Hangzhou Hikvision Digital Technology Co., Ltd.
2024 Half Year Report
January to June 2024
August 17, 2024
Hikvision 2024 Half Year Report
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management of
Hangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as the "Company") hereby
guarantee that the information presented in this report shall be together be wholly liable for the
truthfulness, accuracy and completeness of its contents and free of any false records, misleading
statements or material omissions, and will undertake individual and joint legal liabilities.
Hu Yangzhong, 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 half year report are
authentic, accurate and complete.
All directors of the Company have attended the board meeting to review this report.
The half year proposal of profit distribution or share distribution from capital reserve passed upon
deliberation at the meeting of the Board of Directors (not applicable): The Company will not
distribute cash dividend, distribute bonus shares, or distribute shares from capital reserve during the
current reporting period.
Note:
This document is a translated version of the Chinese version 2024 Half Year Report (“2024 年半年
度报告”), and the published announcements in the Chinese version shall prevail. The complete
published Chinese 2024 Half Year Report may be obtained at www.cninfo.com.cn.
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Hikvision 2024 Half Year Report
Please read the full half year 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 2024 Half Year 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 2024 Half Year Report
CONTENTS
Section I Important Notes, Contents and Definitions ...................................................................................... 1
Section II Corporate Profile & Key Financial Data......................................................................................... 6
Section III Management Discussion and Analysis ......................................................................................... 10
Section IV Corporate Governance .................................................................................................................. 28
Section V Environmental and Social Responsibility ...................................................................................... 30
Section VI Significant Events ........................................................................................................................... 31
Section VII Changes in Shares and Information about Shareholders ......................................................... 44
Section VIII Information of Preferred Shares ............................................................................................... 55
Section IX Bonds ............................................................................................................................................... 56
Section X Financial Report .............................................................................................................................. 57
Section XI Documents Available for Reference ........................................................................................... 185
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Hikvision 2024 Half Year Report
Definitions
Term Definition
Reporting Period From January 1, 2024 to June 30, 2024
Articles of Association Articles of Associations for Hangzhou Hikvision Digital Technology Co., Ltd
Hikvision, our Company, the
Hangzhou Hikvision Digital Technology Co., Ltd
Company, the Group, our Group
CETC China Electronics Technology Group Ltd., the actual controller of the Company
CETHIK China Electronics Technology HIK Group Co., Ltd, the controlling shareholder of the Company
EZVIZ, EZVIZ Network, Smart Hangzhou EZVIZ Network Co., Ltd.(According to the context, also refers to the corresponding
Home business)
HikRobot, Robotic business Hangzhou Hikrobot Technology Co., Ltd. (According to the context, also refers to the
corresponding business)
HikAuto, Auto electronics SensorTech Smart Technology Ltd. (According to the context, also refers to the corresponding
business, Sensortech business)
HikMicro, Micro Sensing, Hangzhou Hikmicro Sensing Technology Ltd. (According to the context, also refers to the
Thermal imaging business corresponding business)
HikSemi Wuhan Hikstorage Technology Ltd. (According to the context, also refers to the 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 corresponding
HikSecurityCheck business)
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
Innovative Business Staff Investment in Innovative Business (《核心员工跟投创新业务管理办法》)
(www.cninfo.com.cn).
In this report, innovative business also refers to EZVIZ, HikRobot, HikAuto, HikMicro,
HikSemi, HikImaging, HikFire, HikRayin and their related products.
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Hikvision 2024 Half Year 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 (if any) 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 Hu Yangzhong
II. Contacts and contact information
Board Secretary Securities Affairs Representative
Name Huang Fanghong Cai Chao
No. 518 WuLianWang Street, Binjiang No. 518 WuLianWang Street, Binjiang
Address
District, Hangzhou District, Hangzhou
Tel. 0571-88075998; 0571-89710492 0571-88075998; 0571-89710492
Fax 0571-89986895 0571-89986895
E-mail hikvision@hikvision.com hikvision@hikvision.com
III. Other relevant information
1. Company's contact information
Whether there is any change in the Company's registered address, office address, zip code, company website or
company email address during the reporting period.
□Applicable √ Inapplicable
There is no change in the Company's registered address, office address, zip code, company website or company
email address during the reporting period. Please refer to 2023 Annual Report for details.
2. Information disclosure and place of the report
Whether there is alteration in information disclosure and place of the report during the current reporting period.
□ Applicable √ Inapplicable
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Hikvision 2024 Half Year Report
The media website and the securities exchange website for the disclosure of the Company Half Year report, and
the place where the Half Year Report is available for inspection remained unchanged during the reporting period.
For details, please refer to the 2023 Annual Report.
