors, supervisors and senior management personnel, the annual
Share restriction May 17, Strict
Investment Partnership transfer of Hikvision’s total shares should not exceed 25% of total number of Long term
commitment 2010 performance
(Limited Partnership) shares held under Pukang; within 6 months after abovementioned personnel’s
demission, should not transfer Hikvision’s shares held under Pukang.
The Company's directors,
supervisors and executive:
HuYangzhong, Wu Weiqi,
During their tenure of the Company’s Board of Directors, supervisors and
Jiang Haiqing, Zhou
Share restriction senior management personnel, the annual shares transfer should not exceed May 17, Strict
Zhiping, Xu Lirong, Cai Long term
commitment 25% of total number of shares held under Weixun; within 6 months after their 2010 performance
Dingguo, He Hongli, Zheng
demission, they should not transfer their shares held under Weixun.
Yibo, Hu Dan, Jiang
Yufeng, Liu Xiang, Wang
Ruihong, Chen Junke
During their tenure of the Company’s Board of Directors, supervisors and
Directors, executive officers
Share restriction senior management personnel, the annual shares transfer should not exceed May 17, Strict
of the Company: Hu Long term
commitment 25% of total number of shares held under Pukang; within 6 months after their 2010 performance
Yangzhong, Wu Weiqi
demission, they should not transfer their shares held under Pukang.
The Company’s director During Gong Hongjia’s tenure of the Company’s Board of Directors,
Share restriction Strict
Gong Hongjia’s spouse, supervisors and senior management personnel, Chen’s annual shares transfer May 17, Long-term
commitment performance
Chen Chunmei should not exceed 25% of total number of shares held under Pukang; within 6 2010
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Hikvision 2023 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
months after the demission of Gong Hongjia, Chen should not transfer her
shares held under Pukang.
To avoid any loss of the Company and other shareholders arising from any
Commitment to
China Electronics competing business, China Electronics Technology Group Co., Ltd., the actual September Strict
avoid horizontal Long term
Technology Group Co., Ltd. controller of the Company, issued Letters of non-competition on 18 18, 2008 performance
competition
September, 2008.
Gong Hongjia; Hangzhou
Weixun Equity Investment To avoid any loss of the Company and other shareholders arising from any
Partnership (Limited competing business, Gong Hongjia, Hangzhou WeiXun I Equity Investment
Commitment to Partnership (Limited Partnership), ZheJiang Orient Holdings Co., Ltd. and
Partnership); Hangzhou Strict
avoid horizontal Hangzhou Pukang Equity Investment Partnership (Limited Partnership), the Long term
Pukang Equity Investment promoters of the Company, issued Commitment Letters of non-competition in July 10, 2008 performance
competition
Partnership (Limited the same industry on July 10, 2008.
Partnership); ZheJiang
Orient Holdings Co., Ltd.
Within 36
Arrangement on trading restriction and commitement to voluntarily restrict months from
shares relating to the spin-off of EZVIZ Network to be listed on the Science
Other the date of
and Technology Innovation Board, for details, please refer to the appendix Ⅵ Strict
commitments December
of the Prospectus on the Initial Public Share Offering and Listing on the STAR issuing and
(commitments Commitment 28, 2022 performance
Market of the Shanghai Stock Exchange of Hangzhou EZVIZ Network Co., listing of
relating to the relating to the spin-
Ltd. published by EZVIZ Network on the website of Shanghai Stock Exchange
spin-off of Hangzhou Hikvision Digital off of EZVIZ EZVIZ
(www.sse.com.cn): commitments relating to investor protection.
EZVIZ Network Network to be listed Network
Technology Co., Ltd.
to be listed on on the Science and
the Science and Technology Commitment relating to the intention to hold shares and the intention to reduce Within 2 years
Technology Innovation Board holdings of shares of EZVIZ Network of the spin-off of EZVIZ Network to be
listed on the Science and Technology Innovation Board, for details, please refer from the end
Innovation December Strict
Board) to the appendix Ⅵ of the Prospectus on the Initial Public Share Offering and date of shares
28, 2022 performance
Listing on the STAR Market of the Shanghai Stock Exchange of Hangzhou restriction
EZVIZ Network Co., Ltd. published by EZVIZ Network on the website of
period of
Shanghai Stock Exchange (www.sse.com.cn): commitments relating to investor
188
Hikvision 2023 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
protection. EZVIZ
Network
Commitments and initiatives to stabilize the stock price of EZVIZ Network, to
repurchase shares of EZVIZ Network, to guarantee no fraud in listing of EZVIZ
Network, to make compensation for diluted spot return, to undertake
compensation or liability in accordance with the law, to have constraints for
failing to fulfill commitments, to avoid intra-industry competition, to regulate
and reduce related party transactions, to avoid capital occupation, and to keep December Strict
Long term
system independent after the spin-of of EZVIZ Network to be listed on the 28, 2022 performance
Science and Technology Innovation Board. For details, please refer the
Prospectus on the Initial Public Share Offering and Listing on the STAR Market
of the Shanghai Stock Exchange of Hangzhou EZVIZ Network Co., Ltd.
published by EZVIZ Network on the website of Shanghai Stock Exchange
(www.sse.com.cn): commitments relating to investor protection.
Whether the
commitments is Yes
fulfilled in time
189
Hikvision 2023 Annual Report
2. Where any profit forecast was made for any of the Company’s assets or projects and the current
reporting period is still within the forecast period, the Company shall explain whether the
performance of the asset or project reaches the profit forecast and why:
□ Applicable √ Inapplicable
II. The Company’s Funds Used by the Controlling Shareholder or Other Related Parties for
Non-operating Purposes
□ Applicable √ Inapplicable
No such case during the current reporting period.
III. Illegal Provision of Guarantees for External Parties
□ Applicable √ Inapplicable
No such case in the current reporting period.
IV. Explanation Given by the Board of Directors regarding the Latest "Non-standard Auditor’s
Report"
□ Applicable √ Inapplicable
V. Explanation Given by the Board of Directors, Supervisory Committee and Independent
Directors (if applicable) regarding the "Non-standard Auditor’s Report" Issued by the CPA
Firm for the Current Reporting Period
□ Applicable √ Inapplicable
VI. For Changes in Accounting Policies, Accounting Estimates or Correction of Significant
Accounting Errors Compared with the Financial Report for the Prior Year
√ Applicable □Inapplicable
For details, please refer to the Note (III) 35.
VII. Explanation for Changes in Scope of the Consolidated Financial Statements as Compared
to the Financial Report for the Prior Year
√ Applicable □ Inapplicable
During the reporting period, the Company established three domestic subsidiaries and three overseas
190
Hikvision 2023 Annual Report
subsidiaries, and acquired two subsidiaries. All of this result in changes in the scope of its consolidation scope. For
details, please refer to changes in the consolidation scope in Note (VI) to the financial statements.
VIII. Engagement and Disengagement of the CPA firm
CPA firm engaged at present
Name of the domestic CPA firm Deloitte Touche Tohmatsu Certified Public Accountants LLP
Remuneration for the domestic CPA firm (RMB’0000) 420
Consecutive years of the audit service provided by the
8
domestic CPA firm
Name of the certified public accountants from the
Chen Yan, Liu Ying
domestic CPA firm
Consecutive years of the audit service provided by the Chen Yan has provided audit service for 1 year;
certified public accountants from the domestic CPA
firm Liu Ying has provided audit service for 1 year.
Whether the CPA firm was changed in the current period
□ Yes √ No
Whether to reappoint a CPA firm during the audit
□ Yes √ No
Engagement of internal control audit CPA firm, financial advisor or sponsor
√Applicable □ Inapplicable
During the reporting period, the Company hired Deloitte Touche Tohmatsu Certified Public Accountants LLP
as the internal control audit accounting firm, and paid a total of RMB 630,000 of internal control audit fees during
the period.
IX. Delisting after Disclosure of this Annual Report
□ Applicable √ Inapplicable
X. Bankruptcy and Restructuring
□ Applicable √ Inapplicable
No such case during the reporting period.
XI. Material Litigations and Arbitration
□ Applicable √ Inapplicable
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Hikvision 2023 Annual Report
The Company had no material litigation or arbitration during the current reporting period.
XII. Punishments and Rectifications
□ Applicable √ Inapplicable
No such case during the reporting period.
XIII. Integrity of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Inapplicable
192
Hikvision 2023 Annual Report
XIV. Significant Related-party Transaction
1. Related-party Transactions Arising from Routine Daily Operations
√ Applicable □Inapplicable
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
Subsidiaries or Under the common
Payment on
research institutes control of the Company’s Procurement 241,106.58 5.18% 350,000 No
delivery Announcement
of CETC actual controller Purchasing Reference
on the forecast
Joint ventures held by the of raw market Payment on
Joint ventures Procurement 283.97 0.01% 2,130 No April 15, of daily
Company materials, price delivery
2023 related-party
Associated Associated companies receiving agreed by Payment on
Procurement 27,103.98 0.58% 73,050 No transactions in
companies held by the Company services both parties delivery
2023 (No.
Other related See Note 1 for details Payment on
Procurement 128,661.34 2.76% 220,050 No 2023-015)
parties delivery
Subsidiaries or Under the common
Payment on
research institutes control of the Company’s Sales 26,945.45 0.30% 70,000 No Announcement
Providing delivery
of CETC actual controller. Reference on the forecast
services,
Joint ventures held by the market Payment on of daily
Joint ventures Sales selling 6,905.60 0.08% 14,600 No April 15,
Company price delivery related-party
products and 2023
Associated Associated companies agreed by Payment on transactions in
Sales commercial 6,670.61 0.07% 20,450 No
companies held by the Company both parties delivery 2023 (No.
goods
Other related See Note 1 for details Payment on 2023-015)
Sales 2,412.21 0.03% 8,720 No
parties delivery
193
Hikvision 2023 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
Announcement
Reference on the forecast
Renting
Subsidiaries or Under the common market April 15, of daily
house from Based on
research institutes control of the Company’s Lease price 232.41 0.55% 500 No 2023 related-party
related contract
of CETC actual controller. agreed by transactions in
parties
both parties 2023 (No.
2023-015)
Total 440,322.15 - 759,500 - - - -
Details on significant sales return None
The above newly increased trading quotas include forecast quota amount of RMB300,000 for purchasing of raw materials and
receiving services from joint ventures, the estimated newly increased amount of RMB5.5 million for purchasing of raw materials and
Total amount of related transactions projected based on
receiving services from associated companies, the estimated newly increased amount of RMB2 million for providing services, selling
different categories, and the actual performance during the
products and commercial goods to associated companies, the estimated newly increased amount of RMB47.2 million for providing
current reporting period (if any)
services, selling products and commercial goods to other related parties. Those forecast quota amount has been approved by the
Chairman of the Company according to related regulations and the Company's Management System of Related Transaction.
Reasons on significant difference between trading price and
Not applicable
market referencing price (if applicable)
Note 1: Enterprises controlled, jointly controlled or serving as directors or senior management personnel by affiliated natural persons of the Company (including
directors, supervisors, senior management of the Company, shareholders holding more than 5% of the shares of the Company and their close family members).
Note 2: The data shown in the totals may differ slightly from the sum of the relevant individual data due to rounding.
194
Hikvision 2023 Annual Report
2. Related-party Transactions regarding Purchase and Disposal of Assets or Equity
□Applicable √Inapplicable
No such case in the reporting period.
3. Significant Related-party Transactions Arising from Joint Investments on External Parties
□Applicable √Inapplicable
No such case in the reporting period.
4. Related Credit and Debt Transactions
□ Applicable √Inapplicable
No related-parties’ creditor’s rights or debts during the reporting period.
5. Transactions with Related Financial Companies
√Applicable □Inapplicable
Deposit business
Amount incurred (0,000 RMB)
Maximum
Opening Closing
daily deposit Deposit interest Total
Related Party Relationship Balance (0,000 Total deposit Balance (0,000
limit (0,000 rate range withdrawal
RMB) amount for the RMB)
RMB) amount for the
current period
current period
(0,000 RMB)
(0,000 RMB)
CETC Finance Under the
Co., Ltd. common
control of the
1,459,403.08 0.2%-2.0% 400,003.35 451,436.54 450,922.15 400,517.74
Company's
ultimate
controller
Credit or other financial services
Total Amount Actual amount incurred
Related Party Relationship Business Type
(0,000 RMB) (0,000 RMB)
CETC Finance Co., Ltd. Under the common control of the Other financial
600,000.00 252,300.00
Company's ultimate controller services
Note: The above amount is the amount of entrusted loans issued by the Group to its subsidiaries through China Electronics
195
Hikvision 2023 Annual Report
Technology Finance Co., Ltd. during the year.
Total Amount Actual amount incurred
Related Party Relationship Business Type
(0,000 RMB) (0,000 RMB)
CETC Finance Co., Ltd. Under the common control of the
Credit 500,000.00 -
Company's ultimate controller
6. Transactions between the Financial Company Controlled by the Company and Related Parties
□ Applicable √Inapplicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and its related parties.
7. Other Significant Related Party Transactions
□Applicable √Inapplicable
There is no other significant related party transactions during the reporting period.
XV. Significant Contracts and Their Execution
1. Trusteeship, Contracting and Leasing
(1) Trusteeship
□ Applicable √ Inapplicable
No such case in the reporting period.
(2) Contracting
□ Applicable √ Inapplicable
No such case in the reporting period.
(3) Leasing
□Applicable √Inapplicable
196
Hikvision 2023 Annual Report
2. Significant Guarantees
√Applicable □ Inapplicable
Unit: RMB’0000
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Guarantee expiration date related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
December 1, December 31, 2029
Hangzhou Hikvision Technology Ltd. April 15, 2023 1,250,000.00 686,260.20 Joint guarantee No No
2019
LuoPu HaiShi DingXin Electronic March 26, 2035
April 15, 2023 29,000.00 March 26, 2019 20,560.00 Joint guarantee No No
Technology Ltd.
PiShan HaiShi YongAn Electronic March 26 2040
April 15, 2023 28,000.00 March 26, 2019 19,678.00 Joint guarantee No No
Technology Ltd.
Urumqi HaiShi Xin’An Electronic June 20, 2028
April 15, 2023 37,000.00 March 26, 2019 17,523.57 Joint guarantee No No
Technology Ltd.
Moyu HaiShi Meitian Electronic Technology March 26, 2035
April 15, 2023 24,000.00 March 26, 2019 16,240.00 Joint guarantee No No
Ltd.
Hangzhou Hikvision System Technology Ltd. April 15, 2023 80,000.00 March 23, 2021 15,103.46 Joint guarantee November 28, 2025 No No
Yutian HaiShi Meitian Electronic March 26, 2034
April 15, 2023 30,000.00 March 26, 2019 9,480.00 Joint guarantee No No
Technology Ltd.
December 4, July 30, 2025
Wuhan Haorong Technology Ltd. April 15, 2023 30,000.00 5,543.48 Joint guarantee No No
2023
September 29, July 31, 2025
Xi'an Hikvision Digital Technology Ltd. April 15, 2023 24,000.00 4,421.14 Joint guarantee No No
2022
Chongqing Hikvision Technology Ltd. April 15, 2023 27,000.00 December 20, 4,131.14 Joint guarantee March 30, 2024 No No
197
Hikvision 2023 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Guarantee expiration date related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
2022
Hangzhou Hikvision Electronic Ltd. April 15, 2023 45,000.00 August 8, 2023 1,311.82 Joint guarantee November 29, 2024 No No
Nanjing Hikvision Digital Technology Ltd. April 15, 2023 12,000.00 June 30, 2022 3,853.70 Joint guarantee July 31, 2025 No No
Chongqing Hikvision System Technology April 15, 2023 July 24, 2024
6,000.00 March 30, 2023 521.85 Joint guarantee No No
Ltd.
Shijiazhuang Hikvision Technology Ltd. April 15, 2023 12,000.00 October 18, 2023 159.31 Joint guarantee July 31, 2025 Yes No
Zhengzhou Hikvision Digital Technology Ltd. April 15, 2023 8,500.00 Not happened during the reporting period
Nanchang Hikvision Digital Technology Ltd. April 15, 2023 2,000.00 Not happened during the reporting period
Hikvision Digital Technology (Shanghai) Ltd. April 15, 2023 3,000.00 Not happened during the reporting period
Hefei Hikvision Digital Technology Ltd. April 15, 2023 3,500.00 Not happened during the reporting period
Fuzhou Hikvision Digital Technology Ltd. April 15, 2023 2,500.00 Not happened during the reporting period
Chengdu Hikvision Digital Technology Ltd. April 15, 2023 6,000.00 Not happened during the reporting period
Wuhan Hikvision Technology Ltd. April 15, 2023 1,000.00 Not happened during the reporting period
Prama Hikvision India Private Ltd. April 15, 2023 9,000.00 Not happened during the reporting period
Hikvision International Co., Ltd.. April 15, 2023 151,200.00 Not happened during the reporting period
HIKVISION UK LTD. April 15, 2023 2,000.00 Not happened during the reporting period
HIKVISION TECHNOLOGY PTE. LTD. April 15, 2023 25,000.00 Not happened during the reporting period
Total guarantee cap for subsidiaries approved during the reporting Total actual guarantee amount for
1,847,700.00 subsidiaries during the reporting 1,178,665.18
period(B1)
period(B2)
198
Hikvision 2023 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Guarantee expiration date related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of the
1,847,700.00 subsidiaries at the end of the reporting 804,787.67
reporting period(B3)
period(B4)
Guarantees provided by the Company’s subsidiary to another subsidiary
Disclosure date of Guarantee
Guarantee Actual Actual guaranteed Type of Fulfilled or
Guaranteed party announcement of Guarantee expiration date for a
cap occurrence date amount guarantee not
the guarantee cap related
Hangzhou Haikang Intelligent Technology
April 15, 2023 80,000.00 March 14, 2022 19,693.02 Joint guarantee 2025.11.30 No No
Ltd.
Hangzhou Haikang Machine Intelligence Ltd. April 15, 2023 80,000.00 June 13, 2023 1,363.53 Joint guarantee 2024.04.12 No No
Hangzhou Hikmicro Intelligent Technology November 2,
April 15, 2023 92,000.00 957.53 Joint guarantee 2024.04.12 No No
Ltd. 2022
September 11,
Chongqing EZVIZ Electronic Ltd. April 15, 2023 30,000.00 800.00 Joint guarantee 2024.09.11 No No
2023
Wuhu Sensortech Intelligent Technology September 27,
April 15, 2023 6,500.00 - Joint guarantee 2024.01.16 No No
Ltd. 2022
Sensortech Hebei Technology Ltd. April 15, 2023 12,000.00 July 28, 2022 - Joint guarantee 2023.12.12 No No
Hangzhou Hikmicro Software Ltd. April 15, 2023 10,000.00 Not happened during the reporting period
Hangzhou Hikstorage Technology Ltd. April 15, 2023 10,000.00 Not happened during the reporting period
Wuhan Hikfire Technology Ltd. April 15, 2023 3,000.00 Not happened during the reporting period
Zhangjiang Hikfire Technology Ltd. April 15, 2023 3,000.00 Not happened during the reporting period
199
Hikvision 2023 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Guarantee expiration date related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
Total actual guarantee amount for
Total guarantee cap for subsidiaries approved during the reporting
326,500.00 subsidiaries during the reporting 55,566.63
period (C1)
period (C2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of the
326,500.00 subsidiaries at the end of the reporting 22,814.08
reporting period（C3）
period(C4)
The total amount of Company’s guarantees (that is, the total of the first three items)
Total guarantee cap approved during the reporting period Total actual guarantee amount during
2,174,200.00 1,234,231.81
（A1+B1+C1） the reporting period（A2+B2+C2）
Total actual guarantee balance at the
Total approved guarantee cap at the end of the reporting period
2,174,200.00 end of the reporting period 827,601.75
（A3+B3+C3）
（A4+B4+C4）
Portion of the total actual guarantee (A4+B4+C4) amount in net
10.84%
assets of the Company
Of which:
The balance of guarantee for shareholders, actual controllers and
0.00
their affiliates. (D)
Amount of debt guarantees provided directly or indirectly for
811,976.44
entities with a liability-to-asset ratio over 70% (E)
Total amount of guarantee exceeding 50% of net assets (F) 0.00
Total guarantee amount of the above-mentioned 3 kinds of 811,976.44
200
Hikvision 2023 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Guarantee expiration date related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
guarantees (D+E+F)
3. Entrusted Others to Manage Cash Assets
(1) Entrusted financial management
□ Applicable √ Inapplicable
No such case during the reporting period
(2) Entrusted loan management
□ Applicable √ Inapplicable
No such case during the reporting period
4. Other Significant Contracts
□ Applicable √ Inapplicable
No such case during the reporting period
XVI. Other Significant Events
√ Applicable □ Inapplicable
1. Repurchase of the Company's Public Shares
201
Hikvision 2023 Annual Report
On September 15, 2022 and October 10, 2022, the Company held the 13h meeting of the 5th session of the Board of Directors and the second extraordinary general
meeting of shareholders in 2022 respectively, deliberated and approved the Proposal on the Plan of Repurchase Part of the Company's Public Shares, approved the
Company using its own fund to repurchase part of its RMB common shares (A shares) that have been issued domestically by means of centralized bidding through the
trading system of the SZSE, the aggregate amount of repurchase funds shall not exceed RMB2.5 billion (inclusive) and not less than RMB 2 billion (inclusive), the
repurchase price shall not exceed RMB40 per share (inclusive), the implementation period of the repurchase shall not exceed 12 months from the date of the general
meeting of shareholders of the Company at which the proposal on the plan of repurchase part of the Company's public shares is reviewed and approved, and the
Company will make repurchase decisions and implement them based on market conditions during the repurchase period. The shares repurchased by the Company will
be cancelled for reducing the registered capital according to law. For details, please refer to the Announcement on Resolutions of 13th Meeting of the 5th Session of the
Board of Directors (Announcement No.: 2022-049), the Announcement on the Plan of Repurchase Part of the Company's Public Shares (Announcement No.: 2022-
050), the Announcement on Resolutions of the Second Extraordinary General Meeting of Shareholders in 2022 (Announcement No.: 2022-056), the Report on the Plan
of Repurchase Part of the Company's Public Shares (Announcement No.: 2022-057) published by the Company on cninfo website (www.cninfo.com.cn) on September
16, 2022 and October 11, 2022. On October 11, 2022, the Company first repurchased 6,820,968 shares of the Company by means of centralized bidding through a
dedicated securities account for the repurchase, accounting for 0.0723% of the Company's total share capital at that time. The highest transaction price was RMB29.65
per share, the lowest transaction price was RMB28.71 per share, and the total transaction amount was RMB199,981,024.67 (excluding transaction fees). For details,
please refer to the Announcement on the Initial Repurchase of the Company's Shares (Announcement No.: 2022-059) published by the Company on cninfo website
(www.cninfo.com.cn) on October 12, 2022. During the repurchase period, the Company disclosed the progress of repurchase as of the end of last month within the first
three trading days each month based on the regulation. For details, please refer to the Announcement on the Progress of Repurchase (Announcement No.: 2022-063)
(Announcement No.: 2022-066) published by the Company on cninfo website (www.cninfo.com.cn) on November 2, 2022, December 3, 2022, respectively. As of
December 30, 2022, the repurchase of shares had been completed, and the actual repurchase date was between October 11, 2022 and December 30, 2022, meet the
requirement on implementation period of repurchase in repurchase plan. As of December 30, 2022, the Company used the dedicated securities account for share
202
Hikvision 2023 Annual Report
repurchase to cumulatively repurchase shares with the total amount of 66,987,835 shares by means of centralized bidding, accounting for 0.7103% of the Company's
total share capital at that time (9,430,920,624 shares). The highest transaction price was RMB35.13 per share, the lowest transaction price was RMB26.83 per share,
and the total transaction amount was RMB2,043,476,488.53 (excluding transaction fees). The source of share-repurchase funding was from the Company's own fund,
and the price of repurchase did not exceed the upper limit of the price (RMB40 per share) specified in the repurchase plan. The repurchase complies with relevant laws,
regulations and rules from the disclosed repurchase plan. For details, please refer to the Announcement on the Progress and Result of Repurchase of the Company's
Shares and Changes in Shares (Announcement No.: 2023-001) published by the Company on cninfo website (www.cninfo.com.cn) on January 4, 2023. On January 13,
2023, the Company had completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities Depository and Clearing Corporation
Ltd., with the total amount of 66,987,835 shares, accounting for 0.7103% of the Company's total share capital before the cancellation (9,430,920,624 shares), and the
number of cancelled shares is equal to the number of actual repurchased shares. After the completion of the repurchase and cancellation of shares, the Company's total
share capital changes from 9,430,920,624 shares to 9,363,932,789 shares. For details, please refer to the Announcement on the Completion of the Cancellation of the
Company's Repurchased Shares and Changes in Shares (Announcement No.: 2023-002) published by the Company on cninfo website (www.cninfo.com.cn) on January
17, 2023.
2. Matters Relating to Capital Increase and Introduction of Strategic Investors for Wholly-Owned Subsidiary Shijiazhuang Sensortech
On February 15, 2023, the Company held the 16th meeting of the 5th session of the Board of Directors, reviewed and approved the Proposal on Capital Increase
and Introduction of Strategic Investors for Wholly-Owned Subsidiary Shijiazhuang Sensortech Intelligent Technology Co., Ltd. (hereinafter referred to as "Shijiazhuang
Sensortech") and agreed to increase the registered capital of Shijiazhuang Sensortech by RMB2,398,000,000. Hikvision intended to increase the registered capital of
Shijiazhuang Sensortech by RMB1,345,200,000 to hold no less than 56.0969% equity in the subsidiary. Meanwhile, Shijiazhuang Sensortech planned to introduce one
or more strategic investors via public listing with a total investment of RMB1,052,800,000 to obtain no more than 43.9031% equity. The final amount of capital increase
and shareholding ratios will be subject to the results of the listing subscription. For details, please refer to the Announcement on Capital Increase and Introduction of
Strategic Investors for Wholly-Owned Subsidiary Shijiazhuang Sensortech Intelligent Technology Co., Ltd. (Announcement No.: 2023-005) published by the Company
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Hikvision 2023 Annual Report
on cninfo website (www.cninfo.com.cn) on February 16, 2023.
On February 24, 2023, the capital increase of Shijiazhuang Sensortech was listed on the China Beijing Equity Exchange. Two potential investors were identified
for the Shijiazhuang Sensortech Capital Increase Project at the end of the announcement period. They were Hangzhou Qianmo Qinghe Equity Investment Partnership
(Limited Partnership) (hereinafter referred to as "Qianmo Qinghe") and a consortium of two investors: Qin Yi (a natural person) and Wuhu Sensi Yingwo Investment
Center (Limited Partnership) (hereinafter referred to as "Sensi Yingwo"). The Company signed the Capital Increase Agreement (hereinafter referred to as "The
Agreement") with Qianmo Qinghe, Sensi Yingwo and Qin Yi on March 28, 2023. Hikvision intended to use equity to subscribe a capital increase of RMB1,345,200,000
and hold 56.0969% equity in Shijiazhuang Sensortech through an agreement. The strategic investors participated in the capital increase through public delisting on the
China Beijing Equity Exchange. They subscribed a capital increase of RMB1,052,800,000 to hold 43.9031% equity in Shijiazhuang Sensortech. Upon completion of
the capital increase, the registered capital of Shijiazhuang Sensortech will increase from RMB10,000 to RMB2,398,010,000. Hikvision will hold 56.0969% equity,
maintaining a controlling interest in Shijiazhuang Sensortech and shall consolidate the financial statements of this subsidiary. For details, please refer to the
Announcement on Progress of Capital Increase and Introduction of Strategic Investors for Wholly-Owned Subsidiary Shijiazhuang Sensortech Intelligent Technology
Co., Ltd. (Announcement No.: 2023-009) published by the Company on cninfo website (www.cninfo.com.cn) on March 29, 2023.
3. The Company's controlling shareholder disclosed and implemented the plan to increase the Company's shares
The Company received a notice from China Electronics Technology HIK Group Co., Ltd. (hereinafter referred to as "CETHIK"), the Company's controlling shareholder,
on October 16, 2023 that CETHIK intended to increase its shareholdings of the Company's shares through the trading system of the Shenzhen Stock Exchange through
centralized bidding, block trading or other trading methods permitted by laws and regulations within 6 months from October 17, 2023. The total amount of the increased
shareholdings would not be less than RMB200 million and not more than RMB300 million, and the proposed price of increased shareholdings should not be higher
than RMB40 per share (inclusive). The plan of increase shareholding would be implemented at the opportunity with the consideration of the fluctuation of Hikvision's
stock price and the overall trend of the capital market. From January 4, 2024 to January 9, 2024, CETHIK increased its holdings of 6,271,400 shares of the Company
through the trading system of the Shenzhen Stock Exchange through centralized bidding, accounting for 0.0672% of the Company's current total share capital, and the
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Hikvision 2023 Annual Report
amount of additional shares is 200,160,059.77 yuan (excluding transaction fees). The shareholding increase plan of CETHIK has been implemented. For details, please
refer to the Announcement on the Plan for the Company's Controlling Shareholders to Increase Their Shareholdings in the Company (Announcement No.: 2023-033)
and Announcement on the Completion of the Implementation of the Company's Controlling Shareholders' Plan to Increase Their Shareholdings in the Company
(Announcement No.: 2024-001) published by the Company on cninfo website (www.cninfo.com.cn) on October 17, 2023 and January 10, 2024
4. The person acting in concert of the controlling shareholder of the Company disclosed and implemented the plan to increase the Company's shares
After the close of trading on January 16, 2024, the Company received a notice from CETC Investment Holdings Co., Ltd. (hereinafter referred to as "CETC Investment"),
a person acting in concert of the CETHIK, the controlling shareholder of the Company, that on January 16, 2024, CETC Investment increased its holdings of 1,319,906
shares of the Company through centralized bidding through the trading system of the Shenzhen Stock Exchange, with the amount of RMB40,363,848.49. CETC
Investment intends to continue to increase its holdings of the Company's shares within 6 months from January 16, 2024, with an increase of not less than RMB300
million and no more than RMB600 million (including the amount of increase on January 16, 2024). There is no fixed price range for this increase plan, and CETC
Investment will implement the shareholding increase plan at the opportunity with the reasonable judgment of the Company's stock value. From January 16, 2024 to
February 6, 2024, CETC Investment has increased its holdings of 12,853,665 shares of the Company through centralized bidding through the Shenzhen Stock Exchange
trading system, accounting for 0.1378% of the Company's current total share capital, and the amount of additional shares is 400,027,006.81 yuan (excluding transaction
FEEs). For details, please refer to the Announcement on the Increase of the Company's Shares and the Subsequent Shareholding Increase Plan by the person acting in
concert of the controlling shareholder of the Company ( Announcement No.: 2024-002) and the Announcement on the Completion of the Company's Shareholding
Increase Plan by the person acting in concert of the controlling shareholder of the Company (Announcement No.: 2024-005) published by the Company on cninfo
website (www.cninfo.com.cn) on January 17, 2024 and February 7, 2024.
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XVII. Significant Events of the Company’s Subsidiaries
√ Applicable □Inapplicable
1. Matters Relating to Steady Promotion of the Spin-off of HikRobot to be Listed on the SZSE ChiNext Market
On March 7, 2023, Hangzhou Hikrobot Co., Ltd. (hereinafter referred to as "HikRobot") received Notice on Accepting the Application Documents for the Initial
Public Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. (SZSE Listing Review [2023] No. 252) issued by Shenzhen Stock
Exchange, and SZSE considered that application documents were completed and decided to accept. For details, please refer to the Announcement on the Application
for the Initial Public Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd., a Subsidiary of the Company, is Accepted by the
SZSE (Announcement No.: 2023-008) published by the Company on cninfo website (www.cninfo.com.cn) on March 8, 2023. Shenzhen Stock Exchange issed the
Inquiry Letter on the Review of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot
Co., Ltd. (Inquiry Letter (2023) No. 010121) on March 30, 2023, and HikRobot has submitted the Reply to the Inquiry Letter on the Review of Application Documents
for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. on May 17, 2023. Shenzhen Stock Exchange
issed the Second Inquiry Letter on the Review of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of
Hangzhou Hikrobot Co., Ltd. (Inquiry Letter (2023) No. 010218) on June 30, 2023, and HikRobot has submitted the Reply to the Second Inquiry Letter on the Review
of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. on July 27, 2023
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Hikvision 2023 Annual Report
Section VII Changes in Shares and Information about Shareholders
I. Changes in Share Capital
1. Table of Changes in Share Capital
Unit: Share
Before the change Changes in the period (+, -) After the change
Share
New Shares Bonus transferred
Shares Ratio Others Sub-total Shares Ratio
Issued share from capital
reserve
1. Shares subject to conditional restriction(s) 255,248,506 2.71% -33,080,833 -33,080,833 222,167,673 2.38%
1) State holdings
2) Shares held by state-owned corporates
3) Shares held by other domestic investors 255,055,236 2.70% -33,023,563 -33,023,563 222,031,673 2.38%
Including: held by domestic corporations
held by domestic individuals 255,055,236 2.70% -33,023,563 -33,023,563 222,031,673 2.38%
4) Shares held by overseas investors 193,270 0.00% -57,270 -57,270 136,000 0.00%
Including: held by overseas corporations
held by overseas individuals 193,270 0.00% -57,270 -57,270 136,000 0.00%
2. Shares without restriction 9,175,672,118 97.29% -67,238,860 -67,238,860 9,108,433,258 97.62%
1) RMB ordinary shares 9,175,672,118 97.29% -67,238,860 -67,238,860 9,108,433,258 97.62%
2) Domestically listed foreign shares
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Hikvision 2023 Annual Report
Before the change Changes in the period (+, -) After the change
Share
New Shares Bonus transferred
Shares Ratio Others Sub-total Shares Ratio
Issued share from capital
reserve
3) Foreign shares listed overseas
4) Others
3. Total 9,430,920,624 100.00% -100,319,693 -100,319,693 9,330,600,931 100.00%
Note: the tailing difference of the data in the table above is due to rounding to two decimal.
Reason for the changes in share capital
√Applicable □Inapplicable
(1) During the Reporting Period, the Company has completed the repurchase and cancellation of the Company's Public Shares
On December 30, 2022, the Company had completed the repurchase of parts of the Company's public shares. The Company used the dedicated securities account
for share repurchase to cumulatively repurchase shares with the total amount of 66,987,835 shares by means of centralized bidding, accounting for 0.7103% of the
Company's total share capital at that time (9,430,920,624 shares). The highest transaction price was RMB35.13 per share, the lowest transaction price was RMB26.83
per share, and the total transaction amount was RMB2,043,476,488.53 (excluding transaction fees).
On January 13, 2023, the Company had completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities Depository and
Clearing Corporation Limited, with the total amount of 66,987,835 shares, accounting for 0.7103% of the Company's total share capital before the cancellation
(9,430,920,624 shares), and the number of cancelled shares is equal to the number of actual repurchased shares. After the completion of the repurchase and cancellation
of shares, the Company's total share capital changes from 9,430,920,624 shares to 9,363,932,789 shares..
For details, please refer to the Announcement on Resolutions of 13th Meeting of the 5th Session of the Board of Directors (Announcement No.: 2022-049), the
Announcement on the Plan of Repurchase Part of the Company's Public Shares (Announcement No.: 2022-050), the Announcement on Resolutions of the Second
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Hikvision 2023 Annual Report
Extraordinary General Meeting of Shareholders in 2022 (Announcement No.: 2022-056), the Report on the Plan of Repurchase Part of the Company's Public Shares
(Announcement No.: 2022-057) published by the Company on cninfo website (www.cninfo.com.cn) on September 16, 2022 and October 11, 2022.
(2) During the reporting period, the Company has completed the third repurchase and cancellation of the 2018 restricted share incentive scheme.
On April 13, 2023 and May 9, 2023, the 17th meeting of the 5th session of the Board of Directors, the 15th meeting of the 5th session of the Board of Supervisors
and 2022 Annual General Meeting reviewed and approved the Proposal on the Unfulfilled Unlocking Conditions for the Third Unlocking Period of the 2018 Restricted
Share Plan and the Repurchase of Restricted Shares Granted but Not Unlocked. As the Company performance did not meet the unlocking conditions for the third
unlocking period of the 2018 Restricted Stock Plan (Revised Draft), 33,331,858 restricted shares granted but not unlocked in the current period for all grantees of the
2018 Restricted Stock Plan were repurchased and cancelled. And the Company had completed the cancellation procedures for the above shares at the Shenzhen branch
of China Securities Depository and Clearing Ltd. on July 5, 2023.
For details, please refer to the Proposal on the Unfulfilled Unlocking Conditions for the Third Unlocking Period of the 2018 Restricted Share Plan and the
Repurchase of Restricted Shares Granted but Not Unlocked ((No. 2023-021) published by the Company on www.cninfo.com.cn on April 15, 2023 and The Proposal
of the Completed Cancellation of the Restricted Shares that have been Granted but not yet Unlocked for the Third Uncloking Period of the 2018 Restricted Plan (2023-
028) published by the Company on www.cninfo.com.cn on July 7, 2023, and the total share capital of the Company decreased from 9,363,932,789 shares to
9,330,600,931 shares.
As of the end of the current reporting period, the Company has a total of 97,402,605 granted but unvested shares, accounting for 1.04% of the Company's total
share capital at the end of the reporting period, and the total share capital of the Company decreased by 2,288,095 shares from 9,433,208,719 shares to 9,430,920,624
shares.
Approval for changes in share capital
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Hikvision 2023 Annual Report
√Applicable □Inapplicable
(1) The Company has completed the repurchase and cancellation of the Company's Public Shares
On September 15, 2022 and October 10, 2022, the Company held the 13th meeting of the 5th session of the Board of Directors and the second extraordinary
general meeting of shareholders in 2022 respectively, deliberated and approved the Proposal on the Plan of Repurchase Part of the Company's Public Shares, approved
the Company using its own fund to repurchase part of its RMB common shares (A shares) that have been issued domestically by means of centralized bidding through
the trading system of the SZSE, the aggregate amount of repurchase funds shall not exceed RMB2.5 billion (inclusive) and not less than RMB2 billion (inclusive), the
repurchase price shall not exceed RMB40 per share (inclusive), the implementation period of the repurchase shall not exceed 12 months from the date of the general
meeting of shareholders of the Company at which the proposal on the plan of repurchase part of the Company's public shares is reviewed and approved, and the
Company will make repurchase decisions and implement them based on market conditions during the repurchase period. The shares repurchased by the Company will
be cancelled for reducing the registered capital according to law. On January 13, 2023, the Company had completed the cancellation procedures for the above shares at
the Shenzhen branch of China Securities Depository and Clearing Corporation Ltd.
(2) The Third Repurchase and Cancellation of the 2018 Restricted Share Incentive Scheme
On April 13, 2023 and May 9, 2023, the 17th meeting of the 5th session of the Board of Directors, the 15th meeting of the 5th session of the Board of Supervisors
and 2022 Annual General Meeting reviewed and approved the Proposal on the Unfulfilled Unlocking Conditions for the Third Unlocking Period of the 2018 Restricted
Share Plan and the Repurchase of Restricted Shares Granted but Not Unlocked. 33,331,858 restricted shares granted but not unlocked in the current period for all
grantees of the 2018 Restricted Stock Plan were repurchased and cancelled. And the Company had completed the cancellation procedures for the above shares at the
Shenzhen branch of China Securities Depository and Clearing Ltd. on July 5, 2023.
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Transfer for changes in share capital
√Applicable □Inapplicable
(1) The Company has completed the repurchase and cancellation of the Company's Public Shares
On January 13, 2023, the Company completed the cancellation procedures for some of the Company's Public Shares at the Shenzhen branch of China Securities
Depository and Clearing Ltd, and the cancelled shares amounted to 66,987,835 shares, accounting for 0.7103% of the total share capital of the Company (9,430,920,624
shares) before the cancellation. The number of shares cancelled this time is consistent with the number of shares actually repurchased by the Company. After the
completion of this share repurchase cancellation procedure, the total share capital of the Company was changed from 9,430,920,624 shares to 9,363,932,789 shares.
(2) The Third Repurchase and Cancellation of the 2018 Restricted Share Incentive Scheme
On July 5, 2023, 33,331,858 restricted shares granted but not unlocked in the third period for all grantees of the 2018 Restricted Stock Plan were canceled at the
Shenzhen branch of China Securities Depository and Clearing Ltd., and the total share capital of the Company decreased from 9,363,932,789 shares to 9,330,600,931
shares.
After the completion of the above matters, there has been no significant change in the shareholder structure, asset and liability structure of the Company.
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per share attributable to common shareholders of the
Company, and other financial indexes over the last year and last period
□Applicable √Inapplicable
Other contents that the Company considers necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Inapplicable
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Hikvision 2023 Annual Report
2. Changes in Restricted Shares
√ Applicable □ Inapplicable
Unit: Share
Opening restricted Increased in current Vested in current
Name of shareholder Closing restricted shares Note for restricted shares Vesting date
shares period period
130,734,463 0 33,331,858 97,402,605 July 5, 2023, the third
Grantees of restricted repurchase and
share incentive plan Equity Incentive Restricted Shares cancellation of the 2018
(consolidated) restricted share incentive
scheme
Qu Liyang 11,812 0 0 11,812 Restricted shares for senior executives
Wang Qiuchao 26,250 0 0 26,250 Restricted shares for senior executives
Xu Lirong 227,250 0 0 227,250 Restricted shares for senior executives
Hu Yangzhong 116,434,858 292,500 0 116,727,358 Restricted shares for senior executives
Wu Weiqi 6,473,317 41,025 0 6,514,342 Restricted shares for senior executives
He Hongli 248,625 0 0 248,625 Restricted shares for senior executives
82,125 0 0 82,125 Restricted shares for senior executives
Cai Changyang
According to the relevant
Xu Ximing 66,150 0 0 66,150 Restricted shares for senior executive
regulations on the
Bi Huijuan 167,850 0 0 167,850 Restricted shares for senior executives
management of executive
Pu Shiliang 169,425 0 0 169,425 Restricted shares for senior executives
shares
Jin Duo 82,125 0 0 82,125 Restricted shares for senior executives
Jin Yan 180,000 0 0 180,000 Restricted shares for senior executives
Huang Fanghong 248,875 0 0 248,875 Restricted shares for senior executives
1,811 0 0 1,811
Xu Peng Restricted shares for senior executives
11,070 0 0 11,070 Restricted shares for senior executives
Guo Xudong
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Hikvision 2023 Annual Report
Opening restricted Increased in current Vested in current
Name of shareholder Closing restricted shares Note for restricted shares Vesting date
shares period period
255,166,006 333,525 33,331,858 222,167,673
Total -- --
Note:
1) Executives who are grantees under incentive restricted shares scheme, his/her holding incentive restricted shares are counted within the "Grantees of restricted
share incentive plan (consolidated)" on the second row.
2) The total amount of vested shares of the "Grantees of restricted share incentive plan (consolidated)" in current period is 33,331,858 shares, which is the third
repurchase and cancellation of restricted stock granted but not unlocked in the current period under the Company's 2018 restricted stock plan (Including the repurchase
and cancellation of the corresponding restricted shares for equity incentives held by the above senior executives).
3) The directors of the Company, Hu Yangzhong and Wu weiqi, increased their holdings of the Company by 390,000 shares and 54,700 shares, respectively, which
were partially included in the restricted shares for senior executives in accordance with the relevant rules for the restriction of shares for senior executives.
II. Issuance and Listing of Securities
1. Securities (exclude Preferred Share) Issued during the Reporting Period
□Applicable √Inapplicable
2. Explanation on Changes in Total Share Capital, the Structure of Shareholders, and the Structure of Assets and Liabilities of the Company
√ Applicable □ Inapplicable
(1) The repurchase and cancellation of the Company's Public Shares
On January 13, 2023, the Company completed the cancellation procedures for some of the Company's Public Shares at the Shenzhen branch of China Securities
Depository and Clearing Ltd, and the cancelled shares amounted to 66,987,835 shares, accounting for 0.7103% of the total share capital of the Company (9,430,920,624
shares) before the cancellation. After the completion of this share repurchase cancellation procedure, the total share capital of the Company was changed from
9,430,920,624 shares to 9,363,932,789 shares.
(2) The Third Repurchase and Cancellation of the 2018 Restricted Share Incentive Scheme
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Hikvision 2023 Annual Report
On July 5, 2023, 33,331,858 restricted shares granted but not unlocked in the third period for all grantees of the 2018 Restricted Stock Plan were canceled at the
Shenzhen branch of China Securities Depository and Clearing Ltd., and the total share capital of the Company decreased from 9,363,932,789 shares to 9,330,600,931
shares.
After the completion of the above matters, there has been no significant change in the shareholder structure, asset and liability structure of the Company.
3. Existent Shares Held by Internal Staff of the Company
□ Applicable √ Inapplicable
III. Particulars about the Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit: Share
Total number of common shareholders at the The total number of ordinary shareholders at the end of the previous month before
324,840 356,222
end of the reporting period the disclosure date of the annual report
Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them (Excluding shares lent through refinancing)
Total ordinary The number Pledged or marked or frozen
Share-holding Increase/decreas The number of shares
Nature of shares held at the of shares held
Name of shareholder percentage e during the held without trading
shareholder end of the reporting with trading Status Amount
(%) reporting period restrictions
period restrictions
China Electronics Domestic state-
Technology HIK Group owned 36.48% 3,403,879,509 - - 3,403,879,509 Pledged 50,000,000
Co., Ltd. corporation
Overseas
Gong Hongjia 10.32% 962,504,814 - - 962,504,814 Pledged 190,548,700
individual
Hangzhou Weixun Equity Domestic non-
Investment Partnership state-owned 4.83% 450,795,176 - - 450,795,176 Pledged 18,100,000
(Limited Partnership) corporation
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Hikvision 2023 Annual Report
Shanghai Perseverance
Asset Management
Partnership (Limited
Partnership) - Other 4.58% 427,000,000 -5,000,000 - 427,000,000 - -
Perseverance Adjacent
Mountain 1 Yuanwang
Fund
Domestic state-
CETC Investment
owned 2.49% 232,307,903 - - 232,307,903 - -
Holdings Co., Ltd.
corporation
Hangzhou Pukang Equity Domestic non-
Investment Partnership state-owned 1.96% 182,510,174 - - 182,510,174 Pledged 48,300,000
(Limited Partnership) corporation
The 52nd Research
Domestic state-
Institute at China
owned 1.94% 180,775,044 - - 180,775,044 - -
Electronics Technology
corporation
Group Corporation
Domestic
Hu Yangzhong 1.67% 155,636,477 390,000 116,727,358 38,909,119 - -
individual
Domestic state-
Central Huijin Investment
owned 0.69% 64,700,691 - - 64,700,691 - -
Co., Ltd.
corporation
Hong Kong Securities
Overseas
Clearing Company 0.58% 53,720,436 2,256,602 - 53,720,436 -
corporation
Ltd.(HKSCC)
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Hikvision 2023 Annual Report
China Electronics Technology HIK Group Co., Ltd., CETC Investment Holdings Co., Ltd., and the 52nd Research Institute at China
Electronics Technology Group Co., Ltd.are all subject to control of China Electronics Technology Group Corporation. Ms. Chen Chunmei,
Explanation on associated relationship or limited partner of Hangzhou Pukang Equity Investment Partnership (Limited Partnership), is the spouse of Mr. Gong Hongjia, overseas
concerted actions among the above-mentioned individual shareholder of the Company. Hu Yangzhong, domestic individual, is holding the capital contribution shares of both Hangzhou
shareholders: Weixun Equity Investment Partnership (Limited Partnership) and Hangzhou Pukang Equity Investment Partnership (Limited Partnership).
Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert parties
in accordance with the Administrative Measures for Acquisitions of Listed Companies.
Particulars about shares held by the Top 10 shareholders holding shares that are not subject to trading restriction(s)
Number of shares without trading Type of shares
Name of shareholder
restrictions held at the period-end Type Number
China Electronics Technology HIK Group Co., Ltd. 3,403,879,509 RMB ordinary shares 3,403,879,509
Gong Hongjia 962,504,814 RMB ordinary shares 962,504,814
Hangzhou Weixun Equity Investment Partnership (Limited Partnership) 450,795,176 RMB ordinary shares 450,795,176
Shanghai Perseverance Asset Management Partnership (Limited
427,000,000 RMB ordinary shares 427,000,000
Partnership) - Perseverance Adjacent Mountain 1 Yuanwang Fund
CETC Investment Holdings Co., Ltd. 232,307,903 RMB ordinary shares 232,307,903
Hangzhou Pukang Equity Investment Partnership (Limited Partnership) 182,510,174 RMB ordinary shares 182,510,174
The 52nd Research Institute at China Electronics Technology Group Co.,
180,775,044 RMB ordinary shares 180,775,044
Ltd.
Central Huijin Investment Co., Ltd. 64,700,691 RMB ordinary shares 64,700,691
Hong Kong Securities Clearing Company Ltd.(HKSCC) 53,720,436 RMB ordinary shares 53,720,436
Hu Yangzhong 38,909,119 RMB ordinary shares 38,909,119
Explanation on associated relationship and
China Electronics Technology HIK Group Co., Ltd., China Electronics Technology Investment Holdings Co., Ltd. and The 52nd Research
concerted actions among Top 10 shareholders
Institute at China Electronics Technology Group Co., Ltd. are all subject to control of China Electronics Technology Group Co. Ltd. Ms.
holding shares without trading restrictions, and
Chen Chunmei, limited partner of Xinjiang Pukang Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual
among Top 10 shareholders and Top 10
shareholder of the Company. Hu Yangzhong, domestic individual, is holding the capital contribution shares of both Xinjiang Weixun
shareholders holding shares without trading
Investment Management Limited Partnership and Xinjiang Pukang Investment Limited Partnership.
restrictions
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Hikvision 2023 Annual Report
Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert
parties in accordance with the Measures for Management of the Disclosure of the Shareholding Changes of Shareholders of the Listed
Company.
Top 10 shareholders participate in refinancing business lending shares
□ Applicable √ Inapplicable
The top ten shareholders have changed from the previous period
□ Applicable √ Inapplicable
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted any agreed buy-back in the reporting period?
□ Yes √ No
No such case during the current reporting period.
2. Particulars about Controlling Shareholder of the Company
Nature of the controlling shareholder: Central State-owned
Type of the actual controller: Corporation
Name of controlling Legal Representative
Date of establishment Organization code Business scope
shareholder /People in charge
Industrial investment; R&D of environmental protection products, network
China Electronics Technology products, intelligent products and electronic products; technology transfer,
Chen Zongnian November 29, 2002 9133000014306073XD
HIK Group Co., Ltd. technical services, manufacturing and sales; business consulting services,
rental services of self-owned real estate; import and export businesses.
Shares held by the controlling
shareholder in other listed Directly holds 47.16% shares of domestic listed company Phoenix Optical Co. Ltd., and directly holds 13.50% shares of domestic listed company Anbang
companies through controlling or Guarding Group Co. and indirectly holds 17.51% shares of domestic listed company Hangzhou EZVIZ Network Co., Ltd. (China Electronics Technology
holding during the reporting HIK Group Co., Ltd.holds 36.48% shares of the Company and the Company holds 48.00% shares of Hangzhou EZVIZ Network Co., Ltd).
period
Change of the controlling shareholder during the reporting period
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Hikvision 2023 Annual Report
□ Applicable √ Inapplicable
The Company's controlling shareholder has not changed during the reporting period.
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Hikvision 2023 Annual Report
3. Particulars about the Company’s Actual Controller & Concerted Parties
Nature of the actual controller: Central state-owned assets management agency
Type of the actual controller: Corporation
Name of the Legal
Date of Organization
actual Representative Business scope
establishment code
controller /People in charge
The Company is responsible for the development and
manufacturing of military electronic equipment and
systems integration, electronic equipment for weapon
platform, military software and electronic basic products;
and the construction of national defense electronic
information infrastructure and safeguard conditions;
construction of national major electronic information
system; the research, development, production and sales
of civil electronic information software, materials,
components, equipment and system integration and related
common technology; self-operated and agent import and
China Electronics export business of various commodities and technologies
February 25, (except for goods and technologies that are restricted or
Technology Group Wang Haibo 91110000710929498G
2002 restricted by the state-limited company); operating feed
Ltd. processing and "three comes one supplement" business;
operating counter trade and entrepot trade; Industrial
investment; asset management; engaged in e-commerce
information services; organization of enterprises in the
industry to go abroad, participate in exhibitions. (Market
entities independently choose business projects and carry
out business activities in accordance with the law; for
projects subject to approval according to law, business
activities are carried out according to the approved content
after approval by relevant departments; the Company
cannot engage in business activities of projects prohibited
or restricted by national and municipal industrial policies.)
Shares held by the
actual controlling
China Electronics Technology Group Ltd. is the actual controller of 18 domestic listed companies including Sun Create
shareholder in Electronic Co., Ltd, CETC Digital Technology Co., Ltd, CETC Cyberspace Security Technology Co., Ltd., CETC Putian
other listed Technology Co., Ltd., Tai’ji Computer Corporation Limited, GLARUN Technology Co., Ltd. , Phoenix Optics Co., Ltd.,
companies Chengdu Tianao Electronic Co., Ltd., CETC Chip Technology Inc., Hebei Sinopack Electronic Technology Co., Ltd.,
through Eastern Communications Co.,Ltd., Eastcompeace Technology Co.,Ltd., Nanjing Putian Telecommunications Co., Ltd.,
Chengdu Siwei Science and Technology Co., Ltd., Nanjingand Guobo Electronics Co., Ltd., Hangzhou EZVIZ Network
controlling or
Co., Ltd., Nanjing Les Information Technology Co., Ltd., Beijing E-hualu Information Technology Co., Ltd. and etc.
holding during the
reporting period
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
No such change during the reporting period.
The ownership and controlling relationship between the actual controller of the Company and the Company is detailed
as follows:
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Hikvision 2023 Annual Report
The actual controller controls the Company through trust or other asset management methods
□ Applicable √Inapplicable
4. The Company's Controlling Shareholder or the Largest Shareholder and its Concerted Action Person's
Cumulative Pledged Shares Account for 80% of the Company's Shares Held by Them
□ Applicable √ Inapplicable
5. Particulars about Other Corporate Shareholders with Shareholding Proportion over 10%
□ Applicable √ Inapplicable
6. Particulars on Shareholding Decrease Restrictions for the Controlling Shareholders, Actual Controller,
Restructurer or Other Committing Parties
□ Applicable √ Inapplicable
IV. The Specific Implementation of Share Repurchase during the Reporting Period
Implementation progress of share repurchase
√ Applicable □Inapplicable
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Hikvision 2023 Annual Report
The number of
repurchased
shares as a
Planned Planned Amount of
Proportion to proportion of
Disclosure repurchase amount of Repurchase Use of repurchased
total share the underlying
Date amount of repurchase period repurchase shares
capital stock covered
shares fund (share)
by the share
incentive
scheme
Calculated
Calculated
based on that
based on that
the repurchase
the repurchase
price shall not
price shall not
exceed RMB40
exceed RMB40
per share. The Shall not
per share. The Cancel and
amount shall exceed
repurchased October 11, reduce
not exceed RMB2.5 billion
September 16, portion of 2022 – registered
62,500,000 (inclusive) and 66,987,835 Inapplicable
2022 shares shall not December 30, capital in
shares and not not less than
exceed 0.66% 202 accordance
less than RMB 2 billion
and not less with law
50,000,000 (inclusive)
than 0.53%,
share, and the
and final result
final result is
is subject to the
subject to the
actual
actual
repurchase.
repurchase.
On September 15, 2022 and October 10, 2022, the Company held the 13h meeting of the 5th session of the Board of
Directors and the second extraordinary general meeting of shareholders in 2022 respectively, deliberated and approved the
Proposal on the Plan of Repurchase Part of the Company's Public Shares, approved the Company using its own fund to
repurchase part of its RMB common shares (A shares) that have been issued domestically by means of centralized bidding
through the trading system of the SZSE, the aggregate amount of repurchase funds shall not exceed RMB2.5 billion
(inclusive) and not less than RMB 2 billion (inclusive), the repurchase price shall not exceed RMB40 per share (inclusive),
the implementation period of the repurchase shall not exceed 12 months from the date of the general meeting of
shareholders of the Company at which the proposal on the plan of repurchase part of the Company's public shares is
reviewed and approved, and the Company will make repurchase decisions and implement them based on market conditions
during the repurchase period. The shares repurchased by the Company will be cancelled for reducing the registered capital
according to law. For details, please refer to the Announcement on Resolutions of 13th Meeting of the 5th Session of the
Board of Directors (Announcement No.: 2022-049), the Announcement on the Plan of Repurchase Part of the Company's
Public Shares (Announcement No.: 2022-050), the Announcement on Resolutions of the Second Extraordinary General
Meeting of Shareholders in 2022 (Announcement No.: 2022-056), the Report on the Plan of Repurchase Part of the
Company's Public Shares (Announcement No.: 2022-057) published by the Company on cninfo website
(www.cninfo.com.cn) on September 16, 2022 and October 11, 2022. On October 11, 2022, the Company first repurchased
6,820,968 shares of the Company by means of centralized bidding through a dedicated securities account for the repurchase,
accounting for 0.0723% of the Company's total share capital at that time. The highest transaction price was RMB29.65
per share, the lowest transaction price was RMB28.71 per share, and the total transaction amount was RMB199,981,024.67
(excluding transaction fees). For details, please refer to the Announcement on the Initial Repurchase of the Company's
Shares (Announcement No.: 2022-059) published by the Company on cninfo website (www.cninfo.com.cn) on October
12, 2022. During the repurchase period, the Company disclosed the progress of repurchase as of the end of last month
within the first three trading days each month based on the regulation. For details, please refer to the Announcement on
the Progress of Repurchase (Announcement No.: 2022-063) (Announcement No.: 2022-066) published by the Company
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Hikvision 2023 Annual Report
on cninfo website (www.cninfo.com.cn) on November 2, 2022, December 3, 2022, respectively. As of December 30, 2022,
the repurchase of shares had been completed, and the actual repurchase date was between October 11, 2022 and December
30, 2022, meet the requirement on implementation period of repurchase in repurchase plan. As of December 30, 2022, the
Company used the dedicated securities account for share repurchase to cumulatively repurchase shares with the total
amount of 66,987,835 shares by means of centralized bidding, accounting for 0.7103% of the Company's total share capital
at that time (9,430,920,624 shares). The highest transaction price was RMB35.13 per share, the lowest transaction price
was RMB26.83 per share, and the total transaction amount was RMB2,043,476,488.53 (excluding transaction fees). The
source of share-repurchase funding was from the Company's own fund, and the price of repurchase did not exceed the
upper limit of the price (RMB40 per share) specified in the repurchase plan. The repurchase complies with relevant laws,
regulations and rules from the disclosed repurchase plan. For details, please refer to the Announcement on the Progress
and Result of Repurchase of the Company's Shares and Changes in Shares (Announcement No.: 2023-001) published by
the Company on cninfo website (www.cninfo.com.cn) on January 4, 2023. On January 13, 2023, the Company had
completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities Depository and
Clearing Ltd., with the total amount of 66,987,835 shares, accounting for 0.7103% of the Company's total share capital
before the cancellation (9,430,920,624 shares), and the number of cancelled shares is equal to the number of actual
repurchased shares. After the completion of the repurchase and cancellation of shares, the Company's total share capital
changes from 9,430,920,624 shares to 9,363,932,789 shares. For details, please refer to the Announcement on the
Completion of the Cancellation of the Company's Repurchased Shares and Changes in Shares (Announcement No.: 2023-
002) published by the Company on cninfo website (www.cninfo.com.cn) on January 17, 2023.
Implementation progress of reduce holdings of repurchased shares by means of centralized bidding
□Applicable√ Inapplicable
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Hikvision 2023 Annual Report
Section VIII Information of Preferred Shares
□ Applicable √ Inapplicable
There is no preferred share existed for the Company during the current reporting period.
223
Hikvision 2023 Annual Report
Section IX Bonds
□ Applicable √ Inapplicable
224
Hikvision 2023 Annual Report
Section X Financial Report
Audit Report
Audit Opinion Standard unqualified audit opinion
Audit Report sign-off Date April 18, 2024
Audit Institution Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Audit Report Number Deloitte Auditors’ Report (Audit) No. 24- P04366
Certified Public Accounts Name Chen yan, Liu ying
To all shareholders of Hangzhou Hikvision Digital Technology Co., Ltd.:
1. Audit Opinion
We have audited the accompanying financial statements of Hangzhou Hikvision Digital Technology Co., Ltd.
(hereinafter referred to as "Hikvision" or "The Group"), including consolidated and parent company's balance sheet as of
December 31, 2023, consolidated and parent company's income statement, cash flow statement and statement of changes
in owners’ equity of 2023 as well as relevant financial notes to financial statements.
In our opinion, the financial statements annexed have been prepared in accordance with Accounting Standards for
Business Enterprises in all material respects and they present fairly the consolidated and parent company’s financial
position of Hikvision as of December 31, 2023 and consolidated and parent company’s financial performance and cash
flows of 2023.
2. Basis of Opinion
We have conducted our audit in accordance with the Auditing Standards for Chinese Certified Public Accountants.
"Responsibilities of Certified Public Accountants for Financial Statements Audit" in the audit report further states our
responsibilities under the standards. As per the code of ethics of Chinese certified public accountants, we are independent
from Hikvision and have implemented other responsibilities as required by the code of ethics. We believe that the audit
evidence we have acquired is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Matters
Key matters are matters we deem the most significant to the financial statements audit for the current period based
on our professional judgment. These matters are handled based on the financial statements audit as a whole and the audit
opinion formed accordingly. We don’t present opinions separately on these matters. We confirm that the following matters
are key matters to be communicated through in the audit report.
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Hikvision 2023 Annual Report
1) Recognition of Sales Revenues
Description:
As shown in Note (V) 46, the operating revenue in the consolidated financial statements of the Group for the year
ended December 31, 2023 is RMB89,339,856,855.68. The product sales revenue, a key performance indicator, reaches
RMB84,971,000,242.56, accounting for 95.11% of the operating revenue, which is a significant indicator of the Group
and has a significant influence on results of business operations. The product sales revenue include different sales models
such as product domestic sales and product export sales by domestic companies and the overseas sales of overseas
subsidiaries, and the revenue recognition is complicated. Therefore, we regard the occurrence of product sales revenue as
a key audit matter.
Audit Measures:
Main audit procedures that we perform for the aforesaid key audit matters include:
(1) Understanding and evaluating design and implementation of key internal control in relation to revenue recognition,
and testing the effectiveness of its operation;
(2) For revenues under different sales models, selecting a sample to check the sales contract, reviewing its main
transaction terms, evaluating whether revenue recognition complies with requirements of accounting policies of the
Group and the Accounting Standards for Business Enterprises;
(3) Analyzing revenues and gross profits based on product types, to understand whether there are abnormal fluctuations
in the revenues and gross profits for the year, and conducting a test of details for identified specific transactions,
through systematic analysis of revenue data, and reviewing relevant supporting documents;
(4) Selecting sample(s) from product sales revenues recorded for the year, checking invoices, sales contracts or orders,
shipping orders, signature forms, and other supporting documents; for the sample(s) of income under the export model
of the selected domestic companies, additional inspections will be made to the customs declaration record and
shipment record.
2) Provision for Credit Loss of Accounts Receivable
Description:
As disclosed in Note (V) 4 to the consolidated financial statements of the Group, as of December 31, 2023, the balance
of accounts receivable amounted to RMB39,006,606,967.83, and the balance of provision for credit losses of accounts
receivable amounted to RMB3,191,433,456.39. The book value of the Group’s accounts receivable is relatively high, and
the provision for credit loss of accounts receivable has a significant impact on the financial statements. As shown in Note
(III) 11.2, Note (III) 13 and Note (III) 34 of the financial statements, the Group makes provisions for credit losses for
accounts receivable at an amount equivalent to expected credit losses during the entire duration. For accounts receivable
with significant individual amount and when the debtor has major financial difficulties, etc., the Group recognizes its credit
losses based on individual assets, and classifies other accounts receivable into different combinations based on common
credit risk characteristics and calculates expected credit losses on a portfolio basis.
For accounts receivable classified into portfolios, the Group uses impairment matrix to determine the expected credit
loss provision for accounts receivable. The expected credit loss provision ratio for each portfolio is determined based on
the Group’s historical overdue ratio and default and with reference to the forward-looking information of the industry. The
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Hikvision 2023 Annual Report
accounting estimates above are subject to a high level of uncertainties. Therefore, we identify the recognition of credit loss
provision for accounts receivable on a portfolio basis as a key audit matter.
Audit Measures:
Main audit procedures that we perform for the aforesaid key audit matters include:
(1) Understanding and evaluating design and implementation of key internal control in relation to expected credit loss
provision for accounts receivable by the Group, and testing the effectiveness of its operation;
(2) Understanding the Group’s accounting policies for expected credit loss on accounts receivable; for the model credit
loss provision for accounts receivable on a portfolio basis, the following main procedures were performed
-Assessing the rationality of measurement method by using impairment matrix model, and the rationality of the key
parameters and assumptions used in the impairment matrix model, including classification of different portfolios,
classification of stage, forward-looking adjustment, etc.;
- Obtaining the historical default data used by the Group’s management in determining the historical loss rate of
accounts receivable, and evaluating the accuracy thereof;
- Selecting samples to test the accuracy of the classification of portfolio and stage by the Group’s management;
- Recalculating the expected credit loss provision based on default loss percentage.
4. Other Information
Management of Hikvision shall be responsible for other information. Other information includes the information
covered in the annual report, excluding the financial statements and our audit report.
Our audit opinion on the financial statements does not cover other information and we do not express any form of
authentication conclusion on other information.
In connection with our audit of the financial statements, our responsibility is to read other information and to consider
whether other information is significantly misstated or materially inconsistent with the financial statements or the
information we learned during the audit.
Based on the works we have performed, if we determine that there is a material misstatement in other information,
we should report the fact. In this respect, we have nothing to report.
5. Responsibility of the Management and Governance for the Financial Statements
The management of Hikvision is responsible for the preparation of financial statements in accordance with
Accounting Standards for Business Enterprises to achieve fair presentation, and design, implementation and maintenance
of necessary internal control to enable the financial statements are free from material misstatement, whether due to fraud
or error.
When preparing the financial statements, the management is responsible for assessing the going-concern ability of
Hikvision, disclosing issues related to going-concern as applicable, and applying going-concern assumptions, unless the
management plans to liquidate Hikvision, terminate operation or has no other realistic choice.
The governance is responsible for supervising financial reporting processes of Hikvision.
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Hikvision 2023 Annual Report
6. Responsibility of Certified Public Accountants on Audit of the Financial Statements
Our objective is to obtain reasonable assurance as to whether the overall financial statements are free from material
misstatement, whether due to fraud or error, and to issue audit report that contain audit opinions. Reasonable assurance is
a high level of assurance, but could not guarantee that an audit performed in accordance with the Auditing Standards can
always figure out any existing material misstatements. Misstatements may be caused by fraud or error. Misstatement is
generally considered to be material if it is reasonably expected that the misstatement, alone or aggregated, may affect the
users’ financial decisions based on the financial statements.
In performing the audit in accordance with the Auditing Standards, we applied professional judgment and maintained
professional skepticism. Meanwhile, we also perform the following duties:
(1) Identify and evaluate the risk of material misstatement of financial statements due to fraud or error; design and
implement audit procedures to cope with these risks, and obtain adequate and appropriate audit evidence as the basis
for expressing audit opinions. As fraud may involve collusion, forgery, willful omission, misrepresentation or
override of internal control, the risk of not discovering a material misstatement due to fraud is higher than the risk of
not discovering a material misstatement due to error.
(2) Understand the internal control related to auditing as a way to design appropriate audit procedures.
(3) Evaluate the properness of accounting policy selected by the management and the rationality of accounting estimate
and related disclosure.
(4) Reach a conclusion on whether the going concern assumption adopted by the management is appropriate. Meanwhile,
based on the audit evidence obtained, reach a conclusion on whether there are material uncertainties in the events or
conditions that may cast significant doubts on Hikvision's ability to continue as a going concern. If we reach a
conclusion that there is a material uncertainty, the Auditing Standards require us to call the attention of the users of
the report to the relevant disclosures in the financial statements in the audit report. If the disclosure is insufficient, we
should issue modified audit opinions. Our conclusion is based on the information available up to the date of the audit
report. However, future events or conditions may result in the failure of Hikvision to continue as a going concern.
(5) Evaluate the overall presentation (including the disclosure), structure and content of the financial statements and
evaluate whether the financial statements fairly reflect the related transactions and events.
(6) Obtain adequate and appropriate audit evidence on the financial information of entity or business activities of
Hikvision so as to express audit opinions on the financial statements. We are responsible for directing, supervising
and executing the audit on the Group, and assume full responsibility for the audit opinions.
We communicated with the governance about the scope of the audit, the schedule and major audit findings, including
the notable shortcomings of internal control identified during the auditing.
We also provide statement to the governance on the independence-related work ethics we follow, and communicate
with the governance on all relations and other matters that might be reasonably deemed to influence our independence as
well as relevant precautionary measures (as applicable).
We determine which of the matters we communicated with the governance are of the greatest importance to the audit
of financial statements of the current period so as to make them key matters. We describe the matters in the audit report.
We decide not to communicate on such matters in the audit report unless the laws and regulations forbid the public
disclosure of such matters, or, in rare circumstances, if the negative consequence of communication of matters in the audit
report is reasonably expected to exceed the benefit of the public interest.
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Hikvision 2023 Annual Report
On December 31, 2023
Consolidated Balance Sheet
Unit: RMB
Item Notes On December 31, 2023 On December 31, 2022(Restated)
Current Assets:
Cash and bank balances (V)1 49,629,469,654.46 40,011,863,999.94
Held-for-trading financial assets (V)2 37,380.00 12,807,438.36
Notes receivable (V)3 2,606,071,375.74 2,519,988,159.23
Accounts receivable (V)4 35,815,173,511.44 29,906,294,410.40
Receivables for financing (V)6 1,594,219,832.62 1,484,218,258.74
Prepayments (V)7 508,151,405.92 534,780,120.52
Other receivables (V)8 571,905,648.93 516,503,485.58
Inventories (V)9 19,211,434,385.32 18,998,222,978.81
Contract assets (V)5 1,173,312,415.20 2,118,223,370.98
Non-current assets due within one year (V)10 1,079,721,006.23 996,902,343.27
Other current assets (V)11 961,593,616.75 806,832,941.58
Total Current Assets 113,151,090,232.61 97,906,637,507.41
Non-current Assets:
Long-term receivables (V)12 538,698,618.76 540,647,965.30
Long-term equity investment (V)13 1,151,104,887.85 1,252,033,513.41
Other non-current financial assets (V)14 472,184,937.66 423,893,239.94
Fixed assets (V)15 11,508,302,317.75 8,539,842,630.68
Construction in progress (V)16 4,307,651,074.46 3,770,803,300.80
Right-of-use assets (V)17 521,061,396.66 574,478,326.31
Intangible assets (V)18 1,810,476,551.45 1,544,933,502.19
Goodwill (V)19 311,353,640.88 217,386,531.28
Long-term deferred expenses (V)20 177,361,533.93 177,277,742.41
Deferred tax assets (V)21 1,978,373,012.15 1,471,197,578.26
Other non-current assets (V)22 2,920,349,344.39 2,815,702,012.70
Total Non-current Assets 25,696,917,315.94 21,328,196,343.28
Total Assets 138,848,007,548.55 119,234,833,850.69
On December 31, 2023
Consolidated Balance Sheet-continued
Unit: RMB
Item Notes On December 31, 2023 On December 31, 2022 (Restated)
Current Liabilities:
Short-term borrowings (V)24 2,118,952,026.06 3,343,071,972.89
Held-for-trading financial liabilities (V)25 38,079,755.04 68,299,685.57
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Hikvision 2023 Annual Report
Notes payable (V)26 1,163,687,279.58 1,207,756,963.94
Accounts payable (V)27 19,163,485,888.09 16,025,563,802.99
Contract liabilities (V)28 2,977,990,775.40 2,644,496,508.36
Payroll payable (V)29 6,120,254,492.28 4,837,302,455.95
Taxes payable (V)30 1,622,401,214.96 1,234,032,138.37
Other payables (V)31 3,911,612,841.06 3,203,308,686.31
Including: Dividends payables (V)31.2 253,957,413.29 300,150,894.34
Non-current liabilities due within one year (V)32 5,814,660,214.96 868,197,272.46
Other current liabilities (V)33 1,481,222,044.19 923,721,593.78
Total Current Liabilities 44,412,346,531.62 34,355,751,080.62
Non-current Liabilities:
Long-term borrowings (V)34 8,940,122,961.01 7,522,315,341.60
Lease liabilities (V)35 344,005,866.13 277,255,924.83
Long-term payables (V)36 5,776,599.85 7,569,934.67
Provisions (V)37 213,084,038.31 219,365,227.62
Deferred income (V)38 966,259,592.34 933,260,426.12
Deferred tax liabilities (V)21 129,866,978.18 116,479,475.98
Other non-current liabilities (V)39 1,672,933,103.20 2,831,108,087.59
Total Non-current Liabilities 12,272,049,139.02 11,907,354,418.41
Total Liabilities 56,684,395,670.64 46,263,105,499.03
Owners’ Equity
Share capital (V)40 9,330,600,931.00 9,430,920,624.00
Capital reserves (V)41 7,864,903,763.52 10,141,153,435.32
Less: Treasury shares (V)42 2,737,987,226.55 5,316,033,650.24
Other comprehensive income (V)43 44,667,516.16 (42,587,158.81)
Surplus reserves (V)44 4,715,460,312.00 4,715,460,312.00
Retained earnings (V)45 57,136,620,244.01 49,460,423,962.05
Total Owners' Equity Attributable to Owner
76,354,265,540.14 68,389,337,524.32
of the Company
Minority equity 5,809,346,337.77 4,582,390,827.34
Total Owners' Equity 82,163,611,877.91 72,971,728,351.66
Total Liabilities and Owners' Equity 138,848,007,548.55 119,234,833,850.69
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Legal Representative: Chen Zongnian; Person in charge of the accounting work: Jin Yan;
Person in Charge of the Accounting Department: Zhan Junhua
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Hikvision 2023 Annual Report
On December 31, 2023
Balance Sheet of the Parent Company
Unit: RMB
On December 31, 2022
Item Notes On December 31, 2023
(Restated)
Current Assets:
Cash and bank balances 36,366,610,163.17 27,826,883,144.97
Notes receivable 214,433,654.20 291,894,821.88
Accounts receivable (XVI)1 19,016,777,665.77 24,375,815,151.52
Receivables for financing 44,650,466.33 1,380,237.21
Prepayments 53,649,708.62 78,220,424.69
Other receivables (XVI)2 3,061,246,174.74 2,409,877,936.73
Including: Dividend receivables (XVI)2.2 41,423,446.39 85,323,007.51
Inventories 199,049,157.84 287,356,998.22
Contract assets 10,490,078.61 2,070,526.66
Non-current assets due within one year 157,086,525.60 145,198,110.49
Other current assets 1,676,541,190.03 10,325,583.58
Total Current Assets 60,800,534,784.91 55,429,022,935.95
Non-current Assets:
Long-term accounts receivable 3,633,588,076.55 544,335,046.78
Long-term equity investment (XVI)3 8,681,387,048.75 7,735,758,795.50
Other non-current financial assets 338,767,764.24 336,896,766.52
Fixed assets 3,392,288,906.32 3,632,220,781.28
Construction in progress 17,377,463.50 31,536,529.55
Right-of-use assets 124,744,108.19 106,886,641.18
Intangible assets 96,021,508.25 108,027,048.91
Long-term deferred expenses 39,437,083.99 44,756,196.08
Deferred tax assets 322,869,398.52 170,615,439.85
Other non-current assets 146,216,939.94 20,271,638.61
Total Non-current Assets 16,792,698,298.25 12,731,304,884.26
Total Assets 77,593,233,083.16 68,160,327,820.21
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Hikvision 2023 Annual Report
On December 31, 2023
Balance Sheet of the Parent Company - continued
Unit: RMB
On December 31, 2022
Item Notes On December 31, 2023
(Restated)
Current Liabilities:
Short-term borrowings - 371,761,513.12
Accounts payable 1,050,518,329.53 871,899,603.98
Contract liabilities 218,875,534.52 252,386,307.55
Payroll payable 3,644,152,847.04 2,751,925,304.64
Taxes payable 944,807,901.59 371,935,883.41
Other payables 738,553,487.03 1,523,785,190.90
Non-current liabilities due within one year 1,523,328,743.28 280,431,699.90
Other current liabilities 1,134,059,460.70 504,448,226.96
Total Current Liabilities 9,254,296,303.69 6,928,573,730.46
Non-current Liabilities:
Long-term borrowings 5,887,380,000.00 1,674,051,800.00
Lease liabilities 66,330,125.99 51,034,219.65
Provisions 97,586,882.51 112,936,131.57
Deferred Income 410,243,110.75 463,302,126.80
Other non-current liabilities 1,642,792,335.93 2,806,169,050.05
Total Non-current Liabilities 8,104,332,455.18 5,107,493,328.07
Total Liabilities 17,358,628,758.87 12,036,067,058.53
Owners’ Equity
Share capital 9,330,600,931.00 9,430,920,624.00
Capital reserves 5,776,371,174.04 8,264,384,780.30
Less: Treasury shares 2,737,987,226.55 5,316,033,650.24
Surplus reserves 4,715,460,312.00 4,715,460,312.00
Retained earnings 43,150,159,133.80 39,029,528,695.62
Total Owners' Equity 60,234,604,324.29 56,124,260,761.68
Total Liabilities and Owners' Equity 77,593,233,083.16 68,160,327,820.21
232
Hikvision 2023 Annual Report
For the reporting period from January 1, 2023 to December 31, 2023
Consolidated Income Statement
Unit: RMB
Amount for the current Amount for the prior
Item Notes
period period (Restated)
I. Total Revenue (V)46 89,339,856,855.68 83,166,321,681.14
Less：Total operating costs (V)46 49,637,055,845.33 47,996,254,466.32
Business taxes and surcharges (V)47 704,641,378.69 581,896,696.51
Selling expenses (V)48 10,842,500,778.25 9,773,457,336.23
Administrative expenses (V)49 2,769,731,410.40 2,642,113,372.00
Research and Development (R&D) expenses (V)50 11,392,948,404.47 9,814,444,260.55
Financial expenses (V)51 (749,780,213.12) (990,401,533.32)
Including：Interest expenses 457,605,119.59 311,251,154.55
Interest income 1,067,148,666.93 921,912,411.61
Add: Other Income (V)52 2,559,522,840.33 2,482,467,855.97
Investment income (V)53 63,302,304.25 218,396,306.44
Including: Investment gains (Losses) in associated
(29,966,477.85) 106,498,595.01
enterprise and joint-venture enterprise
Gains (losses) from changes in fair values (V)54 22,679,257.89 (155,567,520.89)
Credit impairment gains (losses) (V)55 (879,922,773.25) (585,161,235.45)
Impairment gains (losses) of assets (V)56 (463,382,275.12) (508,453,828.82)
Asset disposal income (losses) (5,674,511.78) (17,578,905.00)
II. Operating Profit 16,039,284,093.98 14,782,659,755.10
Add: Non-operating income (V)57 87,573,120.04 87,365,985.48
Less: Non-operating expenses (V)58 27,933,016.91 15,074,113.11
III. Total Profit 16,098,924,197.11 14,854,951,627.47
Less: Income tax expenses (V)59 943,241,010.15 1,296,821,531.79
IV. Net Profit 15,155,683,186.96 13,558,130,095.68
4.1 Classification by continuous operation
(a) Net profit on continuous operation 15,155,683,186.96 13,558,130,095.68
(b) Net loss on terminated operation - -
4.2 Classification by attribution of ownership
(a) Net profit attributable to owners of parent company 14,107,621,359.66 12,837,704,462.49
(b) Profit or loss attributable to minority shareholders 1,048,061,827.30 720,425,633.19
V. Other Comprehensive Income, Net of Income Tax (V)43 183,798,707.05 88,691,088.90
Other comprehensive income attributable to owners of the
87,254,674.97 34,596,966.48
Company, net of tax
(I) Items that will not be reclassified subsequently to profit or
- -
loss
(II) Other comprehensive income to be reclassified to profit or
87,254,674.97 34,596,966.48
loss in subsequent periods
1. Exchange differences arising on conversion of financial
87,254,674.97 34,596,966.48
statements denominated in foreign currencies
Other comprehensive income attributable to minority interests,
96,544,032.08 54,094,122.42
net of tax
VI. Total Comprehensive Income 15,339,481,894.01 13,646,821,184.58
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Hikvision 2023 Annual Report
Amount for the current Amount for the prior
Item Notes
period period (Restated)
Total comprehensive income attributable to owners of the parent
14,194,876,034.63 12,872,301,428.97
company
Total comprehensive income attributable to minority
1,144,605,859.38 774,519,755.61
shareholders
VII. Earnings per Share
(I) Basic earnings per share (RMB/share) (XVII)2 1.520 1.370
(II) Diluted earnings per share (RMB/share) (XVII)2 1.520 1.370
234
Hikvision 2023 Annual Report
For the reporting period from January 1, 2023 to December 31, 2023
Income Statement of the Parent Company
Unit: RMB
Amount for the Amount for the prior
Item Notes
current period period (Restated)
I. Total Revenue (XV)4 25,547,794,166.85 24,284,505,338.35
Less: Total operating Cost (XV)4 4,572,737,093.05 5,097,739,346.67
Business taxes and surcharges 315,430,824.67 282,765,774.49
Selling expenses 3,850,986,446.36 3,580,457,766.03
Administrative expenses 911,095,185.51 883,004,663.75
Research and Development (R&D) expenses 7,500,668,818.36 6,920,548,083.50
Financial expenses (642,865,974.82) (654,027,587.29)
Including : Interest expenses 161,668,592.71 103,549,530.55
Interest income 865,373,583.65 765,252,513.50
Add: Other income 1,634,201,874.22 1,747,068,413.89
Investment income (XV)5 499,611,155.15 387,283,344.13
Including: Investment gains(Losses) in associated
(36,401,170.84) 118,900,466.08
enterprise and joint-venture enterprise
Gains (losses) from changes in fair values 2,475,310.72 (74,432,284.58)
Credit impairment gains (losses) (98,343,814.70) (122,761,912.01)
Impairment gains (losses) of assets 2,652,989.00 (1,195,518.35)
Asset disposal income (losses) 1,072,329.19 (2,215,205.61)
II. Operating profit 11,081,411,617.30 10,107,764,128.67
Add: Non-operating income 15,820,653.67 18,830,134.69
Less: Non-operating expenses 1,821,528.02 1,205,910.50
III. Total profit 11,095,410,742.95 10,125,388,352.86
Less: Income tax expenses 543,355,227.07 527,999,275.46
IV. Net profit 10,552,055,515.88 9,597,389,077.40
V. Other comprehensive income, net of income tax - -
VI. Total comprehensive income 10,552,055,515.88 9,597,389,077.40
235
Hikvision 2023 Annual Report
For the reporting period from January 1, 2023 to December 31, 2023
Consolidated Cash Flow Statement
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Cash Flows from Operating Activities:
Cash receipts from sale of goods or rendering of services 93,594,226,079.25 86,798,776,609.53
Receipts of tax refunds 3,991,363,246.02 3,767,899,232.43
Other cash receipts relating to operating activities (V)60(1) 1,806,465,988.05 2,102,400,537.73
Sub-total of ash inflows from operating activities 99,392,055,313.32 92,669,076,379.69
Cash payments for goods purchased and services received 52,008,656,087.35 54,179,038,046.40
Cash paid to and on behalf of employees 17,977,652,521.22 16,397,768,429.86
Payments of various types of taxes 6,494,574,848.75 5,947,034,037.02
Other cash payments relating to operating activities (V)60(1) 6,287,917,550.08 5,981,100,484.03
Sub-total of cash outflows from operating activities 82,768,801,007.40 82,504,940,997.31
Net Cash Flows from Operating Activities (V)61(1) 16,623,254,305.92 10,164,135,382.38
II. Cash Flows from Investing Activities:
Cash receipts from recovery of investments (V)60(2) 4,688,412,447.25 7,309,732,287.10
Cash receipts from investment income 67,123,840.33 51,892,209.92
Net cash receipts from disposals of fixed assets, intangible assets and
30,738,410.30 12,978,200.27
other long-term assets
Other cash receipts relating to investing activities (V)60(2) 121,237,455.42 47,770,416.23
Sub-total of cash inflows from investing activities 4,907,512,153.30 7,422,373,113.52
Cash payments to acquire or construct fixed assets, intangible assets
(V)60(2) 4,047,816,024.05 3,755,680,900.22
and other long-term assets
Cash payments to acquire investments (V)60(2) 4,803,003,467.44 7,392,073,275.54
Net cash paid for obtaining subsidiaries and other business units (V)61(2) 43,992,651.82 -
Sub-total of cash outflows from investing activities 8,894,812,143.31 11,147,754,175.76
Net Cash Flows from Investing Activities (3,987,299,990.01) (3,725,381,062.24)
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 72,570,000.00 6,015,196,647.38
Including: cash receipts from capital contributions from minority
72,570,000.00 3,121,365,252.83
owners of subsidiaries
Cash receipts from borrowings 11,032,367,859.61 8,360,333,394.08
Other cash receipts from financing activities (V)60(3) 5,000,000.00 -
Sub-total of cash inflows from financing activities 11,109,937,859.61 14,375,530,041.46
Cash repayments of borrowings 6,174,788,332.85 4,786,252,322.38
Cash payments for distribution of dividends or profits or settlement
7,083,299,395.46 8,734,449,665.28
of interest expenses
Including : Dividends and profits paid by subsidiaries to minority
194,009,629.27 3,050,502.27
shareholders
Other cash payments relating to financing activities (V)60(3) 997,281,629.42 2,310,746,266.55
Sub-total of cash outflows from financing activities 14,255,369,357.73 15,831,448,254.21
Net Cash Flows from Financing Activities (3,145,431,498.12) (1,455,918,212.75)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
113,365,015.34 228,609,977.98
Equivalents
V. Net Increase in Cash and Cash Equivalents (V)61(1) 9,603,887,833.13 5,211,446,085.37
Add: Opening balance of Cash and Cash Equivalents (V)61(3) 39,815,390,514.57 34,603,944,429.20
VI. Closing Balance of Cash and Cash Equivalents (V)61(3) 49,419,278,347.70 39,815,390,514.57
236
Hikvision 2023 Annual Report
For the reporting period from January 1, 2023 to December 31, 2023
Cash Flow Statements of the Parent Company
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Cash Flows from Operating Activities::
Cash receipts from the sale of goods and the rendering of services 33,798,989,613.55 26,487,868,077.06
Receipts of tax refunds 1,484,786,334.10 1,436,480,287.99
Other cash receipts relating to operating activities 1,003,715,734.81 1,532,865,664.26
Sub-total of cash inflows from operating activities 36,287,491,682.46 29,457,214,029.31
Cash payments for goods acquired and services received 5,141,659,409.02 5,493,671,074.35
Cash paid to and on behalf of employees 7,743,837,239.02 7,512,557,371.10
Payments of various types of taxes 2,810,558,011.92 3,460,034,171.26
Other cash payments relating to operating activities 4,018,574,345.87 3,467,533,481.78
Sub-total of cash outflows from operating activities 19,714,629,005.83 19,933,796,098.49
Net Cash Flows from Operating Activities (XV)8(1) 16,572,862,676.63 9,523,417,930.82
II. Cash Flows from Investing Activities:
Cash receipts from recovery of investments 876,506,386.63 433,936,760.50
Cash receipts from investment income 559,285,378.22 199,427,999.55
Net cash receipts from disposals of fixed assets, intangible assets and
59,072,378.14 70,976,304.99
other long-term assets
Other cash receipts relating to investing activities 66,769,850,832.31 73,174,669,493.77
Sub-total of cash inflows from investing activities 68,264,714,975.30 73,879,010,558.81
Cash payments to acquire or construct fixed assets, intangible assets
319,040,089.07 830,581,107.94
and other long-term assets
Cash payments to acquire investments 3,569,972,354.33 53,320,000.00
Other cash payments relating to investing activities 70,028,455,422.77 74,151,979,147.50
Sub-total of cash outflows from investing activities 73,917,467,866.17 75,035,880,255.44
Net Cash Flows from Investing Activities (5,652,752,890.87) (1,156,869,696.63)
III. Cash Flows from Financing Activities
Cash receipts from capital contributions - 2,893,831,394.55
Cash receipts from borrowings 5,481,410,000.00 991,175,000.00
Other cash receipts relating to financing activities 11,356,826,127.58 10,877,860,127.00
Sub-total of cash inflows from financing activities 16,838,236,127.58 14,762,866,521.55
Cash repayments of borrowings 473,648,200.00 389,788,200.00
Cash payments for distribution of dividends or profits or settlement of
6,590,228,195.38 8,466,387,329.97
interest expenses
Other cash payments relating to financing activities 12,107,588,596.15 13,134,864,230.77
Sub-total of cash outflows from financing activities 19,171,464,991.53 21,991,039,760.74
Net Cash Flows from Financing Activities (2,333,228,863.95) (7,228,173,239.19)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
(3,379,613.83) (6,756,445.09)
Equivalents
V. Net Increase in Cash and Cash Equivalents (XV)8(1) 8,583,501,307.98 1,131,618,549.91
Add: Opening balance of cash and cash equivalents (XV)8(2) 27,771,201,246.40 26,639,582,696.49
VI. Closing Balance of Cash and Cash Equivalents (XV)8(2) 36,354,702,554.38 27,771,201,246.40
237
Hikvision 2023 Annual Report
For the reporting period from January 1, 2023 to December 31, 2023
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
2023
Owner’s equity attributable to the parent company
Items Other Minority Total owners'
Less: Treasury
Share capital Capital reserves comprehensive Surplus reserve Retained profits interests equity
share
income
I. Closing balance of the prior
9,430,920,624.00 10,141,153,435.32 5,316,033,650.24 (42,587,158.81) 4,715,460,312.00 49,460,240,986.49 4,580,999,418.82 72,970,153,967.58
year
Due to the changes in
- - - - - 182,975.56 1,391,408.52 1,574,384.08
accounting policies
II. Opening balance of current
9,430,920,624.00 10,141,153,435.32 5,316,033,650.24 (42,587,158.81) 4,715,460,312.00 49,460,423,962.05 4,582,390,827.34 72,971,728,351.66
year
III. Increase or decrease in the
(100,319,693.00) (2,276,249,671.80) (2,578,046,423.69) 87,254,674.97 - 7,676,196,281.96 1,226,955,510.43 9,191,883,526.25
current period
(I) Total comprehensive
- - - 87,254,674.97 - 14,107,621,359.66 1,144,605,859.38 15,339,481,894.01
income
(II) Owners’ contributions
(100,319,693.00) (2,276,249,671.80) (2,609,860,174.19) - - - 243,095,948.04 476,386,757.43
and reduction in capital
1. Capital contribution
- - - - - - 72,570,000.00 72,570,000.00
from shareholders
2. Share-based payment
recognized in owners’ - 169,682,759.53 - - - - 37,934,118.40 207,616,877.93
equity
3. Others (100,319,693.00) (2,445,932,431.33) (2,609,860,174.19) - - - 132,591,829.64 196,199,879.50
(III) Profit distribution - - 31,813,750.50 - - (6,431,425,077.70) (160,746,296.99) (6,623,985,125.19)
1. Transfer to surplus
- - - - - - - -
reserves
2. Distributions to
- - (91,514,124.10) - - (6,554,752,952.30) (160,746,296.99) (6,623,985,125.19)
shareholders
3. Others - - 123,327,874.60 - - 123,327,874.60 - -
III. Closing balance of the
9,330,600,931.00 7,864,903,763.52 2,737,987,226.55 44,667,516.16 4,715,460,312.00 57,136,620,244.01 5,809,346,337.77 82,163,611,877.91
current period
238
Hikvision 2023 Annual Report
For the reporting period from January 1, 2023 to December 31, 2023
Consolidated Statement of Changes in Owners' Equity-continued
Unit: RMB
2022(Restated)
Owner’s equity attributable to the parent company
Items Other Minority Total owners'
Less: Treasury
Share capital Capital reserves comprehensive Surplus reserve Retained profits interests equity
share
income
I. Closing balance of the prior year 9,335,806,114.00 5,404,070,600.07 1,023,188,723.04 (77,184,125.29) 4,672,505,348.00 45,148,877,451.52 1,933,755,610.62 65,394,642,275.88
Due to the changes in accounting
- - - - - (179,425.86) 593,436.19 414,010.33
policies
II. Opening balance of current year 9,335,806,114.00 5,404,070,600.07 1,023,188,723.04 (77,184,125.29) 4,672,505,348.00 45,148,698,025.66 1,934,349,046.81 65,395,056,286.21
III. Increase or decrease in the
95,114,510.00 4,737,082,835.25 4,292,844,927.20 34,596,966.48 42,954,964.00 4,311,725,936.39 2,648,041,780.53 7,576,672,065.45
current period
(I) Total comprehensive income - - - 34,596,966.48 - 12,837,704,462.49 774,519,755.61 13,646,821,184.58
(II) Owners’ contributions and
95,114,510.00 4,737,082,835.25 4,412,565,229.40 - - - 1,876,759,941.16 2,296,392,057.01
reduction in capital
1. Capital contribution from
97,402,605.00 2,796,428,789.55 2,893,831,394.55 - - - 58,500,000.00 58,500,000.00
shareholders
2. Share-based payment
- 601,605,075.24 - - - - 49,386,376.03 650,991,451.27
recognized in owners’ equity
3. Others (2,288,095.00) 1,339,048,970.46 1,518,733,834.85 - - - 1,768,873,565.13 1,586,900,605.74
(III) Profit distribution - - (119,720,302.20) - 42,954,964.00 (8,525,978,526.10) (3,237,916.24) (8,366,541,176.14)
1. Transfer to surplus reserves - - - - 42,954,964.00 (42,954,964.00) - -
2. Distributions to
- - (119,720,302.20) - - (8,483,023,562.10) (3,237,916.24) (8,366,541,176.14)
shareholders
III. Closing balance of the current
9,430,920,624.00 10,141,153,435.32 5,316,033,650.24 (42,587,158.81) 4,715,460,312.00 49,460,423,962.05 4,582,390,827.34 72,971,728,351.66
period
239
Hikvision 2023 Annual Report
For the reporting period from January 1, 2023 to December 31, 2023
Statement of Changes in Owners' Equity of the Parent Company
Unit: RMB
2023
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained profits Total owners' equity
I. Closing balance of the prior year 9,430,920,624.00 8,264,384,780.30 5,316,033,650.24 4,715,460,312.00 39,030,437,901.96 56,125,169,968.02
Due to the changes in accounting policies - - - - (909,206.34) (909,206.34)
II. Opening balance of current year 9,430,920,624.00 8,264,384,780.30 5,316,033,650.24 4,715,460,312.00 39,029,528,695.62 56,124,260,761.68
III. Increase or decrease in the current period (100,319,693.00) (2,488,013,606.26) (2,578,046,423.69) - 4,120,630,438.18 4,110,343,562.61
(I) Total comprehensive income - - - - 10,552,055,515.88 10,552,055,515.88
(II) Owners’ contributions and reduction in capital (100,319,693.00) (2,488,013,606.26) (2,609,860,174.19) - - 21,526,874.93
1. Capital contribution from shareholders - - - - - -
2. Share-based payment recognized in owners’ equity - 73,548,755.72 - - - 73,548,755.72
3. Others (100,319,693.00) (2,561,562,361.98) (2,609,860,174.19) - - (52,021,880.79)
(III) Profit distribution - - 31,813,750.50 - (6,431,425,077.70) (6,463,238,828.20)
1. Transfer to surplus reserves - - - - - -
2. Distributions to shareholders - - (91,514,124.10) - (6,554,752,952.30) (6,463,238,828.20)
3. Others 123,327,874.60 123,327,874.60
III. Closing balance of the current period 9,330,600,931.00 5,776,371,174.04 2,737,987,226.55 4,715,460,312.00 43,150,159,133.80 60,234,604,324.29
2022 (Restated)
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained profits Total owners' equity
I. Closing balance of the prior year 9,335,806,114.00 4,937,523,553.84 1,023,188,723.04 4,672,505,348.00 37,958,561,319.89 55,881,207,612.69
Due to the changes in accounting policies - - - - (443,175.57) (443,175.57)
II. Opening balance of current year 9,335,806,114.00 4,937,523,553.84 1,023,188,723.04 4,672,505,348.00 37,958,118,144.32 55,880,764,437.12
III. Increase or decrease in the current period 95,114,510.00 3,326,861,226.46 4,292,844,927.20 42,954,964.00 1,071,410,551.30 243,496,324.56
(I) Total comprehensive income - - - - 9,597,389,077.40 9,597,389,077.40
(II) Owners’ contributions and reduction in capital 95,114,510.00 3,326,861,226.46 4,412,565,229.40 - - (990,589,492.94)
1. Capital contribution from shareholders 97,402,605.00 2,796,428,789.55 2,893,831,394.55 - - -
2. Share-based payment recognized in owners’ equity - 507,562,719.42 - - - 507,562,719.42
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Hikvision 2023 Annual Report
3. Others (2,288,095.00) 22,869,717.49 1,518,733,834.85 - - (1,498,152,212.36)
(III) Profit distribution - - (119,720,302.20) 42,954,964.00 (8,525,978,526.10) (8,363,303,259.90)
1. Transfer to surplus reserves - - - 42,954,964.00 (42,954,964.00) -
2. Distributions to shareholders - - (119,720,302.20) - (8,483,023,562.10) (8,363,303,259.90)
III. Closing balance of the current period 9,430,920,624.00 8,264,384,780.30 5,316,033,650.24 4,715,460,312.00 39,029,528,695.62 56,124,260,761.68
241
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
I. Basic Information about the Company
Hangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as "Company" or "the Company" or
"Hikvision"), is a Sino-foreign equity joint venture company, formerly known as "Hangzhou Hikvision Digital Technology
Ltd", established on November 30, 2001 in Hangzhou upon the approval letter of Hangzhou High-tech No. 604 [2001]
issued by Hangzhou High-tech Industrial Development Zone Management Committee. On June 25, 2008, with approval
of document No. 598 [2008] issued by the MOFCOM (The Ministry of Commerce of the People's Republic of China),
the Company was renamed as "Hangzhou Hikvision Digital Technology Co., Ltd.", headquartered in Hangzhou. On May
28, 2010, the Company was listed on the Shenzhen Stock Exchange.