3. Other relevant information
Whether other relevant information has changed during the current reporting period
□ Applicable √ Inapplicable
IV. Key accounting data and financial indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
√ Yes □ No
Reasons for retroactive adjustment or restatement of the previous accounting data
√ Consolidation under common control
First half of 2023 YoY Change (%)
First half of 2024 Before the After the After the
adjustment adjustment adjustment
Revenue (RMB) 41,209,096,206.36 37,570,786,397.89 37,571,352,435.63 9.68%
Net profit attributable to shareholders
5,064,118,857.29 5,337,868,016.88 5,337,937,850.82 -5.13%
of the Company (RMB)
Net profit attributable to shareholders
of the Company excluding non- 5,243,005,903.72 5,036,128,632.96 5,036,198,466.90 4.11%
recurring gains and losses (RMB)
Net cash flows from operating
-189,636,040.90 1,026,390,862.80 1,025,789,646.36 -118.49%
activities (RMB)
Basic earnings per share (RMB/share) 0.539 0.568 0.568 -5.11%
Diluted earnings per share
0.539 0.568 0.568 -5.11%
(RMB/share)
Weighted average ROE 6.51% 7.60% 7.60% -1.09%
Change(%) between
On December 31, 2023 December 31, 2023
On June 30, 2024 and June 30, 2024
Before the After the After the
adjustment adjustment adjustment
Total assets (RMB) 127,786,046,730.89 138,848,007,548.55 138,858,122,879.55 -7.97%
Net assets attributable to shareholders
73,752,006,863.45 76,354,265,540.14 76,354,265,540.14 -3.41%
of the Company (RMB)
The total share capital of the Company as of the previous trading day of the report disclosure:
The total share capital of the Company as of the previous trading day of the report disclosure (share) 9,233,198,326
Fully diluted earnings per share (RMB/share) calculated with the latest share capital 0.548
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Hikvision 2024 Half Year Report
V. 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
VI. Items and amounts of non-recurring gains and losses
√ Applicable □ Inapplicable
Unit：RMB
Item Amount
Profit or loss from disposal of non-current assets (including the write-off for the impairment
-11,946,748.95
provision of assets)
The government subsidies included in the current profits and losses (excluding the government
subsidy closely related to regular course of business of the Company and government subsidy based 297,707,266.62
on standard quota or quantitative continuous application according to the state industrial policy)
Profits and losses attributed to change in fair value for held-for-trading financial assets and held-for-
trading financial liabilities; and investment income from disposal of held for-trading financial assets,
24,124,811.83
held-for-trading financial liabilities, and available-for-sale financial assets, excluding the effective
hedging business related to the regular business operation of the Company
Share-based payment expenses recognized in one lump sum due to the cancellation or modification
-471,167,293.91
of the equity incentive plan.
Net profit or loss of the subsidiary from the beginning of the period to the date of consolidation
-295,677.15
arising from a business combination under common control
Other non-operating income and expenditures except the items mentioned above 35,006,783.25
Less: Impact of income tax 15,764,971.09
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Hikvision 2024 Half Year Report
Item Amount
Impact of the minority interests (after tax) 36,551,217.03
Total -178,887,046.43
The specific situation of other profit and loss items that meet the definition of non-recurring gains and losses：
□ Applicable √ Inapplicable
The company does not have any specific situations of profit and loss items that meet the definition of non-
recurring gains and losses.
Explanation of the situation where the non-recurring gains and losses items listed in the 'Interpretative
Announcement No. 1 on Information Disclosure of Companies Issuing Securities Publicly — Non-recurring Gains
and Losses' are defined as recurring gains and losses items.
□ Applicable √ Inapplicable
The Company does not have any instances where the non-recurring gains and losses items listed in the 'Interpretative
Announcement No. 1 on Information Disclosure of Companies Issuing Securities Publicly — Non-recurring Gains
and Losses' are classified as recurring gains and losses items.
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Hikvision 2024 Half Year Report
Section III Management Discussion and Analysis
I. The principal business of the Company during the reporting period
There was no significant change for the principal business of the Company during the current reporting period.
Please refer to 2023 Annual Report for details.
II. Core competitiveness analysis
There was no significant change in the Company's core competitiveness during the current reporting period. For
details, Please refer to 2023 Annual Report.
III. Core business analysis
Whether consistent with the Company's core business disclosure during the current reporting period
√Yes □ No
In the first half of 2024, the domestic market demand was relatively weak, with significant industry differentiation;
the overseas market was generally stable, but conflicts persisted in some regions, and trade frictions among major
economies increased, testing the Company' global operations and compliance governance capabilities. Facing the
complex environment both domestically and internationally, Hikvision adheres to the business philosophy of
"professionalism, honesty, and integrity", maintains confidence, always focuses on the growth of its own capabilities,
and continuously promotes the steady development of its business.
During the reporting period, the Company achieved revenue of RMB41.21 billion, with year over year growth of
9.68%; the net profits attributable to shareholders of the Company was RMB5.06 billion, a decrease of 5.13% over
the same period of the previous year; the net profit attributable to shareholders of the Company, after deducting non-
recurring gains and losses, was RMB5.24 billion, an increase of 4.11% over the same period of the previous year.
(1) Continuously increase R&D investment to enhance competitive advantage
During the reporting period, the Company continued to solidify its foundation in AIoT business, increased
investment in scenario-based digitalization business, continuously launched innovative multi-dimensional
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Hikvision 2024 Half Year Report
perception products, and built new competitive strength in scenario-based digitalization, thereby supporting the
Company's long-term sustainable development. In the first half of 2024, the company's R&D investment reached
RMB5.70 billion, a year-on-year increase of 7.81%. The company will continue to build and improve the
differentiated advantages of products and solutions, enhance market competitiveness with product innovation
capabilities, maintain the Company's advantageous position, and ensure the steady development of the business.
(2) Targeted deployment and optimization of marketing resources to improve operational efficiency
During the reporting period, the company continued to empower provincial business centers and urban branches in
China, strengthening the service capabilities of the business system, and promoted organizational changes to
enhance internal operational efficiency. Based on the different economic development speeds and geopolitical
environments of various overseas regions, the Company has invested and allocated resources in a targeted manner
and optimized regional management.
(3) Deepen the transformation of the process management system to enhance operational efficiency
During the reporting period, the Company continued to deepen the transformation of process management,
continuously promoting the synergy and integration of the organizational structure, stimulating the team's
innovative potential, and ensuring the continuous improvement of organizational vitality and efficiency. The
Company has been continuously strengthening the construction and improvement of the compliance system,
ensuring effective control of risks, and solidifying the institutional guarantee for compliant operations, laying a solid
foundation for the Company's stable development.
(4) Innovative businesses consolidate competitive advantages and form stronger synergy with main business
During the reporting period, the overall revenue of the innovative business was RMB10.33 billion, a year-on-year
increase of 26.13%, accounting for 25.06% of the Company's revenue. Innovative business subsidiaries such as
EZVIZ, HikRobot, and HikMicro have established advantageous positions in their respective fields, and the overall
development of the innovative business is good, becoming a strong engine for the Company's development. The
main business, together with the innovative business, forms the AIoT business portfolio, and the business synergy
continues to improve, helping the Company to achieve long-term sustainable development.