The main business activities of the Company and its subsidiaries (hereinafter referred to as "the Group") include the
manufacture and sale of security equipment, network equipment and intelligent equipment, the manufacture and wholesale
of auto parts and accessories, the sale of electronic products, the provision of construction projects, technical services,
technology development, technical consulting, software development, information system integration services, data
processing and storage support services, etc.
The Company’s consolidated financial reports were approved for issuance by the 20th meeting of the 5th session of
the Board of Directors of the Company on April 18, 2023.
II. Basis of Preparation of Financial Statements
Basis of preparation of financial statements
The Group have adopted the Accounting Standards for Business Enterprises ("ASBE") and relevant provisions issued by
the Ministry of Finance ("MoF"). In addition, the Group has disclosed relevant financial information in accordance with
Information Disclosure and Presentation Rules for Companies Offering Securities to the Public No. 15 － General
Provisions on Financial Reporting (revised in 2023).
Going concern
The Group has evaluated its going concern for 12 months going forward starting from December 31st 2023, and there is
no factor that may cast significant doubt on the entity's ability to continue as a going concern. Therefore, the financial
statements have been prepared on a going concern basis.
Bookkeeping base and valuation principles
The Group measures the accounting elements in accordance with the accrual accounting basis. Except certain financial
instruments are measured by fair value, these financial statements are prepared in accordance with the measurements basis
of historical costs. If the asset decreases in value, the provision for impairment of assets should be made according to
relevant regulations.
242
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
According to the historical cost measurement, the assets shall be measured as per the amount of cash or cash equivalent
paid at the time of purchase, or the fair value of consideration paid for the purchase of such assets. The liabilities shall be
measured in accordance with the amount of funds or assets actually received when undertaking current obligations, or the
contract amount when undertaking the current obligations, or the amount of cash or cash equivalents required for paying
back the debts in daily activities.
The fair value is a price received by the market participants from selling asset or transferring liability during orderly
transaction at the measurement date. No matter the fair value is observable or estimated by using valuation technique, the
measured and disclosed fair value in the financial statement shall be determined on this basis.
When measuring non-financial assets at fair value, the assets shall be measured considering the ability of market
participants to use the assets for optimal use to generate economic benefits, or to sell the assets to other market participants
to use the assets for optimal use to generate economic benefits.
For the financial assets measured with transaction price at the initial recognition, and the use of valuation techniques
involving unobservable inputs in the subsequent fair value measurement, the valuation technique is corrected in the
valuation process in order to make the initial recognition results confirmed by valuation techniques equal to the transaction
price.
Based on the observable extent of the input value of the fair value, and the importance of such input value to the fair value
measurement, the fair value measurement is divided into three levels:
Level 1: The input value is the unadjusted offer of the same assets or liabilities on active market acquired on measurement
date;
Level 2: The input value is the input value of relevant assets or liabilities observable directly or indirectly in addition to
level 1 input value;
Level 3: The input value is the non-observable input value of relevant assets or liabilities.
III. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates suggests:
The Group has formulated specific accounting policies and accounting estimates for the method of determining materiality standards
and the basis of selection, provision for credit losses on accounts receivable, provision for inventory depreciation, depreciation of fixed
assets, revenue recognition and attribution of research and development expenses according to the actual production and operation
characteristics. The significant judgements and accounting estimates and their key assumptions applied by the Group in identifying significant
accounting policies are detailed in Notes (III), 34.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
1. Statement for Compliance with Accounting Standards for Business Enterprises (ASBE)
The financial statements of the Company have been prepared in accordance with ASBE, and present truly and completely,
the Company's and consolidated financial position as of December 31, 2023; and the Company's and consolidated results
of operations, and the Company's and consolidated changes in owners' equity, and the Company’s and consolidated cash
flows for 2023.
2. Accounting Period
The Group has adopted the calendar year as its accounting year from January 1st to December 31st each year.
3. Business Cycle
The business cycle refers to the period from purchase of assets used for processing to realization of cash or cash equivalents.
The Group business cycle is usually 12 months.
4. Functional Currency
Renminbi ("RMB") is the currency in the primary economic environments in which the Company and its domestic
subsidiaries are operated. The Company and its domestic subsidiaries take RMB as their functional currency. Overseas
subsidiaries of the Company determine their functional currency on the basis of the primary economic environment in
which it operates. The Group adopts RMB to prepare its financial statements.
5. Methodology for determining materiality criteria and basis for selection
Item Materiality Criteria
Significant single-item receivabls with bad debt provision Single amount accounts for 10% of accounts receivable balance
Significant single-item contract assets with bad debt provision Single amount accounts for 10% of contract asset balance
Single amount of investment of construction in progress accounts for
Significant construction in progress
2% of net assets balance
Significant accounts payable and other payables aged over 1 Accounts payable and other payables aged more than one year account
year for 5% of the balance of liabilities
Minority interests representing 10% of consolidated shareholders'
Significant non-wholly owned subsidiaries
equity at the close of 2023
Investment income of individual joint ventures/associates accounts for
10% of consolidated net profit or the year-end balance of long-term
Significant joint ventures or associates
equity investment in the enterprise accounts for 10% of the total
consolidated assets
Cash received or paid in connection with significant The amount of cash inflow or outflow from a single investing activity
investment activities accounts for 10% of cash inflow or outflow from investing activities
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
6. The Accounting Treatment of Business Combinations Involving Enterprises under Common Control and
Business Combinations Not Involving Enterprises under Common Control
Business combinations are classified into business combinations involving enterprises under common control and business
combinations not involving enterprises under common control.
6.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and
that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded by the combining entities
at the date of the combination. The difference between the carrying amount of the net assets obtained and the carrying
amount of the consideration paid for the combination is adjusted to the share premium in capital reserve. If the share
premium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.
6.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business combination in which all of the
combining enterprises are not ultimately controlled by the same party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred
or assumed, and equity securities issued by the acquirer in exchange for control of the acquiree. If a business combination
not under the common control is realized step by step through multiple transactions, the cost of the combination is the sum
of the consideration paid on the purchase date and the fair value of the equity of the purchase already held before the
purchase date on the purchase date. The intermediary expenses incurred by the acquirer in respect of auditing, legal
services, valuation and consultancy services, etc. and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
The acquiree’s identifiable assets, liabilities and contingent liabilities, acquired by the acquirer in a business combination,
that meet the recognition criteria shall be measured at fair value at the acquisition date.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
difference is treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. Where the
cost of combination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer
firstly reassesses the measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer recognizes the remaining difference
immediately into profit or loss for the current period.
Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presented
separately in the consolidated financial statements.
7. Criteria for determining control right and Preparation Method of Consolidated Financial Statements
7.1 Criteria for determining control right
Control right means that an investor may control an investee; the investor may participate in relevant activities of the
investee to obtain variable rewards and also be able to use the control rights for the investee to influence its amount of
returns. The Group will re-evaluate, if the change of the relevant facts and circumstances leading to the change of the
relevant elements involved in the above definition of control.
7.2 Preparation method of consolidated financial statements
The scope of consolidated financial statements shall be confirmed based on the control.
The merger of subsidiary starts from the Group obtaining the control power of the subsidiary, and terminates when the
Group loses the control power of the subsidiary.
As for subsidiaries disposed by the Group, operating results and cash flows prior to the disposal date (the date of losing
control right) have been properly included in the consolidated profit statement and consolidated cash flow statement.
For a subsidiary acquired through a business combination not involving enterprises under common control, the operating
results and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated income
statement and consolidated statement of cash flows.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
No matter when the business combination occurs in the reporting period, subsidiaries acquired through a business
combination involving enterprises under common control are included in the Group's scope of consolidation as if they had
been included in the scope of consolidation from the date when they first came under the common control of the ultimate
controlling party. Their operating results and cash flows from the beginning of the earliest reporting period are included
in the consolidated income statement and consolidated statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the
uniform accounting policies and accounting periods set out by the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as minority interests and presented as
"minority equity" in the consolidated balance sheet. The portion of net profits or losses of subsidiaries for the period
attributable to minority interests is presented as "minority interests" in the consolidated income statement below the "net
profit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority
shareholders' portion of the opening balance of owners' equity of the subsidiary, the excess amount are still allocated
against minority interests.
Acquisition of minority interests or disposal of interest in a subsidiary that does not result in the loss of control over the
subsidiary is accounted for as equity transactions. The carrying amounts of the total owners' equity attributable to owner
of the Company and minority equity are adjusted to reflect the changes in their relative interests in the subsidiary. The
difference between the amount by which the minority interests are adjusted and the fair value of the consideration paid or
received is adjusted to capital reserve under owners' equity. If the capital reserve is not sufficient to absorb the difference,
the excess is adjusted against retained earnings.
In the case that the equity of the acquiree is obtained through multiple deals in stages to finally form the business
combination not under the common control, the business combination shall be handled differently based on whether it is
"package deal": where it is package deal, the Company accounts each deal as a deal to obtain the control. If the deal is not
a "package deal", a deal where the control is obtained on the acquisition date will be subject to accounting. The acquiree's
equity held before the acquisition date will be re-measured based on the fair value of the equity on the acquisition date
and the difference between the fair value and book value will be included in the profit or loss in the current period. If the
acquiree's equity held before the acquisition date involves any changes in the other comprehensive income or in any other
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
owner's equity accounted by the equity method, then it is transferred to income for the period in which it belongs at the
date of purchase.
8. Joint Arrangement Classification and Joint Operation Accounting
Joint arrangements include joint operation and joint ventures. Such classification is defined based on the rights and
obligations of the joint parties in the joint arrangement, taking into account the structure and legal form of such
arrangement and also the contractual provisions.
The Groups investment in any joint venture is accounted by the equity method. See the details in Note (III) "15.3.2 Long-
term equity investment accounted under the equity method".
9. Recognition Criteria of Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are the Group's
short-term (Generally refers to due within three months from the purchase date), highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
10. Conversion of Transactions and Financial Statements Denominated in Foreign Currencies.
10.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying an exchange rate that approximates the
actual spot exchange rate on the date of transaction; The exchange rate that approximates the actual spot exchange rate on
the date of transaction is calculated according to the middle price of market exchange rate at the beginning of the month
in which the transaction happened.
At the balance sheet date, foreign currency monetary items are translated into [RMB] using the spot exchange rates at the
balance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the
balance sheet date and those on initial recognition or at the previous balance sheet date are recognized in profit or loss for
the period, except for exchange differences related to a specific-purpose borrowing denominated in foreign currency that
qualify for capitalization are capitalized as part of the cost of the qualifying asset during the capitalization period.
When the consolidated financial statements include foreign operation(s), if there is foreign currency monetary item
constituting a net investment in a foreign operation, exchange difference arising from changes in exchange rates are
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
recognized as "exchange differences arising on conversion of financial statements denominated in foreign currencies " in
other comprehensive income, and in profit and loss for the period upon disposal of the foreign operation.
Foreign currency non-monetary items measured at historical cost are converted to the amounts in functional currency at
the spot exchange rates on the dates of the transactions.
10.2 Conversion of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a foreign operation are
converted from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet are
translated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items are converted at the
spot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflecting
the distribution of profits are translated at exchange rates that approximate the actual spot exchange rates on the dates of
the transactions; The difference between the converted assets and the aggregate of liabilities and shareholders' equity items
is recognized into other comprehensive income and shareholders’ equity.
The foreign currency cash flows and cash flows of overseas subsidiaries adopt the exchange rate similar to the spot rate at
the date of cash flows for conversion. The affected amount of cash and cash equivalents due to the change of exchange
rate, as an adjustment item, shall be separately listed as "the impact of cash and cash equivalents due to the change of
exchange rate" in the cash flow statement.
The closing balances of the prior year and the actual amount of the prior year are presented at the converted amounts of
the prior year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over a foreign operation due to
disposal of certain interest in it or other reasons, the Group transfers the accumulated exchange differences arising on
conversion of financial statements of this foreign operation attributable to the owners' equity of the Company and presented
under shareholders' equity, to profit or loss in the period in which the disposal occurs.
In case of a disposal or other reason that does not result in the Group losing control over a foreign operation, but only a
decrease in proportion of overseas business interests, the proportionate share of accumulated exchange differences arising
on conversion of financial statements are re-attributed to minority interests and are not recognized in profit and loss under
current period. For partial disposals of equity interests in foreign operations, which are associates or joint ventures, the
proportionate shares of the accumulated exchange differences arising on conversion of financial statements of foreign
operations is reclassified to profit or loss under current period.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
11. Financial Instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to a contract of financial instrument.
For the purchase or sale of a financial asset in conventional manner, the asset to be received and the liability to be assumed
will be recognized on the trading day, or the asset sold will be derecognized on the trading day.
Financial assets and financial liabilities are measured by fair value upon initial recognition (The method of determining
the fair value of financial assets and financial liabilities is described in the related disclosure of the basis of accounting
and valuation principles in note (ii). For financial assets and financial liabilities at fair value through profit and loss, the
relevant trading costs will be directly charged to profit and loss of the current period. For other types of financial assets
and financial liabilities, the relevant trading costs will be booked into the initial recognition amount. Upon initial
recognition of accounts receivable which have no material financing components or have not taken into consideration the
financing components in contracts with a term not exceeding one year according to Accounting Standards for Business
Enterprise No. 14 – Revenue ("Revenue Standard"), such initial amount is measured by the transaction price as defined
under the Revenue Standard.
Effective interest rate method refers to the method of calculating the amortized cost of financial asset or financial liability
and apportioning interest income or interest expenses to each accounting period.
Effective interest rate refers to the interest rate used for discounting the estimated future cash flows of a financial asset or
a financial liability for an expected subsisting period into the balance of book value of the financial asset or the amortized
cost of the financial liability. When determining the effective interest rate, the expected cash flows are estimated on the
basis of considering all contractual terms of the financial asset or financial liability (such as early repayment, extended
term, call option or other similar option) but without considering the expected credit loss.
The amortized cost of a financial asset or a financial liability refers to the initial recognition amount of such financial asset
or financial liability, less the repaid amount of principal, plus or minus the accrued amortized amount calculated by
amortization of the difference between the initial recognition amount and the amount on maturity by using the effective
interest rate method, and then deducts the accrued provision for losses (only applicable to financial assets).
11.1 Classification, Confirmation and Measurement of Financial Assets
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
After initial recognition, the Group will adopt amortized cost, fair value through other comprehensive income, or fair value
through profit and loss for subsequent measurement depending on different categories of financial assets.
The Group will classify a financial asset into a financial asset measured at amortized cost if the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding and the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows. Financial assets classified by the Group as financial asset measured by amortized
cost include cash and cash equivalents, notes receivables and accounts receivable, other receivables, long-term receivables
and other non-current assets.
The Group will classify a financial asset into a financial asset measured by fair value through other comprehensive income
if the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding, and the financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling the financial assets. This category of financial assets
mainly includes financial assets with a maturity of more than one year from the date of acquisition and which are presented
under other debt investments, financial assets maturing within one year (inclusive) from the balance sheet date and which
are presented under non-current assets maturing within one year, as well as the notes receivable classified as fair value at
the time of acquisition and their changes are included in other comprehensive income are listed in the receivables for
financing, and for those have acquisition period within one year (including one year) are listed in other current assets.
At the time of initial recognition, the Group may, on the basis of a single financial asset, irrevocably designate an
investment in an equity instrument held for non-trading purpose recognized or without consideration in a business
combination of enterprises not under the same control as a financial asset at fair value through other comprehensive income.
This type of financial assets is presented as investment in other equity instruments.
Financial assets which have satisfied one of the following conditions indicate that such financial assets are held for trading
purpose by the Group:
The purpose of acquiring the relevant financial asset is mainly for sale in recent period.
At the time of initial recognition, the relevant financial asset is a part of an identifiable portfolio of financial
instruments under collective management, and there is objective evidence showing a recent and actual existence of short-
term profitable mode.
The relevant financial assets are derivatives.
Financial assets at fair value through profit and loss include financial assets which are classified as financial assets at fair
value through profit and loss and financial assets designated at fair value through profit and loss:
Financial assets which do not satisfy the conditions of being classified as financial assets measured at amortized cost
or as financial assets at fair value through other comprehensive income, they will be classified as financial assets at fair
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
value through profit and loss.
At the time of initial recognition, in order to eliminate or substantially reduce mismatch in accounting, the Group
may irrevocably designate a financial asset as a financial asset measured at fair value with changes through profit and loss.
Financial assets at fair value through profit and loss will be presented as held-for-trading financial assets. If such financial
assets have a maturity of more than one year from the balance sheet date (or without a fixed maturity) and which are
expected to be held for more than one year, they will be presented under other non-current financial assets.
11.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost adopt the effective interest rate method for subsequent measurement according
to amortized cost, the profit or loss when impairment occurs or upon derecognition will be accounted in profit and loss of
the current period.
The Group recognizes interest income by using effective interest rate method for financial assets measured at amortized
cost. The Group determines interest income by multiplying the balance of book value of financial assets with the effective
interest rate except under the following circumstances:
For acquired or generated financial assets which incurred credit impairment already, their interest income will be
determined by using the amortized cost of such financial asset calculated with the credit adjusted effective interest rate.
For acquired or generated financial assets which have not incurred credit impairment but incur credit impairment in
the subsequent period, the Group will determine their interest income by using the amortized cost of such financial assets
multiplied with the effective interest rate in the subsequent period. If such financial asset ceases to have credit impairment
due to improvement in credit risk in the subsequent period, then the Group should change to multiply the effective interest
rate with the balance of book value of such financial asset instead to determine the interest income.
11.1.2 Financial asset at fair value through other comprehensive income
The impairment loss or profit, or interest income calculated by using the effective interest rate method, relating to financial
asset at fair value through other comprehensive income should be accounted in the profit and loss of the current period,
and other changes in fair value of such financial assets will be accounted in other comprehensive income. The amount
charged by such financial asset to the profit and loss of each period is deemed to be equal to the amount which has been
measured by amortized cost and charged to the profit and loss of each period. Upon derecognition of such financial asset,
the accumulated profit or loss previously charged to other comprehensive income will be reversed from other
comprehensive income and charged to profit and loss of the current period.
For non-trading equity instrument investment designated at fair value through other comprehensive income, its changes
in fair value will be recognized in other comprehensive income. Upon derecognition of such financial asset, the
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
accumulated profit or loss charged to other comprehensive income will be reversed from other comprehensive income and
charged to retained earnings. During the period when such investment in equity instruments for non-trading purpose are
held by the Group, the right to receive dividends by the Group has been established, and economic benefits related to
dividends are likely to flow into the Group, and if the amount of dividends may be measured reliably, the dividend income
is recognized and accounted in the profit and loss of the current period.
11.1.3 Financial asset at fair value through profit and loss
For financial asset at fair value through profit and loss, subsequent measurement will be calculated at fair value, the profit
or loss arising from changes in fair value and the dividend and interest income relating to such financial asset will be
accounted in the profit and loss of the current period.
11.2 Impairment of Financial Assets
For financial assets measured at amortized cost, financial assets that are classified as financial asset at fair value through
other comprehensive income, lease receivables and contract assets, the Group will handle impairment on the basis of
expected credit loss and recognize loss provision.
The Group’s consideration of contract assets, notes receivable and accounts receivable that are generated by transactions
regulated by revenue standards and do not contain significant financing components or that do not consider financing
components in contracts that are not more than one year old, as well as those lease receivables formed from transactions
that are defined by the Accounting Standards for Business Enterprises No. 21-Leasing, the loss reserve shall be measured
based on the amount of the expected credit loss during the entire duration.
For other financial instruments, other than acquired or generated financial assets which have incurred credit impairment
already, the Group will assess on each balance sheet date the changes in credit risk of the relevant financial instruments
since initial recognition. If the credit risk of such financial asset has significantly increased after initial recognition, the
Group will calculate its loss provision based on the amount equivalent to the expected credit loss for the entire subsisting
period. If the credit risk of such financial asset since initial recognition has not increased significantly, the Group will
calculate its loss provision according to the expected credit loss amount of such financial asset for the next 12 months.
The amount of increase or reversal in the provision for credit loss, apart from financial assets classified as financial asset
at fair value through other comprehensive income, is accounted in the profit and loss of the current period. For financial
asset classified as measured at fair value through other comprehensive income, the Group will recognize its credit loss
provision in other comprehensive income and charged the impairment loss or gain to the profit and loss of the current
period, and will not decrease the book value of such financial asset presented in the balance sheet.
The Group has calculated the loss provision equivalent to the expected credit loss amount for the entire subsisting period
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
of the financial instrument in the preceding accounting period, but at the balance sheet date of the current period, such
financial instrument is no longer under the condition of significant increase in credit risk since initial recognition, the
Group calculates the loss provision for such financial instrument on the balance sheet date of the current period according
to an amount equivalent to the expected credit loss for the next 12 months, and the resulting loss provision reversal amount
will be counted as impairment gain and booked into the profit and loss of the current period.
11.2.1 Significant increase in credit risk
The Group uses available and reasonable forward-looking information with justification, by comparing the default risk of
the financial instrument at the balance sheet date with the default risk on the initial recognition date, to confirm whether
the credit risk of the financial instrument has significantly increased after initial recognition.
The Group considers the following factors when assessing whether the credit risk has significantly increased:
(1) Whether a significant change has been caused to the internal price indicator due to changes in credit risk.
(2) Whether the external credit rating of financial instrument has actual or expected significant changes.
(3) Whether the actual or expected internal credit rating of the debtor has been downgraded.
(4) Whether adverse changes have occurred in the business, finance or economic conditions which are expected to cause
significant changes in the capability of the debtor to perform debt repayment obligations.
(5) Whether actual or expected significant changes have occurred in the operating results of the debtor.
(6) Whether significant adverse changes have occurred in the supervision, economic or technical environment in which
the debtor operates.
(7) Whether significant changes have occurred in the value of security pledged for the debt or the quality of guarantee
or credit enhancement provided by third parties. Such changes are expected to reduce the debtor’s economic
motivation of repayment according to contractual term or influence the probability of default.
(8) Whether significant changes have occurred in the economic motivation which will lower the expectation of
repayment by the borrower according to the contractual term.
(9) Whether significant changes have occurred in the expected performance and repayment behavior of the debtor.
Whether or not the credit risks increase significantly after the foregoing assessments, if any contractual payment for any
financial instrument that overdue for over (including) 30 days, it indicates the credit risks of that financial instrument have
increased significantly.
On the balance sheet date, if the Group determines that the financial instrument only carries low credit risks, then it assumes
that the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk of
default on financial instruments is low, the borrower is highly able to perform its contractual cash flow obligations in the
short term, and even if the economic situation and operating environment are adversely changed over a long period of time
but not necessarily reducing the borrower’s performance of its contractual cash obligations, the financial instrument is
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
considered as having a lower credit risk.
11.2.2 Financial assets which have incurred credit impairment already
When one or more events which will have adverse effect on the expected future cash flows from the financial asset of the
Group have occurred, such financial asset will become a financial asset which have incurred credit impairment already.
The evidence of credit impairment occurred in a financial asset includes the following observable information:
(1) Material financial difficulties have occurred in the issuer or debtor;
(2) Breach of contract by the debtor, such as default or overdue for the payment of interest or repayment of principal;
(3) Due to economic or contractual considerations relating to financial difficulties of the debtor, the creditor has granted
concession to the debtor under no other circumstances;
(4) The debtor is likely to go bankrupt or carry out other financial restructuring;
(5) The financial difficulties of the issuer or debtor have caused the disappearance of the active market for the financial
asset;
(6) The purchase or generation of a financial asset at a large discount, such discount reflects the fact of occurrence of credit
loss.
11.2.3 Confirmation of expected credit loss
The Group confirms the expected credit loss of the relevant financial instrument according to the following method:
In respect of financial asset and lease receivables, the credit loss is the present value of the difference between the
contractual cash flow that the group should receive and the cash flow that it expects to receive.
In respect of financial assets with credit impairment on the balance sheet date but they are not acquired or generated
financial assets with credit impairment, the credit loss represents the difference between the balance of the book value
of such financial asset and the present value of the estimated future cash flows discounted by the original effective
interest rate.
The factors reflected by the method used for calculating expected credit loss of financial instruments by the Group include:
an unbiased weighted average amount determined by assessing a series of probable outcomes; time value of currency;
reasonable and justifiable information relating to past events, prevailing conditions and forecast of future economic
conditions obtained on the balance sheet date without incurring unnecessary additional cost or effort.
11.2.4 Write-off on financial asset
When the Group ceases to have reasonable expectation on the possible collection of all or part of the contractual cash
flows from the financial asset, the balance of book value of such financial asset will be written off directly. Such a write-
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
off constitutes a derecognition of the relevant financial asset.
11.3 Transfer of financial asset
A financial asset that fulfills one of the following conditions will be de-recognized: (1) termination of contractual rights
to receive cash flows from the financial asset; (2) upon transfer of such financial asset and transfer of substantially all the
risks and rewards in respect of the ownership of such financial asset to the transferee; (3) upon transfer of such financial
asset, though the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownership
of such financial asset, yet it has not retained the control over such financial asset.
If the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownership of such
financial asset, and has retained the control over such financial asset, then such transferred financial asset will continue to
be recognized, and the relevant liabilities will continue to be recognized, according to the level of the Group’s continuous
involvement in such transferred financial asset. The relevant liabilities will be measured by the Group according to the
following method:
If the transferred financial asset is measured by amortized cost, the book value of the relevant liabilities is equivalent
to the book value of the transferred asset of continuous involvement less the amortized cost of the rights retained by the
Group (if the Group has retained the relevant rights due to transfer of the financial asset) and plus the amortized cost of
the obligations undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the
financial asset), and the relevant liabilities are not designated as financial liabilities at fair value through profit and loss of
the current period.
If the transferred financial asset is measured by fair value, the book value of the relevant liabilities is equivalent to
the book value of the transferred asset of continuous involvement less the fair value of the rights retained by the Group (if
the Group has retained the relevant rights due to transfer of the financial asset) and plus the fair value of the obligations
undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the financial asset), and
the fair value of the rights and obligations shall be measured at the fair value on a separate basis.
For full transfer, which satisfies the conditions of derecognition, of the financial assets, the difference between the sum of
the book value of the transferred financial assets as at the date of derecognition and the consideration received from such
transfer and the accumulated amount of change in fair value originally included in other comprehensive income, which
corresponds to the amount in respect of derecognition, shall be recognized in the profit and loss for the current period. If
the transfer of the financial assets by the Group is designated as investment in equity instrument held for non-trading
purpose measured at fair value through other comprehensive income, the accumulated gains or losses previously included
in other comprehensive income shall be transferred out from other comprehensive income and be included in retained
earnings.
For transfer in part, which satisfies the conditions of derecognition, of the financial assets, the book value of the entire
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Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
financial assets before the transfer shall be shared between the derecognized portion and the continuous recognition portion
at their respective relative fair value on the date of transfer, and the difference between the sum of the consideration
received from derecognition and the accumulated amount of change in fair value originally included in other
comprehensive income, which corresponds to the amount in respect of derecognition, and the book value of the
derecognized portion as at the date of derecognition shall be included in the profit and loss of the current period. If the
transfer of the financial assets by the Group is designated as investment in equity instrument for non-trading purpose
measured at fair value through other comprehensive income, the accumulated gains or losses previously included in other
comprehensive income shall be transferred out from other comprehensive income and be included in retained earnings.
For full transfer, which does not satisfy the conditions of derecognition, of the financial assets, the Group will continue to
recognize the entire financial assets transferred and the consideration received as a result of the asset transfer is recognized
as a liability when received.
11.4 Classification, confirmation and measurement of financial liabilities and equity instruments
Pursuant to the contractual terms of the issued financial instruments and the substantive economic condition as reflected,
but not in legal terms only, combined with the definitions of financial liabilities and equity instruments, the Group has
classified such financial instruments or the components thereof as financial liabilities or equity instruments upon initial
recognition.
11.4.1 Classification, confirmation and measurement of financial liabilities
Financial liabilities are classified into financial liabilities at fair value through profit and loss of the current period and
other financial liabilities upon initial recognition.
11.4.1.1 Financial liabilities at fair value through profit and loss of the current period
Financial liabilities at fair value through profit and loss of the current period comprise of financial liabilities held for
trading purpose (including derivatives of financial liabilities) and financial liabilities designated as measured at fair value
through profit and loss of the current period. Except for derivatives of financial liabilities, which are presented separately,
financial liabilities at fair value through profit and loss of the current period are presented as financial liabilities held for
trading.
Financial liabilities that fulfill one of the following conditions suggest that the Group assumes such financial liabilities for
trading purpose:
Assumption of the relevant financial liabilities is mainly for the purpose of the recent repurchases.
The relevant financial liabilities, upon initial recognition, are part of a portfolio of identifiable financial instruments
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
under centralized management, and available objective evidence shows the recent and actual existence of a short-
term profit-making model.
The relevant financial liabilities are derivatives.
Financial liabilities can be designated, upon initial recognition, by the Group as financial liabilities at fair value through
profit and loss of the current period, provided that they have satisfied one of the following conditions: (1) such designation
can eliminate or substantially reduce accounting mismatches; (2) managing and evaluating the performance of portfolios
of financial liabilities, or portfolios of financial assets and financial liabilities, on fair value basis and reporting internally
to key personnel of the Group on this basis in accordance with the risk management or investment strategies specified in
formal written documents of the Group; (3) hybrid contracts, with embedded derivatives, have satisfied the conditions.
Financial liabilities held for trading purpose use fair value for subsequent measurement, gains or losses arise from changes
in fair value and the dividends or interest expenses relating to such financial liabilities are accounted in the profit and loss
of the current period.
11.4.1.2 Other financial liabilities
Excluding transfer of financial assets not complying with derecognition conditions, or financial liabilities as a result of
continuous involvement in transferred financial assets, as well as the financial guarantee contracts, the other financial
liabilities will be classified as financial liabilities measured at amortized cost, subsequent measurement will be based on
amortized cost, gains or losses on derecognition or amortization will be accounted in the profit and loss of the current
period.
If the Group and the counterparty have revised or renegotiated the contract, this has not resulted in the derecognition of
financial liabilities measured at amortized cost for subsequent measurement, but has caused changes in the contractual
cash flows, then the Group should recalculate the book value of such financial liabilities, and the relevant gains or losses
shall be accounted in the profit and loss of the current period. The recalculated book value of such financial liabilities will
be determined by the Group by discounting the cash flows from the renegotiated or revised contract with the original effect
interest rate of the financial liabilities. All costs or expenses incurred in the revision or renegotiation of the contract will
be reflected in the adjusted book value of financial liabilities after such revision, and will be amortized during the
remaining period of the revised financial liabilities.
11.4.2 Derecognition of financial liabilities
When the existing obligations of a financial liability have been wholly or partially discharged, such financial liability or
such part of it will be derecognized. When the Group (as borrower) and the lender enter into an agreement to undertake
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
new financial liabilities for replacing the original financial liabilities, if substantive difference exists in the contractual
terms between the new financial liabilities and the original financial liabilities, the Group should derecognize the original
financial liabilities while at the same time recognizes the new financial liabilities.
When a financial liability is wholly or partially derecognized, the difference between the book value of the derecognized
portion and the consideration paid (including non-cash asset transferred out or new financial liabilities undertaken) will
be accounted in the profit and loss of the current period.
11.4.3 Equity instrument
Equity instrument refers to a contract which can prove the ownership of remainder interest in assets after deducting all
liabilities of the Group. The Group issues (including refinances), repurchases, sells or cancels equity instruments for
treatment of changes in equity. The Group will not recognize changes in the fair value of equity instruments. Trading
expenses relating to equity transactions will be deducted from equity.
The Group’s distribution to holder of equity instrument is treated as profit distribution, the share dividends paid out will
not affect the total equity of shareholders.
11.5 Derivatives
Derivatives include foreign exchange forward contract, foreign exchange option contract and interest rate swap contract,
etc. Derivatives are measured at fair value initially on the date of signing the relevant contract and will be measured at fair
value for subsequent measurement.
11.6 Offsetting between financial assets and financial liabilities
When the Group has legal right to offset the recognized financial assets and financial liabilities, and such legal right is
enforceable currently, while at the same time the Group plans to perform netting settlement, or to liquidate the financial
asset and repay the financial liability at the same time, the amount after offsetting between the financial asset and financial
liability will be presented in the balance sheet. Save as said above, the financial asset and financial liability are presented
separately in the balance sheet without offsetting each other.
11.7 Reclassification of financial instruments
When the Group changes its business model for managing financial assets, all affected underlying financial assets will be
reclassified. All financial liabilities are not reclassified.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
The Group reclassifies financial assets and applies the prospective application method for relevant accounting treatment
from the date of reclassification (i.e., the first day of the first reporting period after the change in the business model that
led to the reclassification of financial assets).
If the Group reclassifies a financial asset measured at amortized cost to a financial asset at fair value through other
comprehensive income, it is measured at the fair value of the financial asset at the date of reclassification. The difference
between the original carrying amount and the fair value is recognized in other comprehensive income.
12. Notes receivable
12.1 Method of determining expected credit losses on notes receivable and its accounting treatment
The Group separately assesses the credit risk of the notes receivable with a single significant amount and the debtor with
severe financial difficulties, and makes provision for credit losses on a portfolio basis for the remaining notes receivable
based on the credit risk characteristics.The increase or reversal of the provision for expected credit losses of notes
receivable is recognized in profit or loss as credit impairment gains or losses.
12.2 Combination category and determination basis of bad debt provision according to credit risk characteristics
The Group classifies notes receivable into different portfolios based on the nature of the acceptor.
Portfolio Categories Determination basis
Bank acceptance bill Notes receivable with acceptors are banks
Non-bank acceptance bill Notes receivable with acceptors are non-banks
13. Accounts receivable, financial lease receivables and installment receivables in long-term receivables
13.1 Method of determining expected credit losses on accounts receivable/long-term receivables and their accounting
treatment
The Group assesses the credit risk of accounts receivable with significant individual amounts and significant financial
difficulties of debtors and financial lease receivables and installment receivables in long-term receivables individually,
and determines the credit loss allowance on a portfolio basis using impairment matrix for the remaining parts. The increase
or reversal of the provision for expected credit losses of accounts receivable is recognized in profit or loss as credit
impairment gains or losses.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
13.2 Combination category and determination basis of bad debt provision according to credit risk characteristics
For accounts receivables, the Group categorizes accounts receivable into Portfolio A, Portfolio B and Portfolio C based
on shared risk characteristics. Common credit risk characteristics adopted by the Group include the geographical location
and business object.
For long-term receivables, the common credit risk profile adopted by the Group includes business objects.
13.3 Calculation of ageing based on age-based recognition of a portfolio of credit risk characteristics
The Group uses the ageing as a credit risk characteristics, and use impairment matrix to determine the credit losses of its
accounts receivable and long-term receivables related to the financial lease and installment collection business. The ageing
is calculated from the end of the credit period. The ageing is calculated on a continuous basis when the terms and conditions
of accounts receivables and long-term receivables are modified but do not result in derecognition of them.
14. Receivables Financing
14.1 Method of determining expected credit losses on receivables financing and its accounting treatment
The Group measures bad debt provisions based on expected credit losses over the entire duration, recognizes credit loss
provisions for receivables financing in other comprehensive income, and recognizes credit impairment losses or gains in
profit or loss for the period, without reducing the carrying amount of receivables financing presented in the balance sheet.
14.2 Combination category and determination basis of bad debt provision according to credit risk characteristics
The Group considers that there is no significant credit risk for the bank acceptance bills held by the Group, which are all
bank acceptance bills and the possibility of significant losses due to bank default is low.
15. Other receivables
15.1 Method of determining expected credit losses on other receivables and its accounting treatment
The Group determines credit losses for other receivables on a portfolio basis. The increase or reversal of the provision for
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
expected credit losses of other receivables is recognized in profit or loss as credit impairment losses or gains.
15.2 Combination category and determination basis of bad debt provision according to credit risk characteristics
The Group categorizes other receivables into different groups according to the nature of the amounts.
15.3 Calculation of ageing based on age-based recognition of a portfolio of credit risk characteristics
The Ageing is calculated from the end of the credit period.
16. Inventories
16.1 Categories of inventories, valuation method, count system, amortization method for low cost and short-lived
consumable items and packaging materials
16.1.1 Categories of inventories
The Group's inventory mainly includes finished products, products in process, raw materials and contract performance
costs. Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion
and other expenditures incurred in bringing the inventories to their present location and condition.
16.1.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
16.1.3 Inventory count system
The perpetual inventory system is maintained for stock system.
16.1.4 Amortization method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortized using the immediate write-off method.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
16.2 The recognition standard and accounting method of inventory falling price reserves
At the balance sheet date, inventory is measured at the lower of cost or net realizable value. When the net realizable
value is lower than the cost, the inventory falling price reserves is withdrawn.
Net realizable value is the amount of the estimated selling price of inventory in day-to-day activities less the estimated
costs to be incurred at completion, estimated selling expenses and related taxes. The determination of net realizable
value of inventories is based on firm evidence obtained, taking into account the purpose for which the inventories are
held and the effect of events after the balance sheet date.
After the provision for inventory depreciation, if the factors affecting the previous reduction of inventory value have
disappeared, resulting in the net realizable value of the inventory being higher than its carrying value, the amount of the
original provision for inventory depreciation shall be reversed, and the amount of the reversal shall be included in the
current profit or loss.
16.3 The combination category and the basis for determining the inventory falling price reserves, and the basis for
determining the net realizable value of different categories of inventories
The Group makes provision for inventory falling price reserves by inventory category for inventories with a large
quantity and low unit price. For inventories manufactured and sold in the same region, having the same or similar use or
purpose, and difficult to measure separately from other items, provision for inventory depreciation shall be made on a
consolidated basis. The Group makes provision for inventory falling price reserves according to the nature and status of
inventories.
17. Contract Assets
17.1 Method and standard for determination of contract assets
Contract assets refer to the Group’s right to consideration in exchange for goods or services that the Group has transferred
to a customer when that right is conditioned on something other than the passage of time. The Group’s unconditional (i.e.,
depending on the passage of time only) right to receive consideration from the customer is separately presented as
receivables.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
17.2 Determination and accounting treatment methods of expected credit loss of contract assets
Consistent with accounts receivable, except for contract assets with significant individual amounts and significant financial
difficulties of debtors, the Group determines the credit loss for contract assets on a portfolio basis for other contract assets.
The increase or reversal of expected credit loss provision for contract assets of this year is recognized as impairment loss
or gain in current profit or loss.
17.3 Combination category and determination basis of bad debt provision according to credit risk characteristics
Consistent with accounts receivable, the Group provides for credit losses on a portfolio basis based on common risk
characteristics. Common credit risk characteristics adopted by the Group include the geographical location and business
object.
18. Long-term Equity Investment
18.1 Basis for determining joint control and significant influence over investee
Control is the power to govern an entity through participating in relevant activities of the investee; the investor is able to
obtain variable benefits from its activities, and at same time, to use the control rights on the investee to influence the
amount of returns. Joint control means that joint control for certain arrangement in accordance with relevant agreements;
activities relevant to the arrangement cannot be decided until obtaining the unanimous consent of parties sharing control
right. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is
not control or joint control over those policies. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee, the effect of potential voting rights of the investee, such as current
convertible debts, current executable warrants, etc., held by the investing enterprises or other parties shall be considered.
18.2 Determination of initial investment cost
For a long-term equity, investment acquired through a business combination involving enterprises under common control,
the shares of merged party's book value of owners' equity in the final controlling party consolidated financial statements
obtained on the merger date shall be considered as the initial investment cost of long-term equity investment. The
differences between the initial investment cost of long-term equity investment and the paid cash, the transferred non-cash
assets and the book value of the assumed debts are adjusted against the capital surplus; if the capital surplus is not sufficient
to be offset, the remaining balance is adjusted against retained earnings. In the case of issued equity securities treated as
consolidation consideration, share of book value of owner's equity of merged party in the final controlling party
consolidated financial statements is regarded as initial investment cost of long-term equity investments on the date of
consolidation; capital reserve shall be adjusted in accordance with taking total nominal value of issued share as capital
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
share, the difference between the initial investment cost of long-term equity investments and total book value of issued
shares; In case the capital reserve is not enough for writing down, the retained earnings shall be adjusted.
For a long-term equity investment acquired through business combination not involving enterprises under common control,
and the merging cost confirmed on the purchased date are regarded as the initial investment cost. In the case that the equity
of the acquiree is obtained through multiple deals in stages to finally form the business combination not under the common
control, the business combination shall be handled differently based on whether it is "package deal": where it is package
deal, the Company accounts each deal as a deal to obtain the control. If the deal is not a "package deal", the sum of the
carrying amount of the equity investment of the acquiree plus the cost of the new investment shall be used as the initial
investment cost of the long-term equity investment calculated according to the cost method. The equity originally held is
accounted for by the equity method, and the relevant other comprehensive income will not be accounted for the time being.
The intermediate expenses made by the combining party or purchaser for audit, legal service, assessment and other
management related expenses during the business merger should be included into the current profit and loss as it happens.
Long-term equity investment obtained by other means other than long-term equity investment formed by business
combination shall be initially measured at cost.
18.3 Subsequent measurement and recognition of profit or loss
18.3.1 Long-term equity investment accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in the Company's financial
statements. A subsidiary is an investee that is controlled by the Group.
The long-term equity investment accounted by the cost method shall be measured at its initial investment cost. If there are
additional investments or disinvestments, the long-term equity investment cost shall be adjusted. Income from the
investment in the current period shall be recognized in accordance with the cash dividends or profits declared and issued
by the investee.
18.3.2 Long-term equity investment accounted for using the equity method
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Except for investments in associates and joint ventures that are wholly or partly classified as holding assets for sale, the
Group accounts for investment in associates and joint ventures using the equity method. An associate is an entity over
which the Group has significant influence and a joint venture is an entity over which the Group can only exercise joint
control along with other investors on the investee’s net assets.
Under the equity method, where the initial investment cost of a long-term equity investment exceeds the Group’s share of
the fair value of the investee’s identifiable net assets at the time of acquisition, no adjustment is made to the initial
investment cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’s
identifiable net assets at the time of acquisition, the difference is recognized in profit or loss for the period, and the cost of
the long-term equity investment is adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss and other comprehensive income of the
investee for the period as investment income or loss and comprehensive income for the period, meanwhile, the book value
of the long-term equity investment shall be adjusted; The Group shall accordingly reduce the book value of the long-term
equity investment in terms of the part that shall be enjoyed according to the profit or cash dividends declared by the
invested unit to be distributed; For other changes in the owners' equity of the invested unit other than net profits and losses,
other comprehensive incomes and the profit distribution, the book value of long-term equity investment shall be adjusted
and be included into the capital reserves. The Group shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested
entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the
invested unit are different from those adopted by the Group, the adjustment shall be made for the financial statements of
the invested unit in accordance with the accounting policies and accounting periods of the Group to recognize the
investment income and other comprehensive incomes. For the transaction incurred between the group and associated
enterprises and joint ventures, invested or sold assets don't constitute a business, the part that doesn't achieve internal
transaction profit or loss or belongs to the Group calculated according to the enjoyed ratio will be offset, and the profit or
loss on investment will be confirmed on this basis. But for the unrealized loss arising from the internal transaction between
the Group and the invested unit, if such transaction loss is defined as the impairment loss of the transferred asset, they
cannot be offset.
When the Group determines the net loss of the invested unit that shall be shared, it is necessary to write-down the book
value of the long-term equity investment and other long-term equities substantially constituting the net investment of the
invested unit to zero as a limit. Besides, if the Group is obliged to bear extra loss for the invested unit, it shall be necessary
to determine provisions and record them to current investment loss in compliance with obligations expected to be assumed.
If the invested unit realizes any net profits later, the Group shall, after the amount of its attributable share of profits offsets
its attributable share of the un-confirmed losses, resume recognizing its attributable share of profits.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
18.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually received and the carrying
amount is recognized in profit or loss for the period.
19. Fixed Assets
19.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others,
or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognized only
when it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can be
measured reliably. Fixed assets are initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable that
economic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measured
reliably. Meanwhile the carrying amount of the replaced part is derecognized. Other subsequent expenditures are
recognized in profit or loss in the period in which they are incurred.
19.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month subsequent to the one in
which it is ready for intended use. The depreciation method, depreciation period, estimated residual value rate and annual
depreciation rate of each category of fixed assets are as follows:
Depreciation
Item Depreciation period Residual value rate (%) Annual depreciation rate (%)
method
Straight-line
Buildings and Constructions 20 years 10 4.5
depreciation
Straight-line
General-purpose equipment 3-5 years 10 18.0-30.0
depreciation
Straight-line
Special-purpose equipment 3-5 years 10 18.0-30.0
depreciation
Straight-line
Transportation vehicles 5 years 10 18.0
depreciation
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Estimated net residual value of a fixed asset is the estimated amount that the Group would currently obtain from disposal
of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition
expected at the end of its useful life.
19.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal, the
fixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on
disposal of the asset net of the carrying amount and related taxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at
least once at each financial year-end, and account for any change as a change in an accounting estimate.
20. Construction in Process
Construction in progress is measured at its actual costs. The actual costs include various construction expenditures during
the construction period, borrowing costs capitalized before it is ready for intended use and other relevant costs.
Construction in progress is not depreciated. Construction in progress is transferred to a fixed asset when it is ready for
intended use. The standards and time points for carrying forward various types of projects under construction to fixed
assets are as follows:
Item Standards and timing of carry-over as fixed assets
The main construction project and supporting projects have been substantially completed and
reached a state of practical usability.
Buildings and Constructions
Relevant equipment and other supporting facilities have been installed; after debugging, the
equipment can maintain normal and stable operation for a period of time.
Equipments to be installed and
commissioned
21. Borrowing Costs
Borrowing costs directly attributable to the acquisition & construction or production of assets eligible for capitalization
shall be capitalized when assets expenditure, borrowing costs and necessary construction or production for bringing assets
to expected conditions for use or marketing have taken place; when construction or production of assets ready for
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
capitalization reach to expected conditions for use or marketing, capitalization shall be ceased. Other borrowing expenses
are recognized as expenses in the current period.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interest
expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before
being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed
under general-purpose borrowings, the Group determines the amount of interest to be capitalized on such borrowings by
applying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the
amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable to
the general-purpose borrowings. During the capitalization period, exchange differences related to a specific-purpose
borrowing denominated in foreign currency are all capitalized. Exchange differences in connection with general-purpose
borrowings are recognized in profit or loss in the period in which they are incurred.
22. Intangible Assets
22.1 Service life and its basis for determination, estimate, amortization method or review procedure
Intangible assets include land use right, intellectual property (IP), application software, and franchise, etc.
An intangible asset is measured initially at cost. When an intangible asset with a finite useful life is available for use, its
original cost is amortized over its estimated useful life using the straight-line method. The amortization method, service
life and net residual value of various intangible assets are shown as follows:
Amortization method Determination basis Salvage value
Class Service life (year)
rate (%)
Land use right Straight-line method 40 or 50 years Term of use of property rights -
IP Right Straight-line method 5-10 Years Expected economic benefit life -
Application Software Straight-line method 5-10 years Expected economic benefit life -
Straight-line method Franchised operating Franchise contract duration
Franchise -
period
The fees charged by the Group to those who acquire public products and services during the project operation period do
not constitute an unconditional right to receive cash. When the PPP project assets are ready for their intended use, the
difference between the consideration amount of the relevant PPP project assets or the amount of confirmed construction
income and the amount of cash (or other financial assets) that is entitled to receive a determinable amount will be
recognized as intangible assets.
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization method at the end of the
year, and makes adjustments when necessary.
For the impairment test of intangible assets, please refer to Note (III), 20. Long-term asset impairment.
22.2 The accounting treatment methods and the collection scope of research and development expenditure
Expenditure during the research phase is recognized as an expense in the period in which it is incurred.
Expenditure during the development phase that meets all of the following conditions at the same time is recognized as
intangible asset. Expenditure during development phase that does not meet the following conditions is recognized in profit
or loss for the period.
(1) It is technically feasible to complete the intangible asset so that it will be available for use or sale;
(2) The Group has the intention to complete the intangible asset and use or sell it;
(3) The Group can demonstrate the ways in which the intangible asset will generate economic benefits, including the
evidence of the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset;
(4) The availability of adequate technical, financial and other resources to complete the development and the ability to use
or sell the intangible asset; and
(5) The expenditure attributable to the intangible asset during its development phase can be reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase, the Group recognizes all
of them in profit or loss for the period. The costs of the intangible assets generated by internal development activities only
include the total expenditure incurred from the time point when the capitalization conditions are available to the point
when the intangible assets are used for their intended purposes; for the expenditure that already becomes an expenditure
in the profit and loss statement before the capitalization conditions are available during development of the same intangible
asset, no adjustment will be made.
The aggregate scope of the Group's R & D expenses includes employee compensation for personnel directly engaged in
R & D activities, materials and service fees directly consumed by R & D activities, depreciation expenses and amortization
expenses of intangible assets for equipment and equipment used in R & D activities, rental expenses for R & D sites,
intermediate testing expenses for R & D activities, new product design expenses, and travel, transportation and
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
communication expenses required for research and test development. The Group uses the passing of feasibility studies and
the completion of R&D project projects after evaluation as the specific criteria for classifying R&D projects into research
and development phases.
23. Long-term Assets Impairment
The Group assesses at each balance sheet date whether there is any indication that the long-term equity investment, fixed
assets, construction in process, and intangible assets with a finite useful life may be impaired. If there is any indication
that such assets may be impaired, recoverable amounts are estimated for such assets. Intangible assets with indefinite
useful life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether there
is any indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an
individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable
amount is determined by the higher of 1) net amount of fair value of the asset or asset group deducted by the disposal
expenses; or 2) the present value of the expected future cash flows of the asset or asset group.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted as an
impairment provision and is recognized in profit or loss for the period.
Goodwill impairment test shall be conducted at the end of each year at least. Goodwill impairment test shall be conducted
in accordance with the concerned asset group or asset portfolio. That is to allocate the book value of goodwill to the asset
group or asset portfolio that is expected to benefit from the synergies of the combination in a reasonable way from the date
of purchasing. When recoverable amount of apportion-included asset group or asset portfolio of goodwill is less than book
value of goodwill, impairment loss shall be recognized. Firstly, amount of impairment loss shall be apportioned to the
book value of goodwill of the said asset group or asset portfolio, and then book value of other assets, except for goodwill,
in asset group or asset portfolio shall be abated in proportion.
Once the impairment loss of such assets is recognized, it cannot be reversed in any subsequent period.
24. Long-term Deferred Expenses
Long-term deferred expenses are the expenses that are already incurred but will be shared in the current reporting period
and later periods with amortization term of more than one year, mainly for the expenses on betterment of leased fixed
assets and employee housing loan deferred interest. Long-term deferred expenses are evenly amortized in installments in
three to five years during the expected benefit period.
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25. Contract Liabilities
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration received
or receivable from customers. Contract assets and contract liabilities under the same contract are presented in net terms.
26. Employee Compensation
26.1 Accountant Arrangement Method of Short-term Remuneration
During accounting period when the Group's employees provide services, actual short-term remuneration shall be
recognized as the liabilities and current profit and loss or relevant asset cost. The Group’s employee benefits and welfare
are included into current profit and loss or relevant asset cost according to actual amount occurred during the period. If
the employee benefits and welfare is non-monetary, it shall be measured according to its fair value.
During the accounting period that the employees service the Group, the Group pays social insurance premiums such as
medical insurance premium, industrial injury insurance premium, maternity insurance premium and housing accumulation
fund for its employees, as well as labor union expenditure and employee education expenses calculated and withdrawn
according to the regulations, corresponding employee remuneration amount shall be calculated and determined in
accordance with specified calculation and withdrawal basis and proportion to recognize corresponding liabilities and
included into the current profit and loss or relevant asset cost.
26.2 Accountant Arrangement Method of Post-employment Benefits
All post-employment benefits shall be considered as the defined contribution plan.
In the accounting period when the employee serves for the Group, the deposited amount calculated based on defined
contribution plan shall be recognized as liabilities and included in the current profit and loss or relevant asset cost.
26.3 Accountant Arrangement Method of the Termination Benefits
Where the Group provides termination benefits, the employee remuneration liabilities caused by such termination benefits
will be determined as the following date, whichever is earlier, and will be included in the current profit and loss: 1) When
the Group cannot unilaterally withdraw the termination benefits provided due to labor relation cancellation plan or
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employee lay-off suggestion; or 2）when the Group determines costs or expenses in relation with the restructuring of the
paid termination benefits.
27. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency such as products quality
assurance, etc. And it is probable that an outflow of economic benefits will be required to settle the obligation, and the
amount of the obligation can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at
the balance sheet date, taking into account factors pertaining to a contingency such as the risks, uncertainties and time
value of money. Where the effect of the time value of money is material, the amount of the provision is determined by
discounting the related future cash outflows.
The Group estimates product quality guarantee deposits based on expected claim rates, maintenance and replacement costs,
etc.
28. Share-based Payment
Share-based payment refers to a transaction in which the Group grants the equity instruments or undertakes the equity-
instrument-based liabilities in return for services from employees. The Group's share-based payment is an equity-settled
share-based payment.
28.1 Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees are measured at the fair value of the
equity instruments granted to employees at the grant date. Such amount is recognized as related costs or expenses on a
straight-line basis over the vesting period, with a corresponding increase in capital reserve.
At each balance sheet date during the vesting period, the Group makes the best estimate according to the subsequent latest
information of change in the number of employees who are granted with options that may vest, etc. and revises the number
of equity instruments expected to vest. The effect of the above estimate is recognized as related costs or expenses, with a
corresponding adjustment to capital reserve.
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28.2. Accounting treatment related to implementation, modification and termination of share-based payment arrangement
In case the Group modifies a share-based payment arrangement, if the modification increases the fair value of the equity
instruments granted, the Group will include the incremental fair value of the equity instruments granted in the measurement
of the amount recognized for services received. If the modification increases the number of the equity instruments granted,
the Group will include the fair value of additional equity instruments granted in the measurement of the amount recognized
for services received. The increase in the fair value of the equity instruments granted is the difference between fair value
of the equity instruments before and after the modification on the date of the modification. If the Group modifies the terms
or conditions of the share-based payment arrangement in a manner that reduces the total fair value of the share-based
payment arrangement, or is not otherwise beneficial to the employee, the Group will continue to account for the services
received as if that modification had not occurred, other than a cancellation of some or all the equity instruments granted.
If cancellation of the equity instruments granted occurs during the vesting period, the Group will account for the
cancellation of the equity instruments granted as an acceleration of vesting, and recognize immediately the amount that
otherwise would have been recognized over the remainder of the vesting period in profit or loss for the period, with a
corresponding recognition in capital reserve. When the employee or counterparty can choose whether to meet the non-
vesting condition but the condition is not met during the vesting period, the Group treats it as a cancellation of the equity
instruments granted.
29. Revenue
The Group's revenue consists of product sales revenue, engineering construction revenue and cloud services and other
service revenue.
When (or as) a performance obligation in a contract was satisfied, i.e., when (or as) the customer obtains control of relevant
goods or services, the Group recognizes as revenue the amount of the transaction price that is allocated to that performance
obligation. A performance obligation is the Group’s commitment to transfer to a customer a good or service (or a bundle
of goods or services) that is distinct, in a contract with the customer.
The Group evaluates the contract on the commencement date of the contract, identifies the individual performance
obligations contained in the contract and determines whether each individual performance obligation is to be performed
over a certain period of time or at a certain point in time. Revenue is recognized over time by reference to the progress
towards complete satisfaction of the relevant performance obligation if one of the following criteria is met: (1) the customer
simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; (2) the
Group’s performance creates or enhances an asset that the customer controls as the Group performs; or (3) the Group’s
performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to
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payment for performance completed to date. Otherwise, revenue is recognized at a point in time when the customer obtains
control of the distinct good or service.
If the contract contains two or more performance obligations, the Group allocates the transaction price to each single
performance obligation on the contract start date in accordance with the relative proportion of the individual selling price
of the goods or services promised by each single performance obligation. However, if there is strong evidence that the
contract discount or variable consideration is only related to one or more (but not all) performance obligations in the
contract, the Group allocates the contract discount or variable consideration to the relevant one or more performances
obligation. Individual selling price refers to the price at which the Group sells goods or services to customers separately.
Where the individual selling price cannot be directly observed, the Group comprehensively considers all relevant
information that can be reasonably obtained, and uses the observable input value to the maximum to estimate the individual
selling price.
The Group judges whether the Group’s identity is the principal or agent when engaging in transactions based on whether
it has control over the goods or services before transferring the goods or services to customers. If the Group is able to
control the goods or services before transferring them to customers, the Group is the principal responsible person, and
revenue is recognized based on the total amount of consideration received or receivable. Otherwise, the Group acts as an
agent and recognizes revenue based on the amount of commission or handling fee to which it is expected to be entitled,
which is determined based on the net amount of the total consideration received or receivable less the consideration payable
to other related parties, or based on a predetermined commission amount or proportion, etc.
29.1 Revenue from sale of products
Product sales revenue is the revenue from sales of video surveillance products, smart home products, robotics products
and other products of the Group.
According to the contract, the Group recognizes revenue when the control of the product is transferred, that is, when the
product is handed over to the agreed carrier or delivered to the place designated by the other party for receipt. As the
delivery of the products to the customer represents the right to receive the contract consideration unconditionally, and the
maturity of the payment is only subject to the passage of time, the Group recognises a receivable when the product is
delivered to the customer. When a customer prepays for a purchase, the Group recognises the transaction amount received
as a contractual liability until revenue is recognized when the product is delivered to the customer.
There is variable consideration in the product sales contracts between the Group and its distributors. The Group determines
the best estimate of the variable consideration based on the expected delivery time, quantity and price of the products. The
transaction price, including variable consideration, does not exceed the amount by which the accrued recognized revenue
is unlikely to be materially reversed at the time the relevant uncertainty is eliminated. At each balance sheet date, the
Group re-estimates the amount of variable consideration that should be included in the transaction price.
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When the Group sells products to distributors, it provides an additional purchase option under sales incentives, i.e., the
Group's distributors can accumulate sales rebates when purchasing specific products from the Group and use them to offset
the price of goods in future purchases. These sales rebates provide resellers with discounts on their future purchases that
are not available to similar customers. As a result, the commitment to provide the dealer with a credit for future purchases
is a separate performance obligation that is recognized as a contractual liability at the time of the sale transaction at the
transaction price apportioned to the fair value of the rebate, and revenue is recognized when the reseller uses the sales
rebate offset.
The Group provides quality assurance for the products sold, and the quality assurance related to the products sold by the
Group cannot be purchased separately, but is to assure customers that the products sold meet the established standards, so
the Group carries out accounting treatment in accordance with the provisions of Accounting Standard for Business
Enterprises No. 13 - Contingencies.
For product sales of the Group with sales return terms attached, as the customer obtains ownership of related products, the
Group recognizes revenue in accordance with the consideration (excluding expected refund amounts due to sales returns)
that the Group is expected to receive due to the transfer of products or services to the customer, and recognizes expected
liabilities in accordance with expected refund amounts due to sales returns. The remaining amount, subsequent to
deduction of expected costs from collecting the products (including the decrease in value of the returned products), is
recognized as an asset in accordance with the carrying amount during the expected transfer of returned products after
deducting the costs of the above net assets carried forward.
Some of the Group's product sales contracts have instalment payment clauses, and there is a significant financing
component in the contract, the Group determines the transaction price based on the amount payable in cash when the
customer assumes control of the products. The difference between the transaction price and the contract consideration is
amortized using the effective interest rate method during the contract period. On the contract commencement date, the
Group does not consider the significant financing components in the contract if the interval between the customer obtaining
control of the products and the price being paid by the customer is not more than one year.
29.2 Project construction revenue
Project construction revenue is the revenue from constructions related to intelligent security solution projects and PPP
Projects provided by the Group.
For project construction, the customer is able to control the assets under construction in the course of the Group's
performance, and the Group regards them as a performance obligation to be performed within a certain period of time, and
the revenue is recognized according to the performance progress, unless the performance progress cannot be reasonably
determined.
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The Group uses the output method to determine the progress of performance, which is to determine the progress of
performance based on the value of engineering construction services transferred to customers. If the progress of
performance cannot be reasonably determined and the costs incurred by the Group are expected to be compensated,
revenue is recognized according to the amount of costs incurred until the progress of performance can be reasonably
determined.
The Group's customers make milestone payments with the Group in respect of projects in accordance with the terms of
the contract. The Group first recognizes the completed performance obligations as contract assets and reclassifies them as
accounts receivable when the payment milestone is reached; if the contract price received or receivable by the Group
exceeds the accumulated performance obligations completed, the excess part is recognized as a contract liability. The
Group's contract assets and contractual liabilities under the same contract are presented on a net basis.
Some of the Group's construction contracts have long-term payment clauses, and there are significant financing elements
in the contracts. The Group determines the transaction price on the basis of the amount payable in cash on the assumption
that the customer will take control of the asset-building. The difference between the transaction price and the contract
consideration is amortized over the life of the contract using the effective interest method. At the commencement date of
the contract, the Group expects that the interval between the customer obtaining control of the service and the customer
paying the price will not exceed one year, regardless of the significant financing component existing in the contract.
The Group, as a private capital, entered into a PPP project contract with the government and provided construction,
operation, maintenance and other services. The Group identifies construction services, operation services and maintenance
services as individual performance obligations in the contract, and allocates the transaction price to each performance
obligation based on the relative proportion of the stand-alone selling price of each performance obligation. When providing
construction services or outsourcing projects to other parties, The identity of the Group is the principal responsible person,
and then accounting for construction revenue to confirm the contract assets is made. After the PPP project is ready for use,
the Group recognizes revenue related to operation and maintenance services.
29.3 Cloud service and other service revenue
Revenue from cloud services and other services refers to cloud services such as storage services, video services, and
telephone services provided by the Group, maintenance services related to security projects, and other services, etc.
For cloud services and other services, the economic benefits brought by the customer are obtained and consumed at the
time of the Group's performance, and the Group regards them as a performance obligation to be performed within a certain
period, and the revenue is recognized according to the performance progress during the period of providing services. The
Group adopts the output approach to determine the performance progress, i.e. the performance progress is determined
based on the value of the services transferred to the customer to the customer. The customer paid for the cloud services in
advance at the time of purchase, so the Group recognized the cloud service payment received at the time of the transaction
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as a contractual liability, and recognized the revenue according to the performance progress during the period of the
provision of the services. The Group presents contract assets and contract liabilities under the same contract on a net basis.
For the provision of operation and maintenance services to customers, the economic benefits obtained and consumed by
the customers at the same time as the performance of the contract by the Group shall be regarded as the performance
obligation to be performed within a certain period of time, and the revenue shall be recognized according to the
performance progress. The Group's customers make milestone payments with the Group for O&M services in accordance
with the terms of the contract. The Group first recognizes completed performance obligations as contract assets and
reclassifies them as accounts receivable when payment milestones are reached, and if the contract price received or
receivable by the Group exceeds the accumulated performance obligations completed, the excess part is recognized as a
contract liability. The Group's contract assets and contractual liabilities under the same contract are presented on a net
basis.
For the provision of operation and maintenance services to customers, the economic benefits obtained and consumed by
the customers at the same time as the performance of the contract by the Group shall be regarded as the performance
obligation to be performed within a certain period of time, and the revenue shall be recognized according to the
performance progress. The Group's customers make milestone payments with the Group for O&M services in accordance
with the terms of the contract. The part of the Group that has obtained the unconditional right to receive payment is
recognized as accounts receivable, and the remainder is recognized as contract assets, and if the contract price received or
receivable by the Group exceeds the accumulated performance obligations completed, the excess part is recognized as a
contract liability. The Group's contract assets and contractual liabilities under the same contract are presented on a net
basis.
30. Cost of Contract
30.1 Cost of obtaining a contract
Incremental costs incurred by the Group to obtain a contract (that is, costs that would not have occurred without a contract)
and expected to be recovered are recognized as an asset, and amortized using the same basis as revenue recognition for
the goods or services to which the asset relates, and included in current profit or loss. If the amortization period of the
asset does not exceed one year, it is included in current profit or loss when it occurs. Other expenses incurred by the Group
in order to obtain the contract shall be included in current profit or loss when incurred, unless it is clearly borne by the
customer.
30.2 Cost of contract fulfillment
The cost of the Group’s performance of a contract that does not fall within the scope of accounting standards other than
the revenue standard and meets the following conditions is recognized as an asset: (1) The cost is directly related to a
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current or anticipated contract; (2) The cost increases the Group’s resources for fulfilling performance obligations in the
future; (3) The cost is expected to be recovered. The aforesaid assets are amortized on the same basis as the recognition
of income from goods or services related to the assets, and are included in the current profit or loss.
The Group’s asset in relation to contract costs are mainly contract performance costs, and they are included in inventories
based on their current nature.
30.3 Impairment losses on assets related to contract costs
In determining impairment losses on assets related to contract costs, impairment losses are first determined for other assets
recognized in accordance with other relevant ASBEs and related to the contract. Then, for assets related to contract costs
whose carrying value is higher than the difference between the following two items, the Group makes provision for
impairment for the excess to be recognized as asset impairment losses: (1) the remaining amount of consideration expected
to be obtained by the Group for the transfer of goods or services related to the asset; (2) the estimated costs to be incurred
in connection with the transfer of such relevant goods or services.
After provision for impairment is made for the asset related to contract costs, if the difference between the above two items
is higher than the carrying value of the asset due to changes in the factors of impairment in previous periods, the original
provision for impairment of the asset is reversed and included in the current profit or loss, but the carrying value of the
asset after the reversal shall not exceed the carrying value of the asset on the reversal date assuming no provision for
impairment is made.
31. Governmental Subsidies
Government subsidies refer to the monetary and non-monetary assets obtained by the Group from the government for free.
Government subsidies are recognized when they can meet the conditions attached to the government subsidies and can be
received.
If a government subsidy is a monetary asset, it shall be measured at the amount received or receivable.
31.1 Judgment basis and Accountant treatment of government subsidy related to assets
The government subsidies for some special subsidies and etc. are used for constructions and forms long-term assets, and
therefore are categorized as government subsidy related to assets.
A government grant related to an asset is recognized as deferred income, and it should be evenly amortized to profit or
loss over the useful life of the related asset.
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31.2 Judgment basis and accountant treatment of government subsidy related to income
The Group receives government subsidies including subsidies for special projects and Value-Added-Tax refund, etc. which
are used to compensate the group-related costs or losses, and therefore are categorized as government subsidy related to
income.
For a government grant related to income, if the subsidy is a compensation for related expenses or losses to be incurred in
subsequent periods, it is recognized as deferred income, and recognized in profit or loss over the periods in which the
related costs or losses are recognized; If the subsidy, such as VAT refund, is a compensation for related expenses or losses
already incurred, it is recognized immediately in profit or loss for the period.
For government subsidies related to the Group’s daily operations shall be booked into other income; for those not related
to the Group’s daily operations, shall be booked into non-operating income/expense.
32. Lease
Lease refers to a contract that conveys the right to use an asset for a period of time in exchange for consideration.
The Group assesses whether a contract is, or contains, a lease at the inception date. The Group does not re-assess whether
a contract contains a lease unless the terms and conditions of the contract are changed.
32.1 The Group as the lessee
32.1.1 Separating components of lease
In case the contract contains one or more lease and non-lease components, the Group separates each lease component and
non-lease component, and allocates the consideration to the lease and non-lease components based on the proportion of
relative stand-alone prices of the components.
32.1.2 Right-of-use assets
The Group recognizes the right-of-use assets for leases on the commencement date of the lease term, except for short-term
lease and lease of low-value assets. The commencement date of the lease term refers to the date from which the lessor
makes the leased assets available for use by the Group. Right-of-use assets are initially measured at cost. The cost includes:
Initial measurement amount of lease liabilities;
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Amount of lease payment made at or before the commencement date of the lease, less any lease incentives received;
Initial direct costs incurred by the Group;
An estimate of any costs to be incurred by the Group in dismantling and removing the underlying asset, or restoring
the site on which it is located, or restoring the leased assets to the conditions as agreed under the terms of the lease,
excluding costs incurred to produce inventories.
The Group calculates depreciation of the right-of-use assets in accordance with the relevant depreciation provisions of
Accounting Standards for Business Enterprises No. 4 - Fixed Assets. The right-of-use asset is depreciated over the shorter
of the lease term and the useful life of the right-of-use asset, unless there is a transfer of ownership or purchase option
which is reasonably certain to be exercised at the end of the lease term.
The Group determines whether the right-of-use assets are impaired and accounts for the identified impairment loss in
accordance with the provisions of Accounting Standards for Business Enterprises No. 8 - Impairment of Assets.
32.1.3 Lease liabilities
The Group initially measures the lease liability on the commencement date at an amount equal to the present value of the
lease payments during the lease term that are not paid at that date, except short-term lease and lease of low-value assets.
In calculating the present value of the lease payments, the Group adopts the interest rate implicit in the lease as the discount
rate. The Group uses its incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the leased asset
during the lease term, including:
Fixed payments, including in-substance fixed payments, less any lease incentives receivable;
The exercise price of a purchase option, if the Group is reasonably certain to exercise that option;
Payments for terminating the lease, if the lease term reflects the lessee exercising the option to terminate the lease;
Amounts expected to be payable by the Group under residual value guarantees.
After the commencement date of the lease term, the Group calculates interest expense of lease liabilities in each period of
lease term at fixed periodic rate and recognizes in the current loss and profit or relevant asset costs.
After the commencement date of the lease term, the Group remeasures the lease liability and adjusts the corresponding
right-of-use assets under the following circumstances. If the carrying value of the right-of-use assets has been reduced to
zero while the lease liability needs to be further reduced, the Group will recognize the difference into the current loss and
profit:
In case of any change of the lease term or any change in the valuation of the purchase option, the Group remeasures
the lease liability at the present value calculated based on the modified lease payments and the revised discount rate;
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In the event of any change in the amount expected to be payable based on the residual value guarantees, the Group
remeasures the lease liability at the present value calculated based on the changed lease payments and the original
discount rate.
32.1.4 Basis for judgment and accounting treatment of the lessee's simplified treatment of short-term leases and leases
of low-value assets
The Group has elected not to recognize the right-of-use assets and lease liabilities for short-term leases and leases of low-
value assets. Short-term lease refers to lease with a term no more than 12 months from the commencement date of lease
term and without purchase option. Lease of low-value assets refers to lease for single lease asset with low value when it
is new. The Group recognizes lease payments under short-term leases and leases of low-value assets as the current loss
and profit or the relevant asset costs on a straight-line basis over each period during the lease term.
32.1.5 Lease modification
In case of lease modification, the Group makes accounting treatment of such lease change as a separate lease if all of the
following conditions are met:
Such lease modification increases the scope of the lease by adding the right to use one or more lease assets;
The increased consideration is commensurate with the stand-alone price for the increase in scope and any appropriate
adjustments to reflect the circumstances of the particular contract.
Where accounting treatment is not made for lease modification as a separate lease, at the effective date of lease
modification, the Group reallocates the contract consideration after the modification, redetermines the lease term, and
remeasures the lease liability based on the present value calculated according to the modified lease payments and the
revised discount rate.
In the event that the lease scope is decreased or the lease term is shortened as a result of the lease modification, the Group
reduces the carrying amount of the right-of-use assets, and recognizes the relevant gains or losses relating to the partial or
full termination of the lease in the income statement; for the lease liabilities remeasured due to other lease modifications,
the Group adjusts the carrying amount of the right-of-use assets accordingly.
32.2 The Group as the lessor
32.2.1 Separating components of lease
In case the contract contains both lease and non-lease components, the Group allocates the contract consideration in
accordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue on portion of
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transaction prices, based on the respective stand-alone prices of the lease component and the non-lease component.
32.2.2 Classification criteria and accounting treatment for leases as lessors
Finance lease is a lease that substantially transfers all the risks and rewards of incidental to ownership of an underlying
asset. Operating lease refers to the leases other than finance lease.
32.2.2.1 The Group records the operating lease business as the lessor
The Group recognizes the lease payments from operating leases as rental income on a straight-line basis for all periods
over the lease term. The Group's initial direct costs incurred in connection with operating leases is capitalized as incurred,
recognized in the income statement over the lease term on the same basis as the lease income.
32.2.2.2 The Group records the finance lease business as the lessor
On the commencement date of the lease term, the Group uses the net lease investment as the carrying value of the finance
lease receivables and derecognizes the finance lease assets. Net lease investment is the sum of present value of
unguaranteed residual value and lease payments receivable discounted at the interest rate implicit in lease on the
commencement date of the lease term.
Lease payments receivable, which refer to amounts receivable by the Group from the lessee for conveying the right to use
the leased assets during the lease term, include:
Fixed payment including in-substance fixed payments by the lessee, less any lease incentives payable;
The exercise price of a purchase option, if the lessee is reasonably certain to exercise that option;
Payments for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease;
Residual value guarantees provided to the Group by the lessee, a party related to the lessee, or a third party unrelated
to the lessor that is capable of discharging the obligations under the guarantee.
The Group calculates and recognizes the interest income in each period of the lease term according to the fixed periodic
interest rate.
In financial leases in which the Group acts as a manufacturer or distributor as the lessor, on the commencement date of
the lease term, the Group recognizes revenue based on the lower of the fair value of the leased assets and the present value
of the lease receipts discounted at the market rate, and carries forward the cost of sales based on the balance of the carrying
amount of the leased assets after deducting the present value of the unsecured residual value.
The costs incurred by the Group acting as a manufacturer or distributor as a lessor to obtain a financial lease are recognized
in profit or loss for the current period on the commencement date of the lease term.
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32.2.3 Lease modification
In case of modification of the operating lease, the Group accounts for it as a new lease as of the effective date of the
modification, any prepaid or accrued lease payments relating to the original lease are considered as payments for the new
lease .
In case of modification of the finance lease, the Group accounts for the modification of a finance lease as a separate lease
if all of the following conditions are met:
The modification increases the scope of the lease by adding the right to use one or more lease assets;
The consideration for the lease increases by an amount that is commensurate with the stand-alone price for the
increase in scope, and any appropriate adjustments to that price to reflect the circumstances of the particular contract.
If a modification of finance lease is not accounted for as a separate lease, the Group accounts for the changed lease under
the following circumstances:
If the modification becomes effective on the commencement date of the lease and the lease is classified as an
operating lease, the Group accounts for it as a new lease from the effective date of the lease modification and measures
as the net lease investment prior to the effective date of the lease modification as the carrying value of the leased
asset.
If the modification becomes effective on the commencement date of the lease and the lease is classified as a finance
lease, the Group accounts for it in accordance with the provisions of Accounting Standards for Business Enterprises
No. 22 - Recognition and Measurement of Financial Instruments regarding the modification or renegotiation of
contracts.
33. Deferred Tax Assets / Deferred Tax Liabilities
The income tax expenses include current income tax and deferred income tax.
33.1. Current Income Tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at the
amount expected to be paid (or recovered) according to the requirements of tax laws.
33.2 Deferred Tax Assets and Deferred Tax Liabilities
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Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between the
nil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined
according to tax laws, deferred tax assets and liabilities are recognized through the balance sheet liability method.
In general, all temporary differences are recognized as the relevant deferred income tax. However, for deductible
temporary differences, the Group recognizes the relevant deferred tax assets to the extent that it is likely to obtain the
taxable income to offset the deductible temporary differences. In addition, deferred tax assets or liabilities relating to the
initial recognition of goodwill, as well as those arising from transactions that are neither a business combination nor affect
accounting profits and taxable income (or deductible losses) and do not result in equal taxable and deductible temporary
differences, are not recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the extent that it is
probable that future taxable profits will be available against which the deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except
where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments are only recognized to the extent that it is probable that there will be taxable
profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable
future.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are measured at the applicable
tax rates in the period in which the related assets are recovered or the related liabilities are recovered in accordance with
the tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except when they arise from
transactions or events that are directly recognized in other comprehensive income or in shareholders' equity, in which case
they are recognized in other comprehensive income or in shareholders' equity; and when they arise from business
combinations, in which case they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probable
that sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilized. Such
reduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
285
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
33.3 Offset of Income Tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the assets
and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets
and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are
expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
34. Important Judgments while Applying Accounting Policy, and Key Assumptions and Uncertainty Factors
Applied for Accounting Estimate
During the process of using accounting policy described in note (III), due to the uncertainty in operation activities, the
group should judge, estimate and assume the book value of the report items which may not be metered reliably. These
judgments, estimates and assumptions are based on the historical experience of the Group's management and other related
factors. Differences may exist between the actual results and the Group’s estimate.
The Group regularly reviews the above judgments, assumptions and estimations on the basis of continuous operation. If
the changes of accounting estimate only influence current period, the influence amount will be affirmed during the
changing period; if it influences the current period and subsequent periods, the influence amount will be recognized in the
current period and future period.
- Key assumptions and uncertainties used in accounting estimate
On balance sheet date, key assumptions and uncertainties for performing accounting estimates on book value of assets and
liabilities in subsequent future periods are:
Impairment provision for inventories
Except for contract performance costs, inventories are measured at the lower of cost or net realizable value. For raw
materials, the latest or future actual purchase price is used as the basis for determining the net realizable value; For products
in progress, the net realizable value is determined by the actual selling price of the most recent or post-period finished
product, less the estimated costs of the current similar type at the time of completion of the product, the estimated sales
expenses and related taxes; For finished products, the actual selling price of the latest or future finished product minus the
286
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
estimated selling expenses and related taxes will be incurred, is used as the basis for determining the net realizable value.
The Group will regularly conduct a comprehensive stocktaking to review the impairment circumstances on defective,
obsoleted or slow-moving inventory if any; in addition, the Group's management will regularly review the impairment
circumstance of inventory with long storage time according to the inventory aging.. Based on the above procedure, the
Group's management deems that the full provision amounts have been withdrawn for inventory. For details, please refer
to Note (V) 9.
Impairment of accounts receivable
Except for accounts receivable whose credit losses are determined on the basis of individual basis, the Group adopts an
impairment matrix on a portfolio basis to determine its expected credit loss of the relevant accounts receivable. The Group
divides the risk characteristics according to the region and object of its business, and divides the relevant accounts
receivable into different portfolios. Based on the historical loss rate and consider reasonable and well-founded forward-
looking information in the industry, the Group determines the proportion of corresponding loss reserves for different
portfolios of various types of accounts receivable. As of December 31, 2023, based on the historically loss rate and consider
reasonable and well-founded forward-looking information in the industry, the Group determines the corresponding
proportion of loss provision for accounts receivable. The amount of the provision for expected credit losses will change
as the estimation of the Group. The details on the provision for expected credit losses of the accounts receivable of the
Group are given in Note (V) 4.
Useful life and predicted net residual value of fixed asset
The Group's estimation of fixed assets useful life is based on the historical experience of actual usable term of fixed assets
with similar properties and functions, the estimation of predicted net residual value is the amount obtained currently by
the Group from the assets after deducting the anticipated disposal expense based on the anticipated status assuming the
conditions that fixed assets' predicted useful life expires and fixed assets are at the end of useful life. The Group shall
conduct the review on the predicted service life and predicted net residual value of fixed assets at least annually. For the
current reporting period, the Group's management did not see signs either indicating a shortened or extended useful life of
the Group’s fixed asset or indicating a change in predicted net residual value.
Accrued liabilities of product quality warranty
Accrued liabilities of product quality assurance are costs and expenses incurred to meet the established standards of
product quality assurance obligations to customers in accordance with the product contract; the Group made such an
estimation according to the predicted claim rate, repair and replacement cost of relevant products. The management deems
287
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
that the current estimation on accrued liabilities of product quality warranty is reasonable, however, the Group will
continue to review the conditions of product repairs, and will conduct adjustment if any sign indicating the need to make
adjustments on accounting estimates.
Deferred tax assets and deferred tax liabilities
Deferred income tax assets and deferred income tax liabilities are measured at the applicable income tax rate during the
period when the relevant asset is expected to be recovered or the relevant debt is expected to be paid off. The expected
applicable income tax rate is determined according to the relevant current tax regulations and the actual situation of the
Group. If the estimated income tax rate is different from the original estimate, the management of the Group will adjust it.
The realization of deferred income tax assets mainly depends on the actual future taxable income, taxable temporary
differences, and the effective tax rate of temporary difference in the future applicable years. If the actual taxable income
and taxable temporary differences in the future is less than the estimation, or actual tax rate is lower than the estimation,
then the confirmed deferred income tax assets will be reversed and confirmed in the income statement during the
corresponding period. If the actual taxable income and taxable temporary differences in the future is more than the
estimation, or actual tax rate is higher than the estimation, then the deferred tax assets that are partially unrecognized
deductible losses and deductible temporary differences will be recognized and confirmed in the income statement during
the corresponding period.
Goodwill impairment
When testing goodwill for impairment, a pre-tax interest discount rate that appropriately reflects the current market time
value of money and asset-specific risk is determined and the present value of the projected future cash flows of the relevant
asset group or combination of asset groups containing goodwill is calculated. When the future actual result is different
from the original estimation, the result of the goodwill impairment test will alter.
35. Significant Alternation in Accounting Policy and Accounting Estimations
Interpretation No. 16 of Accounting Standards for Business Enterprises
The Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for Business Enterprises (the
"Interpretation No. 16") on November 30, 2022. It specifies the accounting treatment of the income tax effects on dividends
related to financial instruments classified as equity instruments by an issuer and the accounting treatment of the
288
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
modification of cash-settled share-based payments to equity-settled share-based payments by an enterprise. The
Interpretation No. 16 amends the scope of the initial recognition exemption for deferred income tax in ASBE No. 18 –
Income Tax. It clarifies that for single transaction that are not business combinations, where neither accounting profits nor
taxable income (or deductible losses) are affected at the time of the transaction, and the assets and liabilities initially
recognized result in equal taxable temporary differences and deductible temporary differences do not apply to the
provisions of ASBE No. 18 – Income Tax on exemption from initial recognition of deferred tax liabilities and deferred tax
assets. This regulation is effective as of January 1, 2023, and can be implemented in advance. The Group implemented
this requirement on January 1, 2023, applied retrospective adjustment method for accounting treatment, and restated the
financial statements for the comparative period. The specific impacts are listed below:
(1) The impact on the relevant items of the Group's consolidated balance sheet on January 1, 2022
Unit: RMB
Item January 1, 2022 Adjustment January 1, 2022
Deferred tax assets 1,210,877,575.24 461,934.26 1,211,339,509.50
Deferred tax liabilities 93,315,151.17 47,923.93 93,363,075.10
Retained earnings 45,148,877,451.52 (179,425.86) 45,148,698,025.66
Minority equity 1,933,755,610.62 593,436.19 1,934,349,046.81
(2) The impact on the relevant items of the Group's consolidated balance sheet on December 31, 2022
Unit: RMB
Item December 31, 2022 Adjustment December 31, 2022
Deferred tax assets 1,469,646,489.04 1,551,089.22 1,471,197,578.26
Deferred tax liabilities 116,502,770.84 (23,294.86) 116,479,475.98
Retained earnings 49,460,240,986.49 182,975.56 49,460,423,962.05
Minority equity 4,580,999,418.82 1,391,408.52 4,582,390,827.34
(3) The impact on the relevant items of the Group's 2022 consolidated income statement
Unit: RMB
Item 2022 Adjustment 2022
Income tax expenses 1,297,981,905.54 (1,160,373.75) 1,296,821,531.79
Net profit attributable to owners of parent
12,837,342,061.07 362,401.42 12,837,704,462.49
company
Profit or loss attributable to minority
719,627,660.86 797,972.33 720,425,633.19
shareholders
289
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
(4) The impact on the relevant items of the parent company's balance sheet on January 1, 2022
Unit: RMB
Item January 1, 2022 Adjustment January 1, 2022
Deferred tax assets 281,893,463.93 (443,175.57) 281,450,288.36
Retained earnings 37,958,561,319.89 (443,175.57) 37,958,118,144.32
(5) The impact on the relevant items of the parent company's balance sheet on December 31, 2022
Unit: RMB
Item December 31, 2022 Adjustment December 31, 2022
Deferred tax assets 171,524,646.19 (909,206.34) 170,615,439.85
Retained earnings 39,030,437,901.96 (909,206.34) 39,029,528,695.62
(6) The impact on the relevant items of the parent company's 2022 income statement
Unit: RMB
Item 2022 Adjustment 2022
Income tax expenses 527,533,244.69 466,030.77 527,999,275.46
IV. Taxes
Major Categories of Taxes and Tax Rates
Category of tax Basis of tax computation Tax rate
Enterprise income tax Taxable income 25% (Note 1)
For the taxable product sales revenue or taxable labor revenue, the Company and its domestic subsidiaries are ordinary 6%, 9%, 13% and simple collection rate of
VAT
Value-added Tax payers; the VAT payable is the balance of input tax after deducting the deductible output tax. 5%, 3% (Note 3)
290
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
City maintenance and construction tax Actual payable turnover tax 7%, 5%
Education surcharges Actual payable turnover tax 3%
Local education surcharges Actual payable turnover tax 2%
Note 1: Except that this Company and subsidiaries in China are applicable to the following tax preference, this Company's other subsidiaries in China are applicable to 25% of enterprise
income tax rate, the overseas subsidiaries are applicable to corresponding local tax rate.
(1) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Province in 2020 (Guo Ke Huo Zi [2020] No. 251) issued by the Leading
Group Office of National High-tech Enterprise Identification Management on December 29, 2020 and the list of High-tech Enterprises Identified and Reported by the Zhejiang
Provincial Accreditation Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management on December 28, 2023, the Company was
identified as the high-tech enterprise, and valid terms for both are 3 years, and the preferential tax period is from 2020 to 2022 and from 2023 to 2025. Therefore, the enterprise
income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period (2022:15%).
According to the Announcement on the Enterprise Income Tax Policies for Promoting the High-quality Development of Integrated Circuit Industry and Software Industry (Ministry
of Finance, State Administration of Taxation, National Development and Reform Commission, Ministry of Industry and Information Technology Announcement [2020] No. 45)
(hereinafter referred to as " Preferential Tax Policies for Integrated Circuit and Software Industries"), the Company was approved by the tax authorities in May 2023 to pay the 2022
annual corporate income tax at the rate of 10%. As of the approval date of this report, the Company’s preferential income tax in 2023 has not been verified and approved. Therefore,
the Company’s enterprise income tax in 2023 is still calculated and paid at the rate of 15% (2022: 10%).
(2) According to the Announcement on Continuation of the Corporate Income Tax Policy for the Western Development (Ministry of Finance, State Administration of Taxation, National
Development and Reform Commission Announcement [2020] No.23), the subsidiaries of the Company, Chongqing Hikvision Technology Co., Ltd. (hereinafter referred to as
"Chongqing Technology"), Chongqing Hikvision System Technology Co., Ltd. (hereinafter referred to as "Chongqing System"), and Chongqing EZVIZ Electronics Ltd. have enjoyed
preferential tax policies for the development of the western region. Therefore, the current enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the
current reporting period (2022:15%).
(3) According to the Recording List of the First Batch of identified High-tech Enterprises of Zhejiang Province in 2021 issued by the Leading Group Office of National High-tech
Enterprise Identification Management Work on January 24, 2022, Hangzhou Fuyang Haikang Baotai Surveillance Technology Service Ltd. (hereinafter referred to as "Fuyang Baotai")
and Hangzhou Hikstorage Technology Ltd. ("Hikstorage Technology") , subsidiaries of the Company, are identified as high-tech enterprises, and the validity period of the identification
is 3 years and the preferential tax period is from 2021 to 2023. Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current
reporting period (2022:15%).