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Hikvision 2024 Half Year Report
YoY changes in key financial data
Unit: RMB
First half of 2024 First half of 2023 YoY (%) Note of Change
Revenue 41,209,096,206.36 37,571,352,435.63 9.68% No significant change
Total operating costs 22,643,709,573.16 20,594,523,514.10 9.95% No significant change
Selling expenses 5,562,524,020.03 4,887,451,798.48 13.81% No significant change
Administrative expenses 1,464,347,813.80 1,275,014,764.20 14.85% No significant change
Increase in foreign currency exchange
Financial expenses -250,188,701.72 -567,385,030.82 55.90% losses due to fluctuation in foreign
exchange rate
Increase in deferred income tax expense
Income Tax Expenses 660,855,881.81 490,214,292.26 34.81%
during the reporting period
R&D investments 5,698,043,754.07 5,285,435,437.59 7.81% No significant change
Net cash flows from Increase in cash paid for procurement
-189,636,040.90 1,025,789,646.36 -118.49%
Operating Activities during the reporting period
Net cash flows from
-1,903,226,404.50 -2,084,866,544.28 8.71% No significant change
Investment Activities
increase in expenditures such as repayment
Net cash flows from
-13,360,325,362.71 -4,394,856,598.02 -204.00% of loans and cash dividends during the
Financing Activities
reporting period
Net decrease in cash and increase in cash outflows from financing
-15,473,769,254.35 -5,293,394,543.88 -192.32%
cash equivalents activities during the reporting period
Revenue structure
Unit：RMB
First half of 2024 First half of 2023
YoY Change
Proportion to total Proportion to total
Amount Amount (%)
revenue revenue
Total revenue 41,209,096,206.36 100.00% 37,571,352,435.63 100.00% 9.68%
Classified by industry
AIoT products and services 41,209,096,206.36 100.00% 37,571,352,435.63 100.00% 9.68%
Classified by product/business
Products and services for 30,229,701,063.88 73.36% 28,634,854,717.12 76.21% 5.57%
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Hikvision 2024 Half Year Report
First half of 2024 First half of 2023
YoY Change
Proportion to total Proportion to total
Amount Amount (%)
revenue revenue
main business1
Constructions for main
651,214,618.73 1.58% 748,219,037.49 1.99% -12.96%
business
Subtotal 30,880,915,682.61 74.94% 29,383,073,754.61 78.20% 5.10%
Robotic business 2,744,389,603.14 6.66% 2,278,447,297.18 6.06% 20.45%
Smart home business 2,448,684,604.42 5.94% 2,183,062,932.81 5.81% 12.17%
Thermal imaging business 1,829,997,676.77 4.44% 1,475,222,288.91 3.93% 24.05%
Auto electronics business 1,605,885,368.24 3.90% 1,001,472,278.41 2.67% 60.35%
Storage business 1,311,887,493.34 3.18% 792,630,227.93 2.11% 65.51%
Other innovative businesses2 387,335,777.84 0.94% 457,443,655.78 1.22% -15.33%
Subtotal 10,328,180,523.75 25.06% 8,188,278,681.02 21.80% 26.13%
Classified by region
Domestic 27,029,231,758.69 65.59% 25,503,985,249.52 67.88% 5.98%
Overseas 14,179,864,447.67 34.41% 12,067,367,186.11 32.12% 17.51%
Revenue structure3
Unit: RMB 100mn
YoY Change
First half of 2024 First half of 2023
(%)
PBG 56.93 62.73 -9.25%
Domestic main EBG 74.89 69.96 7.05%
business SMBG 57.89 57.52 0.64%
Other products and services for main business 4.69 4.53 3.53%
Overseas main
Products and services for main business 114.41 99.09 15.46%
business
Innovative businesses4 103.28 81.88 26.13%
Total 412.09 375.71 9.68%
1 Main business refers to the business parts other than innovative businesses
2 Other innovative businesses include the products and services of the innovative business subsidiaries, such as HikFire, Rayin and
HikImaging. Same below.
3 The revenue from domestic main business and overseas main business only include Hikvision's main business's products and
services, excluding revenue from innovative businesses.
4 Innovative businesses’ revenue includes its domestic and overseas revenue.
5 The data listed in the footnote may differ slightly from the sum of the related individual data due to rounding.
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Hikvision 2024 Half Year Report
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
Gross YoY Change (%)
Revenue Operating costs (%) of (%) of gross
margin of operating costs
revenue margin
Classified by industry
AIoT products and
41,209,096,206.36 22,643,709,573.16 45.05% 9.68% 9.95% -0.14%
services
Classified by product/business
Products and services
30,229,701,063.88 16,182,730,296.61 46.47% 5.57% 6.78% -0.60%
for main business
Constructions for
651,214,618.73 514,054,139.49 21.06% -12.96% -9.15% -3.32%
main business
Innovative businesses 10,328,180,523.75 5,946,925,137.06 42.42% 26.13% 22.03% 1.94%
Subtotal 41,209,096,206.36 22,643,709,573.16 45.05% 9.68% 9.95% -0.14%
Classified by region
Domestic 27,029,231,758.69 15,250,579,727.53 43.58% 5.98% 9.40% -1.76%
Overseas 14,179,864,447.67 7,393,129,845.63 47.86% 17.51% 11.11% 3.00%
When the statistical caliber of the Company's major business data is adjusted during the reporting period, the
Company's major business data would be adjusted according to the end of the reporting period in the most recent
period.