291
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
(4) In accordance with the List of High-tech Enterprises Identified by the Zhejiang Provincial Accreditation Agency in 2022 issued by the leading group office of Zhejiang high-tech
enterprise identification management work on January 17, 2022, the Company’s subsidiaries, Hangzhou Hikvision System Technology Ltd. (hereinafter referred to as "Hangzhou
System"), Hangzhou Kuangxin Technology Ltd. (hereinafter referred to as "Hangzhou Kuangxin"), Hangzhou Rayin Technology Co., Ltd. (hereinafter referred to as "Hangzhou
Rayin Technology"), and Hangzhou Hikfire Technology Ltd. (hereinafter referred to as "HikFire Technology") were recognized as high-tech enterprises with a valid term of 3 years
and the preferential tax period is from 2022 to 2024. Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting
period (2022:15%).
(5) In accordance with the Notice on Publishing the List of Third Batch of Proposed Identified High-tech Enterprises of Shanghai in 2020 issued by Shanghai High-tech Enterprise
Identification Office on November 20, 2020 and the List of Second Batch of High-tech Enterprises Identified and Reported by Shanghai Accreditation Agency in 2023 issued by
Shanghai High-tech Enterprise Identification Office on January 4, 2024, the Company’s subsidiary, Shanghai Goldway Intelligent Transportation System Ltd. (hereinafter referred to
as "Goldway Transportation") was identified as the high-tech enterprise, and valid term for both are 3 years, and the preferential tax period is from 2020 to 2022 and from 2023 to
2025. Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period (2022:15%).
(6) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Province in 2020 (Guo Ke Huo Zi [2020] No. 251) issued by the Leading
Group Office of National High-tech Enterprise Identification Management on December 29, 2020 and the list of High-tech Enterprises Identified and Reported by the Zhejiang
Provincial Accreditation Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management on December 28, 2023, the Company’s
subsidiaries, Hangzhou Hikauto Software Ltd. (hereinafter referred to as "HikAuto Software") and Hangzhou Hikimaging Technology Ltd. (hereinafter referred to as "HikImaging
Technology") were identified as the high-tech enterprise, and valid term for both are 3 years, and the preferential tax period is from 2020 to 2022 and from 2023 to 2025. Therefore,
the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period (2022:15%).
(7) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Province in 2020 (Guo Ke Huo Zi [2020] No. 251) issued by the Leading
Group Office of National High-tech Enterprise Identification Management on December 29, 2020 and the list of High-tech Enterprises Identified and Reported by the Zhejiang
Provincial Accreditation Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management on December 28, 2023, the Company’s
subsidiary, Hangzhou Hikrobot Technology Co., Ltd. (formerly known as Hangzhou Hikrobot Technology Ltd. and hereinafter referred to as "HikRobot") was identified as the high-
tech enterprises, and valid term for both are 3 years, and the preferential tax period is from 2020 to 2022 and from 2023 to 2025.
According to the preferential tax policies for the integrated circuit industry and the software industry and the Announcement No. 10 of 2021 of the Ministry of Industry and Information
Technology of the People's Republic of China, the National Development and Reform Commission, the Ministry of Finance and the State Administration of Taxation, Hikrobot is a
qualified software enterprise., and is exempted from enterprise income tax in the first and second years after start of profiting and pays enterprise income tax at half of the 25%
statutory tax rate in the third to fifth years. The year of 2023 is the first year of HikRobot making profits and is exempted from enterprise income tax (2022: 15%).
292
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
(8) In accordance with the Announcement on the Filing of High-tech Enterprises Recognized by Zhejiang Provincial Identification Institution in 2022 issued by the Leading Group Office
of National High-tech Enterprise Identification Management on January 17, 2023, the Company’s subsidiary, Hangzhou Hikmicro Sensing Technology Co., Ltd. (hereinafter referred
to as "Hikmicro Sensing") was identified as the high-tech enterprise with a valid term of 3 years and the preferential tax period is from 2022 to 2024.
In accordance with the Preferential Tax Policies for Integrated Circuit and Software Industries, Hikmicro Sensing is a qualified intergrated circuit company, and is exempted from
enterprise income tax in the first and second years after start of profiting and pays enterprise income tax at half of the 25% statutory tax rate in the third to fifth years. The year of
2023 is the third year of Hikmicro Sensing making profits and enjoyed enterprise income tax at half of the 25% statutory tax rate (2022: tax-exempted).
(9) In accordance with the Announcement on the Filing of High-tech Enterprises Recognized by Zhejiang Provincial Identification Institution in 2022 issued by the Leading Group Office
of National High-tech Enterprise Identification Management on January 17, 2023, the Company’s subsidiary, Hangzhou Hikmicro Software Ltd. (hereinafter referred to as "Hangzhou
Hikmicro Software") was identified as the high-tech enterprise with a valid term of 3 years and the preferential tax period is from 2022 to 2024.
In accordance with the Preferential Tax Policies for Integrated Circuit and Software Industries, Hangzhou Hikmicro Software is a qualified software enterprise, and is exempted from
corporate income tax for the first year to the fifth year from the profitable year, and levied at a reduced rate of 10% in the subsequent years. The year of 2023 is the forth year of
Hikmicro Sensing making profits and is exempted from enterprise income tax (2022: tax-exempted).
(10) In accordance with the Recording List of the Second Batch of identified High-tech Enterprises of Hebei Province in 2022 issued by the Leading Group Office of Hebei Province's
High-tech Enterprise Identification Management on December 26, 2022, the Company’s subsidiary, Sensortech Hebei Technology Ltd. (hereinafter referred to as " Sensortech Hebei")
was identified as the high-tech enterprises with a valid term of 3 years and the preferential tax period is from 2022 to 2024. Therefore, the enterprise income tax is calculated and paid
on the basis of a reduced tax rate of 15% in the current reporting period.
(11) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Province in 2020 (Guo Ke Huo Zi [2020] No. 251) issued by the Leading
Group Office of National High-tech Enterprise Identification Management on December 29, 2020 and the list of High-tech Enterprises Identified and Reported by the Zhejiang
Provincial Accreditation Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management on December 28, 2023, the Company's
subsidiary, Hangzhou EZVIZ Software Ltd. (hereinafter referred to as "EZVIZ Software") was identified as the high-tech enterprise, and valid term for both are 3 years, and the
preferential tax period is from 2020 to 2022 and from 2023 to 2025.
According to the preferential tax policies for the integrated circuit industry and the software industry and the Announcement No. 10 of 2021 of the Ministry of Industry and Information
Technology of the People's Republic of China, the National Development and Reform Commission, the Ministry of Finance and the State Administration of Taxation, EZVIZ Software
is a qualified software enterprise, and is exempted from enterprise income tax in the first and second years after start of profiting and pays enterprise income tax at half of the 25%
statutory tax rate in the third to fifth years. The year of 2023 is fourth year of EZVIZ Software making profits and enjoyed the preferential enterprise income tax at half of the 25%
293
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
statutory tax rate (2022: half of the 25% statutory tax rate).
Note 2: In accordance with the requirements of the Notice on Software Product Value-added Tax Policy (Cai Shui [2011] No. 100) promulgated by the Ministry of Finance and the State
Administration of Taxation, as for self-developed software products sales of the Company, Hangzhou System, HikRobot, HikAuto Software, Hangzhou EZVIZ Software, Hikstorage
Technology, Hikimaging Technology, HikFire Technology, Hangzhou Rayin Technology, Hangzhou Microimage Software, Henan Haikang Hua’An BaoQuan Electronics Co., Ltd.
(hereinafter referred to as "Hua’An BaoQuan Electronics") , Hangzhou Kuangxin, Fuyang Baotai, Zhejiang Hailai Yunzhi Technology Co., Ltd., Sensortech Hebei, and Wuhu Sensortech
Intelligent Technology Ltd., the VAT shall be calculated and paid with tax rate of 13% at first, then the portion with actual tax bearing excess 3% shall be refunded after State Administration
of Taxation reviews.
Note 3: In accordance with the Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry Fa Gai Cai Jin [2022] No. 271, in 2022,
taxpayers in the production and life service industries will be deducted by 10% and 15% respectively according to the deductible input tax deductible for the current period (hereinafter
referred to as the "Additional Deduction Policy"). In accordance with the Announcement on clarifying policies such as VAT reduction and exemption for small-scale taxpayers (Ministry
of Finance, State Administration of Taxation Announcement [2023] No. 1), In 2023, the current deductible input tax for production and living services taxpayers will continue to be
deducted by 5% and 10% of the tax payable respectively.
The Company’s subsidiaries, a part of Hangzhou Hikvision Technology Ltd.’s branches , Chongqing System, Hangzhou Hikvision Security Equipment Leasing Service Co., Ltd., Anhui
Hikvision Urban Operation Service Co., Ltd., a part of Hangzhou EZVIZ Network Co., Ltd.(hereinafter referred to as "EZVIZ Network")'s branches, Zhejiang Haikang City Service Co.,
Ltd. Luliang Branch, Henan Hua’An Bao Quan Intelligent Development Co., Ltd. Luoyang Branch, Henan Hua’an Security Services Co., Ltd., and Guizhou Haikang Transportation Big
Data Co., Ltd. are complying with the provisions of the Additional Deduction Policy and were entitled to additional deduction preferential tax policy of input tax since 2022. Some
branches of the Company, subsidiaries such as Urumqi HaiShi Xin'An Electronic Technology Ltd., Chengdu Hikvision Digital Technology Ltd., Hangzhou EZVIZ Software, Hangzhou
branch of Zhejiang Hikfire Technology Ltd., Henan Hua'An Bao Quan Intelligent Development Ltd, Wuhan Hikvision Technology Ltd., and some branches of Hangzhou Haikang
Intelligent Technology Ltd. met the provisions of the VAT Additional Deduction Policy and were entitled to additional deduction preferential tax policy of input tax since 2023.
Note 4: In accordance with the Notice of the Ministry of Finance and the State Administration of Taxation on the Additional VAT Deduction Policy for Integrated Circuit Enterprises
(Finance and Taxation [2023] No. 17), from January 1, 2023 to December 31, 2027, enterprises in integrated circuit design, production, packaging and testing, equipment and materials
are allowed to deduct an additional 15% of the current deductible input tax to deduct the tax payable. The Company's subsidiary, Hikmicro Sensing complies with the provisions of the
policy and additional deducts an additional 15% of the current deductible input tax to deduct the tax payable.
V. Notes to Items in the Consolidated Financial Statements
1. Cash and Bank Balances
Unit: RMB
294
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Closing Balance Opening Balance
Item Exchange rate for Foreign currency Exchange rate for
Foreign currency amount RMB amount RMB amount
conversion amount conversion
Cash：
RMB - - 1,678.63 - - 1,710.03
EUR 147,128.30 7.8592 1,156,310.77 43,514.50 7.4229 323,003.75
USD 30,104.54 7.0827 213,221.43 32,583.86 6.9646 226,933.53
Other currencies - - 414,544.09 - - 658,417.85
Bank balance：
RMB - - 45,204,054,391.90 - - 35,604,295,321.02
USD 348,625,559.51 7.0827 2,469,210,250.34 369,237,191.93 6.9646 2,571,589,346.94
EUR 113,802,623.62 7.8592 894,397,579.52 116,323,339.53 7.4229 863,456,516.97
Other currencies - - 824,341,197.50 - - 568,425,909.28
Other currency funds:
RMB - - 179,985,499.57 - - 361,751,169.54
USD 2,700,309.07 7.0827 19,125,479.05 1,623,544.38 6.9646 11,307,337.16
EUR 565,119.25 7.8592 4,441,385.18 713,664.81 7.4229 5,297,462.51
Other currencies - - 32,128,116.48 - - 24,530,871.36
Total 49,629,469,654.46 40,011,863,999.94
Including: deposited in overseas banks 942,602,817.26 589,363,613.39
Details of other currency funds:
Unit: RMB
295
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Closing Balance Opening Balance
Foreign currency Exchange rate for Exchange rate for
Item RMB amount Foreign currency amount RMB amount
amount conversion conversion
Capitals with limitations：
Deposits for letter of credit - - 5,807,814.00 -
Bank acceptance bill - - 5,729,976.08 - - 9,477,411.92
Deposits for letter of guarantee - - 150,406,759.09 - - 126,434,505.79
Other security deposits - - 17,821,752.36 - - 13,666,564.66
Other capitals with limitations - - 30,425,005.23 - - 46,895,003.00
Subtotal 210,191,306.76 196,473,485.37
Capitals without limitations:
Deposit in payment instrument provided by third-party and
- - 25,453,125.41 - - 205,579,877.47
in securities account
Other currency funds in USD - - - 93,664.25 6.9646 652,334.03
Other currency funds in EUR 4,586.74 7.8592 36,048.11 24,403.36 7.4229 181,143.70
Subtotal 25,489,173.52 206,413,355.20
Total 235,680,480.28 402,886,840.57
2. Held-for-trading Financial Assets
Unit: RMB
Item Closing Balance Opening Balance
Derivative financial assets 37,380.00 12,807,438.36
Total 37,380.00 12,807,438.36
296
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
On December 31, 2023, derivative financial assets are forward foreign exchange contracts, and they are not designated as hedging instruments, and the gains or losses arising from changes
in their fair values are directly included in the current profit and loss.
3. Notes Receivable
1) Categories of notes receivable
Unit：RMB
Category Closing Balance Opening Balance
Bank acceptance bill 2,199,710,776.69 2,047,876,364.66
Finance company acceptance bill 123,274,741.72 136,900,226.65
Commercial acceptance bill 283,085,857.33 335,211,567.92
Total 2,606,071,375.74 2,519,988,159.23
2) As of December 31, 2023, notes receivable pledged by the Group
Unit：RMB
Item Amount pledged as of December 31, 2023
Bank acceptance bill 14,755,434.94
Total 14,755,434.94
3) At the end of the current reporting period, notes receivable endorsed or discounted by the Group but not yet due at the balance sheet day
Unit：RMB
Item Amount not derecognized as of December 31, 2023
297
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Bank acceptance bill 1,109,685,052.49
Finance company acceptance bill 47,808,575.05
Commercial acceptance bill 500,000.00
Total 1,157,993,627.54
As of December 31, 2023, the Group gave RMB1, 075,118,808.52 (2022: RMB1,175,364,261.35) undue bank acceptance bills to suppliers for endorsement, RMB47,808,575.05 (2022:
RMB7,048,955.85) undue acceptance bill of the finance company to suppliers for endorsement, RMB500,000.00 (2022: nil) undue commercial acceptance bill to suppliers for endorsement.
Discounted RMB34,566,243.97 (2022: 59,466,804.99) undue bank acceptance to banks. Since the Group has not transferred almost all the risks and rewards of ownership of financial
assets, the Group has not terminated its confirmation. For details, please refer to Note (V) 24 and Note (V) 31.3.
4) Classified disclosure by method of provision for bad debts.
Unit：RMB
Category Closing balance
Carrying amount Credit loss provision Book value
Amount Proportion (%) Amount Proportion (%) Amount
Provision for bad debts of notes receivables by portfolios
Including: Bank acceptance bill 2,199,710,776.69 84.33 - - 2,199,710,776.69
Non-bank acceptance bill 408,852,989.70 15.67 2,492,390.65 0.61 406,360,599.05
Total 2,608,563,766.39 100.00 2,492,390.65 0.10 2,606,071,375.74
Provision for bad debts of notes receivables by portfolios
Bank acceptance bill portfolio:
The Group believes that there is no significant credit risk to the acceptors of bank acceptance bills held by the Group, so no loss provision is made.
Non-bank acceptance bill portfolio:
298
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Unit：RMB
Closing balance
Item Expected average loss ratio (%)
Carrying amount Carrying amount Carrying amount
Non-bank acceptance bill portfolio 0.61 408,852,989.70 2,492,390.65 406,360,599.05
Total 0.61 408,852,989.70 2,492,390.65 406,360,599.05
5) Provision for bad debts of notes receivables.
Expected Credit loss for the entire duration Expected Credit loss for the entire duration
Provision for bad debts (not incurred (incurred Total
credit impairment) credit impairment)
Balance as of January 1, 2023 - - -
Balance as of January 1, 2023
During 2023：
-- Expected credit losses carried over to the entire duration (credit
- - -
impairment incurred)
Accrued for the current year 2,492,390.65 - 2,492,390.65
Balance as at December 31, 2023 2,492,390.65 - 2,492,390.65
6) Situation of provision
Amount of changes changed in the current reporting period Difference due to
Category Opening balance foreign currency Closing balance
Provision /Recollect or Reverse Recover or write-off
statement translation
Notes receivable - 2,492,390.65 - - 2,492,390.65
Total - 2,492,390.65 - - 2,492,390.65
4. Accounts Receivable
1) Disclosure by aging
Unit: RMB
299
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Aging Closing balance Opening balance
Within credit period 21,237,108,394.91 17,802,665,327.45
Within 1 year after exceeding credit period 12,622,668,221.07 10,468,264,283.90
1-2 years after exceeding credit period 2,520,053,396.18 1,906,850,057.03
2-3 years after exceeding credit period 1,029,311,890.05 907,553,767.72
3-4 years after exceeding credit period 579,297,343.23 762,308,314.38
Over 4 years after exceeding credit period 1,018,167,722.39 557,358,170.53
Total 39,006,606,967.83 32,404,999,921.01
Less: Credit impairment provision 3,191,433,456.39 2,498,705,510.61
Carrying amount 35,815,173,511.44 29,906,294,410.40
2) Classified disclosure of credit loss by provision methods
Unit: RMB
Closing Balance
Category Carrying amount Credit loss provision Book Value
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 39,006,606,967.83 100.00 3,191,433,456.39 8.18 35,815,173,511.44
Total 39,006,606,967.83 100.00 3,191,433,456.39 8.18 35,815,173,511.44
Unit: RMB
Beginning Balance
Category Carrying amount Credit loss provision Book Value
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 32,404,999,921.01 100.00 2,498,705,510.61 7.71 29,906,294,410.40
Total 32,404,999,921.01 100.00 2,498,705,510.61 7.71 29,906,294,410.40
Provision for credit loss by portfolios for accounts receivable
300
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Unit: RMB
Closing balance
Customer
Carrying amount Credit loss provision Proportion (%)
Portfolio A 4,676,680,000.49 67,836,989.17 1.45
Portfolio B 25,670,911,917.61 2,860,366,981.72 11.14
Portfolio C 8,659,015,049.73 263,229,485.50 3.04
Total 39,006,606,967.83 3,191,433,456.39 8.18
Description of credit loss provision by portfolios for accounts receivable
As part of the Group's credit risk management, the Group uses an impairment matrix to determine expected credit losses based on the ageing of accounts receivable beyond the credit
period, and divides the risk characteristics account receivables into portfolio A, portfolio B and portfolio C according to the risk characteristics of business areas and objects. And the
Company uses an impairment matrix to determine expected credit losses of each portfolio based on the ageing of accounts receivable beyond the credit period. These three portfolios
involve a large number of customers with the same risk characteristics. Aging information is able to reflect the solvency of these three types of customers when the accounts receivable
are due.
301
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
As of December 31, 2023 and January 1, 2023, the credit risk and expected credit losses during the duration of accounts receivable from portfolio A are as follows:
Unit: RMB
Closing balance Beginning balance
Age Expected average Bad debt Expected average Bad debt
Carrying value Book value Carrying value Book value
loss rate (%) provision loss rate (%) provision
Within credit period 0.02 3,906,568,313.68 852,571.17 3,905,715,742.51 0.03 2,958,550,090.46 952,575.87 2,957,597,514.59
Within 1 year after exceeding credit period 1.90 676,630,538.84 12,829,329.20 663,801,209.64 2.02 672,866,835.07 13,604,729.18 659,262,105.89
1-2 years after exceeding credit period 30.36 50,103,162.12 15,213,054.67 34,890,107.45 48.47 27,091,133.84 13,129,835.35 13,961,298.49
2-3 years after exceeding credit period 63.25 12,070,966.60 7,635,014.88 4,435,951.72 77.48 23,880,801.35 18,503,703.14 5,377,098.21
3-4 years after exceeding credit period 100.00 20,084,869.22 20,084,869.22 - 100.00 13,340,404.86 13,340,404.86 -
Over 4 years after exceeding credit period 100.00 11,222,150.03 11,222,150.03 - 100.00 8,509,701.80 8,509,701.80 -
Total 1.45 4,676,680,000.49 67,836,989.17 4,608,843,011.32 1.84 3,704,238,967.38 68,040,950.20 3,636,198,017.18
As of December 31, 2023 and January 1, 2023, the credit risk and expected credit losses during the duration of accounts receivable from portfolio B are as follows:
Unit: RMB
Closing balance Beginning balance
Age Expected average Bad debt Expected average Bad debt
Carrying value Book value Carrying value Book value
loss rate (%) provision loss rate (%) provision
Within credit period 0.80 10,001,831,444.99 80,372,286.33 9,921,459,158.66 0.76 8,531,459,822.34 65,085,907.08 8,466,373,915.26
Within 1 year after exceeding credit period 4.69 10,816,276,812.71 506,914,857.87 10,309,361,954.84 5.30 9,133,051,848.20 484,083,420.12 8,648,968,428.08
1-2 years after exceeding credit period 23.34 2,416,434,272.21 564,052,271.46 1,852,382,000.75 18.66 1,841,980,392.51 343,623,789.72 1,498,356,602.79
2-3 years after exceeding credit period 42.77 993,475,956.99 424,940,431.68 568,535,525.31 38.19 835,970,994.09 319,296,676.54 516,674,317.55
3-4 years after exceeding credit period 69.63 522,837,171.09 364,030,874.76 158,806,296.33 72.52 702,886,673.06 509,743,109.66 193,143,563.40
Over 4 years after exceeding credit period 100.00 920,056,259.62 920,056,259.62 - 100.00 500,527,605.77 500,527,605.77 -
Total 11.14 25,670,911,917.61 2,860,366,981.72 22,810,544,935.89 10.31 21,545,877,335.97 2,222,360,508.89 19,323,516,827.08
302
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
As of December 31, 2023 and January 1, 2023, the credit risk and expected credit losses during the duration of accounts receivable from portfolio C are as follows:
Unit: RMB
Closing balance Beginning balance
Age Expected average Bad debt Expected average
Carrying value Book value Carrying value Bad debt provision Book value
loss rate (%) provision loss rate (%)
Within credit period 0.28 7,328,708,636.24 20,812,836.46 7,307,895,799.78 0.25 6,312,655,414.65 15,648,321.26 6,297,007,093.39
Within 1 year after exceeding credit period 6.19 1,129,760,869.52 69,879,355.77 1,059,881,513.75 5.72 662,345,600.63 37,905,044.12 624,440,556.51
1-2 years after exceeding credit period 50.85 53,515,961.85 27,212,412.79 26,303,549.06 48.19 37,778,530.68 18,205,757.98 19,572,772.70
2-3 years after exceeding credit period 92.83 23,764,966.46 22,060,264.82 1,704,701.64 88.35 47,701,972.28 42,142,828.74 5,559,143.54
3-4 years after exceeding credit period 100.00 36,375,302.92 36,375,302.92 - 100.00 46,081,236.46 46,081,236.46 -
Over 4 years after exceeding credit period 100.00 86,889,312.74 86,889,312.74 - 100.00 48,320,862.96 48,320,862.96 -
Total 3.04 8,659,015,049.73 263,229,485.50 8,395,785,564.23 2.91 7,154,883,617.66 208,304,051.52 6,946,579,566.14
3) Bad debt provision
Unit: RMB
Amount of changes changed in the current reporting period Difference due to
Category Beginning balance foreign currency Closing balance
Provision Recollect or reverse Recover or write-off
statement translation
Accounts receivable 2,498,705,510.61 771,705,436.37 (28,120,329.42) (53,995,945.48) 3,138,784.31 3,191,433,456.39
Total 2,498,705,510.61 771,705,436.37 (28,120,329.42) (53,995,945.48) 3,138,784.31 3,191,433,456.39
303
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
4) Top five debtors based on corresponding closing balance of accounts receivable and contract assets (including
the part included in other non-current assets)
At the end of the current period, the aggregate amount of the Group's accounts receivable and contract assets (including
the part included in other non-current assets) of top five companies amounted to RMB2,211,990,742.07, accounting for
5.26% of the total year-end balance of accounts receivable and contract assets (including the part included in other non-
current assets), and the amount of provision for bad debts was RMB124,365,687.46.
5. Contract Assets
1) Details of contract assets:
Unit: RMB
Closing Balance Opening Balance
Items Provisions for Provisions for
Carrying amount Book value Carrying amount Book value
impairment impairment
Constructions 2,847,993,321.71 21,993,021.25 2,826,000,300.46 4,088,650,761.92 26,189,172.06 4,062,461,589.86
Maintenance
227,366,849.25 1,945,550.21 225,421,299.04 270,901,478.31 1,642,480.80 269,258,997.51
services
Less:
Contract
assets that are
included in 1,893,506,565.03 15,397,380.73 1,878,109,184.30 2,229,022,015.47 15,524,799.08 2,213,497,216.39
other non-
current assets
(Note (V) 22)
Total 1,181,853,605.93 8,541,190.73 1,173,312,415.20 2,130,530,224.76 12,306,853.78 2,118,223,370.98
2) The classification and disclosure of the method of provision for impairment of contract assets:
Unit: RMB
Closing Balance
Carrying amount Provisions for impairment Book value
Items
Proportion Provision
Amount Amount Amount
(%) proportion (%)
Provision for impairment on a single item - - - - -
Provision for impairment by portfolio 3,075,360,170.96 100.00 23,938,571.46 0.78 3,051,421,599.50
Total 3,075,360,170.96 100.00 23,938,571.46 0.78 3,051,421,599.50
Opening Balance
Carrying amount Provisions for impairment Book value
Items
Proportion Provision
Amount Amount Amount
(%) proportion (%)
Provision for impairment on a single item - - - - -
Provision for impairment by portfolio 4,359,552,240.23 100.00 27,831,652.86 0.64 4,331,720,587.37
Total 4,359,552,240.23 100.00 27,831,652.86 0.64 4,331,720,587.37
3) Provision for bad debts of contract assets (including the part included in other non-current assets) in the current
period:
Unit: RMB
Opening Amount of changes changed in the current reporting Difference due Closing
Category
balance period to foreign balance
304
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
currency
Recover or
Provision /Recollect or Reverse statement
write-off
translation
Contract assets 27,831,652.86 (3,893,081.40) - - 23,938,571.46
Total 27,831,652.86 (3,893,081.40) - - 23,938,571.46
305
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
6. Receivables for Financing
1) Receivables for financing by categories
Unit: RMB
Item Closing Balance Opening Balance
Bank acceptance bill 1,594,219,832.62 1,484,218,258.74
Total 1,594,219,832.62 1,484,218,258.74
2) At the end of the reporting period, the Group’s pledged receivables for financing
Unit: RMB
Item Amount pledged as of December 31, 2023
Bank acceptance bill 42,274,830.03
Total 42,274,830.03
3) At the end of the reporting period, receivables for financing endorsed or discounted by the Group that have not
yet expired on the balance sheet date.
Unit: RMB
Item Derecognized amount as of December 31, 2023
Bank acceptance bill 1,918,451,539.74
Total 1,918,451,539.74
4) The Group believes that the acceptance bank's credit rating of the bank acceptance bill held is high, and there is
no significant credit risk, so no loss provision is made.
7. Prepayment
1) Prepayments by aging analysis
Unit: RMB
Closing Balance Opening Balance
Aging
Carrying amount Proportion (%) Carrying amount Proportion (%)
Within 1 year 439,229,846.71 86.44 467,175,741.37 87.36
1-2 years 54,598,580.98 10.74 60,041,088.41 11.23
2-3 years 9,132,956.08 1.80 4,732,310.18 0.88
Over 3 years 5,190,022.15 1.02 2,830,980.56 0.53
Total 508,151,405.92 100.00 534,780,120.52 100.00
2) Closing balances of top five prepayments parties
As of December 31, 2023, the Group’s top five balances of prepayments amounted to RMB127,482,333.32, accounting
for 25.09% of total closing balance of prepayments.
306
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
8. Other Receivables
1) Other receivables by aging
Unit: RMB
Aging Closing balance Opening balance
Within contract period 497,347,123.04 435,726,390.34
Within 1 year 58,190,602.54 74,536,873.66
1-2 years 20,606,423.68 6,501,889.62
2-3 years 4,357,328.94 5,758,160.62
3-4 years 3,216,083.19 8,938,449.42
Over 4 years 20,110,646.73 15,094,368.40
Total 603,828,208.12 546,556,132.06
Less: Credit impairment provision 31,922,559.19 30,052,646.48
Carrying amount 571,905,648.93 516,503,485.58
2) Other receivables by nature of the payment
Unit: RMB
Item Closing Balance Opening Balance
Guarantee deposits 217,477,539.62 262,305,393.59
Repurchase payments for restricted share 169,968,816.44 80,136,229.12
Temporary payments for receivables 109,935,025.72 73,826,738.90
Tax rebates 27,765,998.37 2,166,013.19
Others 78,680,827.97 128,121,757.26
Total 603,828,208.12 546,556,132.06
307
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
3) Accrual for bad debts of other receivables
Unit: RMB
Stage 1 Stage 2 Stage 3
Bad debts allowance Expected credit loss for the entire Expected credit loss for the entire
Expected credit losses in the Total
duration (credit impairment has not duration (credit impairment has
next 12 months
incurred) occurred)
Balance on January 1, 2023 2,647,306.22 4,248,324.22 23,157,016.04 30,052,646.48
Balance on January 1, 2023
In the current reporting period:
--Transfer into stage 2 (353,543.76) 353,543.76 - -
-- Transfer into stage 3 - (770,375.76) 770,375.76 -
--Accrual/(reverse) in the current reporting period (742,798.46) 1,878,354.49 318,419.47 1,453,975.50
Derecognition of financial assets (including direct
- - (194,870.21) (194,870.21)
write-downs) and transfer out
Other changes 610,807.42 - - 610,807.42
Balance on December 31, 2023 2,161,771.42 5,709,846.71 24,050,941.06 31,922,559.19
4) Provision for bad debts of other receivables :
Unit: RMB
Amount of changes in the current reporting period Difference resulted from foreign
Category Opening balance Closing balance
Provision Recollect or reverse Recover write off currency statements conversion
Other receivables 30,052,646.48 4,492,138.91 (3,038,163.41) (194,870.21) 610,807.42 31,922,559.19
Total 30,052,646.48 4,492,138.91 (3,038,163.41) (194,870.21) 610,807.42 31,922,559.19
5) Top five debtors based on corresponding closing balance of other receivables
At the end of current period, the aggregate amount of other receivables of the top five debtors of the Group was RMB52,010,738.44, accounting for 8.61% of the total balance of other
receivables at the end of the year, and the provision for bad debts amounted to RMB170,901.46.
308
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
9. Inventories
1) Categories of inventories
Unit: RMB
Closing Balance Opening Balance
Provision for decline in value of Provision for decline in value of
Category
Carrying amount inventories/ Impairment provision Book value Carrying amount inventories/ Impairment provision Book value
for contract performance cost for contract performance cost
Raw materials 7,912,250,689.30 368,431,917.68 7,543,818,771.62 8,590,579,068.82 405,402,336.01 8,185,176,732.81
Work-in-progress 561,630,556.81 - 561,630,556.81 413,355,134.81 - 413,355,134.81
Finished goods 11,653,209,829.25 950,498,742.24 10,702,711,087.01 10,955,174,807.28 839,876,008.09 10,115,298,799.19
Contract performance cost 409,869,715.64 6,595,745.76 403,273,969.88 290,988,057.76 6,595,745.76 284,392,312.00
Total 20,536,960,791.00 1,325,526,405.68 19,211,434,385.32 20,250,097,068.67 1,251,874,089.86 18,998,222,978.81
2) Provision for decline in value of inventories
Unit: RMB
The amount accrued in the The amount reversed or resold in the current Effect on conversion of financial statements
Category Opening balance Closing Balance
current reporting period reporting period denominated in foreign currencies
Raw materials 405,402,336.01 150,471,908.41 187,442,326.74 - 368,431,917.68
Finished goods 839,876,008.09 337,092,072.44 260,187,047.99 33,717,709.70 950,498,742.24
Contract performance cost 6,595,745.76 - - - 6,595,745.76
Subtotal 1,251,874,089.86 487,563,980.85 447,629,374.73 33,717,709.70 1,325,526,405.68
The write-offs of provision for inventories in the current reporting period are due to use or sale of inventories.
3) Descriptions of the amortization amount of the contract performance cost for the current reporting period
For the contract performance cost recognized as an asset, the Group adopts the same basis as the recognition of revenue related to the asset, and includes it in the profit or loss for the
current period when the finished products of the project have been completed, installed and commissioned in accordance with the contract requirements and the acceptance certificate of
the other party has been obtained. The amount included in profit or loss for the current period in 2023 is RMB581,435,596.91.
309
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
10. Non-current Assets Due within One Year
Unit: RMB
Item Closing Balance Opening Balance
Long-term receivables due within one year (Note (V) 12) 1,079,721,006.23 996,902,343.27
Total 1,079,721,006.23 996,902,343.27
11. Other Current Assets
Unit: RMB
Item Closing balance Opening balance
Deductible VAT input 733,273,484.32 670,250,077.42
Prepaid corporate income tax 132,978,082.06 61,808,729.93
Prepaid tariff 32,945,213.90 17,113,351.36
Others 62,396,836.47 57,660,782.87
Total 961,593,616.75 806,832,941.58
310
Hikvision 2023 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2023 to December 31, 2023
12. Long-term Receivables
1) Details of long-term receivables
Unit: RMB
Closing balance Opening balance
Item Provision for
Carrying amount Book value Carrying amount Provision for impairment Book value
impairment
Financial leases receivables 265,985,187.99 53,601,885.63 212,383,302.36 294,708,514.70 41,885,999.65 252,822,515.05
Including: Unrealized income from financing 7,730,078.24 - 7,730,078.24 8,548,939.32 - 8,548,939.32
Installments business 1,191,642,272.96 235,773,626.86 955,868,646.10 916,676,013.71 125,838,244.59 790,837,769.12
Including: Unrealized income from financing 26,937,454.05 - 26,937,454.05 32,175,399.92 - 32,175,399.92
Employee housing loan 450,167,676.53 - 450,167,676.53 493,890,024.40 - 493,890,024.40
Including: Unrealized income from financing 42,598,988.47 - 42,598,988.47 44,084,149.81 - 44,084,149.81
Subtotal 1,907,795,137.48 289,375,512.49 1,618,419,624.99 1,705,274,552.81 167,724,244.24 1,537,550,308.57
Less: Non-current assets due within one year (Note (V) 10) 1,367,395,229.26 287,674,223.03 1,079,721,006.23 1,163,050,529.25 166,148,185.98 996,902,343.27
Total 540,399,908.22 1,701,289.46 538,698,618.76 542,224,023.56 1,576,058.26 540,647,965.30
2) Disclosure by method of provision for bad debts
Closing balance Opening balance
Item Provision for Provision for
Carrying amount Book value Carrying amount Book value
impairment impairment
Provision for bad debts by portfolio (including the portion
1,907,795,137.48 289,375,512.49 1,618,419,624.99 1,705,274,552.81 167,724,244.24 1,537,550,308.57
due within one year)
Including: portfolio of employees 450,167,676.53 - 450,167,676.53 493,890,024.40 - 493,890,024.40
Portfolio of financial leasing and installment
1,457,627,460.95 289,375,512.49 1,168,251,948.46 1,211,384,528.41 167,724,244.24 1,043,660,284.17
collection customers
Total 1,907,795,137.48 289,375,512.49 1,618,419,624.99 1,705,274,552.81 167,724,244.24 1,537,550,308.57
Portfolio of employees
The Group believes that the employees corresponding to the long-term receivable employee housing loans held by the Group all have labor relations with the Group and the Group
assesses that the relevant debtors have good credit records, and the Group believes that there is no significant credit risk and therefore loss of provision is made.
311
Hikvision 2023 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2023 to December 31, 2023
Portfolio of financial leasing and installment collection customers
As of December 31, 2023, the credit risk and expected credit losses of long-term receivables relevant to financial leasing and installment collection customers are as follows:
Unit: RMB
Closing balance
Age
Amounts Credit loss provision Estimated average loss rate (%)
Within credit period 586,838,996.39 4,056,119.29 0.69
Within 1 year after exceeding credit period 223,289,798.92 10,152,377.89 4.55
1-2 years after exceeding credit period 282,764,655.38 54,045,829.10 19.11
2-3 years after exceeding credit period 171,566,519.28 67,692,233.18 39.46
3-4 years after exceeding credit period 126,919,635.75 87,181,097.80 68.69
Over 4 years after exceeding credit period 66,247,855.23 66,247,855.23 100.00
Total 1,457,627,460.95 289,375,512.49 19.85
3) Provision for bad debts
Unit: RMB
Amount of changes in the current reporting period Difference resulted from foreign
Category Opening balance Closing balance
Provision Recollect or reverse write off currency statements conversion
Long term receivables 167,724,244.24 132,765,741.94 (374,441.79) (10,740,031.90) - 289,375,512.49
Total 167,724,244.24 132,765,741.94 (374,441.79) (10,740,031.90) - 289,375,512.49
312
Hikvision 2023 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2023 to December 31, 2023
13. Long-term Equity Investment
Unit: RMB
Increase/Decrease in the current reporting period
Closing
balance
Opening Investment Profit Adjustment to Declaration of Closing
The invested entity Other for
Balance Additional Investment (Loss) recognized other cash dividends Impairment Balance
Changes others impairment
Investments reduction under the equity comprehensive or profit provision provision
in equity
Method income distribution
1. Joint venture companies
Hangzhou Haikang
Intelligent Industrial Equity
829,825,387.60 - - (47,428,857.55) - 8,959,723.09 - - - 791,356,253.14 -
Investment Fund Partnership
(L.P.) (Note 1)
Zhejiang City Digital
26,341,510.80 - - 3,293,974.81 - - - - - 29,635,485.61 -
Technology Ltd.
Zhejiang Haishi Huayue
13,382,016.23 - - 685,265.42 - - - - - 14,067,281.65 -
Digital Technology Ltd.
Guangxi Haishi Urban
13,059,993.97 - - (609,658.09) - - - - - 12,450,335.88 -
Operation Management Ltd.
Xuzhou Kangbo Urban
Operation Management 10,385,566.88 - - 666,781.48 - - - - - 11,052,348.36 -
Service Ltd.
Others 6,752,804.77 - - (1,580,417.62) - - - - - 5,172,387.15 -
Subtotal 899,747,280.25 - - (44,972,911.55) - 8,959,723.09 - - - 863,734,091.79 -
2. Associated companies
Wuhu Sensortech Intelligent
98,094,380.52 - - (4,911,240.97) - - - - (93,183,139.55) - -
Technology Ltd. (Note 2)
Beijing Taifang Technology
39,695,050.60 - - (4,568,631.47) - 1,815,791.56 - - - 36,942,210.69 -
Co. Ltd. (Note 1)
313
Hikvision 2023 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2023 to December 31, 2023
Increase/Decrease in the current reporting period
Closing
balance
Opening Investment Profit Adjustment to Declaration of Closing
The invested entity Other for
Balance Additional Investment (Loss) recognized other cash dividends Impairment Balance
Changes others impairment
Investments reduction under the equity comprehensive or profit provision provision
in equity
Method income distribution
Jiaxin Haishi JiaAn Zhicheng
24,348,699.37 - - 4,792,796.03 - - (1,200,000.00) - - 27,941,495.40 -
Technology Ltd.
Zhiguang Hailian Big Data
22,425,370.08 - - 820,002.92 - - - - - 23,245,373.00 -
Technology Ltd.
Terapark (Nanjing) Ltd. 19,603,125.69 - - (1,345,340.17) - - - - - 18,257,785.52 -
Others (Note 1) 148,119,606.90 - - 20,218,847.36 - 12,645,477.19 - - - 180,983,931.45 -
Subtotal 352,286,233.16 - - 15,006,433.70 14,461,268.75 (1,200,000.00) - (93,183,139.55) 287,370,796.06 -
1,252,033,513.4
Total - - (29,966,477.85) - 23,420,991.84 (1,200,000.00) - (93,183,139.55) 1,151,104,887.85 -
1
Note 1: Changes in other equities during the reporting period was due to the changes in equity caused by increasing capital of the investee by other shareholders.
Note 2: During the reporting period, the Group acquired control of Wuhu Sensortech Intelligent Technology Ltd., which was included in the scope of the consolidated financial statements
and ceased to account for it as an associate. Please refer to Note (VI)(1) for details.
314
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
14. Other Non-current Financial Assets
Unit: RMB
Item Closing balance Opening balance
Investments in equity instruments (Note) 472,184,937.66 423,893,239.94
Total 472,184,937.66 423,893,239.94
Note: It refers to the Group’s equity investments of private companies. The Group has no control, joint control or
significant influence over the invested companies. During the current reporting period, the Company received a cash
dividend of RMB65,923,840.33 from the investees. (2022: RMB51,892,209.92) and recognized it as current profit and
loss. Please refer to Note (V) 53 for details.
15. Fixed Assets
1) Details of fixed assets
Unit: RMB
Buildings and General-purpose Special-purpose Transportation
Item Total
constructions equipment equipment vehicles
I. Total original carrying amount
1. Opening balance 7,452,114,917.55 1,795,698,464.97 2,966,436,208.66 101,263,567.44 12,315,513,158.62
2. Increase in the current
3,261,282,926.30 296,868,507.94 705,001,776.60 10,677,104.88 4,273,830,315.72
reporting period
1) purchase 17,608,212.61 289,377,081.84 497,497,368.94 8,493,541.10 812,976,204.49
2) transferred from
3,243,674,713.69 800,596.85 131,164,109.50 - 3,375,639,420.04
construction in progress
3) Increase due to business
- 6,690,829.25 70,412,972.99 2,183,563.78 79,287,366.02
combinations
4) transferred from
- - 5,927,325.17 - 5,927,325.17
inventory
3. Decrease in the current
22,462,439.97 50,086,906.77 53,392,631.11 6,681,905.52 132,623,883.37
reporting period
1) disposal or write-off 22,462,439.97 50,086,906.77 53,392,631.11 6,681,905.52 132,623,883.37
4. Effect on conversion of
financial statements
27,309,309.28 20,742,356.01 3,090,423.15 1,703,795.12 52,845,883.56
denominated in foreign
currencies
5. Closing Balance 10,718,244,713.16 2,063,222,422.15 3,621,135,777.30 106,962,561.92 16,509,565,474.53
II. Accumulated depreciation
1. Opening balance 1,509,685,892.00 760,815,155.19 1,440,166,642.10 65,002,838.65 3,775,670,527.94
2. Increase in the current
398,171,850.94 333,081,056.25 558,126,932.06 13,528,288.35 1,302,908,127.60
reporting period
(1) accrual 398,171,850.94 333,081,056.25 558,126,932.06 13,528,288.35 1,302,908,127.60
3. Decrease in the current
10,237,378.36 37,027,365.79 38,971,781.87 6,032,200.40 92,268,726.42
reporting period
(1) disposal or write- off 10,237,378.36 37,027,365.79 38,971,781.87 6,032,200.40 92,268,726.42
4. Effect on conversion of
financial statements
2,591,190.18 9,824,041.43 1,870,617.87 667,378.18 14,953,227.66
denominated in foreign
currencies
5. Closing balance 1,900,211,554.76 1,066,692,887.08 1,961,192,410.16 73,166,304.78 5,001,263,156.78
III. Total book value
Closing balance on book value 8,818,033,158.40 996,529,535.07 1,659,943,367.14 33,796,257.14 11,508,302,317.75
Opening balance on book value 5,942,429,025.55 1,034,883,309.78 1,526,269,566.56 36,260,728.79 8,539,842,630.68
315
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
2) As of December 31, 2023, the book value of the special-purpose equipment rent out through operating leasing
by the Group is RMB79,633,944.01.