□Applicable √ Inapplicable
Total operating costs structure
Classified by industry
Unit: RMB
First half of 2024 First half of 2023
Proportion to Proportion to YoY
Industry Item
Amount operating Amount operating Change (%)
costs costs
AIoT products and
Operating costs 22,643,709,573.16 100.00% 20,594,523,514.10 100.00% 9.95%
services
Classified by product/business
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Hikvision 2024 Half Year Report
Unit: RMB
First half of 2024 First half of 2023
Proportion to Proportion to YoY
Product/business Item
Amount operating Amount operating Change (%)
costs costs
Products and Services
Operating costs 16,182,730,296.61 71.47% 15,155,184,539.95 73.59% 6.78%
for main business
Constructions for main
Operating costs 514,054,139.49 2.27% 565,835,111.46 2.75% -9.15%
business
Innovative businesses Operating costs 5,946,925,137.06 26.26% 4,873,503,862.69 23.66% 22.03%
Subtotal Operating costs 22,643,709,573.16 100.00% 20,594,523,514.10 100.00% 9.95%
IV. Non-core business analysis
□Applicable √ Inapplicable
V. Analysis of assets and liabilities
1. Material changes of asset items
Unit：RMB
June 30, 2024 December 31, 2023 Change between
Percentage Percentage December 31,
Note of significant change
Amount to total Amount to total 2023 and June
assets assets 30, 2024
Cash dividend distributions
Cash and bank
34,126,501,664.33 26.71% 49,638,158,662.54 35.75% -9.04% lead to a decrease in cash and
balances
bank balances
Accounts
36,783,112,910.26 28.78% 35,816,573,511.44 25.79% 2.99% Due to the increase in revenue
receivable
Contract assets 1,195,004,401.26 0.94% 1,173,312,415.20 0.84% 0.10% No significant change
Inventories 19,036,775,398.88 14.90% 19,211,444,296.82 13.84% 1.06% No significant change
Long-term
equity 1,096,209,035.64 0.86% 1,151,104,887.85 0.83% 0.03% No significant change
investment
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Hikvision 2024 Half Year Report
June 30, 2024 December 31, 2023 Change between
Percentage Percentage December 31,
Note of significant change
Amount to total Amount to total 2023 and June
assets assets 30, 2024
Projects including Shijiazhuang
Fixed assets 13,152,617,644.44 10.29% 11,508,312,342.17 8.29% 2.00% Science and Technology Park
transferred to fixed assets
Construction in
3,630,236,850.80 2.84% 4,307,651,074.46 3.10% -0.26% No significant change
process
Right-of-use
460,246,699.21 0.36% 521,061,396.66 0.38% -0.02%
assets No significant change
Lease liabilities 308,658,409.00 0.24% 344,005,866.13 0.25% -0.01%
Contract
3,071,483,493.77 2.40% 2,977,990,775.40 2.14% 0.26% No significant change
liabilities
Short-term
1,310,349,077.28 1.03% 2,118,952,026.06 1.53% -0.50%
borrowings
Non-current
liabilities due 8,102,855,879.79 6.34% 5,814,660,214.96 4.19% 2.15%
No significant change
within one year
Long-term
5,680,041,584.23 4.44% 8,940,122,961.01 6.44% -2.00%
borrowings
2. Main overseas assets
□ Applicable √ Inapplicable
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Hikvision 2024 Half Year Report
3. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
Provision for Purchase Sold
Cumulative fair
Profit or loss from change in decline in value d amount amount
value changes
Item Opening balance fair value during the current during the during during Other changes Closing balance
included in
reporting period current reporting the the
equity
period period period
Financial assets
1. Derivative financial assets 37,380.00 6,775,026.08 6,812,406.08
2. Other non-current financial
472,184,937.66 12,581,839.26 484,766,776.92
assets
3. Receivables for financing 1,594,219,832.62 168,610,733.84 1,762,830,566.46
Subtotal of financial assets 2,066,442,150.28 19,356,865.34 168,610,733.84 2,254,409,749.46
Financial Liabilities 38,079,755.04 31,032,277.28 7,047,477.76
Whether there were any material changes on the measurement attributes of major assets of the Company during the reporting period:
□ Yes √ No
4. Assets right restrictions as of the end of reporting period
Unit: RMB
Item Closing book value Reasons for being restricted
Cash and bank balance 172,303,562.90 Various cash deposits and other restricted funds
17
Hikvision 2024 Half Year Report
Item Closing book value Reasons for being restricted
Notes receivable 1,112,921,700.38 Endorsed to suppliers, discounted to the bank
Accounts receivable 364,011,946.79 Pledge for long-term borrowings
Contract assets 138,746,685.24 Pledge for long-term borrowings
Fixed assets 63,958,980.34 Fixed assets leased by operating leases
Intangible assets 36,404,952.72 Pledge and collateral for long-term borrowings
Other non-current assets 1,470,880,090.19 Pledge for long-term borrowings
Total 3,359,227,918.56
VI. Analysis of investments
1. Overview
√Applicable □ Inapplicable
Investment during the first half of 2024 (RMB) Investment during the first half of 2023 (RMB) YoY (%)
1,778,530,933.52 1,920,765,797.38 -7.41%
2. Significant equity investment during the current reporting period
□Applicable √ Inapplicable
3. Significant non-equity investment during the current reporting period
√ Applicable □ Inapplicable
18
Hikvision 2024 Half Year Report
Unit: RMB
Cumulative Reasons for not
Fixed
Investment during amount of reaching planned Disclosure
Invest assets Project Project Disclosure Index (if
Project name the current investment by the Source of funds progress and Date (if
method investme industry schedule applicable)
reporting period end of the current expected benefits applicable)
nt or not
reporting period
Announcement on
AIoT
Investment and Construction
Xi'an Science and Self- products September
YES 100,433,899.09 1,289,744,549.82 Self-fund 79.97% None of Xi'an Science and
Technology Park Project built and 23, 2017
Technology Park in Xi'an
services
(No. 2017-031)
Announcement on
Smart
EZVIZ Intelligent Investment and Construction
home
Manufacturing Chongqing Self- Self-fund / August 11, of EZVIZ Intelligent
YES products 231,569,582.59 859,784,275.39 73.48% None
Base Project (Infrastructure built raised fund 2021 Manufacturing Chongqing
and
Part) Base by the holding
services
subsidiary (No. 2021-052)
Announcement on
AIoT Investment and Construction
Shijiazhuang Science and
Self- products March 22, 2 of Shijiazhuang Science and
Technology Park Project YES 80,666,336.75 356,913,939.48 Self-fund 100.00% None
built and 018 Technology Park in
(Phase Ⅱ)
services Shijiazhuang (No. 2018-
016)
HikRobot Intelligent Self- YES AIoT 177,225,468.08 197,524,958.64 Self-fund 18.44% None January 19, Announcement on
19
Hikvision 2024 Half Year Report
Cumulative Reasons for not
Fixed
Investment during amount of reaching planned Disclosure
Invest assets Project Project Disclosure Index (if
Project name the current investment by the Source of funds progress and Date (if
method investme industry schedule applicable)
reporting period end of the current expected benefits applicable)
nt or not
reporting period
Manufacturing (Tonglu) built products 2022 Investment and Construction
Base Project and of HikRobot Intelligent
services Manufacturing (Tonglu)
Base Project by the holding
subsidiary (No. 2022-009)
Announcement on
Investment and Construction
AIoT
HikRobot Product of HikRobot Product
Self- products January 19,
Industrialization Base YES 27,456,008.36 88,873,615.17 Self-fund 8.77% None Industrialization Base
built and 2022
Construction Project Construction Project by the
services
holding subsidiary (No.
2022-007)
Announcement on
Investment and Construction
AIoT
Infrared Thermal Imaging of Infrared Thermal Imaging
Self- products January 19,
Complete Machine Products YES 11,724,843.58 82,657,207.56 Self-fund 10.90% None Complete Machine Products
built and 2022
Industrial Base Industrial Base by the
services
holding subsidiary (No.
2022-008)
Announcement on
AIoT
Investment and Construction
Wuhan Intelligence Industry Self- products September
YES 745,593.48 6,416,709.64 Self-fund 0.46% None of Wuhan Intelligence
Park Project (Phase II) built and 23, 2017
Industry Park in Wuhan (No.
services
2017-036)
20
Hikvision 2024 Half Year Report
Cumulative Reasons for not
Fixed
Investment during amount of reaching planned Disclosure
Invest assets Project Project Disclosure Index (if
Project name the current investment by the Source of funds progress and Date (if
method investme industry schedule applicable)
reporting period end of the current expected benefits applicable)
nt or not
reporting period
Total -- -- -- 629,821,731.93 2,881,915,255.70 -- -- -- -- --
Note: In accordance with the Company's Authorization Management System, new fixed asset investments in Xi'an Science and Technology Park Project, Shijiazhuang
Science and Technology Park Project, and Wuhan Intelligence Industry Park Project were approved by the Strategy Committee of the Board of Directors.
4. Financial asset investment
4.1 Securities Investments
□ Applicable √ Inapplicable
There no such case in the reporting period.
4.2 Derivatives Investments
√ Applicable □ Inapplicable
1) Derivative investments for the purpose of hedging within the reporting period.
√ Applicable □ Inapplicable
Unit: 0,000 RMB
Gain or loss
on changes Sold amount Proportion of closing
Changes in cumulative Purchased amount
Type of derivatives Initial investment Opening in fair value during the investment amount to the
fair value included in during the reporting Closing amount
investment amount amount during the reporting Company’s net assets at the
equity period
reporting period end of the reporting period
period
21
Hikvision 2024 Half Year Report
Foreign exchange
176,133.92 176,133.92 3,780.73 - 99,946.39 - 87,476.05 1.19%
contract
Total 176,133.92 176,133.92 3,780.73 - 99,946.39 - 87,476.05 1.19%
In accordance with the provisions of Accounting Standards for Business Enterprises (hereinafter referred to as "ASBE") No. 22 - Recognition and
Accounting policies and specific accounting
Measurement of Financial Instruments, ASBE No. 24 - Hedge Accounting, ASBE No. 37 - Presentation of Financial Instruments and other relevant
principles for hedging business during the
regulations and guides, the Company correspondingly conducted accounting and reporting for foreign exchange derivatives business carried out.
reporting period and explanations on
The Company conducted initial and subsequent measurements on contracts of foreign exchange derivatives by held- for-trading financial assets/
whether there have been significant changes
held-for-trading financial liabilities, and the fair value for held-for-trading financial assets and held-for-trading financial liabilities is determined by
from the previous reporting period
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
There was a total of RMB26.26 million actual losses during the reporting period.
the reporting period
The Company's purpose was to avoid and prevent risks of foreign exchange rate fluctuations and prohibited any speculative actions, further
Explanations on the effect of hedging
improving the Company's ability to cope with risks of foreign exchange fluctuations, better avoiding and preventing risks of foreign exchange rate
business
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,
For details of the risk analysis and control measures, please refer to the Announcement on Carrying out Foreign Exchange Hedging Business in
liquidity risk, credit risk, operational risk,
2024(Announcement No. 2024-015) disclosed by the Company on April 20, 2024.
legal risk, etc.) of holding derivatives
during the reporting period
Change of market price or fair value of
invested derivatives during the reporting The Company recognized and measured the fair value of derivatives in accordance with the Accounting Standards for Business Enterprises Article
period; specific methods, related 22 - Recognition and Measurement of Financial Instruments. During the reporting period, a total of RMB37.81 million of gains from changes in fair
assumptions and parameter setting of the value of derivatives were recognized, and the fair value is determined according to the exchange rate provided by banks and other pricing service
derivatives’ fair value analysis should be institutions, measured and recognized on a monthly basis.
disclosed
Prosecution (if applicable) None
22
Hikvision 2024 Half Year Report
Announcement date for approvals of
derivatives investment from the Board of April 20, 2024
Directors (if any)
Announcement date for approvals of
derivatives investment from the general Inapplicable
meeting of shareholders (if any)
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 August 10, 2024 in 2024 Half Year Report of
Hangzhou EZVIZ Network Co., Ltd. on the website of Shanghai Stock Exchange ( www.sse.com.cn).