3) Fixed assets of which certificates of title have not been granted as of December 31, 2023：
Unit: RMB
Carrying
Item Reason for certificates of title not granted
amount
Office space for branch offices 11,993,190.22 In the process of obtaining the real estate certificates
Wuhan Intelligence Industrial Park (Phase I) 952,872,640.65 In the process of obtaining the real estate certificates
Shijiazhuang Science and Technology Park Project (Phase I) 288,123,484.13 In the process of obtaining the real estate certificates
Total 1,252,989,315.00
316
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
16. Construction in Progress
1) Details of construction in progress
Unit: RMB
Closing balance Opening balance
Item
Carrying amount Provision Book value Carrying amount Provision Book value
Xi’an Science and Technology Park Project 1,189,310,650.73 - 1,189,310,650.73 510,141,028.55 - 510,141,028.55
EZVIZ Intelligent Manufacturing Chongqing Base
628,214,692.80 - 628,214,692.80 72,173,018.20 - 72,173,018.20
Project(Infrastructure Part)
Shijiazhuang Science and Technology Park Project
276,247,602.73 - 276,247,602.73 122,700,460.71 - 122,700,460.71
(Phase II)
Chongqing Science and Technology Park Project-
257,682,402.52 - 257,682,402.52 88,837,517.21 - 88,837,517.21
Phase III
Infrared Thermal Imaging Complete Machine
70,932,363.98 - 70,932,363.98 369,535.06 - 369,535.06
Products Industrial Base
HikRobot Product Industrial Base Construction
61,417,606.81 - 61,417,606.81 375,915.30 - 375,915.30
Project
HikRobot Intelligent Manufacturing (Tonglu) Base
20,299,490.56 - 20,299,490.56 658,673.77 - 658,673.77
Project
Wuhan Intelligence Industry Park Project Hangzhou
5,671,116.16 - 5,671,116.16 3,972,553.78 - 3,972,553.78
Innovation Industry Park (Phase II)
Chengdu Science and Technology Park Project - - - 1,424,680,236.64 - 1,424,680,236.64
Wuhan Intelligence Industrial Park (Phase I) - - - 362,495,271.16 - 362,495,271.16
Shijiazhuang Science and Technology Park Project
- - - 118,287,175.20 - 118,287,175.20
(Phase I)
Hikvision Global Warehousing Logistics Center
- - - 21,838,347.13 - 21,838,347.13
(Phase I)
Others 1,797,875,148.17 - 1,797,875,148.17 1,044,273,568.09 - 1,044,273,568.09
Total 4,307,651,074.46 - 4,307,651,074.46 3,770,803,300.80 - 3,770,803,300.80
2) Changes in significant construction in progress during the current reporting period
Unit: RMB
317
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Transferred to fixed Amount invested as Construction
Budget Increase in the current
Item Opening balance assets during the current Closing balance a proportion of in Progress Source of funds
(RMB 0,000) reporting period
reporting period budget amount (%) (%)
Xi’an Science and
162,269.00 510,141,028.55 679,169,622.18 - 1,189,310,650.73 73.29% 73.29% Self-financing
Technology Park Project
EZVIZ Intelligent
Manufacturing Self-financing/
117,011.00 72,173,018.20 556,041,674.60 - 628,214,692.80 53.69% 53.69%
Chongqing Base Project raised fund
(Infrastructure Part)
Shijiazhuang Science and
Technology Park Project 44,868.00 122,700,460.71 153,547,142.02 - 276,247,602.73 61.57% 61.57% Self-financing
(Phase II)
Infrared Thermal
Imaging Complete
82,485.00 369,535.06 70,562,828.92 - 70,932,363.98 8.60% 8.60% Self-financing
Machine Products
Industrial Base
HikRobot Product
Industrial Base 101,346.00 375,915.30 61,041,691.51 - 61,417,606.81 6.06% 6.06% Self-financing
Construction Project
HikRobot Intelligent
Manufacturing (Tonglu) 107,105.00 658,673.77 19,640,816.79 - 20,299,490.56 1.90% 1.90% Self-financing
Base Project
Wuhan Intelligence
Industry Park Project
154,009.00 3,972,553.78 1,698,562.38 - 5,671,116.16 0.37% 0.37% Self-financing
Hangzhou Innovation
Industry Park (Phase II)
Chengdu Science and
144,925.00 1,424,680,236.64 4,687,853.06 (1,429,368,089.70) - 98.63% 100.00% Self-financing
Technology Park Project
Wuhan Intelligence
98,398.00 362,495,271.16 597,753,883.32 (960,249,154.48) - 97.59% 100.00% Self-financing
Industrial Park (Phase I)
Shijiazhuang Science and
Technology Park Project 28,813.00 118,287,175.20 169,836,308.93 (288,123,484.13) - 100.00% 100.00% Self-financing
(Phase I)
Hikvision Global
Warehousing Logistics 10,846.00 21,838,347.13 84,761,013.93 (106,599,361.06) - 98.28% 100.00% Self-financing
Center (Phase I)
318
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
17. Right-of-use Assets
Unit: RMB
Building and General-purpose Special-purpose Transportation
Items Total
construction equipment equipment vehicles
I. Total original carrying amount
1. Opening balance 861,163,145.37 298,882.81 91,934,144.20 24,869,131.92 978,265,304.30
2. Increased 229,123,382.15 10,324,662.94 25,866,583.99 2,782,146.50 268,096,775.58
(1) New Lease 224,832,007.58 10,324,662.94 25,866,583.99 2,782,146.50 263,805,401.01
(2) Increase due to business
4,291,374.57 - - - 4,291,374.57
combination
3. Decreased 179,680,168.92 - - 5,137,402.08 184,817,571.00
(1) The lease contract
179,680,168.92 - - 5,137,402.08 184,817,571.00
expires or terminates early
4. Effect on conversion of
financial statements denominated 12,632,916.21 807,872.37 - 1,304,255.96 14,745,044.54
in foreign currencies
5. Closing balance 923,239,274.81 11,431,418.12 117,800,728.19 23,818,132.30 1,076,289,553.42
II. Accumulated depreciation
1. Opening balance 309,924,850.37 226,559.76 82,732,047.46 10,903,520.40 403,786,977.99
2. Increased 302,131,960.00 70,935.87 7,264,590.65 7,298,295.74 316,765,782.26
(1) Provisions 302,131,960.00 70,935.87 7,264,590.65 7,298,295.74 316,765,782.26
3. Decreased 167,472,776.16 - - 4,909,882.86 172,382,659.02
(1) The lease contract
167,472,776.16 - - 4,909,882.86 172,382,659.02
expires or terminates early
4. Effect on conversion of
financial statements denominated 6,396,667.01 2,819.46 - 658,569.06 7,058,055.53
in foreign currencies
5. Closing balance 450,980,701.22 300,315.09 89,996,638.11 13,950,502.34 555,228,156.76
III. Total book value
1. Closing balance on book value 472,258,573.59 11,131,103.03 27,804,090.08 9,867,629.96 521,061,396.66
2. Opening balance on book value 551,238,295.00 72,323.05 9,202,096.74 13,965,611.52 574,478,326.31
18. Intangible Assets
1) Details of construction in progress
Unit: RMB
Intellectual property
Item Land use right Application Software Franchise Total
right
I. Total original carrying
amount
1. Opening balance 1,582,307,939.63 70,012,763.87 397,648,996.73 103,241,971.57 2,153,211,671.80
2. Increased 133,103,621.97 204,053,373.52 20,394,567.15 7,025,910.47 364,577,473.11
(1) Purchase 133,103,621.97 653,373.52 16,673,506.15 7,025,910.47 157,456,412.11
(2) Increase due to
- 203,400,000.00 3,721,061.00 - 207,121,061.00
business combination
3. Decreased - 13,972.73 3,227,312.38 - 3,241,285.11
(1)Disposal or write-off - 13,972.73 3,227,312.38 - 3,241,285.11
4. Effect on conversion of
financial statements
- 102,207.17 1,865,009.42 (22,154.29) 1,945,062.30
denominated in foreign
currencies
5. Closing balance 1,715,411,561.60 274,154,371.83 416,681,260.92 110,245,727.75 2,516,492,922.10
319
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Intellectual property
Item Land use right Application Software Franchise Total
right
II. Total accumulated
amortization
1. Opening balance 135,271,377.29 68,378,497.22 342,499,507.53 20,094,724.08 566,244,106.12
2. Increased 35,098,426.85 30,023,838.10 29,175,003.52 4,627,368.42 98,924,636.89
(1)Accrual 35,098,426.85 30,023,838.10 29,175,003.52 4,627,368.42 98,924,636.89
3. Decreased - 3,027.46 3,133,019.98 - 3,136,047.44
(1)Disposal or write-off - 3,027.46 3,133,019.98 - 3,136,047.44
4. Effect on conversion of
financial statements
- 91,869.03 1,873,106.67 (15,364.11) 1,949,611.59
denominated in foreign
currencies
5. Closing balance 170,369,804.14 98,491,176.89 370,414,597.74 24,706,728.39 663,982,307.16
III. loss provision
1. Opening balance - - - 42,034,063.49 42,034,063.49
2. Closing balance - - - 42,034,063.49 42,034,063.49
Ⅳ. Total book value
1. Closing balance on book
1,545,041,757.46 175,663,194.94 46,266,663.18 43,504,935.87 1,810,476,551.45
value
2. Opening balance on
1,447,036,562.34 1,634,266.65 55,149,489.20 41,113,184.00 1,544,933,502.19
book value
2) At the end of the current reporting period, the land use right of the Group that has not completed the title
certificate is nil.
19. Goodwill
1) Goodwill book value
Unit: RMB
Increased Decreased Effect on
conversion of
Business combination financial
The name of the investee or the matter Opening
not involving Liquidation & statements Closing balance
that forming a goodwill balance
enterprises under cancellation denominated in
common control foreign
currencies
Wuhu Sensortech Intelligent
Technology Ltd. and its subsidiaries
- 92,088,117.87 - - 92,088,117.87
(hereinafter referred to as the
"Sensortech") (Note (VI), 1)
SISTEMAS Y SERVICIOS DE
79,881,823.62 - - 1,354,570.74 81,236,394.36
COMUNICACIN, S.A. DE C.V.
Henan HuaAn Baoquan Intelligence
61,322,871.63 - - - 61,322,871.63
development Ltd. and its subsidiaries
Hangzhou Kuangxin Technology Ltd. 59,060,454.06 - - - 59,060,454.06
Zhejiang Zhiyuan Fire Safety
8,199,253.77 - - - 8,199,253.77
Engineering Ltd.
BK EESTI AKTSIASELTS 4,464,161.60 - - 262,392.56 4,726,554.16
SIA "BK Latvia" 4,457,966.60 - - 262,028.43 4,719,995.03
Total 217,386,531.28 92,088,117.87 - 1,878,991.73 311,353,640.88
2) Information about the asset group or asset group combination to which the goodwill belongs
The composition and basis of the asset group or Whether it is consistent with
Name
portfolio to which it belongs previous years
Sensortech Not Applicable
320
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
SISTEMAS Y SERVICIOS DE
Yes
COMUNICACIN, S.A. DE C.V.
Henan HuaAn Baoquan Intelligence Yes
development Ltd. and its subsidiaries The portfolio of the assets generates cash inflows
Hangzhou Kuangxin Technology Ltd. independently. Yes
Zhejiang Zhiyuan Fire Safety Engineering Ltd. Yes
BK EESTI AKTSIASELTS Yes
SIA "BK Latvia" Yes
3) Goodwill impairment provision
When the Group conducts impairment test on goodwill at the end of the reporting period, the key assumptions adopted
and their basis are as follows:
The recoverable amount of asset group portfolios containing apportioned goodwill is determined according to the present
value of the estimated future cash flow of the relevant asset group portfolios. The forecast period for future cash flows is
5 years. The projection of future cash flows is based on management's estimate of sales revenue, cost of sales and operating
expenses for the expected period based on past performance and expectations of market developments. The cash flow
growth rate over 5 years is 0-2%..
During the reporting period, the Group did not find that the recoverable amount of the relevant asset group portfolios
including the apportioned goodwill was lower than its book value, so it is considered that there is no need to accrue
impairment loss for goodwill.
20. Long-term Deferred Expenses
Unit: RMB
Difference of
Increased due Other
Opening foreign Closing
Invested unit Increased to business Amortized decreased
Balance currency balance
combination amount
translation
Improvement
expenditure for leased 133,193,592.60 67,697,478.05 2,215,794.17 69,681,091.67 - 1,336,772.31 134,762,545.46
fixed asset
Employee housing
44,084,149.81 13,639,910.90 - 14,463,336.10 661,736.14 - 42,598,988.47
loan deferred interest
Total 177,277,742.41 81,337,388.95 2,215,794.17 84,144,427.77 661,736.14 1,336,772.31 177,361,533.93
21. Deferred Tax Assets/Deferred Tax Liabilities
1) Deferred tax assets that are not presented on net off basis
Unit: RMB
Closing balance Opening balance (Restated)
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Provision for impairment
1,127,769,340.63 278,268,231.18 1,244,117,898.85 303,398,701.08
losses of assets
Provision for credit loss 3,364,947,416.28 704,178,085.23 2,592,933,147.29 539,409,348.22
Share-based payments 93,168,926.31 16,404,683.77 102,865,533.19 18,154,808.30
Provisions 135,644,054.99 24,189,557.95 159,335,457.04 26,406,150.70
Accrued but unsettled
2,515,576,691.84 426,431,441.31 1,283,025,501.82 216,296,041.04
liabilities
Unrealized profit from inter-
2,578,365,430.99 367,414,352.61 2,407,578,813.30 361,136,821.99
group transactions
Changes in the fair value of 38,079,755.04 9,519,938.76 68,299,685.57 17,074,921.39
321
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Closing balance Opening balance (Restated)
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
derivative financial
instruments
Deferred income 940,537,242.40 127,045,105.84 913,846,162.56 108,383,170.93
Changes in fair value of
other non-current financial 32,396,750.76 4,859,512.61 32,701,261.48 4,905,189.22
assets
Difference in depreciation of
fixed assets and difference
199,086,488.75 32,012,352.33 305,795,669.55 13,305,393.19
in amortization of intangible
assets
Tax deductible losses 1,205,938,357.65 184,742,525.11 294,467,968.83 39,179,829.21
Lease liabilities 517,071,628.81 81,703,353.99 566,315,667.05 82,917,594.29
Others 79,735,281.12 23,121,972.50 - -
Total 12,828,317,365.57 2,279,891,113.19 9,971,282,766.53 1,730,567,969.56
2) Deferred tax liabilities that are not presented on net off basis
Unit: RMB
Closing balance Opening balance (Restated)
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Difference in depreciation of
fixed assets and difference in
1,446,155,125.82 257,662,359.02 1,439,877,224.17 256,804,768.33
amortization of intangible
assets
Long term investment –
partnership accounted by the 191,356,253.14 28,703,437.97 230,000,194.33 34,500,029.15
equity method
Changes in the fair value of
derivative financial 37,380.00 9,345.00 12,807,438.36 3,201,859.59
instruments
Changes in the fair value of
other non-current financial 19,420,700.00 4,855,175.00 - -
assets
Right-of-use assets 521,061,396.66 80,828,988.24 574,478,326.31 81,343,210.21
Valuation and appreciation of
assets of business
174,342,857.16 43,585,714.29 - -
combinations not under
common control
Others 47,107,004.45 15,740,059.70 - -
Total 2,399,480,717.23 431,385,079.22 2,257,163,183.17 375,849,867.28
3) Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset
Unit: RMB
Closing balance Opening balance (Restated)
Deferred tax assets or Offset amount at the Deferred tax assets or
Item Offset amount at the end
liabilities at the net beginning of the liabilities at the net
of the reporting period
amount after offset reporting period amount after offset
Deferred tax assets 301,518,101.04 1,978,373,012.15 259,370,391.30 1,471,197,578.26
Deferred tax liabilities 301,518,101.04 129,866,978.18 259,370,391.30 116,479,475.98
4) Details of unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary differences 342,665,221.23 896,347,987.05
322
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Deductible loss 3,281,013,576.44 2,279,586,556.97
Total 3,623,678,797.67 3,175,934,544.02
5) Deductible losses for unrecognized deferred tax assets will expire in the following years
Unit: RMB
Year Closing balance Opening balance
2023 - 23,615,749.83
2024 15,999,871.35 31,698,815.96
2025 6,519,258.67 16,588,829.27
2026 24,119,133.46 49,208,121.54
2027 38,699,273.23 99,525,057.16
2028 and beyond 3,195,676,039.73 2,058,949,983.21
Total 3,281,013,576.44 2,279,586,556.97
22. Other Non-current Assets
Unit: RMB
Closing balance Opening balance
Item
Carrying amount Provision Book value Carrying amount Provision Book value
Contract assets 1,893,506,565.03 15,397,380.73 1,878,109,184.30 2,229,022,015.47 15,524,799.08 2,213,497,216.39
Prepayments for
962,718,172.95 - 962,718,172.95 363,341,827.45 - 363,341,827.45
real estate
Prepayments for
acquisition of 1,049,973.59 - 1,049,973.59 127,079,348.02 - 127,079,348.02
land
Prepayments for
68,421,659.50 - 68,421,659.50 70,134,950.70 - 70,134,950.70
equipment
Prepayments for
8,032,635.16 - 8,032,635.16 39,467,612.18 - 39,467,612.18
infrastructure
Others 2,017,718.89 - 2,017,718.89 2,181,057.96 - 2,181,057.96
Total 2,935,746,725.12 15,397,380.73 2,920,349,344.39 2,831,226,811.78 15,524,799.08 2,815,702,012.70
23. Assets with Restriction in Ownership or Use Rights
Unit: RMB
Item Book value at the end of the current reporting period Cause of restriction
Cash and bank balances 210,191,306.76 Various guarantee deposits and other restricted funds
Endorsed to the supplier, discounted to the bank, and
Notes receivable 1,172,749,062.48
pledged for issuing bank acceptance bills
Receivables for financing 42,274,830.03 Pledged for issuing bank acceptance bills
Accounts receivable 320,648,995.89 Pledged for long-term borrowings
Contract assets 129,223,004.39 Pledged for long-term borrowings
Fixed assets 79,633,944.01 Fixed assets leased out under operating leases
Intangible assets 37,374,930.65 Pledged and mortgage for long-term borrowings
Other non-current assets 1,500,999,221.99 Pledge for long-term borrowings
Total 3,493,095,296.20
323
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Book value at the beginning of the current reporting
Item Cause of restriction
period
Cash and bank balances 196,473,485.37 Various guarantee deposits and other restricted funds
Endorsed to the supplier, discounted to the bank, and
Notes receivable 1,241,880,022.19
pledged for issuing bank acceptance bills
Receivables for financing 10,312.23 Pledged for issuing bank acceptance bills
Accounts receivable 344,585,345.01 Pledged for long-term borrowings
Contract assets 120,072,855.46 Pledged for long-term borrowings
Fixed assets 81,627,645.88 Fixed assets leased out under operating leases
Intangible assets 39,314,886.51 Pledged and mortgage for long-term borrowings
Other non-current assets 1,607,546,382.61 Pledge for long-term debts
Total 3,631,510,935.26
24. Short-term Borrowings
1) Categories of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Credit loan 2,084,385,782.09 3,283,605,167.90
Discounted but not expired notes 34,566,243.97 59,466,804.99
Total 2,118,952,026.06 3,343,071,972.89
2) As of December 31, 2023, the Group did not have any overdue short-term loans that were failed to repay.
25. Held-for-trading Financial Liabilities
Unit: RMB
Item Closing balance Opening balance
Derivative financial liabilities 38,079,755.04 68,299,685.57
total 38,079,755.04 68,299,685.57
As of December 31, 2023, derivative financial liabilities are forward foreign exchange contracts, which are not designated
as hedging instruments, measured at fair value and their changes are recognized in profit and loss for the current period.
26. Notes Payable
List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 1,163,687,279.58 1,207,756,963.94
Total 1,163,687,279.58 1,207,756,963.94
As of December 31, 2023, the Group did not have any unpaid matured notes payable.
324
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
27. Accounts Payable
1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payments for goods 18,669,058,955.74 15,803,616,247.96
Payables on project equipment 494,426,932.35 221,947,555.03
Total 19,163,485,888.09 16,025,563,802.99
2) As of December 31, 2023, the Group did not have any significant accounts payable with aging above one year.
28. Contract Liabilities
1) List of contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advanced receipts from product sales 2,411,948,613.09 2,177,001,350.72
Advanced receipts from construction settlement payment 267,231,078.24 216,246,689.72
Advanced receipts from other services payment 328,951,851.34 276,187,505.46
Subtotal 3,008,131,542.67 2,669,435,545.90
Less：Contract liabilities included in other non-current liabilities
30,140,767.27 24,939,037.54
(Note (V), 39)
Total 2,977,990,775.40 2,644,496,508.36
2) Qualitative and Quantitative Analysis on the Above Contract Liabilities:
Advanced receipts from product sales are prepayments for goods by customers and sales rebates provided to distributors.
Revenue will be recognized when the goods are shipped to or delivered to the customer, and sales rebates provided to
resellers will be recognized when resellers use sales rebates to offset the price.
Advanced receipts from construction settlement payment are the part of the contract price received or receivable from the
customer for the construction project according to the contract according to the contract provisions in excess of the
cumulative completed performance obligations, and the revenue will be recognized according to the performance progress
during the contract period.
Advanced receipts from other services payment are the cloud service fees paid in advance by some customers and the part
of the contract price received or receivable from customers for operation and maintenance according to the contract
provisions that exceeds the cumulative completed performance obligations, and the revenue will be recognized according
to the performance progress during the service period.
325
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
3) The carrying amount of contract liabilities amounted to RMB2,644,496,508.36 at the beginning of the period
has been recognized as revenue during the current period, and it is expected that RMB24,939,037.54 will be
recognized as revenue in 2024 and beyond. The carrying amount of contract liabilities amounted
RMB2,977,990,775.40 at the end of the period will be recognized as revenue in the coming year, and it is
expected that RMB30,140,767.27 will be recognized as revenue in 2025 and beyond.
29. Payroll Payable
1) Details of payroll payable
Unit: RMB
Increase in the Decrease in the
Item Opening balance current reporting current reporting Closing balance
period period
1. Short-term remuneration 4,709,892,590.60 18,001,049,804.45 16,679,876,818.99 6,031,065,576.06
2. Termination benefits – defined
127,409,865.35 1,192,491,826.12 1,230,712,775.25 89,188,916.22
contribution scheme
Total 4,837,302,455.95 19,193,541,630.57 17,910,589,594.24 6,120,254,492.28
2) List of Short-term remuneration
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
reporting period reporting period
1. Wages or salaries,
bonuses, allowances and 4,364,544,911.02 15,583,272,827.79 14,384,319,619.39 5,563,498,119.42
subsidies
2. Staff welfare - 388,419,203.15 387,806,211.19 612,991.96
3. Social insurance
67,666,467.66 667,823,973.44 696,729,006.77 38,761,434.33
contributions
Including:
64,600,517.79 637,023,906.26 664,815,124.67 36,809,299.38
Medical insurance
Injury insurance 2,577,031.70 24,539,736.41 25,372,514.43 1,744,253.68
Maternity insurance 488,918.17 6,260,330.77 6,541,367.67 207,881.27
4. Housing funds 3,892,614.17 1,072,855,370.62 1,076,747,984.79 -
5. Labor union and
273,788,597.75 288,678,429.45 134,273,996.85 428,193,030.35
education fund
Subtotal 4,709,892,590.60 18,001,049,804.45 16,679,876,818.99 6,031,065,576.06
3) List of defined contribution plan
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
1. Basic pension insurance 125,140,923.68 1,148,680,658.64 1,186,545,710.54 87,275,871.78
2. Unemployment insurance 2,268,941.67 43,811,167.48 44,167,064.71 1,913,044.44
Subtotal 127,409,865.35 1,192,491,826.12 1,230,712,775.25 89,188,916.22
Note: The Group participates in pension insurance and unemployment insurance plans established by government agencies
in accordance with regulations. According to these plans, the Group pays monthly fees to these plans in proportion to the
payment base. The Group has no other material obligation for the payment of pension benefits beyond the contributions
described above, and corresponding expenses were booked into current profits and losses or corresponding assets.
326
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
In 2023, the Group shall pay RMB1,148,680,658.64 and RMB43,811,167.48 to the pension insurance plan and
unemployment insurance plan respectively (2022: RMB1,079,281,000.54 and RMB40,304,044.61). As of December 31,
2023, the Group had fees payables of RMB87,275,871.78 and RMB1,913,044.44 (December 31, 2022:
RMB125,140,923.68 and RMB2,268,941.67), which were due but not paid during the reporting period for pension and
unemployment insurance plans.
30. Taxes Payable
Unit: RMB
Item Closing balance Opening balance
Corporate income tax 990,162,395.70 648,624,680.00
Value-added tax 476,076,769.76 380,413,435.90
City construction and maintenance tax 28,555,595.11 29,362,098.03
Education surcharges 11,969,432.94 13,048,855.45
Local education surcharges 8,314,407.76 9,328,597.02
Others 107,322,613.69 153,254,471.97
Total 1,622,401,214.96 1,234,032,138.37
31. Other Payables
1) Categories
Unit: RMB
Item Closing balance Opening balance
Dividend payable 253,957,413.29 300,150,894.34
Other payables 3,657,655,427.77 2,903,157,791.97
Total 3,911,612,841.06 3,203,308,686.31
2) Dividends payable
Unit: RMB
Item Closing balance Opening balance
Dividends of incentive restricted shares 155,844,168.00 187,657,918.50
Dividends payable to minority shareholders 98,113,245.29 112,492,975.84
Total 253,957,413.29 300,150,894.34
3) Other payables
(1) List of other payables according to the nature of the payment
Unit: RMB
Item Closing balance Opening balance
Unexpired commercial acceptance bills that were endorsed (Note
1,123,427,383.57 1,182,413,217.20
(V) 3)
Accrued expenses 1,682,496,005.40 988,937,734.54
Guarantee and deposit fees 445,461,469.36 401,628,843.74
Collection and payment on behalf 294,323,679.79 236,839,241.37
Other expense payable 111,946,889.65 93,338,755.12
Total 3,657,655,427.77 2,903,157,791.97
327
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
(2) As of December 31, 2023, the Group did not have any significant other payables aging over one year.
32. Non-current Liabilities Due within One Year
Unit：RMB
Item Closing balance Opening balance
Long-term borrowings due within one year (Note (V) 34) 5,627,525,836.16 562,906,197.43
Lease liabilities due within one year (Note (V), 35) 184,722,447.43 303,328,658.06
Long-term payables due within one year (Note (V) 36) 2,411,931.37 1,962,416.97
Total 5,814,660,214.96 868,197,272.46
328
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
33. Other Current Liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription payment of restricted shares 1,095,194,890.62 465,979,374.84
Output VAT to be transferred 386,027,153.57 457,742,218.94
Total 1,481,222,044.19 923,721,593.78
34. Long-term Borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan (Note 1) 1,259,495,605.29 1,363,216,974.37
Mortgage loan (Note 2) 320,694,296.02 229,070,200.25
Credit loan (Note 3) 12,959,458,895.86 6,315,934,364.41
Other borrowing (Note 4) 28,000,000.00 177,000,000.00
Less：Long-term loans due within one year (Note (V) 33) 5,627,525,836.16 562,906,197.43
Total 8,940,122,961.01 7,522,315,341.60
Note 1: As of December 31, 2023, the pledged loan was mainly obtained by the Group with all the rights and benefits
pledged under relevant PPP Projects. The maturity period is from June 20, 2028 to March 26, 2040, the above annual
interest rate of the loan is variable interest rate, ranging from 3.795% to 4.90%.
Note 2: As of December 31, 2023, the mortgage loan was obtained by the Group with the use right of land as the mortgage.
The maturity date is on August, 13, 2026 with the annual interest rate of 1-year LPR rate, which is adjusted each 12 months.
Note 3: At the end of the reporting period, the maturity period of credit loan is from June 27, 2024 to December 1, 2027,
and the annual interest rate ranges from 1.75% to 3.70%
Note 4: During 2016, the Group and CDB Development Fund Ltd. (CDBDF) jointly injected capital into Hikvision
Electronics Co., Ltd. ("Hangzhou Electronics"), a subsidiary of the Group. Pursuant to the capital injection agreement,
CDBDF would not participate in senior management personnel such as directors, and it would either take part in decision-
making or make significant influence on Hangzhou Electronics. The Group shall pay a 1.2% annualized return to CDBDF
through dividends or interest payments, and the Group is required to redeem its equity holdings from CDBDF in
installments each year from 2021 to 2024. Therefore, the capital injection by CDBDF is treated as a long-term loan. As
the end of the reporting period, the cumulative amount of equity held by the Group in Hangzhou Electronics held by the
Group from CDBDF is RMB149 million, and the balance of the loan is 28 million (December 31, 2022: RMB 177 million).
35. Lease Liabilities
Unit: RMB
Item Closing balance Opening balance
Lease liabilities 528,728,313.56 580,584,582.89
Less ：Lease liabilities due within one year (Note (V), 32) 184,722,447.43 303,328,658.06
Total 344,005,866.13 277,255,924.83
The Group's lease liabilities are analysed according to the maturity period of the remaining undiscounted contractual
obligations as follows:
Unit: RMB
Item Closing balance Opening balance
329
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Within 1 year 197,066,597.67 329,108,201.98
1- 5 years 324,095,420.30 232,457,044.47
Over 5 years 41,329,449.20 56,490,511.25
Total 562,491,467.17 618,055,757.70
36. Long-term Payables
Unit: RMB
Item Closing balance Opening balance
Purchase goods in installments 8,188,531.22 9,532,351.64
Less: Long-term payables due within one year (Note
2,411,931.37 1,962,416.97
(V), 32)
Total 5,776,599.85 7,569,934.67
37. Provisions
Unit: RMB
Item Closing balance Opening balance
Product quality warranty 197,386,826.08 205,095,341.94
Return payment payable 15,697,212.23 14,269,885.68
Total 213,084,038.31 219,365,227.62
38. Deferred Income
Unit: RMB
Increase in current Decrease in current
Item Opening balance Other changes Closing balance
reporting period reporting period
Government Subsidies
933,260,426.12 267,425,591.35 263,561,416.75 29,134,991.62 966,259,592.34
(Note (VIII), 1)
Total 933,260,426.12 267,425,591.35 263,561,416.75 29,134,991.62 966,259,592.34
39. Other Non-current Liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription for restricted stocks 1,642,792,335.93 2,806,169,050.05
Contract liabilities (Note (V), 28) 30,140,767.27 24,939,037.54
Total 1,672,933,103.20 2,831,108,087.59
40. Share Capital
Unit: RMB
330
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Changes for the current reporting period
Bon Transfer
Opening balance New issue of us from Closing balance
Others Subtotal
shares issu Capital
e Reserve
Total shares 9,430,920,624.00 - - (100,319,693.00) (100,319,693.00) 9,330,600,931.00
Note: According to the Proposal on the Unfulfilled Unlocking Conditions for the Third Unlocking Period of the 2018
Restricted Share Plan and the Repurchase of Restricted Shares Granted but Not Unlocked that is reviewed and approved
by the 17th meeting of the 5th session of the Board of Directors, the 15th meeting of the 5th session of the Board of
Supervisors and 2022 Annual General Meeting, as the Company performance did not meet the unlocking conditions for
the third unlocking period of the 2018 Restricted Stock Plan (Revised Draft), 33,331,858 restricted shares granted but not
unlocked in the current period for all grantees of the 2018 Restricted Stock Plan were agreed to be repurchased and
cancelled. In 2023, the Company reduced its share capital by RMB33,331,858.00 and its capital reserve by
RMB532,643,090.84. The Company completed the deregistration on July 5, 2023.
According to the resolutions of the 13th meeting of the 5th session of the Board of Directors of the Company and the second
Extraordinary General Meeting of shareholders in 2022 and the revised Articles of Association, the Company has
repurchased a total of 66,987,835 outstanding shares of the Company through a centralized bidding transaction through a
special securities account for share repurchase, reducing the share capital by RMB66,987,835.00 and the capital reserve
by RMB1,976,897,390.35. The company completed the deregistration on January 13, 2023.
41. Capital Reserves
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance reporting period reporting period Closing balance
(Note 1) (Note 2)
Share capital
9,289,814,942.29 226,657,083.90 2,527,333,896.79 6,989,138,129.40
premium
Other capital
851,338,493.03 190,086,646.32 165,659,505.23 875,765,634.12
reserves
Total 10,141,153,435.32 416,743,730.22 2,692,993,402.02 7,864,903,763.52
Note 1: The increase of RMB165,659,505.23 in the share capital premium in the current period was due to the transfer of
other capital reserves to share capital premiums due to the exercise of equity-settled share-based payments.
The increase of RMB6,300,234.59 in share capital premium in the current period was due to the transfer of an asset
portfolio of business held by the Company to its subsidiary, Micro Sensing.
During the current period, Hikrobot, a subsidiary of the Group, received a subsidy of RMB5,000,000.00 for the robot
R&D and industrialization project from the parent company of the Company, CETHIK Group Co., Ltd. (hereinafter
referred to as " CETHIK"), increasing the Group's share capital premium by RMB3,000,000.00 and minority interests of
RMB2,000,000.00. Please refer to Note (XI), 5(4) for details.
The increase of RMB1,067,943.25 in the share capital premium in the current period was the portion of the equity-settled
share-based payment to be shared by minority shareholders during the current period.
The increase of RMB50,629,400.83 in share capital premium in the current period was due to the Group's additional
investments in Shijiazhuang Sensortech Intelligent Technology Co., Ltd. (hereinafter referred to as "Shijiazhuang
Sensortech"), a subsidiary of the Group, by using equities held by the Group of Hangzhou Hikauto Technology Co., Ltd.
(hereinafter referred to as "Auto Technology") and its subsidiaries and Sensortech, Please refer to Note (VII), 2.
The increase in other capital reserves in the current reporting period of RMB168,614,816.28 is due to the equity-settled
share-based payment; RMB21,471,830.04 was due to changes in other equity of the investees in the long-term equity
investments accounted for by the equity method. .
.
331
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Note 2: The decrease of RMB1,976,897,390.35 in share capital premium in the current reporting period was due to the
repurchase and cancellation of 66,987,835 outstanding shares by the Company; RMB532,643,090.84 was due to the
repurchase and cancellation of 33,331,858 restricted shares by the Company. Please refer to Note (V), 40 for details.
RMB17,793,415.60 was due to the change in the Group's shareholding ratio in Hangzhou Kuangxin, a subsidiary, from
80% to 100.00%, as detailed in Note (VII), 2.
42. Treasury Shares
Unit: RMB
Increase in the current Decrease in the current
Item Opening Balance Closing balance
reporting period reporting period
Restricted shares
3,272,148,424.89 - 534,161,198.34 2,737,987,226.55
incentive scheme
Outstanding shares 2,043,885,225.35 - 2,043,885,225.35 -
Total 5,316,033,650.24 - 2,578,046,423.69 2,737,987,226.55
Note: Among the decrease in treasury shares during the current reporting period, the Company reduced treasury shares by
RMB2,043,885,225.35 due to the repurchase and cancellation of 66,987,835 outstanding shares, and the total decrease in
treasury shares by RMB534,161,198.34 due to the provision of cash dividends on restricted stocks, the repurchase and
cancellation of 33,331,858 shares of restricted shares of restricted shares under the 2018 equity incentive plan and the
reversal of the corresponding cash dividends of restricted stocks. For details, see Note (V), 40.
.
332
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
43. Other Comprehensive Income
Unit: RMB
Amounts occurred in the current reporting period
Less:
The before- transfer to
income-tax current
amount Less: Attributable to Attributable to
Opening period P/L
Item incurred income the parent minority Closing balance
balance from
during the tax company (after shareholders
current previous expense (after tax)
tax)
reporting other
period comprehens
ive income
Other incomes
that may be
reclassified (42,587,158.81) 183,798,707.05 - - 87,254,674.97 96,544,032.08 44,667,516.16
subsequently to
profit or loss
Including: Effect
on conversion of
financial
(42,587,158.81) 183,798,707.05 - - 87,254,674.97 96,544,032.08 44,667,516.16
statements
denominated in
foreign currencies
Other
comprehensive (42,587,158.81) 183,798,707.05 - - 87,254,674.97 96,544,032.08 44,667,516.16
income
.
333
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
44. Surplus Reserves
Unit: RMB
Increase in the Decrease in the
current current
Item Opening balance Closing balance
reporting reporting
period period
Statutory surplus reserves 4,715,460,312.00 - - 4,715,460,312.00
Total 4,715,460,312.00 - - 4,715,460,312.00
Note: According to the Company Law of the People's Republic of China and the Articles of Association of the Company, The Company shall
withdraw the statutory surplus reserve fund at 10% of the annual net profit of the parent company, and when the accumulated amount of the
statutory surplus reserve fund reaches more than 50% of the registered capital, it may not be withdrawn. The statutory surplus reserve can be
used to make up for losses or increase the share capital after approval.
45. Retained Earnings
Unit: RMB
Item 2023 2022 (Restated）
Retained Earnings at the close of the prior reporting period 49,460,240,986.49 45,148,877,451.52
before adjustments
Adjustments on retained earnings at the open of the current 182,975.56 (179,425.86)
reporting period
Retained Earnings at the close of current he reporting 49,460,423,962.05 45,148,698,025.66
period after adjustments
Add: Net profit attributable to the parent company for the 14,107,621,359.66 12,837,704,462.49
reporting period
Less: withdraws on the statutory surplus reserve - 42,954,964.00
Dividends payable on common shares (Note) 6,431,425,077.70 8,483,023,562.10
Retained earnings at the end of the current reporting period 57,136,620,244.01 49,460,423,962.05
Note：According to the resolution of 2022 Annual General Meeting dated on May 10, 2023, based upon the total capital share of the Company
on the equity distribution date, for each 10 ordinary shares, the Company distributed cash dividends of RMB 7 (tax inclusive), the rest of
retained earnings were all carried forward for future distributions.
46. Revenue/cost of sales and services
46.1 Revenue and cost of sales and services
Unit: RMB
2023 2022
Item
Revenue Cost Revenue Cost
Major business 88,735,530,906.73 49,244,429,307.10 82,542,204,243.66 47,602,859,697.82
Other business 604,325,948.95 392,626,538.23 624,117,437.48 393,394,768.50
Total 89,339,856,855.68 49,637,055,845.33 83,166,321,681.14 47,996,254,466.32
46.2 Revenue (By product or business type)
Unit: RMB
Item 2023 2022
Products and services for main business (Note) 68,779,757,950.20 65,873,570,961.21
Constructions of main business 2,007,188,913.81 2,222,876,059.14
Innovative businesses 18,552,909,991.67 15,069,874,660.79
Including: Robotic business 4,940,495,688.57 3,916,176,952.59
334
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Smart home business 4,686,023,001.37 4,077,290,933.03
Thermal imaging business 3,284,778,727.13 2,790,033,744.03
Auto electronics business 2,706,680,020.16 1,905,289,927.53
Storage business 1,931,387,706.41 1,616,267,518.08
Other innovative businesses 1,003,544,848.03 764,815,585.53
Total 89,339,856,855.68 83,166,321,681.14
Note: Main business refers to the business parts other than the innovative businesses.
46.3 Major business (by business type)
Unit: RMB
2023
Item
Revenue Cost
Product sales 84,971,000,242.56 47,055,941,178.02
Construction contract 2,007,188,913.81 1,529,858,191.39
Provide services 1,757,341,750.36 658,629,937.69
Total 88,735,530,906.73 49,244,429,307.10
46.4 Major business (by the time of revenue recognition)
Unit: RMB
2023
Item
Revenue Cost
Recognized at a point in time 84,971,000,242.56 47,055,941,178.02
Recognized over time 3,764,530,664.17 2,188,488,129.08
Total 88,735,530,906.73 49,244,429,307.10
47. Business Taxes and Surcharges
Unit: RMB
Items 2023 2022
City construction and maintenance tax 314,257,068.06 261,890,379.68
Education surcharges 136,548,924.16 114,135,419.82
Local education surcharges 91,032,619.45 76,090,687.28
Stamp duty 83,472,191.23 69,797,920.71
Real estate tax 68,387,163.53 50,840,111.92
Tax on use of land 7,973,676.69 7,492,257.10
Vehicle and vessel tax 142,212.47 144,621.51
Others 2,827,523.10 1,505,298.49
Total 704,641,378.69 581,896,696.51
48. Selling Expenses
Unit: RMB
Items 2023 2022
Payroll 6,810,618,419.65 6,373,360,098.93
Marketing Expenses 1,547,002,657.18 1,327,140,202.21
Shipping, transportation, and vehicle expense 399,732,317.41 397,419,186.30
335
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Travelling expenses 535,865,115.05 392,884,475.16
Office expenses 292,733,211.13 265,238,884.68
Business hospitality expenses 299,654,749.49 267,086,429.99
Rental expenses 97,873,220.30 72,212,549.78
Professional Intermediary expenses 204,146,036.74 202,590,077.82
Depreciation and amortization expenses 278,842,930.03 262,935,078.67
Others 376,032,121.27 212,590,352.69
Total 10,842,500,778.25 9,773,457,336.23
49. Administrative Expenses
Unit: RMB
Items 2023 2022
Payroll 1,694,010,419.43 1,621,419,524.98
Office expenses 300,566,514.26 295,789,889.76
Depreciation and amortization expenses 331,431,645.25 237,858,482.96
Professional Intermediary expenses 109,041,879.81 96,942,652.20
Travelling expenses 48,698,135.31 36,736,435.95
Shipping, transportation, car expense 62,205,098.49 62,093,258.21
Rental expenses 11,603,089.54 5,262,993.41
Business hospitality expenses 12,101,649.04 8,369,231.08
Others 200,072,979.27 277,640,903.45
Total 2,769,731,410.40 2,642,113,372.00
50. R&D Expenses
Unit: RMB
Items 2023 2022
Payroll 9,106,625,103.96 7,813,245,802.96
Consumables and service fees 827,535,055.34 786,747,111.47
Depreciation and amortization expenses 396,521,961.36 318,021,624.81
Office expenses 294,212,819.79 251,800,832.86
Intermediate testing fees 279,447,277.60 264,433,773.09
Travelling expenses 197,702,784.59 169,736,403.69
New product design fees 186,837,407.75 132,053,314.05
Rental expenses 8,832,413.30 8,122,851.03
Others 95,233,580.78 70,282,546.59
Total 11,392,948,404.47 9,814,444,260.55
51. Financial Expenses
Unit: RMB
Items 2023 2022
Interest expenses 443,682,056.79 296,404,671.30
Interest expense on lease liabilities 20,277,211.42 20,907,764.05
336
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Less: Interest income 1,067,148,666.93 921,912,411.61
Foreign exchange losses (gains) (201,813,404.51) (428,082,371.67)
Less: Capitalized specific loan interests and foreign 6,354,148.62 (2,660,111.75)
exchange differences on specific loan
Others 61,576,738.73 39,620,702.86
Total (749,780,213.12) (990,401,533.32)
52. Other Income
Unit: RMB
Items 2023 2022
VAT refund 1,905,727,477.36 1,753,740,330.32
Special subsidies 594,438,518.34 707,753,385.13
Tax reduction 59,356,844.63 20,974,140.52
Total 2,559,522,840.33 2,482,467,855.97
53. Investment Income
Unit: RMB
Items 2023 2022
Long-term equity investment gains (losses) based on the equity (29,966,477.85) 106,498,595.01
method
Investment income from other non-current financial assets during 65,923,840.33 51,892,209.92
the holding period
Investment income from disposal of non-current financial assets - 1,260,000.00
Investment income (losses) from disposal of held-for-trading (90,195,333.19) 55,194,649.80
financial assets
Income (losses) from multi-transactions business combination of 116,433,610.45 -
enterprises not under the same control (Note (VI)1(4))
Investment income from disposal of subsidiaries and other business - 3,550,851.71
units
Others 1,106,664.51 -
Total 63,302,304.25 218,396,306.44
54. Gains (Losses) from Changes in Fair Values
Unit: RMB
Sources of gains (losses) from changes in fair values 2023 2022
Held-for-trading financial assets (12,770,058.36) (21,549,304.93)
Including: gains on the changes in fair value of derivative financial (12,770,058.36) (21,549,304.93)
instruments
Gains (Losses) from changes in fair value of other non-current 5,229,385.72 (69,793,177.28)
financial assets
Held-for-trading financial liabilities 30,219,930.53 (64,225,038.68)
Including: gains (losses) on the changes in fair value of derivative 30,219,930.53 (64,225,038.68)
financial instruments
Total 22,679,257.89 (155,567,520.89)
337
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
55. Credit Impairment Gains (Losses)
Unit: RMB
Items 2023 2022
Credit impairment gains (losses) on notes receivable (2,492,390.65) -
Credit impairment gains (losses) on accounts receivable (743,585,106.95) (532,337,205.31)
Credit impairment reverses gains (losses) on other receivables (1,453,975.50) (4,552,362.71)
Credit impairment gains (losses) on long-term receivables (132,391,300.15) (48,271,667.43)
Total (879,922,773.25) (585,161,235.45)
56. Impairment Gains (Losses) of Assets
Unit: RMB
Items 2023 2022
Gains (losses) on inventory depreciation (467,275,356.52) (473,766,927.68)
Gains (losses) on impairment of intangible assets - (42,034,063.49)
Gains on contract assets impairment 3,893,081.40 7,347,162.35
Total (463,382,275.12) (508,453,828.82)
57. Non-operating Income
Unit: RMB
The amount booked into current
Items 2023 2022 period non-recurring profits and
losses
Fines and confiscations 71,548,457.58 65,172,834.46 71,548,457.58
Government subsidies 630,722.79 884,540.66 630,722.79
Others 15,393,939.67 21,308,610.36 15,393,939.67
Total 87,573,120.04 87,365,985.48 87,573,120.04
58. Non-operating Expenses
Unit: RMB
2022 The amount booked into current period
Items 2023
non-recurring profits and losses
Losses on disposal of non-current assets 4,832,681.02 1,038,677.10 4,832,681.02
Local water conservancy construction fund 2,682,863.47 2,055,980.46 -
Donation expenses 2,078,792.44 1,575,092.28 2,078,792.44
Others 18,338,679.98 10,404,363.27 18,338,679.98
Total 27,933,016.91 15,074,113.11 25,250,153.44
59. Income Tax Expenses
59.1 Details of income tax expenses
338
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Unit: RMB
Items 2023 2022 (Restated)
Income tax for the current reporting period 1,839,065,829.64 1,829,079,291.07
Deferred income tax expenses (535,918,231.15) (243,141,372.78)
Differences in filing and payment of income tax in previous (359,906,588.34) (289,116,386.50)
reporting years
Total 943,241,010.15 1,296,821,531.79
59.2 Reconciliation of income tax expenses to the accounting profit
Unit: RMB
Unit: RMB Item 2023 2022 (Restated)
Total profit 16,098,924,197.11 14,854,951,627.47
Income tax expenses calculated at applicable tax rates of 2,414,838,629.55 2,228,242,744.12
15%
Impact of non-deductible costs, expenses and losses 34,413,929.90 53,248,187.90
Tax effect of non-taxable income (98,174,019.29) (2,963,187.15)
Impact of deductible temporary differences or deductible 172,197,460.01 105,389,667.58
losses for which no deferred income tax assets is
recognized for the current period
Impact of using deductible temporary differences or (117,780,210.38) (127,946,065.51)
deductible losses for which no deferred income tax assets
was recognized for the prior periods
Differences of income tax annual filing (359,906,588.34) (289,116,386.50)
Impact by different tax rates applicable to different 184,249,925.30 163,817,215.68
subsidiaries
Impact of additional deduction of R&D expenses (1,272,836,446.36) (920,031,766.64)
Others (13,761,670.24) 86,181,122.31
Income tax expenses 943,241,010.15 1,296,821,531.79
60. Notes to Consolidated Cash Flow Statement Items
60.1 Cash flow from operating activities
Other cash receipts relating to operating activities
Unit: RMB
Items 2023 2022
Interest income 938,138,655.67 769,911,170.27
Government subsidies 598,933,415.73 903,309,813.09
Withdrawal of restricted currency funds 115,110,998.04 334,647,085.86
Others 154,282,918.61 94,532,468.51
Total 1,806,465,988.05 2,102,400,537.73
Other cash payments relating to operating activities
Unit: RMB
Item 2023 2022
Advertising and Selling services 1,100,850,473.21 1,094,845,870.81
Office expenses and business expenses 1,714,208,976.51 1,357,207,317.97
Shipping and transportation expense 461,937,415.90 459,512,444.51
R&D expense 1,310,339,918.88 1,276,697,213.62
339
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Item 2023 2022
Travelling expense 771,400,658.11 561,674,225.16
Outsourcing service fees, fees for hiring intermediaries, etc. 457,158,581.72 473,912,644.83
Rental expense 118,308,723.14 85,598,394.22
Deposits to restricted monetary funds 123,808,399.08 256,100,102.65
Others 229,904,403.53 415,552,270.26
Total 6,287,917,550.08 5,981,100,484.03
60.2 Cash flow from investing activities
Cash receipts relating to important investing activities
Unit: RMB
Item 2023 2022
Forward foreign exchange contract payments 4,687,808,134.25 7,278,782,403.07
Total 4,687,808,134.25 7,278,782,403.07
Cash payments relating to important investing activities
Unit: RMB
Item 2023 2022
Forward foreign exchange contract payments 4,778,003,467.44 7,223,587,753.27
Cash paid for the purchase and construction of fixed assets, 3,755,680,900.22
4,047,816,024.05
intangible assets and other long-term assets
Total 8,825,819,491.49 10,979,268,653.49
Other cash receipts relating to investing activities
Unit: RMB
Item 2023 2022
Receipts of financing lease payments 121,237,455.42 47,587,599.27
Net cash receipts from acquiring subsidiaries and other business - 182,816.96
units
Total 121,237,455.42 47,770,416.23
60.3 Cash flow from financing activities
Other cash receipts relating to financing activities
Unit: RMB
Item 2023 2022
Cash receipts from CETHIK’s project fund (refer to XI 5(4) for
5,000,000.00 -
details)
Other cash payments relating to financing activities
Unit: RMB
Item 2023 2022
Repurchase of outstanding shares - 2,043,885,225.35
Repurchase of restricted shares 655,807,536.16 38,851,853.10
Repayment of lease liabilities 285,474,093.26 228,009,188.10
Consideration paid for the acquisition of minority shareholder 56,000,000.00 -
equity
Total 997,281,629.42 2,310,746,266.55
340
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Influence of financing activities on liabilities
Unit: RMB
Item 31 Dec. 2022 2023 31 Dec. 2023
Cash influence Non-cash influence
Lease liabilities (including lease 580,584,582.89 (285,474,093.26) 233,617,823.93 528,728,313.56
liabilities due within one year)
Long-term borrowings (including 11,428,293,511.92 4,431,528,588.77 826,778,722.54 16,686,600,823.23
loan due within one year) and short-
term loan
Dividends payable 300,150,894.34 (6,657,248,457.47) 6,611,054,976.42 253,957,413.29
Total 12,309,028,989.15 (2,511,193,961.96) 7,671,451,522.89 17,469,286,550.08
61. Supplementary Information about Cash Flow Statement
61.1 Supplementary information about cash flow statement
Unit: RMB
Supplementary information 2023 2022 (Restated)
1. Reconciliation of net profit to cash flows from
operating activities:
Net profit 15,155,683,186.96 13,558,130,095.68
Add: Impairment of assets 463,382,275.12 508,453,828.82
Provision for credit losses 879,922,773.25 585,161,235.45
Fixed assets depreciation 1,302,908,127.60 928,114,412.10
Amortization of right-of-use assets 316,765,782.26 246,373,656.24
Amortization of intangible assets 98,924,636.89 79,676,213.21
Long-term deferred expenses amortization 84,144,427.77 81,486,526.31
Losses on disposal of fixed assets, intangible 5,674,511.78 17,578,905.00
assets and other long-term assets
Fixed asset scrapping losses 4,832,681.02 1,038,677.10
Losses (gains) from changes in fair value (22,679,257.89) 155,567,520.89
Financial expenses 325,040,311.15 165,311,194.01
Investment income (63,302,304.25) (218,396,306.44)
Share-based payment based on equity 207,616,877.93 620,309,681.65
settlement
Decrease (increase) of restricted funds (8,697,401.04) (78,546,983.21)
Decrease (increase) in deferred income tax (507,175,433.89) (259,857,130.93)
assets
Decrease (increase) in deferred income tax (54,853,902.30) 20,899,178.93
liabilities
Increase (decrease) in inventories (365,476,343.55) (1,510,338,683.95)
Decrease of other operating non-current assets 340,718,688.36 560,599,677.46
Decrease (increase) in operating receivables (6,131,432,357.74) (4,921,967,123.64)
Increase (decrease) in operating payables 4,587,392,851.89 (570,133,160.37)
Increase in deferred income 3,864,174.60 194,673,968.07
Net cash flows from operating activities 16,623,254,305.92 10,164,135,382.38
2. Net changes in cash and cash equivalents:
Closing balance of cash 49,419,278,347.70 39,815,390,514.57
Less: Opening balance of cash 39,815,390,514.57 34,603,944,429.20
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
341
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Supplementary information 2023 2022 (Restated)
Net Increase (decrease) in cash and cash 9,603,887,833.13 5,211,446,085.37
equivalents
61.2 Net cash paid for obtaining subsidiaries during the current year
Unit: RMB
Amounts
Cash or cash equivalents paid for the business combination in this year 56,297,070.00
Including: Sensortech 56,297,070.00
Less: Cash and cash equivalents held by subsidiaries of the Company on the acquisition date 12,304,418.18
Including: Sensortech 12,304,418.18
Net cash paid for obtaining the subsidiary 43,992,651.82
61.3 Constituents of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
Cash 49,419,278,347.70 39,815,390,514.57
Including: Cash on hand 1,785,754.92 1,210,065.16
Bank deposit for payment at any time 49,392,003,419.26 39,607,767,094.21
Other monetary capital for payment at any time 25,489,173.52 206,413,355.20
Cash equivalents - -
Closing balance of cash and cash equivalents 49,419,278,347.70 39,815,390,514.57
62. Monetary Items of Foreign Currencies
Unit: RMB
Balance in foreign currency at Exchange rate for Balance of RMB converted at
Items
the end of the reporting period conversion the end of the reporting period
Cash and bank balances
Including: USD 345,102,648.21 7.0827 2,444,258,526.49
EUR 99,421,307.43 7.8592 781,371,939.39
Accounts receivable
Including: EUR 291,000,515.77 7.8592 2,287,031,253.54
USD 143,302,128.57 7.0827 1,014,965,986.02
Short-term borrowings
Including: EUR 100,118,494.44 7.8592 786,851,271.50
USD 9,104,951.02 7.0827 64,487,636.60
Accounts payable
Including: USD 36,895,825.04 7.0827 261,322,060.01
EUR 681,400.79 7.8592 5,355,265.09
Non-current liabilities due within
one year - Long-term borrowings
Including: EUR 142,034,711.11 7.8592 1,116,279,201.56
342
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
63. Lease
63.1 As lessee
The company leases a number of assets, including houses and buildings, general equipment, special purpose equipment and transport
vehicles, ranging from 1 month to 13 years. Such assets cannot be used for loan, mortgage, guarantee and other purposes.
The total amount of short-term lease expenses and lease expenses of low-value assets included in profit or loss for the period was
RMB133,767,688.72 (2022: RMB99,598,934.33).
Total lease-related cash outflows for the year is RMB 419,241,781.98 (2022: RMB 327,608,122.43)
63.2 As a lessor
Operating lease as a lessor
,Unit: RMB
Among which: income related to variable lease payments not
Item Lease income
included in lease collections
Special equipment lease 101,525,163.21
Total 101,525,163.21
The company’s operating leases as a lessor relate to special equipment.
Financial lease as a lessor
,Unit: RMB
Income related to variable lease
Item Profit or loss on sales Financing proceeds payments that are not included in
net lease investments
Special equipment lease 19,182,712.36 7,238,000.91
Total 19,182,712.36 7,238,000.91
As a lessor, the Group entered into financial lease contracts with customers in relation to special equipment.
63.3 Gains and losses on finance lease as a manufacturer
,Unit: RMB
Item Sales Costs Gains or loss on finance lease
Special equipment finance lease 50,557,589.47 31,374,877.11 19,182,712.36
Total 50,557,589.47 31,374,877.11 19,182,712.36
VI. Changes in Consolidation Scope
1. Business Combination of Enterprises Not under the Same Control
1.1 Business combination of enterprises not under the same control
Sensortech
The company held 35% shares of Wuhu Sensortech Intelligent Technology Ltd., and accounted it as an associate. In
January 2023, the Company and the original shareholder of Wuhu Sensortech signed the Equity Acquisition Agreement,
agreed to acquire 9.40% equity of Wuhu Sensortech held by the original shareholder for RMB56,297,070.00. On February
28, 2023, the delivery of Sensortech Equity was completed and the Group has acquired 44.40% equity of Sensortech.
Meanwhile, as some shareholders of Wuhu Sensortech Intelligent Technology Ltd. issued a waiver of voting rights, the
Company obtained more than half of Sensortec’s voting rights, and therefore included it in the scope of consolidation. At
the close of 2023, the Company had completed the payment of equity transfer.
Unit: RMB
343
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Income of Net profit of
Equity Basis for
Time of acquisitio Equity acquiree from acquiree from
Name of the Equity determining
equity acquisition Date of acquisition acquisition data acquisition data
acquiree acquisition cost n ratio the
acquisition method to the end of the to the end of the
(%) acquisition
reporting period reporting period
date
February 28, Cash obtained
Sensortec
2023
56,297,070.00 9.40 February 28, 2023 589,748,080.19 15,559,734.36
Payments control
1.2 Cost of business combination and goodwill
Unit: RMB
Cost of business combination Sensortec
- Cash 56,297,070.00
- Fair value of equity held prior to the purchase date at the purchase date 209,616,750.00
Total cost of business combination 265,913,820.00
Less: The fair value share of identifiable net assets obtained 173,825,702.13
Goodwill 92,088,117.87
1.3 The assets and liabilities of the acquiree can be identified on the date of purchase
Unit: RMB
Sensortech (Note)
Fair value on the date of acquisition Fair value on the date of acquisition
Assets:
Cash and bank balances 17,324,838.53 17,324,838.53
Accounts receivable 191,923,998.93 191,923,998.93
Inventories 354,659,691.82 303,058,398.74
Fixed assets 79,287,366.02 79,287,366.02
Intangible assets 207,121,061.00 3,721,061.00
Other assets 100,292,827.66 100,292,827.66
Total assets 950,609,783.96 695,608,490.88
Liabilities:
Short-term borrowings 327,277,293.17 327,277,293.17
Accounts payable 86,533,455.87 86,533,455.87
Deferred tax payable 66,897,446.03 3,147,122.76
Other payables 78,402,259.76 78,402,259.76
Total liabilities 559,110,454.83 495,360,131.56
Net assets: 391,499,329.13 200,248,359.32
Less: Minority equity 217,673,627.00 111,338,087.78
Net assets acquired 173,825,702.13 88,910,271.54
Note: The fair value of intangible assets is valued using the income method and the fair value of other identifiable assets and liabilities is
valued using the asset basis method. The company has no contingent liabilities of the purchase to be assumed.
1.4 Fair value of the purchased equity prior to the purchase day
344
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Other comprehensive
Gain or loss of the Methods of using fair income related to the
Book value of the Fair value of the
purchased equity from value to assess the purchased equity prior
Name of the acquiree purchased equity prior purchased equity prior
reassessment using purchased equity prior the purchase day that
to the purchase day to the purchase day
fair value to the purchase day can be transferred into
investment income
Sensortec 93,183,139.55 209,616,750.00 116,433,610.45 Income approach -
2. Changes of Consolidation Scope due to Other Causes
The subsidiaries newly established and incorporated in the consolidation scope during the current reporting
period as follows:
Company Name Time of establishment Registered capital
Zhejiang Haishi Luyue Technology. Ltd. Auguest 2023 RMB 20 million
LLC VIETNAM HIKVISION TECHNOLOGY
Auguest 2023 USD 0.3 million
COMPANY LIMITED
Shijiazhuang Haishi Digital Technology. Ltd. November 2023 RMB 5 million
Hikrobot Europe B.V. (Note) November 2023 USD 0.8 million
Hikrobot Singapore Pte. Ltd. (Note) November 2023 USD 0.5 million
Zhengzhou Hikvision Technology. Ltd. (Note) December 2023 RMB 300 million
Note: As of the end of this year, Hikrobot Europe B.V., Hikrobot Singapore Pte. Ltd., Zhengzhou Hikvision Technology.
Ltd. have not yet completed their paid-in capital.
VII. Interest in Other Entities
1. Equity in Subsidiaries
(1) Composition of the corporate group
Location of Place of Acquisition
Name Nature of business
operation registration Method
System integration,
Hangzhou Hikvision System Technology Hangzhou,
Hangzhou Technology Establishment
Ltd. Zhejiang
development
Hangzhou Hikvision Technology Co., Hangzhou,
Hangzhou Manufacture Establishment
Ltd. Zhejiang
Hangzhou, Technology
Hangzhou EZVIZ Network Co., Ltd. Hangzhou Establishment
Zhejiang development
Hangzhou, Technology
Hangzhou EZVIZ Software Ltd. Hangzhou Establishment
Zhejiang development
Hangzhou, Technology
Hangzhou Hikrobot Technology Co., Ltd. Hangzhou Establishment
Zhejiang development
Hangzhou, Technology
Hangzhou Hikrobot Intelligence Ltd. Hangzhou Establishment
Zhejiang development
2. Changes in the share of owners' equity in subsidiaries and still controls the transactions of subsidiaries.
345
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
(1) Description of the change in the share of owners' equity in subsidiaries
Capital increase for Shijiazhuang Sensortech
On March 28, 2023, the Company entered into the Capital Increase Agreement with external strategic investors. It is agreed that Shijiazhuang
Sensortech, a subsidiary of the Company, will increase the registered capital by RMB2,398,000,000, in which the Company will increase the
capital by RMB1,078,800,000 with 60.00% equity of HikAuto, a subsidiary of the Company, and RMB266,400,000 with 44.40% equity of
Sensortech, a subsidiary of the Company, with a total equity price of RMB1,345,200,000. Upon completion of the capital increase, the
Company's direct shareholding in Shijiazhuang Sensortech was diluted from 100% to 56.0969%, the Company's direct shareholding in
HikAuto was changed from direct holdings of 60.00% to indirect holdsing of 56.0969%, and the Company's direct holding of Sensortech
changed from 44.40% to indirect holding of 56.0969%.The Group's control over the three subsidiaries remains unchanged.
(2) The impact of the transaction on minority equity and owners' equity attributable to owner of the Company
Unit: RMB
Shijiazhuang HikAuto Sensortec
Project
Sensortec
Share of the subsidiary's net assets as a
/ / 44,867,715.32 44,867,715.32
percentage of increased equity
Share of a subsidiary's net assets (net
(259,000.35) (5,502,685.16) / (5,761,685.51)
liabilities) as a percentage of reduced equity
Increase in capital reserves 259,000.35 5,502,685.16 44,867,715.32 50,629,400.83
Acquisition of a minority stake of Hangzhou Kuangxin.
On May 22, 2023, the Company and the former minority shareholders of its subsidiary, Hangzhou Kuangxin, signed the
Equity Transfer Agreement in respect of Hangzhou Kuangxin Technology Co., Ltd. It is agreed to purchase 20.00%
minority equity of Hangzhou Kuangxin held by the original shareholder at RMB56 million. After purchase, the Company
holds 100% shares of Hangzhou Kuangxin in total. On June 30, 2023, the equity delivery of Hangzhou Kuangxin
completed. At the close of 2023, the Company had completed the payment of equity transfer.
Unit: RMB
Cost of purchase Hangzhou Kuangxin
Cash 56,000,000.00
Total cost of purchase 56,000,000.00
Less: net assets of subsidiaries according to the proportion of equity acquired 38,206,584.40
Decrease in capital reserves 17,793,415.60
3. Equity in Joint Ventures or Associates
(1) Aggregated financial information of insignificant joint-ventures and associates
Unit：RMB
Closing balance / Amount for Opening balance / Amount for
2023 2022
Associates：
The aggregate carrying amount of investments in associates 287,370,796.06 352,286,233.16
The aggregate amount of the following items calculated based on the
Company’s equity share percentage of the associates
- Net income (loss) 15,006,433.70 (11,985,343.35)
- Other comprehensive income - -
--Total comprehensive income (loss) 15,006,433.70 (11,985,343.35)
Joint Ventures:
Total investment book value 863,734,091.79 899,747,280.25
The sum of the following items calculated according to the
shareholding ratio
- Net income (44,972,911.55) 118,483,938.36
346
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Closing balance / Amount for Opening balance / Amount for
2023 2022
- Other comprehensive income - -
- Total comprehensive losses (44,972,911.55) 118,483,938.36
(2) There are no significant restrictions on the ability of the joint ventures or associates to transfer funds to the Group.
(3) Unrecognized commitments relating to investments in joint ventures
Unit：1000 RMB
Joint Venture Capital Commitment (Note)
Shenzhen Haishi Urban Service Operation Co., Ltd. 10,500.00
Guangxi Haishi Urban Operation Management Co., Ltd. 2,440.00
Note: The above capital commitments are the capital amounts that the Group has subscribed but not paid in to the above
joint ventures.
(4) The Group has no contingent liabilities related to investments in joint ventures or associates.
VIII. Government subsidy
1. Liabilities relating to government subsidy
Unit: RMB
Amount at the Increase in 2023 Other income Other changes Amount at the Asset-related
Liabilities
open of 2023 2023 close of 2023 /revenue-related
Special subsidy 659,589,058.05 129,398,427.90 76,115,713.34 28,250,000.00 741,121,772.61 Asset-related
Special subsidy 273,671,368.07 138,027,163.45 187,445,703.41 884,991.62 225,137,819.73 Revenue-related
Total 933,260,426.12 267,425,591.35 263,561,416.75 29,134,991.62 966,259,592.34
2. Government subsidy recognized as gain or loss in the reporting period
Unit: RMB
2022
Liabilities 2023
VAT collected and refunded 1,905,727,477.36 1,753,740,330.32
Special subsidy 595,069,241.13 708,635,845.02
tax refund - 20,976,221.29
Total 2,500,796,718.49 2,483,352,396.63
IX. Risks Associated with Financial Instrument
The Company’s principal financial instruments include cash and bank balances, other non-current financial assets, notes
receivable, accounts receivable, receivables for financing, other receivables, long-term receivables, part of the other non-
current assets, borrowings, notes payable, accounts payable, other payables, part of the other current liabilities, long-term
payables, part of other non-current liabilities, derivative financial instruments, etc. Details of these financial instruments
are set out in Note (V). Below are the risks associated with such financial instruments and the risk management policies
347
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
adopted by the Group to mitigate such risks. The management of the Group manages and monitors such risk exposures to
ensure such risks are contained within a prescribed scope.
Unit: RMB
Items Closing balance of 2023 Closing balance of 2022
Financial assets：
Measured at fair value through current profit and loss
Held –for-trading financial assets 37,380.00 12,807,438.36
Other non-current financial assets 472,184,937.66 423,893,239.94
Measured at fair value through other comprehensive
income
Receivables for financing 1,594,219,832.62 1,484,218,258.74
Measured at amortized cost
Cash and bank balances 49,629,469,654.46 40,011,863,999.94
Notes receivable 2,606,071,375.74 2,519,988,159.23
Accounts receivable 35,815,173,511.44 29,906,294,410.40
Other receivables 571,905,648.93 516,503,485.58
Other non-current assets 2,017,718.89 2,181,057.96
Long-term receivables (including those due within one year) 1,618,419,624.99 1,537,550,308.57
Financial liabilities
Measured at fair value through current profit and loss
38,079,755.04 68,299,685.57
Held-for-trading financial liabilities
Measured at amortized cost
2,118,952,026.06 3,343,071,972.89
Short-term borrowings
1,163,687,279.58 1,207,756,963.94
Notes payable
19,163,485,888.09 16,025,563,802.99
Accounts payable
348
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
3,911,612,841.06 3,203,308,686.31
Other payables
1,095,194,890.62 465,979,374.84
Other current liabilities
14,567,648,797.17 8,085,221,539.03
Long-term borrowings (including those due within one year)
8,188,531.22 9,532,351.64
Long-term payables (including those due within one year)
1,642,792,335.93 2,806,169,050.05
Other non-current liabilities
The Group adopts sensitivity analysis techniques to analyze the possible effects of rational and probable changes in risk
variables to profit or loss for the period or to the interests of shareholders. Since risk variables seldom change on a stand-
alone basis, while the correlation between variables may have significant influence to the ultimate amount of change
effected by the change in a single risk variable, the analysis below is based on the assumption that the changes in each
variable occurred separately.
1. Objectives, Policies and Procedures of Risk Management, and changes in the reporting period
The Group engages in risk management with the aim of achieving an appropriate balance between risk and return, where
the negative effects of risks against the Group’s operating results are minimized, in order to maximize the benefits of
shareholders and other stakeholders. Based on such objective in risk management, the underlying strategy of the Group’s
risk management is to ascertain and analyze all types of risks exposures of the Group, establish appropriate risk tolerance
thresholds, carry out risk management procedures and perform risk monitoring on all kinds of risks in a timely and reliable
manner, thus containing risk exposures within a prescribed scope.
1.1 Market risks
1.1.1 Foreign exchange risks
Foreign exchange risks refer to the risk that losses will occur because of changes in foreign exchange rates. The Company
is primarily exposed to risks relating to the currencies such as USD, EUR and etc. The Group’s subsidiaries in the mainland
of China whose procurement, sales and financing are denominated in RMB, USD and EUR. Other principal activities are
settled in RMB. The Group’s subsidiaries in Hong Kong and outside China are principally engaged in procurement, sales,
financing and other major business activities in local currencies such as USD, EUR and etc.
As of December 31, 2023, except for monetary items of foreign currencies set out in Note (V) 62, the Group mainly
adopted the functional currency of each of its subsidiary to present the balance of its assets and liabilities. The foreign
exchange risks arising from assets and liabilities denominated in USD and EUR (which has been converted into RMB) as
follows may generate significant impact on the operating results of the Group.
Unit: RMB
Currencies Assets Liabilities
349
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Closing balance Opening balance Closing balance Opening balance
USD 3,459,224,512.51 3,241,969,531.76 325,809,696.61 655,023,052.11
EUR 3,068,403,192.93 2,951,284,991.71 1,908,485,738.15 2,200,890,176.03
The Group has been paying close attention to the effect of fluctuation in exchange rate on the foreign exchange risks of
the Group, and has purchased various financial derivative instruments, such as forward foreign exchange contracts to
mitigate the foreign exchange risk exposure.
Sensitivity analysis on exchange rate risk
The sensitivity analysis of the Group's foreign exchange risk includes only monetary items denominated in foreign
currencies and does not consider the impact of the purchased derivative financial instruments.
With other variables unchanged, the exchange rate might float within a reasonable range, and has the following before-
tax effect on profit or loss and shareholders’ equity for the current period:
Unit: RMB
2023 2022
Change in foreign exchange rates Effect on Effect on
Effect on profit Effect on profit
shareholders’ equity shareholders’ equity
5% appreciation of USD against functional currency 156,670,740.8 156,670,740.80 129,347,323.98 129,347,323.98
5% depreciation of USD against functional currency (156,670,740. (156,670,740.80) (129,347,323.98) (129,347,323.98)
5% appreciation of EUR against functional currency 57,995,872.74 57,995,872.74 37,519,740.78 37,519,740.78
5% depreciation of EUR against functional currency (57,995,872.7 (57,995,872.74) (37,519,740.78) (37,519,740.78)
1.1.2. Interest rate risk
The risk of changes in cash flow of financial instruments due to changes in interest rates exposed to the Group are primarily
related to bank borrowings bearing floating interest rate (please refer to Note (V) 34) and bank deposits bearing floating
interest rate. The Group's risks of changes in the fair value of financial instruments due to changes in interest rates are
related to fixed-rate bank borrowings (please refer to Note (V) 24 and Note (V) 34) and fixed-rate bank deposits.
The Group determines the relative proportion of fixed interest rate contracts and floating interest rate contracts based on
the prevailing market environment. On December 31, 2023, the Group’s total long-term and short-term interest-bearing
debts bearing fixed interest rates amounted to RMB 11,105,877,902.09 (December 31, 2022: RMB 9,106,539,532.31)
(Note (V) 24 and Note (V) 34). The total amount of long-term and short-term interest-bearing debts bearing floating
interest rates is RMB 5,546,156,677.17 (December 31, 2022: RMB2,262,287,174.62) (Note (V) 34).
At present, the Group does not have any interest rate swap arrangements and will continue to pay close attention to the
impact of changes in borrowing interest rates on the interest rate risk of the Group, and will make timely adjustments
according to the latest market conditions.
The Group expects that the exposure to cash flow risk arising from floating-rate bank deposits and the exposure to changes
in fair value arising from fixed-rate bank deposits are not significant.
1.1.3. Other price risks
The Group’s price risk mainly arises from investments in held-for-trading equity instruments and derivative financial
instruments. Held-for-trading equity instrument investments are all investments in unlisted held-for-trading equity
instruments.
The Group is exposed to price risk due to the holding of financial assets measured at fair value. The fair value of certain
financial instruments is determined by the general pricing model based on discounted future cash flow method or other
valuation techniques, while the valuation techniques are based on certain valuation assumptions. Therefore, the valuation
results are highly sensitive to valuation assumptions. However, at the end of the current reporting period, the amount of
350
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
investment in held-for-trading equity instruments and derivative financial instruments is not significant, and the changes
of the amount due to changes in price of financial instruments as a result of change in valuation assumptions is limited,
accordingly, no sensitivity analysis is conducted.
1.2 Credit Risk
As of December 31, 2023, the largest credit risk exposure that may result in financial losses of the Group is mainly due to
the loss of the Group’s financial assets arising from the failure of the counterparty to perform its obligations, including:
cash and bank balances (Note (V) 1), notes receivable (Note (V) 3), accounts receivable (Note (V) 4), receivables for
financing (Note (V) 6), other receivables (Note (V) 8), contract assets (Note (V) 5 and Note (V) 22), non-current assets
due within one year (Note (V) 10), long-term receivables (Note (V) 12), etc., and derivative financial assets that are not
included in the scope of impairment assessment and are measured at fair value through current profit or loss (Note (V) 2).
As of the balance sheet date, the book value of the Group’s financial assets represents its maximum credit risk exposure.
In order to reduce credit risk, the Group has arranged a team to determine the credit limit, conduct credit approval, and
implement other monitoring procedures to ensure that necessary measures are taken to recover over-due debt. In addition,
the Group reviews the recovery of financial assets on each balance sheet date to ensure that sufficient credit loss provisions
are made for relevant financial assets. Therefore, the management of the Group believes that the credit risk exposure of
the Group has been reduced significantly.
The credit risk on cash and bank balances of the Group is low as they are deposited with banks with high credit ratings.
For accounts receivable, contract assets and long-term receivables, the Group has put in place relevant policies to control
credit risk exposure. The Group assesses credit quality of customers and sets corresponding credit period based on the
customer’s financial status, the possibility of obtaining guarantees from third parties, credit history and other factors such
as current market conditions. The Group will regularly monitor the credit history of its customers. For customers with
poor credit history, the Group takes various measures, such as written payment reminders, shorten or cancel the credit
period, to ensure that the overall credit risk of the Group is maintained in a controllable range. For accounts receivable,
contract assets, and long-term receivables related to financial leasing and installment collection business, the Group uses
a simplified method, that is, to measure the loss provision based on the amount equivalent to the expected credit loss for
the entire duration. For details of the relevant expected credit loss measurement, see (Note (V) 4 & Note (V) 5). For
remaining long-term receivables, the Group calculates the expected credit losses based on the expected credit loss rate in
the next 12 months or the entire duration based on the default risk exposure. For details of the related expected credit loss
measurement, see (Note (V) 12).
With respect to bank acceptance bills and receivables financing, the Company believes that there is no significant credit
risk and will not incur any significant losses due to the default of the counterparty as the acceptors are mainly banks with
higher credit ratings. For financial company acceptance bills and commercial acceptance bills, the Company has set
relevant policies to control credit risk exposure. The Company evaluates the credit status of the acceptor based on its
financial position, credit history and other factors, such as current market conditions, and sets an internal credit rating for
the acceptor. The Company regularly monitors the credit records of the acceptors, and for the acceptors with bad credit
records, the Company adopts written reminders and other means to ensure that the overall credit risk is within a controllable
range. For the acceptance bills and commercial acceptance bills receivable from financial companies, the Group calculates
the expected credit loss based on the default risk exposure based on the expected credit loss ratio in the entire duration,
and the relevant expected credit loss measurement is detailed in (Note (V) 3).
For other receivables, the Group regularly monitors the debtor’s credit history. For debtors with poor credit history, the
Group takes various measures such as written payment reminders to ensure that the Group’s overall credit risk is
maintained in a controllable range. For other receivables, the Group calculates the expected credit loss based on the
expected credit loss ratio in the next 12 months or the entire duration based on the default risk exposure. For details of the
relevant expected credit loss measurement, see (Note (V) 8).
The Group’s risk exposure is distributed among multiple contractors and multiple customers, so the Group has no
significant credit concentration risk.
351
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
1.3. Liquidity risk
The Group maintains and monitors a level of cash and cash equivalents deemed adequate by the management to meet the
operation needs of the Group and to reduce the effect of cash flow movements when managing liquidity risk. The
management of the Group monitors the usage of bank borrowings, and ensures compliance with borrowing agreements.
According to the term to maturity of non-discounted and remaining contract obligations, the financial liabilities held by
the Group are analyzed as below:
Unit：RMB
December 31, 2023
Within one year 1-5 years More than 5 years Total
Non-derivative financial liabilities
2,143,916,039.71
Short-term borrowings 2,143,916,039.71 - -
1,163,687,279.58
Notes payable 1,163,687,279.58 - -
Accounts payable 19,163,485,888.09 - - 19,163,485,888.09
Other payables 3,911,612,841.06 - - 3,911,612,841.06
Other current liabilities 1,095,194,890.62 - - 1,095,194,890.62
Other non-current liabilities - 1,642,792,335.93 - 1,642,792,335.93
Long-term borrowings (including
5,933,400,372.89 8,526,366,272.08 769,181,586.13 15,228,948,231.10
those due within one year)
Long-term payables (including
2,673,997.26 6,141,020.06 - 8,815,017.32
those due within one year)
Derivative financial instruments
Forward foreign exchange contracts
- settled in the gross amount
- Cash inflow 1,761,339,224.80 - - 1,761,339,224.80
- Cash outflow 1,799,381,599.84 - - 1,799,381,599.84
- Net cash inflow 38,042,375.04 - - 38,042,375.04
352
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
X. Fair Value Disclosure
1. The Financial Assets and Financial Liabilities Measured at Fair Value at the end of the Reporting Period
Unit：RMB
Closing fair value
Items
Level 1 Level 2 Level 3 Total
I. Continuous fair value measurement - 1,556,177,457.58 472,184,937.66 2,028,362,395.24
(I) Financial Assets held-for-trading - 37,380.00 - 37,380.00
1. Financial Assets Financial assets
measured at fair value through - 37,380.00 - 37,380.00
profit and loss
(II) Other non-current financial assets - - 472,184,937.66 472,184,937.66
1. Financial assets at fair value
- 472,184,937.66 472,184,937.66
through profit or loss
(III) Receivables for financing 1,594,219,832.62 - 1,594,219,832.62
1. Financial assets at fair value
through other comprehensive - 1,594,257,212.62 - 2,066,442,150.28
income
Total assets measured continuously at
- 1,594,257,212.62 472,184,937.66 2,066,442,150.28
fair value
(IV) Held-for-trading Financial
- 38,079,755.04 - 38,079,755.04
Liabilities
1. Held-for-trading Financial
LiabilitiesFinancial liabilities
38,079,755.04 - 38,079,755.04
measured at fair value through
profit and loss
Total liabilities measured
- 38,079,755.04 - 38,079,755.04
continuously at fair value
2. Information on the Estimation Technique and Important Parameters Adopted as for Continuous Level 2 Fair
Value Measurement Items
Unit: RMB
Fair value at
Estimation technique Inputs
December 31, 2023
Forward exchange rate
Forward Foreign Exchange Contracts Discounted cash flow
37,380.00 Discounted rate that reflects the credit risk
(Assets) approach
of counterparty
Forward exchange rate
Forward Foreign Exchange Contracts Discounted cash flow
(38,079,755.04) Discounted rate that reflects the credit risk
(Liabilities) approach
of counterparty
Discounted cash flow Discounted rate that reflects the credit risk
Receivables for financing 1,594,219,832.62
approach of counterparty
3. The Third Level of Fair Value Measurement Item, the Valuation Techniques and Important Parameters Used
Unit: RMB
Fair value on
Items Valuation techniques Inputs
December 31, 2023
Comparable public companies’ PB
Other non-current financial assets-- Market approach (price/book value) ratio within the same
Investment in equity instruments of 472,184,937.66
/Income approach industry
private companies
/Future cash flows, Discount rate
4. The Third Level of Fair Value Measurement Item, Adjustment Information between the Opening and Closing
Book Value
Unit: RMB
Other non-current financial assets Amount
Book value on January 1, 2023 423,893,239.94
Increase in the current reporting period 25,000,000.00
Increase in merge 18,666,625.00
Decrease in the current reporting period 604,313.00
353
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Changes in fair value booked into profit and loss during the current reporting period 5,229,385.72
Book value on December 31, 2023 472,184,937.66
The total amount of profit or loss in 2023 includes unrealized gains related to financial assets measured at fair value at the
end of the year is RMB 5,229,385.72(2022 unrealizied losses: RMB 69,793,177.28)and such gains or losses are included
in changes in fair value; the realized gains of financial assets measured at fair value at the end of the current reporting
period which were included in investment income was RMB65,923,840.33 (2022: RMB 51,892,209.92).
5. Items Measured at Continuous Fair Value. There Were No Transfers between Levels for the Current
Reporting Period. There was No Estimation Technique Change for the Current Reporting Period
6. Fair Values of Financial Assets and Financial Liabilities that not Measured at Fair Value
The Group’s management team believes that financial assets and financial liabilities measured at amortized cost mainly
include cash and bank balances, notes receivable, accounts receivable, other receivables, some other non-current assets,
non-current assets due within one year, long-term receivables, short-term borrowings, notes payable, accounts payable,
other payables, part of other current liabilities, non-current liabilities due within one year, long-term borrowings, long-
term payables and part of other non-current liabilities, etc., carrying value of which approximates to its fair value.
XI. Related Party Relationships and Transactions
1. Information on Parent Company of the Company
Percentage of
Shareholding ratio
voting rights of
Name Place of registration Nature of business Registered capital of parent company
parent company to
in the Company (%)
the Company (%)
China Electronics
Technology HIK Industrial
Hangzhou, Zhejiang RMB 660 million 36.48 36.48
Group Co., Ltd. investment
(CETHIK)
The ultimate controlling party of the Company is China Electronics Technology Group Co., Ltd. (hereinafter referred to
as " CETC").
2. Information on the Subsidiaries of the Company
For details of the main subsidiaries of the Company, see Note ((VII)1).
3. Information on the Joint Ventures and Associated Companies of the Company
Joint ventures and associates that had related party transactions with the Group in the current reporting period, or in the
prior periods and formed balances are as follows:
Name of the associates or joint ventures Relationship with the Company
Sensortech (Note1) Associated company
Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries (Note2) Associated company
Zhiguang Hailian Big Data Technology Ltd. and its subsidiaries (Note2) Associated company
Jiaxin Haishi JiaAn Zhicheng Technology Ltd. (Note2) Associated company
Sanmenxia Xiaoyun Vision Technology Ltd. (Note2) Associated company
Beijing Taifang Technology Ltd. (Note2) Associated company
Guangxi Haishi Operation Management Ltd. and its subsidiaries (Note3) Joint venture
Shenzhen Haishi Urban Service Operation Ltd. and its subsidiaries (Note3) Joint venture
Xuzhou Kangbo Operation Management Service Ltd. (Note3) Joint venture
354
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Yunnan Yinghai Parking Service Ltd. (Note3) Joint venture
Zhejiang City Digital Technology Ltd. (Note3) Joint venture
Zhejiang Haishi Huayue Digital Technology Ltd. (Note3) Joint venture
Note 1: During the period from December 2016 to February 2023, Sensortech was an associate of the Company. On
February 28, 2023, the Company acquired control right of Senstech and included it in the scope of the consolidated
financial statements. The amount of the Company's transactions with the Group for the period from January 2023 to
February 2023 and in 2022, and the balance of transactions with the Group as at 31 December 2022 are summarized in
the following related party transactions and related party receivables and payables under "Associates".
Note 2: Those companies are collectively referred to as "associated companies" in the following disclosures of related
party transactions, receivables from related parties, and payable from related parties.
Note 3: Those companies are collectively referred to as "joint ventures" in the following disclosures of related party
transactions, receivables from related parties, and payable from related parties.
4. Information on Other Related Parties
Name (Note1) Relationship
The related close family members of shareholder(s) that
Shanghai Fullhan Microelectronics Co., Ltd. and its subsidiaries hold(s) more than 5% shares of the Company act in
concert with the actual controller of the Company
Shareholder(s) that hold(s) more than 5% shares of the
Shenzhen Guotengan Vocational Education Technology Ltd.
Company was(were) the director(s) of this company
The Group’s senior management serve(s) as director(s)
Confirmware Technology (Hangzhou) Co., Ltd.
of this company
Zhejiang Fast Line data fusion Information Technology Co., Ltd. and its The Group’s senior management serve(s) as director(s)
subsidiaries of this company
The Group’s senior management serve(s) as director(s)
Chengdu Guoshengtianfeng Network Technology Ltd. and its subsidiaries
of this company
The Group’s independent director(s) serve(s) as
Ningbo Industrial Internet Research Institute Co., Ltd.
director(s) of this company
The Group’s supervisor(s) serve(s) as director(s) of this
INESA (Group) Ltd. and its subsidiaries
company
The Group’s supervisor(s) serve(s) as independent
Shanghai Vico Precision Mold & Plastics Co.,Ltd.
director(s) of this company
The Group’s supervisor(s) serve(s) as independent
Bank of Tianjin Co., Ltd. and its subsidiaries
director(s) of this company
The Group’s former independent director(s) serve(s) as
Aurotek CORP. and its subsidiaries (Note2)
director(s) of this company (Note 1)
The Group's chairman(chairmen) of Board of the
Shenzhen Zhongtu Instrument Co., Ltd. (Note3）
Supervisors was(were) he director(s) of this company
The Group's chairman(chairmen) of Board of the
Suzhou Ximeng Technology Co., Ltd.
Supervisors was(were) he director(s) of this company
Under common control of the ultimate controlling party
Subsidiaries of CETC (Note 4)
of the Company
Note 1: Those companies (excluding subsidiaries of CETC) are collectively referred to as "other related parties" in the
following disclosures of related party transactions, receivables from related parties, and payable from related parties.
Note 2: Cheng Tianzong, a former independent director of the Company, once served as a director of the corresponding
company. As he resigned as an independent director of the Company upon expiration of the term of the Company in March
2021, the corresponding company was recognized as a related party of the Company during the period between January
2022 and March 2022.
Note 3: Hong Tianfeng, the chairman of Board of the Supervisors of the Company, once served as a director of the
corresponding company. As he departed the Company in April 2022, the corresponding company was recognized as a
related party of the Company during 2022 and between January 2023 and April 2023.
Note 4: Subsidiaries and affiliated research institutes of CETC, excluding Hikvision and its subsidiaries.
355
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
5. Related Party Transactions
(1) Related party transactions regarding sales and purchases of goods, provision of services and receiving services
Purchase of commodities / receiving of services:
Unit: RMB
Related party Transaction type Amount occurred in 2023 Amount occurred in 2022
Purchase of materials and
Subsidiaries of CETC 2,411,065,827.96 2,234,524,161.20
receiving of services
Purchase of materials and
Joint ventures 2,839,703.41 5,071,741.36
receiving of services
Purchase of materials and
Associated companies 271,039,815.54 417,989,556.67
receiving of services
Purchase of materials and
Other related parties 1,286,613,375.22 1,598,406,260.25
receiving of services
Total 3,971,558,722.13 4,255,991,719.48
Sales of commodities / rendering of services:
Unit: RMB
Related party Transaction content Amount occurred in 2023 Amount occurred in 2022
Sales of products and 269,454,480.67
Subsidiaries of CETC 447,186,616.90
rendering of services
Sales of products and 69,056,009.44
Joint ventures 77,751,276.48
rendering of services
Sales of products and 66,706,135.61
Associated companies 87,149,633.74
rendering of services
Sales of products and 24,122,066.41
Other related parties 11,233,785.52
rendering of services
Total 429,338,692.13 623,321,312.64
(2) Related party lease
Unit: RMB
Lessor Type of leased assets Rental fee confirmed in 2023 Rental fee confirmed in 2022
Subsidiaries of CETC Equipment 10,375,908.82 13,913,056.77
Subsidiaries of CETC House 2,324,068.08 -
Joint ventures House - 542,554.11
Total 12,699,976.90 14,455,610.88
(3) Compensation for key managers
Unit: RMB
Item 2023 2022
Compensation for key managers 42,555,350.07 38,836,690.44
(4) Other related party transactions
Statement of capital deposits:
Unit: RMB
Content of related Amount occurred in Balance at the end of the Amount occurred in
Related Party Opening Balance
party transaction 2023 current reporting period 2022
Deposit into
Subsidiaries of CETC (withdraw from) 3,005,143,927.06 3,005,177,445.74 (499,973,215.52) 33,518.68
current deposits
Deposit into
Subsidiaries of CETC (withdraw from) (3,000,000,000.00) 1,000,000,000.00 - 4,000,000,000.00
fixed deposits
Total 5,143,927.06 4,005,177,445.74 (499,973,215.52) 4,000,033,518.68
356
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Note: For the deposit deposited by the Group with China Electronics Technology Finance Co., Ltd., the deposit interest
income during the reporting period was RMB81,941,576.31 (2022: RMB 80,026,784.06).
Information on notes discounted:
In 2023, The Company had no bank acceptance discounted to China Electronics Technology Finance Co., Ltd. (2022:
RMB33,564,209.39), no bank acceptance matured at discount (2022: RMB33,564,209.39), no interest expense arising
from discounting bank acceptance (2022: RMB241,747.39).
Information on entrusted loans:
In 2023, the Company issued entrusted loans to its subsidiaries through China Electronics Technology Finance Co., Ltd.
in the amount of RMB2,523,000,000.00, and the amount of handling fees confirmed to China Electronics Technology
Finance Co., Ltd. was RMB277,300.00.
Others:
During the reporting year, Hikrobot, a subsidiary of the Company, received a subsidy of RMB5,000,000.00 from
CETHIK, the parent company of the Company. The subsidy was designated for robot R&D and industrialization projects
to be carried out by Hikrobot from 1 January 2022 to 31 December 2023.
6. Receivables from Related Parties and Payables to Related Parties
(1) Receivables from related parties
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Accounts
Subsidiaries of CETC 640,493,055.77 220,124,781.15 703,246,712.68 226,247,765.93
receivable
Accounts
Joint ventures 59,425,217.10 1,625,142.58 33,380,436.75 1,573,681.64
receivable
Accounts
Associated companies 72,319,683.18 8,556,237.95 101,753,693.78 5,670,312.45
receivable
Accounts
Other related parties 7,442,685.65 154,865.50 3,849,485.72 79,488.44
receivable
Total 779,680,641.70 230,461,027.18 842,230,328.93 233,571,248.46
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Notes
Subsidiaries of CETC 176,267,380.85 1,197,255.34 170,543,239.65 -
receivable
Notes
Joint ventures 400,000.00 - 2,500,000.00 -
receivable
Notes
Associated companies 22,277,196.50 - 2,358,308.70 -
receivable
Notes
Other related parties 1,215,030.00 - 281,113.19 -
receivable
Total 200,159,607.35 1,197,255.34 175,682,661.54 -
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Other
Subsidiaries of CETC 1,649,910.00 561,932.90 1,720,917.15 240,722.93
receivables
Other
Joint ventures 191,713.33 6,768.82 374,619.85 2,472.49
receivables
Other Associated companies 4,387,500.00 30,273.75 - -
357
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
receivables
Total 6,229,123.33 598,975.47 2,095,537.00 243,195.42
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Long-term
receivables Subsidiaries of CETC 47,210.22 325.75 300,478.44 1,983.16
(including those due
within one year)
Long-term
receivables
Joint ventures 35,381,700.20 1,144,327.88 43,800,876.33 973,106.36
(including those due
within one year)
Total 35,428,910.42 1,144,653.63 44,101,354.77 975,089.52
Unit: RMB
Item Related Party Closing balance Opening balance
Prepayments Subsidiaries of CETC 7,831,067.74 6,707,516.94
Prepayments Associated companies 118,402.50 -
Total 7,949,470.24 6,707,516.94
(2) Payables to related parties
Unit: RMB
Item Related Party Closing balance Opening balance
Accounts payable Subsidiaries of CETC 877,667,364.69 759,760,264.93
Accounts payable Joint ventures 4,068,366.04 966,037.73
Accounts payable Associated companies 43,869,241.50 88,750,828.96
1,335,847,926.03
Accounts payable Other related parties 410,242,953.80 240,030,055.22
Total 1,089,507,186.84
Unit: RMB
Item Related Party Closing balance Opening balance
Notes Payable Subsidiaries of CETC 1,224,954.15 7,561,539.70
Notes Payable Other related parties 4,390,639.49 31,994,311.07
Total 5,615,593.64 39,555,850.77
Unit: RMB
Item Related Party Closing balance Opening balance
Contract liabilities Subsidiaries of CETC 6,277,318.83 8,673,665.99
Contract liabilities Joint ventures 1,300,172.80 2,558,659.59
Contract liabilities Other related parties 30,042.00 -
Total 7,607,533.63 11,232,325.58
Unit: RMB
Item Related Party Closing balance Opening balance
Other payables Subsidiaries of CETC 8,230,611.43 56,652,471.09
Other payables Joint ventures - 10,000.00
Other payables Associated companies 20,527,386.00 236,000.00
Other payables Other related parties 250,000.00 250,000.00
358
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Total 29,007,997.43 57,148,471.09
Unit: RMB
Item Related Party Closing balance Opening balance
Lease liabilities (including those
Subsidiaries of CETC 5,215,883.84 16,863,126.87
due within one year)
Total 5,215,883.84 16,863,126.87
XII. Share-based Payments
1. Overview of Share-based Payments
Restrictive Share Incentive Scheme
According to the Approval of the Implementation of the Restrictive Share Incentive Scheme of Hangzhou Hikvision Digital
Technology Co., Ltd. (Guo Zi Fen Pei [2012] No. 426) issued by the State-owned Assets Supervision and Administration
Commission of the State Council and the Opinion the Restrictive Share Incentive Scheme of Hangzhou Hikvision Digital
Technology Co., Ltd. (Shang Shi Bu Han [2012] No. 353) issued by China Securities Regulatory Commission, the
Company convened the ninth meeting of the second session of the Board of Directors on July 25, 2012 and the first
extraordinary general meeting for 2012 on August 13, 2012, whereat the Proposal Relating to the Restrictive Share Scheme
(Amendments to the Draft) of the Company and Highlights was reviewed and passed. The purpose of the Share Incentive
Scheme is to: further improve the Company’s governance structure to establish a good and balanced value allocation
system; establish a profit-sharing and restriction mechanism among shareholders, the Company and its employees, so as
to provide shareholders with sustainable return; fully mobilize the positivity of core employees to support the Company
in realizing its strategies and long-term sustainable development; attract and retain core employees to ensure the
Company’s long-term development.