VII. Disposal of significant assets and equity
1. Disposal of significant assets:
□ Applicable √ Inapplicable
There is no disposal of significant assets for the Company during the current reporting period.
23
Hikvision 2024 Half Year Report
2. Sale of significant equity:
□ Applicable √ Inapplicable
24
Hikvision 2024 Half Year Report
VIII. Analysis of major subsidiaries and holding companies
□Applicable √Inapplicable
The Company has no important holding company information that should be disclosed during the current
reporting period.
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Inapplicable
Equity acquisition and disposal Impact on overall production
Company name
method during the reporting period results
Hangzhou Hikimaging Electronics Ltd. Equity acquisition in cash Business development
Hangzhou Rayin Detection Technology Ltd. Equity acquisition in cash Business development
IX. Structural entities controlled by the Company
□ Applicable √ Inapplicable
X. Risks of the Company and risk response solutions
During the reporting period, the Company has been striving to identify various risk exposures, and actively adopting
countermeasures to avoid and reduce risks:
(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
25
Hikvision 2024 Half Year Report
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.
(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
26
Hikvision 2024 Half Year Report
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.
27
Hikvision 2024 Half Year Report
Section IV Corporate Governance
I. Annual General Meeting and Extraordinary General Meetings convened during the
reporting Period
1. Annual General Meeting convened during the reporting period
Proportion of
Meeting Nature participating Convened date Disclosure date Resolution of the meeting
investors
21 proposals including the 2023
Annual Report and Summary were
2023 Annual Annual General
65.7518% May 10, 2024 May 11, 2024 reviewed and voted. For details,
General Meeting Meeting
please refer to the Company's
announcement: No. 2024-022
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights:
□ Applicable √ Inapplicable
II. Changes of directors, supervisors and senior management personnel
□ Applicable √ Inapplicable
There were no changes in the Company's directors, supervisors and senior management during the reporting period.
For details, please refer to the 2023 annual report.
The company has completed the re-election of the board of directors, board of supervisors, and senior management
team on August 2, 2024, with Chen zongnian, Qu liyang, Wu weiqi, Li shuhua, Guan qingyou, Hong tianfeng, Xu
lirong, and Jin duo having reached the end of their terms and left their positions.
The list of the newly elected directors, supervisors, and senior management can be found in the Announcement on
Resolutions of the 1st Extraordinary General Meeting of 2024, Announcement on Resolutions of the 1st Meeting of
the 6th session of the Board of Directors, and Announcement on Resolutions of the 1st Meeting of the 6th session of
the Board of Supervisors, which were published by the Company on www.cninfo.com.cn on August 3, 2024.
III. Profit distribution and capitalizing of capital reserves for the current reporting period
□ Applicable √ Inapplicable
The Company did not plan to distribute cash dividends, send bonus shares, or convert capital reserve into share
28
Hikvision 2024 Half Year Report
capital during the first half of 2024.
IV. The implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or other
incentive plans
√Applicable □ Inapplicable
1. During the reporting period, the Company reviewed and approved the Proposal on Terminating the
Implementation of the 2021 Restricted Stock Plan and Repurchasing and Canceling Relevant Restricted Shares
On April 18, 2024 and May 10, 2024, the 20th meeting of the 5th session of the Board of Directors, the 18th meeting
of the 5th session of the Board of Supervisors and 2023 Annual General Meeting reviewed and approved Proposal
on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasing and Canceling Relevant
Restricted Shares. Given that the current operating environment has changed significantly from when the restricted
stock plan for 2021 year was established, it has become more difficult to implement this restricted stock plan to
achieve the expected motivational purpose and effect. After careful consideration, it is agreed that the company will
terminate the implementation of the 2021 Restricted Stock Plan and repurchase and cancel all restricted stocks that
have been granted but not yet unlocked. The number of restricted stocks proposed to be repurchased and cancelled
this time totals 97,402,605 shares, accounting for 1.0439% of the company's total share capital (9,330,600,931
shares) before the repurchase and cancellation. On August 15, 2024, the aforementioned restricted stocks have
completed the repurchase and cancellation procedures at the Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited.
For details, please refer to the Announcement on Terminating the Implementation of the 2021 Restricted Stock Plan
and Repurchasing and Canceling Relevant Restricted Shares and the Announcement on the Completion of
Repurchase and Cancellation of Restricted Stocks Related to the 2021 Restricted Stock Plan published by the
Company on www.cninfo.com.cn on April 20, 2024 and August 17, 2024.
The Company carries out accounting treatment related to the restricted stock plan in accordance with the
requirements of accounting standards such as "Enterprise Accounting Standards No. 11 — Share-based Payment".
For specific details, please refer to the notes to the financial statements (XII. Share-based payments).
As of now, the Company does not have any outstanding restricted shares.
29
Hikvision 2024 Half Year 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 national environmental protection department.
□Yes √ No.
II. Social responsibilities
During the reporting period, the Company has not yet carried out poverty alleviation and rural revitalization.
30
Hikvision 2024 Half Year Report
Section VI Significant Events
I. Complete and incomplete commitments of the Company and its actual controller,
shareholders, related parties, acquirers, and other related parties for the commitments during
the current reporting period.
□ Applicable √ Inapplicable
No such case during the current reporting period.
II. The Company's funds used by the controlling shareholder or its 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. Engagement and disengagement of the CPA firm
Has the half year report been audited?
□ Yes √ No
The Company's half year report has not been audited.
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. Explanation given by the Board of Directors regarding the "non-standard auditor's report"
for the prior reporting period
□ Applicable √ Inapplicable
VII. Bankruptcy and restructuring
□ Applicable √ Inapplicable
31
Hikvision 2024 Half Year Report
No such case during the reporting period.
VIII. Material litigations
Material litigation and arbitration
□ Applicable √ Inapplicable
The Company had no material litigation or arbitration during the current reporting period.
Other litigation matters
□ Applicable √ Inapplicable
IX. Punishments and rectifications
□ Applicable √ Inapplicable
No such case during the reporting period.
X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Inapplicable
XI. Significant related-party transaction
1. Related-party transactions arising from routine daily operations
√ Applicable □ Inapplicable
32
Hikvision 2024 Half Year Report
Pricing Proportion to Approved Whether
Type of Content of Trading amount
principles for the amount trading exceed the Settlement Disclosure Disclosure
Related party Relationship related related （0'000
related party of similar quota (0'000 approved method date reference
transaction transaction RMB）
transactions transactions. RMB） quota
Under the common
Subsidiaries or
control of the Payment on
research institutes of Procurement 98,847.24 4.48% 350,000.00 No
Company's actual delivery
CETC Announcement
controller.
on the forecast
Joint ventures in which Both parties
Procurement Payment on of daily related-
Joint ventures the Company holds Procurement agree jointly 266.33 0.01% 2,100.00 No April 20,
, receiving delivery party
shares based on the 2024
services transactions in
Associated companies market price
Payment on 2024 (No. 2024-
Associated companies in which the Company Procurement 10,378.04 0.47% 61,800.00 No
delivery 014)
holds shares
Refer to note 1 for Payment on
Other related parties Procurement 50,516.81 2.29% 200,100.00 No
details delivery
Under the common
Subsidiaries or
control of the Payment on
research institutes of Sales 8,311.44 0.20% 50,000.00 No
Company's actual delivery
CETC Announcement
controller
Selling on the forecast
Joint ventures in which Both parties
commercial Payment on of daily related-
Joint ventures the Company holds Sales agree jointly 2,273.85 0.06% 18,600.00 No April 20
goods, delivery party
shares based on the 2024
providing transactions in
Associated companies market price
services, Payment on 2024 (No. 2024-
Associated companies in which the Company Sales 1,623.26 0.04% 15,700.00 No
delivery 014)
holds shares
Refer to note 1 for Payment on
Other related parties Sales 1,008.95 0.02% 10,100.00 No
details delivery
33
Hikvision 2024 Half Year Report
Pricing Proportion to Approved Whether
Type of Content of Trading amount
principles for the amount trading exceed the Settlement Disclosure Disclosure
Related party Relationship related related （0'000
related party of similar quota (0'000 approved method date reference
transaction transaction RMB）
transactions transactions. RMB） quota
Announcement
on the forecast
Under the common Renting Both parties
Subsidiaries or of daily related-
control of the house from agree jointly Based on April 20,
research institutes of Lease 167.06 0.80% 500.00 No party
Company's actual related based on the contract 2024
CETC transactions in
controller parties market price
2024 (No. 2024-
014)
Total 173,392.97 - 708,900
Details on significant sales return None
Total amount of related transactions projected based on
different categories, and the actual performance during the Not applicable
current reporting period (if any)
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.
34
Hikvision 2024 Half Year 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. Deals with related-party financial companies
√ Applicable □ Inapplicable
Deposit business
Amount incurred
Maximum daily Deposit Total deposit Total amount
Related Opening balance Closing balance
Relationship deposit limit interest amount in the withdrawn in the
party (0,000 RMB) (0,000 RMB)
(0,000 RMB) rate range current period current period
(0,000 RMB) (0,000 RMB)
Under the
CETC
common control 0.2%-
Finance 1,643,272.24 401,364.74 391,830.01 393,162.91 400,031.84
of the Company's 1.75%
Co., Ltd.
ultimate controller
Credit or other financial services
Total amount Actual amount incurred
Related party Relationship Business type
(0,000 RMB) (0,000 RMB)
Under the common control of
Other financial
CETC Finance Co., Ltd. the Company's ultimate 600,000.00 229,000.00
business
controller
Note: The above amount is the amount of entrusted loans issued by the Group to its subsidiaries through CETC Finance Co., Ltd.
during the reporting period.
35
Hikvision 2024 Half Year Report
Total amount Actual amount incurred
Related party Relationship Business type
(0,000 RMB) (0,000 RMB)
Under the common control of
CETC Finance Co., Ltd the Company's ultimate Credit 500,000.00 -
controller
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √ Inapplicable
7. Other significant related party transactions
□ Applicable √ Inapplicable
No such case in the reporting period.
XII. Significant contracts and their execution
1. Trusteeship, contracting and leasing
1.1 Trusteeship
□ Applicable √ Inapplicable
No such case in the reporting period.
1.2 Contracting
□ Applicable √ Inapplicable
No such case in the reporting period.
1.3 Leasing
□ Applicable √ Inapplicable
No such case in the reporting period.
36
Hikvision 2024 Half Year Report
2. Significant guarantees
√Applicable □ Inapplicable
Unit: 0,000 RMB
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual occurrence Actual guaranteed Type of Expiration date of Fulfilled
Guaranteed party announcement of the related
cap date amount guarantee guarantee or not
guarantee cap party or
not
Hangzhou Hikvision Technology
April 20, 2024 1,088,400.00 July 26, 2021 580,944.92 Joint guarantee December 31, 2029 No No
Ltd.
Luopu HaiShi Ding Xin Electronic
April 20, 2024 29,000.00 March 26, 2019 20,040.00 Joint guarantee March 26, 2035 No No
Technology Ltd.
Pishan HaiShi Yong An Electronic
April 20, 2024 28,000.00 March 26, 2019 19,178.00 Joint guarantee March 26, 2040 No No
Technology Ltd.