The Scheme shall be effective for a term of 10 years commencing from the date of approval by general meeting of the
Company, during which the Company may grant restricted shares to grantees under the Scheme. In principle, each grant
should be at an interval of two years. After the expiry of the Scheme, no restricted shares could be granted to grantees
under the Scheme. However, all the provisions of the Scheme remain valid to the restricted shares granted under the
Scheme.
Each batch of restricted shares shall not be unlocked unless fulfilling, each time, by the Company its unlock performance
criteria (including net asset yield, revenue growth rate, and economic value added), and by grantees’ individual
performance criteria simultaneously. Where, during the unlocking period, any one or more unlock criteria for the Company
or individuals is or are not fulfilled, such portion of subject shares shall be cancelled. The cancelled restricted shares will
be repurchased by the Company based on the relevant regulations under the scheme.
On December 20, 2018, authorized by the 2nd extraordinary general meeting of 2018 and reviewed by the Board of
Directors, the Company granted 121,195,458 restricted shares to grantees at a grant price of RMB 16.98 per share ("2018
Share Incentive Scheme"). The Lock-up Period of the Subject Shares shall last for a period of 24 months commencing on
the grant date, during which the Subject Shares granted to grantees under the scheme shall be subject to lock-up and are
not transferable. The Unlocking Period shall be the 24 to 60 months following the grant of restricted shares (including
Lock-up Period), during which grantees may, subject to unlocking conditions stipulated by the scheme being satisfied,
apply for unlocking in 3 tranches: the first unlocking period shall be the 24 to 36 months following the grant date and the
number of shares to be unlocked shall be 40% of the aggregate number of the Subject Shares granted; the second unlocking
period shall be the 36 to 48 months following the grant date and the number of shares to be unlocked shall be 30% of the
aggregate number of the Subject Shares granted; the third unlocking period shall be the 48 to 60 months following the
grant date and the number of shares to be unlocked shall be 30% of the aggregate number of the Subject Shares granted.
The Company has completed the equity registration work in January 2019.
In accordance with the authorization by the Company’s second Extraordinary General Meeting in 2018, approved by the
17th meeting of the 5th session of the Board of Directors on April 13, 2023 and the 2022 Annual General Meeting, and also
in accordance with the revised Articles of Association, the Company repurchased in cash and cancelled the granted
359
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
33,331,858 restricted RMB treasury shares that have not been unlocked. The Company completed the deregistration on
July 5, 2023, and thus the implementation of the 2018 Restricted Stock Plan was completed.
On January 18, 2022, authorized by the 1st extraordinary general meeting of 2022 and reviewed by the Board of Directors,
the Company granted 97,402,605 restricted shares to grantees at a grant price of RMB29.71 per share ("2021 Share
Incentive Scheme"). The Lock-up Period of the Subject Shares shall last for a period of 24 months commencing on the
grant date, during which the Subject Shares granted to grantees under the scheme shall be subject to lock-up and are not
transferable. The Unlocking Period shall be the 24 to 60 months following the grant of restricted shares (including Lock-
up Period), during which grantees may, subject to unlocking conditions stipulated by the scheme being satisfied, apply for
unlocking in 3 tranches: the first unlocking period shall be the 24 to 36 months following the grant date and the number
of shares to be unlocked shall be 40% of the aggregate number of the Subject Shares granted; the second unlocking period
shall be the 36 to 48 months following the grant date and the number of shares to be unlocked shall be 30% of the aggregate
number of the Subject Shares granted; the third unlocking period shall be the 48 to 60 months following the grant date and
the number of shares to be unlocked shall be 30% of the aggregate number of the Subject Shares granted. The Company
has completed the equity registration work in February 2022.
Unit: share
2018 Share Incentive Scheme 2023 2022
Total of equity instruments outstanding at the beginning of the
- 68,762,683
reporting period
Total of equity instruments granted (share dividend) during the current
- -
reporting period
Total of equity instruments vested during the current reporting period - 33,142,730
Total of equity instruments forfeited during the current reporting
- 35,619,953
period (Note)
Total of equity instruments outstanding at the end of the reporting
- -
period
The exercise price (ex-rights) of the outstanding Share-based payments
of the Company at the end of the reporting period and the remaining Inapplicable Inapplicable
period of the contract
2021 Share Incentive Scheme 2023 2022
Total of equity instruments outstanding at the beginning of the
97,402,605 -
reporting period
Total of equity instruments granted (share dividend) during the current -
97,402,605
reporting period
-
Total of equity instruments vested during the current reporting period -
Total of equity instruments forfeited during the current reporting 38,961,042
-
period (Note)
Total of equity instruments outstanding at the end of the reporting
58,441,563 97,402,605
period
The exercise price (ex-rights) of the outstanding Share-based payments
of the Company at the end of the reporting period and the remaining RMB29.71 /share and 36 months RMB29.71 /share and 48 months
period of the contract
According to the relevant provisions of the 2021 Restricted Stock Plan (Revised Draft), the unlocking conditions for the
first unlocking period of restricted shares in 2021 did not meet the goal, and the corresponding number of restricted shares
granted but not unlocked totaled 38,961,042 shares became invalid during the year.
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
On October 22, 2015, the Company considered and approved Management Measures for Core Staff Co-Investment in
Innovative Businesses (Draft) (hereafter referred to as "Management Measures") at the 2nd extraordinary general meeting.
On March 7, 2016, representative congress of labor union of Hikvision passed Implementation Provisions for Management
Measures for Core Staff Investment in Innovative Businesses (hereafter referred to as "Provisions"), to initiate and
implement the incentive mechanism of staff co-investment (hereafter referred to as "Staff Co-Investment Plan") in
innovative business subsidiaries. Staff who participate in the Staff Co-Investment Plan (hereafter referred to as "Co-
Investment Staff") signed an Entrusted Investment Agreement with the labor union committee of Hikvision (hereafter
referred to as "Hikvision Labor Union"), to entrust Hikvision Labor Union to make investments. Hikvision Labor Union,
360
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
as a principal, shall cooperate with a trust company, which shall be a limited partner (LP) of a partnership enterprise, to
establish a trust plan, and to invest trust funds into innovative business subsidiaries. (Investment form described above is
referred to as "Co-Investment Platform").
Staff Investment Plan is classified as plan A and plan B according to applicable grantees. Grantees of plan A are comprised
of medium-and-senior level management personnel and core competent staff from the Company and its subsidiaries are
able to invest in all innovative businesses. Grantees of plan B are comprised of core and full-time staff from innovative
business subsidiaries, and could participate in investment on innovative business subsidiaries and their subsidiaries where
they serve. The Co-Investment Platform will increase capitals annually, the corresponding increased equity of which will
be distributed to core staff who meets investment conditions pursuant to particular rules. The waiting period shall be five
years after equity of Co-Investment Platform is held by the staff. Within the waiting period, if the labor relationship
between the grantees and the Company or its subsidiaries is released or terminated, equity of Co-Investment Platform held
by the grantees shall be refunded and settled by the labor union at an agreed price pursuant to the Provisions.
The Co-Investment Platform grants Co-Investment Staff additional equity annually. The Company determines whether
share-based payment shall be constituted based on the fair value of equity instruments newly obtained by the Group’s staff
in Co-Investment Platform on each granting date. On December 25, 2020, the Company held the 20th meetings of 4th
session of the Board of Directors, which reviewed and approved the Proposal on Revising Management Measures for Core
Staff Co-Investment in Innovative Businesses. The updated version of Management Measures for Core Staff Co-Investment
in Innovative Businesses (hereinafter referred to as "updated version of Management Measures"), The new version adds
rules relating to the confirmation of shares held directly by employees under Staff Co-Investment Plan and equities of
innovative business subsidiaries held indirectly by employees, clarifies the treatment of shares under Co-Investment Plan
after the disqualification about co-investment of employees, adds rules of management committee.
On December 31, 2020, the Executive management committee of the Co-Investment Plan approved the Provisions for
Management Measures for Core Staff Investment in Innovative Businesses (hereafter referred to as "New Provisions". In
accordance of the New Provisions, for the confirmed Plan A shares, the waiting period is five years since the employee
has worked for the Company or its subsidiaries and for the confirmed share of Plan B, the waiting period is five years
since the employee has worked for the innovative business subsidiary corresponding to the Plan B or its subsidiaries.
2. Information of the Share-based Payment through Equity Settlements
Restrictive Share Incentive Scheme
Unit: RMB
2021 Share Incentive Scheme
Determined based on stock price at the grant date and the
Method of determine the fair value of equity instruments at the grant date
costs of restricted shares during Lock-up Period
Recognition basis of the number of the equity instruments qualified for Determined based on the results estimation of each
vesting vesting period and turnover rate
Reasons of the significant difference between the estimates of the current
reporting period with that of the prior year None
Accumulative amount of share-based payment through equity settlement and
584,850,306.40
further included in the capital reserve
Total amount of the expenses recognized according to share-based payment
(44,951,095.37)
through equity settlement in the current reporting period
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
Unit：RMB
Share Incentive Scheme of Staff Co-Investment in
Innovative Businesses
Evaluated and determined based on income method at the
Method of determining the fair value of equity instruments at the grant date
grant date
Recognition basis of the number of the equity instruments qualified for Estimated based on the turnover rate of each vesting period
vesting
Accumulative amount of share-based payment through equity settlement and
695,972,415.25
further included in the capital reserve
Total amount of the expenses recognized according to share-based payment 252,567,973.30
361
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
through equity settlement in the current reporting period
RMB37,934,118.40 of the total expenses of paid and confirmed by equity settlements was shared by minority shareholders.
3. There is no share-based payment through cash settlements
4. There is no modification or termination of share-based payment during the current reporting period.
XIII. Commitments and Contingencies
1. Significant Commitments
(1) Capital commitments
Unit: RMB’000
Closing balance Opening balance
Contracted but not yet recognized in financial statements
- Commitment on construction of long-term assets 12,527,408 16,521,850
- Commitment on external investments 12,940 12,940
Total 12,540,348 16,534,790
2. Contingencies
There are no material contingencies that need to be disclosed by the Group.
XIV. Events after the Balance Sheet Date
1. Significant Unadjusted Events
Restricted Stock Incentive Plan
The Company’s 20th meeting of the 5th session of the board of directors held on April 18, 2024, deliberated and approved
the Proposal on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasing and Canceling
Relevant Restricted Shares, which intends to repurchase and cancel all the restricted shares granted but not unlocked in
the 2021Restricted Stock Plan. After the completion of this repurchase and cancellation, the Company's 2021Restricted
Stock Plan will be terminated. The proposal is subject to the approval of the Company's general meeting of shareholders.
2. Profit Distribution
Pursuant to the proposal of the 20th meeting of the 5th session of the Board of Directors on April 18, 2024, the Company
proposed to distribute cash dividend of RMB9 (tax inclusive) per each 10 shares to all shareholders. The above dividend
distribution plan is still subject to the approval of the general meeting of shareholders.
XV. Other Significant Events
1. Segment Information
1.1 Report segment determining and accounting policy
According to the Group's internal organization structure, management requirements and internal report principles, the
Group has only one operating segment, which is the research and development, production and sales of AIoT products and
services.
362
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
External revenue by geographical area & non-current assets by geographical location
Unit: RMB
Item 2023 2022
External revenue generated in domestic area 60,372,251,251.28 56,890,890,769.45
External revenue generated in overseas area 28,967,605,604.40 26,275,430,911.69
Total 89,339,856,855.68 83,166,321,681.14
Unit: RMB
Item (Note) On December 31, 2023 On January 1, 2023
Non-current assets in domestic area 20,706,528,578.27 16,808,935,279.10
Non-current assets in overseas area 850,027,281.25 831,488,767.27
Total 21,556,555,859.52 17,640,424,046.37
Note: the non-current assets above did not include other non-current financial assets, long-term receivables, long-term
equity investment, and deferred tax assets.
363
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
XVI. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts Receivable
(1) Disclosure by age
Unit: RMB
Book balance on December 31, 2023 Book balance on January 1, 2023
Within credit period 9,090,405,506.46 7,024,926,501.10
Within 1 year after exceeding credit period 9,384,300,440.80 16,771,801,690.71
1-2 years after exceeding credit period 508,157,816.90 513,230,879.82
2-3 years after exceeding credit period 311,172,302.13 312,592,580.10
3-4 years after exceeding credit period 177,209,156.93 180,224,406.31
Over 4 years after exceeding credit period 215,593,619.38 164,982,539.08
Subtotal 19,686,838,842.60 24,967,758,597.12
Less: bad debts provisions 670,061,176.83 591,943,445.60
Book value 19,016,777,665.77 24,375,815,151.52
(2) Classification and disclosure of by bad debts provision methods
Unit: RMB
Closing balance Opening balance
Carrying balance Credit loss provision Book value Carrying balance Credit loss provision Book value
Category
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount Amount Amount
(%) (%) (%) (%)
Provision for
bad debts on a - - - - - - - - - -
single basis
Provision for
bad debts by 19,686,838,842.60 100.00 670,061,176.83 3.40 19,016,777,665.77 24,967,758,597.12 100.00 591,943,445.60 2.37 24,375,815,151.52
portfolios
Total 19,686,838,842.60 100.00 670,061,176.83 3.40 19,016,777,665.77 24,967,758,597.12 100.00 591,943,445.60 2.37 24,375,815,151.52
364
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Accounts receivable provision for bad debts by portfolios
Unit: RMB
Closing balance
Customer
Carrying balance Bad debts provision Proportion (%)
Subsidiaries in the Group 15,710,430,253.38 - -
Portfolio A 376,849.67 179,867.03 47.73
Portfolio B 3,975,808,542.43 669,658,112.68 16.84
Portfolio C 223,197.12 223,197.12 100.00
Total 19,686,838,842.60 670,061,176.83 3.40
Description of accounts receivable for bad debts provision by portfolios
As part of the Company's credit risk management, the Company's accounts receivable are divided into portfolio A, portfolio B and portfolio C according to the regional and object risk
characteristics of the business, and the impairment matrix is used to determine the expected credit loss of each portfolio based on the aging of accounts receivable over credit period. For
the accounts receivable generated by the Group’s related parties, because the payment time is arranged by the Group according to the cash flow of the companies in the Group, the
Company believes that the credit risk is low and no provision for bad debts is required. The aging information can reflect the solvency of these three types of customers when the accounts
receivable are due.
(3) Bad debts provision
Unit: RMB
Changes in the year
Amount at the opening Translation differences for Amount at the closing
Item Provision /Recollect or
balance Accrual Recover or write-off foreign currency statements balance
Reverse
Account receivables 591,943,445.60 99,200,771.50 - (21,083,040.27) - 670,061,176.83
Total 591,943,445.60 99,200,771.50 - (21,083,040.27) - 670,061,176.83
365
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
(4) Top five debtors and contract assets (including those included in other non-current assets) based on corresponding closing balance of accounts receivable
At the end of the year, the aggregate amount of the Company's top five accounts receivable and contract assets was RMB15,759,511,992.08, accounting for 79.92%
of the total balance of accounts receivable and contract assets at the end of the year, and the provision for bad debts amounted to RMB65,926,097.62.
2. Other Receivables
2.1 By ccategories
Unit：RMB
Category Closing balance Opening balance
Dividends receivable 41,423,446.39 85,323,007.51
Other receivables 3,019,822,728.35 2,324,554,929.22
Total 3,061,246,174.74 2,409,877,936.73
2.2 Dividends receivable
Unit：RMB
Investees Closing balance Opening balance
Subsidiaries of Hikvision 41,423,446.39 85,323,007.51
Total 41,423,446.39 85,323,007.51
2.3 Other receivables
(1) Other receivables by aging
Unit: RMB
Closing balance
Age
Other receivables Credit loss provision
Within contract period 2,989,035,526.46 2,291,096,654.42
Within 1 year 24,581,596.42 33,503,835.61
1-2 years 8,955,049.99 2,112,945.32
366
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
2-3 years 1,282,544.62 341,396.88
3-4 years 120,699.57 946,880.46
Over 4 years 961,843.47 646,571.70
Subtotal 3,024,937,260.53 2,328,648,284.39
Less: bad debts provision 5,114,532.18 4,093,355.17
Book value 3,019,822,728.35 2,324,554,929.22
(2) Other receivables by nature of the payment
Unit: RMB
Nature Closing balance Opening balance
Payments of subsidiaries within the Group 2,761,272,567.36 2,137,185,066.96
Restricted stock repurchase payments 169,968,816.44 80,136,229.12
Temporary payments for receivables 24,622,620.38 29,809,325.81
Guarantee deposit 54,134,994.62 69,392,171.01
Others 14,938,261.73 12,125,491.49
Total 3,024,937,260.53 2,328,648,284.39
(3) Provision for bad debts of other receivables
Unit: RMB
Amount at the opening Changes in the year Translation differences Amount at the closing
Item
balance Accrual Provision /Recollect Recover or write-off for foreign currency balance
367
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
or Reverse k statements
Other receivables 4,093,355.17 1,041,177.01 - (20,000.00) - 5,114,532.18
total 4,093,355.17 1,041,177.01 - (20,000.00) - 5,114,532.18
The actual write-off of other receivables in the current reporting period was RMB 20,000.00.
(4) Top 5 debtors of other receivables in terms of closing balance
At the end of the year, the total amount of the top five other receivables of the Company was RMB2,154,682,457.36, accounting for 71.23% of the total balance of other receivables at the end of
the year, without provision for bad debts.
3. Long-term Equity Investment
Unit: RMB
Closing balance Opening balance
Item
Carrying balance Provisions Book value Carrying balance Provisions Book value
Investment in subsidiaries 7,687,757,432.17 - 7,687,757,432.17 6,629,092,230.54 - 6,629,092,230.54
Investments in associated enterprises and joint ventures 993,629,616.58 - 993,629,616.58 1,106,666,564.96 - 1,106,666,564.96
Total 8,681,387,048.75 - 8,681,387,048.75 7,735,758,795.50 - 7,735,758,795.50
(1) Investment in main subsidiaries
Unit：RMB
Increase during Decrease during Write-off of impairment Balance of impairment loss
Name of investee Opening balance the current the current Closing balance provision during the current provision at the end of the
reporting period reporting period reporting period current reporting period
Hangzhou Hikvision System 873,470,130.37 - 2,460,087.09 871,010,043.28 - -
368
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Increase during Decrease during Write-off of impairment Balance of impairment loss
Name of investee Opening balance the current the current Closing balance provision during the current provision at the end of the
reporting period reporting period reporting period current reporting period
Technology Ltd.
Hangzhou Hikvision
1,099,649,009.63 - 5,253,484.62 1,094,395,525.01 - -
Technology Ltd.
Hangzhou EZVIZ Network
60,631,166.55 70,991.92 - 60,702,158.47 - -
Co., Ltd.
Hangzhou EZVIZ Software
32,365,508.28 - 2,378.24 32,363,130.04 - -
Ltd.
Hangzhou Hikrobot
137,606,813.93 148,095.01 - 137,754,908.94 - -
Technology Co., Ltd.
Hangzhou Haikang
8,398,458.69 147,909.39 - 8,546,368.08 - -
Intelligence Ltd.
(2) Investments in associated enterprises and joint ventures
Unit：RMB
Balance of
impairment
Investment
Other Declared cash loss provision
Opening income (losses) Other
Name of investee Additional Reduced comprehensive dividends or Provision for Closing balance at the end of
balance recognized changes in Others
investments investments income profit impairment the current
under the equity
adjustment distribution reporting
equity method
period
1. Joint Ventures
369
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Balance of
impairment
Investment
Other Declared cash loss provision
Opening income (losses) Other
Name of investee Additional Reduced comprehensive dividends or Provision for Closing balance at the end of
balance recognized changes in Others
investments investments income profit impairment the current
under the equity
adjustment distribution reporting
equity method
period
Hangzhou Haikang 829,825,387.60 - - (47,428,857.55) - 8,959,723.09 - - - 791,356,253.14
Intelligent Industrial
-
Equity Investment Fund
Partnership (L.P.)
Zhejiang City Digital 26,341,510.80 - - 3,293,974.81 - - - - - 29,635,485.61
-
Technology Ltd.
Zhejiang Haishi Huayue 13,382,016.23 - - 685,265.42 - - - - - 14,067,281.65
-
Digital Technology Ltd.
Guangxi Haishi Operation 13,059,993.97 - - (609,658.09) - - - - - 12,450,335.88
-
Management Ltd.
Xuzhou Kangbo Operation 10,385,566.88 - - 666,781.48 - - - - - 11,052,348.36
-
Management Service Ltd.
Others 6,752,804.77 (1,580,417.62) 5,172,387.15
Subtotal 899,747,280.25 - - (44,972,911.55) - 8,959,723.09 - - - 863,734,091.79 -
2. Associated Companies
Wuhu Sensortech 98,094,380.52 - - (4,911,240.97) - - - - (93,183,139.55) -
-
Intelligent Technology
370
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Balance of
impairment
Investment
Other Declared cash loss provision
Opening income (losses) Other
Name of investee Additional Reduced comprehensive dividends or Provision for Closing balance at the end of
balance recognized changes in Others
investments investments income profit impairment the current
under the equity
adjustment distribution reporting
equity method
period
Co., Ltd (Note(V)13 note
2)
Zhiguang Hailian Big Data 22,425,370.08 - - 820,002.92 - - - - - 23,245,373.00
-
Technology Ltd.
Others 86,399,534.11 12,662,978.76 7,587,638.92 - - - 106,650,151.79
Subtotal 206,919,284.71 - - 8,571,740.71 - 7,587,638.92 - - (93,183,139.55) 129,895,524.79 -
Total 1,106,666,564.96 - - (36,401,170.84) - 16,547,362.01 - - (93,183,139.55) 993,629,616.58 -
(3) As of December 31, 2023, there were no restrictions on the capability of transferring fund to the Company from investees in which the Company held long-term
equity investment.
371
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
4. Revenue/cost of sales and services
Unit：RMB
2023 2022
Item
Revenue Cost Revenue Cost
Major business 21,953,642,926.65 4,405,677,506.76 21,018,811,109.28 4,962,133,305.77
Other business 3,594,151,240.20 167,059,586.29 3,265,694,229.07 135,606,040.90
Total 25,547,794,166.85 4,572,737,093.05 24,284,505,338.35 5,097,739,346.67
5. Investment Income
Unit：RMB
Item 2023 2022
Long-term equity investment income calculated by the cost
424,509,196.39 205,293,907.63
method
Long-term equity investment income(losses) measured by
(36,401,170.84) 118,900,466.08
the equity method
Investment income from disposal of long-term equity
- 1,709,563.80
investments
Investment income of other non-current financial assets
65,923,840.33 51,892,209.92
during the holding period
Investment income from disposal of trading financial assets - 8,227,196.70
Investment income from disposal of other non-current
- 1,260,000.00
financial assets
Investment income from debt investments 30,076,287.42 -
Investment income from the disposal of the business asset
15,902,073.63 -
group
Others (399,071.78) -
Total 499,611,155.15 387,283,344.13
6. Related Party Transactions
(1) Sales and purchase of goods, provision of services and receiving services
Purchase of goods/receiving of services:
Unit：RMB
Related party Transaction type 2023 2022
Subsidiaries of Hikvision Purchase of materials and 5,307,205,803.18 6,144,557,450.80
(Note) receiving of services
Purchase of materials and 51,579,706.89 115,654,935.67
Subsidiaries of CETC
receiving of services
Purchase of materials and 547,169.80 -
Joint ventures
receiving of services
Purchase of materials and 71,939,278.00 76,150,000.00
Associated companies
receiving of services
Purchase of materials and 20,000,000.00 20,744,901.95
Other related parties
receiving of services
Total 5,451,271,957.87 6,357,107,288.42
372
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Note: Subsidiaries of Hikvision are subsidiaries of the Company.
Sales of goods/rendering of services:
Unit：RMB
Related party Transaction type 2023 2022
Sales of products and
Subsidiaries of Hikvision 20,445,938,282.22 18,556,146,320.10
rendering of services
Sales of products and
Subsidiaries of CETC 53,550,416.34 39,345,286.87
rendering of services
Sales of products and
Joint ventures 7,910,493.83 6,434,024.76
rendering of services
Sales of products and
Associated companies - 250,870.35
rendering of services
Sales of products and
Other related parties 5,660,404.06 4,824,922.37
rendering of services
Total 20,513,059,596.45 18,607,001,424.45
(2) Related party lease
Lessor Lease type Lease fee recognized in 2023 Lease fee recognized in 2022
Subsidiaries of CETC House 2,324,068.08 -
Total 2,324,068.08 -
(3) Guarantees with related parties
In the current reporting period, the Company has provided guarantees for its 31 subsidiaries in an amount not
exceeding an equivalent of RMB21.742 billion (2022: RMB17.90 billion), including the joint liability guarantee for
the payment obligations on purchase from suppliers in an amount not exceeding an equivalent of RMB250 million
(2022: RMB320 million), and the joint liability guarantee for the general credit limit applied from commercial banks
and other financial institutions or other financing methods through agreed methods in an amount not exceeding an
equivalent of RMB21.492billion (2022: RMB17.58 billion).
(4) Funding to related parties
In April 2023, the Company held the 17th Meeting of the 5th Session of the Board of Directors, which considered
and approved the Proposal on Providing Financial Assistance to Subsidiaries. Under this proposal, the Company
will offer a loan of up to RMB600 million, RMB600 million, RMB400 million, RMB200 million, and RMB500
million, to Hikvision Imaging Technology, Hangzhou Rayin Technology, HikFire Technology, Zhejiang Hikfire
Technology Ltd., Wuhu Sensortech Intelligence Technology Co., Ltd., respectively. It will be used for each
innovative business subsidiary to supplement the operating capital needs, and the specific loan amount will be
373
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
provided according to the actual business needs of each innovative business subsidiary. The proposal was
deliberated and approved by the Company's General Meeting of Shareholders on April 15, 2023, and the validity
period of the related party loan limit is 3 years from the date of deliberation and approval by the Company's General
Meeting of Shareholders, and the amount (balance) can be recycled in batches during the validity period. The annual
borrowing interest rate of financial assistance shall be determined through negotiation between the parties to the
agreement without violating relevant laws and regulations, and the borrowing interest rate shall be determined in
accordance with the principle of marketization, and the specific contract shall prevail. When the above proposal
took effect, the unused amount of the 2022 related party borrowing quota for Hikvision Imaging Technology,
Hangzhou Rayin Technology, and HikFire Technology, automatically become invalid. In 2023, the Company lent
a total of RMB2,371,482,198.39 for various innovation business subsidiaries, recovered RMB3,247,963,256.59,
and received a total interest income of RMB17,756,318.06.
In April 2022, the Company held the 9th Meeting of the 5th Session of the Board of Directors, which considered
and approved the Proposal on Providing Financial Assistance to Innovative Subsidiaries. Under this proposal, the
Company will offer a loan of up to RMB1200 million, RMB1500 million, RMB300 million, RMB700 million,
RMB200 million, RMB300 million, and RMB300 million, to HikAuto Technology, Wuhan HikSemi Technology
Co., Ltd., HikFire Technology, HikMicro Sensing, HikImaging Technology, Rayin Technology and HikAuto
Software, respectively. The loans are intended to meet the operating capital needs of these innovative subsidiaries
and the specific amount of a loan will be provided based on the actual business needs of each subsidiary. The
proposal was considered and approved by the shareholders' meeting of the Company on May 13, 2022. The validity
period of the loan is 3 years from the date of proposal consideration and approval by the shareholders' meeting of
the Company, and the loan (balance) can be taken out several times during the validity period. The annual loan
interest rate shall be determined by the parties to the agreement in accordance with the market-based principles
without violating the relevant laws and regulations, and shall be subject to the specific contract. In 2022, the
Company lent a total of RMB4,058,597,035.23 to these innovative subsidiaries, and recovered
RMB3,969,815,977.03 with interest income totaling RMB31,573,270.34.
In order to meet the R&D funding needs et al., the Company along with its subsidiaries, including Hangzhou
Systems, Hangzhou Rayin Technology, HikStorage Technology, HikMicro Sensing, HikRobot and HikAuto
Software (hereinafter referred to as "loan recipient"), signed long-term loan-and-repayment contracts with some
banks. Under these loan-and-repayment contracts, the Company is regard as the borrower, a loan recipient is regard
as the recipient, and these banks are regard as lenders. Associated with the loan recipient’s R&D project progress
and funding needs, the loan recipients will apply for the loan via the Company. After approval by the corresponding
bank, the loan will be allocated to the loan recipient via the Company. The contract period is from December 31,
2021 to December 2, 2026. RMB3,427,994,954.00 (2022: RMB287,020,000.00) of the Company's long-term
374
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
receivables represented the actual borrowings applied by the loan recipients as of December 31, 2023, and interest
income of RMB75,642,852.46 was recognized in 2023 (2022: RMB5,118,686.47).
(5) Other related party transactions
Statement of capital deposits
Unit: RMB
Closing balance at
Amount occurred Amount occurred Opening Balance at the
Content of related party the end of the
Related Party (Note) during the current during the prior beginning of the current
transaction current reporting
reporting period reporting period reporting period
period
Deposit into (withdraw
Subsidiaries of CETC 3,004,985,831.20 3,005,019,349.88 (499,973,215.52) 33,518.68
from) current deposits
Deposit (withdraw from)
Subsidiaries of CETC (3,000,000,000.00) 1,000,000,000.00 - 4,000,000,000.00
into fixed deposits
Total 4,985,831.20 4,005,019,349.88 (499,973,215.52) 4,000,033,518.68
Note: For the deposit that the Company deposited into China Electronics Technology Finance Co., Ltd., the deposit
interest income was RMB 81,941,288.77 in 2023 (2022: RMB 80,026,784.06).
Statement of discounted note
Please refer to note (XI), 5(4) Statement of discounted note
In 2023, the Company issued entrusted loans to its subsidiaries through China Electronics Technology Finance Co.,
Ltd. in the amount of RMB 2,523,000,000.00, recognized investment income for entrusted loans in the amount of
RMB 30,076,287.42, and confirmed the fee for China Electronics Technology Finance Co., Ltd. in the amount of
RMB 277,300.00. At the end of the year, the Company granted entrusted loans of RMB1,663,000,000.00 to its
subsidiaries through China Electronics Technology Finance Co., Ltd
Purchase of business asset group
In May 2023, the Company and its subsidiary, Hikrobot, entered into an acquisition agreement for the business asset
group, stipulating that the Company would purchase a business asset group of Hikrobot for RMB77,431,660.60,
including but not limited to assets and corresponding personnel, business, contractual rights and interests, etc., and
the transaction would be completed on May 31, 2023. As of the end of the year, the Company has completed the
payment for the transfer of the business asset group.
375
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Disposition of business asset group
On March 31, 2023, the Company and its subsidiary, HikSensor, signed a business asset group transfer agreement,
stipulating that the subsidiary, HikSensor, would purchase a business asset group held by the Company for
RMB16,845,844.15, including but not limited to assets and corresponding personnel, business, contractual rights
and interests, etc., and the transaction was completed on March 31, 2023. The Company recognized an investment
income of RMB15,902,073.63 As of the end of the year, the Company has received the payment for the disposal
of the business asset group.
7. Receivables from Related Parties and Payables to Related Parties
(1) Receivables from related parties
Unit：RMB
Closing balance Opening balance
Item Related party Bad debts Bad debts
Carrying balance Carrying balance
provision provision
Subsidiaries of 15,710,430,253.38 - 20,790,257,807.56 -
Accounts receivable
Hikvision
Accounts receivable Subsidiaries of CETC 239,193,519.53 93,713,214.14 245,305,306.90 98,031,982.92
Accounts receivable Joint ventures 8,035,455.55 368,023.86 2,379,952.00 101,147.96
Accounts receivable Associated companies 8,012,788.72 4,626,280.98 8,072,547.52 2,436,481.82
Accounts receivable Other related parties 2,789,778.82 54,524.86 1,902,966.26 44,955.65
Total 15,968,461,796.00 98,762,043.84 21,047,918,580.24 100,614,568.35
Unit：RMB
Closing balance Opening balance
Item Related party Bad debts Bad debts
Carrying balance Carrying balance
provision provision
Subsidiaries of
Notes receivable 78,686,478.44 - 35,619,298.47 -
Hikvision
Notes receivable Subsidiaries of CETC 30,036,696.08 207,253.20 1,681,429.40 -
Total 108,723,174.52 207,253.20 37,300,727.87 -
Unit：RMB
Closing balance Opening balance
Item Related party Bad debts Bad debts
Carrying balance Carrying balance
provision provision
376
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Subsidiaries of
Other receivables 2,761,272,567.36 - 2,137,185,066.96 -
Hikvision
Other receivables Subsidiaries of CETC 1,149,910.00 218,482.90 1,190,907.15 49,197.51
Other receivables Joint ventures 16,837.13 116.18 228,543.65 1,508.39
Other receivables Associates 1,012,500.00 6,986.25 - -
Total 2,763,451,814.49 225,585.33 2,138,604,517.76 50,705.90
Unit：RMB
Item Related party Closing balance Opening balance
Prepayments Subsidiaries of Hikvision 1,849,870.06 772,949.48
Prepayments Subsidiaries of CETC 2,023,660.38 625,681.13
Total 3,873,530.44 1,398,630.61
Unit：RMB
Closing balance Opening balance
Item Related party Bad debts Bad debts
Carrying balance Carrying balance
provision provision
Long-term 3,427,994,954.00 - 287,020,000.00 -
receivables Subsidiaries of
(including those due Hikvision
within one year)
Long-term 47,210.22 325.75 300,478.44 1,983.16
receivables
Subsidiaries of CETC
(including those due
within one year)
Total 3,428,042,164.22 325.75 287,320,478.44 1,983.16
Unit：RMB
Closing balance Opening balance
Item Related party Bad debts Bad debts
Carrying balance Carrying balance
provision provision
Dividends Subsidiaries of
41,423,446.39 - 85,323,007.51 -
receivable Hikvision
Total 41,423,446.39 - 85,323,007.51 -
Unit：RMB
Item Related party Closing balance Opening balance
377
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Other current assets Subsidiaries of Hikvision 1,663,000,000.00 -
Total 1,663,000,000.00 -
(2) Payables to related parties
Unit：RMB
Item Related party Closing balance Opening balance
Accounts payable Subsidiaries of Hikvision 723,182,432.60 516,915,904.84
Accounts payable Subsidiaries of CETC 9,360,219.51 6,494,664.60
Total 732,542,652.11 523,410,569.44
Unit：RMB
Item Related party Closing balance Opening balance
Contract liabilities Subsidiaries of Hikvision 6,294,170.87 8,000,394.52
Contract liabilities Subsidiaries of CETC 382,321.75 273,933.15
Contract liabilities Other related parties 2,052.00 -
Total 6,678,544.62 8,274,327.67
Unit：RMB
Item Related party Closing balance Opening balance
Other payables Subsidiaries of Hikvision 105,286,603.62 667,461,756.46
Other payables Subsidiaries of CETC 640,040.00 278,540.00
Other payables Joint ventures - 10,000.00
100,000.00
Other payables Associates 19,996,880.00 2,040.00
Other payables Other related parties 100,000.00
Total 126,023,523.62 667,852,336.46
Unit：RMB
Item Related party Closing balance Opening balance
Lease liabilities (including
Subsidiaries of CETC 5,215,883.84 7,379,632.09
those due within one year)
Total 5,215,883.84 7,379,632.09
8. Supplementary Information to the Cash Flow Statement
(1) Supplementary information to the cash flow statement
Unit：RMB
Supplementary information 2023 2022(Restated)
1. Reconciliation of net profit to cash flows from
operating activities:
Net profit 10,552,055,515.88 9,597,389,077.40
378
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Supplementary information 2023 2022(Restated)
Add: Assets impairment provision (2,652,989.00) 1,195,518.35
Credit loss provision 98,343,814.70 122,761,912.01
Depreciation of fixed assets 394,552,937.63 352,312,160.94
Amortization of intangible assets 19,203,854.89 30,908,858.01
Depreciation of right of use assets 60,032,344.15 51,303,066.27
Amortization of long-term deferred expenses 18,328,579.31 33,629,517.18
Losses (gains) on disposal of fixed assets,
(1,072,329.19) 2,215,205.61
intangible assets and other long-term assets
Financial expenses 113,727,235.45 49,308,908.32
Losses（gains）from change in fair value (2,475,310.72) 74,432,284.58
Investment losses（gains） (499,611,155.15) (387,283,344.13)
Share-based payment through equity settlement 87,813,763.64 334,727,555.19
Decrease (increase) in restricted funds 43,774,289.78 (38,774,781.68)
Decrease (increase) in deferred income tax assets (152,253,958.67) 108,618,564.42
Decrease of inventories 91,007,632.42 58,285,769.30
Decrease (increase) in operating receivables 4,966,174,990.63 (676,508,556.07)
Increase (decrease) in operating payables 838,972,476.93 (288,706,205.97)
Increase (decrease) in deferred income (53,059,016.05) 97,602,421.09
Net cash flow from operating activities 16,572,862,676.63 9,523,417,930.82
2. Net change in cash and cash equivalents:
Closing balance of cash 36,354,702,554.38 27,771,201,246.40
Less: Opening balance of cash 27,771,201,246.40 26,639,582,696.49
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase in cash and cash equivalents 8,583,501,307.98 1,131,618,549.91
(2) Composition of cash and cash equivalents
Unit：RMB
Item Closing balance Opening balance
I. Cash 36,354,702,554.38 27,771,201,246.40
Including: Cash on hand 311,652.18 360,563.22
Bank deposit for payment at any time 36,354,378,020.77 27,609,458,740.05
Other currency funds for payment at any
12,881.43 161,381,943.13
time
379
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Item Closing balance Opening balance
II. Cash equivalents - -
III. Closing balance of cash and cash equivalents 36,354,702,554.38 27,771,201,246.40
On December 31, 2023, the Company’s closing balance of other currency funds was RMB 11,920,490.22
(December 31, 2022: RMB 217,063,841.70), of which RMB 11,907,608.79 were various guarantee deposits
(December 31, 2022: RMB 55,681,898.57), not cash or cash equivalents.
380
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
XVII. Supplementary Information
1. Details of Non-Recurring Profit or Loss
Unit：RMB
Item Amount Description
(10,507,192.80)
Profit or loss from disposal of non-current assets /
The government subsidies included in the current profits and 518,953,527.79
/
losses (Except for government subsidies that are closely related
to the normal business of the enterprise, comply with national
policies and regulations, and enjoy the quota or quota in
accordance with the standards determined by the state, and have
a continuous impact on the Company's profit and loss )
In addition to the Company's normal business related to the
/
effective hedging business, gains and losses on changes in fair
value arising from holding derivative financial assets, derivative
financial liabilities, other non-current financial assets, and (67,516,075.30)
investment gains from the disposal of the above-mentioned
financial assets/financial liabilities and receivables financing
(losses)
Profit from business combinations not under common control
116,433,610.45 /
and that are realized by multiple transactions
Other non-operating income and expense except the items
69,942,462.96 /
mentioned above
Other profit or loss items that meet the definition of non-
1,106,664.51 /
recurring profit or loss
Impact of income tax (64,745,616.43) /
The impact of minority equity (122,008,347.17) /
Total 441,659,034.01 /
Note: according to the Explanatory Announcement No. 1 on Information Disclosure of Companies Offering Securities
to the Public - Non-recurring Gains and Losses, as amended in 2023, the government subsidy of RMB61,397,772.47 in
2022 that is closely related to the Company's normal business and complies with national policies and regulations, and
which has a continuous impact on the Company's profit and loss, is not included in non-recurring gains and losses.
2. Return on Net Assets and Earnings per Share
The return on net assets and earnings per share have been prepared by Hangzhou Hikvision Digital Technology Co.,
Ltd. in accordance with the Information Disclosure and Presentation Rules for Companies Making Public Offering
of Securities No. 9 – Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revised in 2010)
issued by China Securities Regulatory Commission.
Unit：RMB
Weighted Earnings per share
Profit for the reporting period average return on
Basic earnings per Diluted earnings per
net assets (%)
share share
Net profit attributable to ordinary shareholders of the
19.64 1.520 1.520
Company
Net profit excluding non-recurring items of profit or loss
19.02 1.472 1.472
attributable to ordinary shareholders of the Company
381
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
3. Supplementary information related to retrospective application of accounting policies/retrospective
restatement/reclassification of financial statement items
Unit: RMB
items 31, December, 2023 31, December, 2022 1, January, 2022
Current assets
Cash and bank balances 49,629,469,654.46 40,011,863,999.94 34,721,870,931.36
Held-for-trading financial assets 37,380.00 12,807,438.36 34,320,010.83
Notes receivables 2,606,071,375.74 2,519,988,159.23 1,522,760,905.30
Accounts receivables 35,815,173,511.44 29,906,294,410.40 26,174,773,100.42
Receivables for financing 1,594,219,832.62 1,484,218,258.74 1,316,035,122.06
Prepayments 508,151,405.92 534,780,120.52 505,798,253.35
Other receivables 571,905,648.93 516,503,485.58 359,620,445.88
Inventories 19,211,434,385.32 18,998,222,978.81 17,974,112,407.60
Contract assets 1,173,312,415.20 2,118,223,370.98 1,411,372,624.91
Non-current assets due within one
1,079,721,006.23 996,902,343.27 975,960,437.14
year
Other current assets 961,593,616.75 806,832,941.58 1,022,600,377.78
Total Current Assets 113,151,090,232.61 97,906,637,507.41 86,019,224,616.63
Non-current assets
Long-term receivables 538,698,618.76 540,647,965.30 613,067,944.97
Long-term equity investments 1,151,104,887.85 1,252,033,513.41 982,165,546.45
Other non-current financial assets 472,184,937.66 423,893,239.94 438,724,172.22
Fixed assets 11,508,302,317.75 8,539,842,630.68 6,695,590,671.27
Construction in progress 4,307,651,074.46 3,770,803,300.80 2,323,336,098.68
Right-of-use assets 521,061,396.66 574,478,326.31 566,393,672.75
Intangible assets 1,810,476,551.45 1,544,933,502.19 1,304,247,415.07
Goodwill 311,353,640.88 217,386,531.28 202,381,895.37
Long-term amortized expenses 177,361,533.93 177,277,742.41 158,007,174.90
Deferred tax assets 1,978,373,012.15 1,471,197,578.26 1,211,339,509.50
Other non-current assets 2,920,349,344.39 2,815,702,012.70 3,350,526,411.63
Total Non-Current Assets 25,696,917,315.94 21,328,196,343.28 17,845,780,512.81
Total Assets 138,848,007,548.55 119,234,833,850.69 103,865,005,129.44
Unit: RMB
382
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Items 31, December, 2023 31, December, 2022 1, January, 2022
Current liabilities
Short-term borrowing 2,118,952,026.06 3,343,071,972.89 4,074,962,469.97
Held-for-trading financial liabilities 38,079,755.04 68,299,685.57 4,062,317.57
Notes payables 1,163,687,279.58 1,207,756,963.94 1,339,998,383.34
Accounts payables 19,163,485,888.09 16,025,563,802.99 15,889,694,981.12
Contract liabilities 2,977,990,775.40 2,644,496,508.36 2,580,894,226.59
Payroll Payable 6,120,254,492.28 4,837,302,455.95 4,595,552,073.12
Taxes payables 1,622,401,214.96 1,234,032,138.37 1,461,470,029.69
Other payables 3,911,612,841.06 3,203,308,686.31 1,830,626,583.03
Non-current liabilities due within one
5,814,660,214.96 868,197,272.46 596,915,360.58
year
Other current liabilities 1,481,222,044.19 923,721,593.78 917,479,922.61
Total Current Liabilities 44,412,346,531.62 34,355,751,080.62 33,291,656,347.62
Non-current liabilities
Long-term borrowings 8,940,122,961.01 7,522,315,341.60 3,284,371,642.52
Lease liabilities 344,005,866.13 277,255,924.83 317,951,879.21
Long-term payables 5,776,599.85 7,569,934.67 9,009,331.50
Provisions 213,084,038.31 219,365,227.62 200,675,950.96
Deferred income 966,259,592.34 933,260,426.12 738,586,458.05
Deferred tax liabilities 129,866,978.18 116,479,475.98 93,363,075.10
Other non-current liabilities 1,672,933,103.20 2,831,108,087.59 534,334,158.27
Total Non-current Liabilities 12,272,049,139.02 11,907,354,418.41 5,178,292,495.61
Total Liabilities 56,684,395,670.64 46,263,105,499.03 38,469,948,843.23
Shareholders' equity
Owners’ Equity 9,330,600,931.00 9,430,920,624.00 9,335,806,114.00
Capital reserves 7,864,903,763.52 10,141,153,435.32 5,404,070,600.07
Less: Treasury shares 2,737,987,226.55 5,316,033,650.24 1,023,188,723.04
Other comprehensive income 44,667,516.16 (42,587,158.81) (77,184,125.29)
Surplus Reserves 4,715,460,312.00 4,715,460,312.00 4,672,505,348.00
Retained earnings 57,136,620,244.01 49,460,423,962.05 45,148,698,025.66
Total Owners' Equity Attributable to
76,354,265,540.14 68,389,337,524.32 63,460,707,239.40
Owner of the Company
Minority equity 5,809,346,337.77 4,582,390,827.34 1,934,349,046.81
383
Hikvision 2023 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2023 to December 31, 2023
Items 31, December, 2023 31, December, 2022 1, January, 2022
Total Owners' Equity
82,163,611,877.91 72,971,728,351.66 65,395,056,286.21
Total Liabilities and Owners' Equity
138,848,007,548.55 119,234,833,850.69 103,865,005,129.44
384
Hikvision 2023 Annual Report
Section XI Documents Available for Reference
1. The financial report was signed and sealed by the person in charge of the Company, the person in
charge of accounting work and person in charge of accounting organization (Accounting Supervisor);
2. The original audit report containing the seal of the accounting firm and the signature and seal of
the certified public accountant;
3. Original versions and copies of all the Company's documents and announcements that were
publicly disclosed on the website designated by CSRC during the reporting period.
The above documents are completely placed at the Company's board of directors’ office.
Hangzhou Hikvision Digital Technology Co., Ltd.
Chairman: Chen Zongnian
April 20, 2024
Note:
This document is a translated version of the Chinese version 2023 Annual Report ("2023 年年度报
告"), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2023 Annual Report may be obtained at www.cninfo.com.cn.
385