Urumqi HaiShi Xin'An Electronic
April 20, 2024 37,000.00 March 26, 2019 15,766.86 Joint guarantee June 20, 2028 No No
Technology Ltd
Moyu HaiShi Electronic
April 20, 2024 24,000.00 March 26, 2019 15,840.00 Joint guarantee March 26, 2035 No No
Technology Ltd.
Hangzhou Hikvision System
April 20, 2024 80,000.00 March 23, 2021 12,052.78 Joint guarantee March 31, 2026 No No
Technology Ltd.
Yutian Haishi Meitian Electronic
April 20, 2024 30,000.00 March 26, 2019 9,480.00 Joint guarantee March 26, 2034 No No
Technology Co., Ltd.
Nanjing Hikvision Digital
April 20, 2024 11,000.00 June 30, 2022 3,853.70 Joint guarantee July 31, 2025 No No
Technology Ltd.
Chongqing Hikvision Technology April 20, 2024 25,000.00 May 10, 2024 2,400.00 Joint guarantee July 31, 2026 No No
37
Hikvision 2024 Half Year Report
Ltd.
Hangzhou Hikvision Electronics
April 20, 2024 21,500.00 October 31, 2023 805.95 Joint guarantee July 31, 2026 No No
Ltd.
Chongqing Hikvision System
April 20, 2024 2,000.00 March 30, 2023 173.95 Joint guarantee July 24, 2024 No No
Technology Ltd.
Xi’an Hikvision Digital
April 20, 2024 18,000.00 September 29, 2022 - Joint guarantee July 31, 2025 Yes No
Technology Ltd.
Wuhan Haorong Technology Ltd April 20, 2024 33,000.00 December 4, 2023 - Joint guarantee July 31, 2025 Yes No
Shijiazhuang Hikvision
April 20, 2024 12,000.00 October 18, 2023 - Joint guarantee July 31, 2025 Yes No
Technology Ltd.
Hikvision International 85,000.00
April 20, 2024 Not happened during the reporting period
Co.,Limited
HIKVISION TECHNOLOGY 10,000.00
April 20, 2024 Not happened during the reporting period
PTE. LTD.
Zhengzhou Hikvision Ditigal 6,100.00
April 20, 2024 Not happened during the reporting period
Technology Ltd.
Chengdu Hikvision Digital 6,000.00
April 20, 2024 Not happened during the reporting period
Technology Ltd.
Nanchang Hikvision Digital 4,500.00
April 20, 2024 Not happened during the reporting period
Technology Ltd.
Hefei Hikvision Digital 3,500.00
April 20, 2024 Not happened during the reporting period
Technology Ltd.
Hikvision Digital Technology 3,000.00
April 20, 2024 Not happened during the reporting period
(Shanghai) Ltd.
Fuzhou Hikvision Digital 2,500.00
April 20, 2024 Not happened during the reporting period
Technology Ltd.
38
Hikvision 2024 Half Year Report
Wuhan Hikvision Technology Ltd. April 20, 2024 1,000.00 Not happened during the reporting period
Total guarantee cap for subsidiaries approved during the Total actual guarantee amount for
1,560,500.00 subsidiaries during the reporting period 1,083,455.99
reporting period (B1)
(B2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of
1,560,500.00 subsidiaries at the end of the reporting 680,536.16
the reporting period (B3)
period (B4)
Guarantees provided by subsidiaries of the Company to their subsidiaries
Guarantee
Disclosure date of
Guarantee Actual occurrence Actual guaranteed Type of Fulfilled for a
Guaranteed party announcement of the Term of guarantee
cap date amount guarantee or not related
guarantee cap
party or not
Hangzhou Haikang Intelligent
April 20, 2024 32,000.00 July 28, 2022 3,459.09 Joint guarantee 2025.11.30 No No
Technology Ltd.
Hangzhou Hikrobot Intelligence April 20, 2024
23,000.00 July 12, 2023 2,035.27 Joint guarantee 2025.4.12 No No
Ltd.
Chongqing EZVIZ Electronic Ltd. April 20, 2024 17,000.00 September 11, 2023 800.00 Joint guarantee 2024.9.11 No No
Hangzhou Hikmicro Intelligent April 20, 2024
11,000.00 November 2, 2023 647.49 Joint guarantee 2025.04.12 No No
Technology Ltd.
Zhejiang Hikfire Technology Ltd April 20, 2024 10,000.00 Not happened during the reporting period
Hikrobot Korea Limited April 20, 2024 5,000.00 Not happened during the reporting period
Hikrobot Europe B.V. April 20, 2024 5,000.00 Not happened during the reporting period
Wuhan Hikfire Technology Ltd April 20, 2024 3,000.00 Not happened during the reporting period
Hangzhou EZVIZ Software Ltd. April 20, 2024 1,000.00 Not happened during the reporting period
Total guarantee cap for subsidiaries approved during the Total actual guarantee amount for
107,000.00 26,992.66
reporting period (C1) subsidiaries during the reporting period
39
Hikvision 2024 Half Year Report
(C2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of
107,000.00 subsidiaries at the end of the reporting 6,941.85
the 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
1,667,500.00 1,110,448.65
（A1+B1+C1） the reporting period（A2+B2+C2）
Total actual guarantee balance at the
Total approved guarantee cap at the end of reporting period
1,667,500.00 end of the reporting period 687,478.01
（A3+B3+C3）
（A4+B4+C4）
Portion of the total actual guarantee (A4+B4+C4) amount
9.32%
in net assets of the Company
Of which:
The balance of guarantee for shareholders, actual
-
controllers and their affiliates. (D)
Amount of debt guarantees provided directly or indirectly
672,045.33
for entities with a liability-to-asset ratio over 70% (E)
Total amount of guarantee exceeding 50% of net assets (F) -
Total guarantee amount of the above-mentioned 3 kinds of
672,045.33
guarantees (D+E+F)
40
Hikvision 2024 Half Year Report
3. Entrusted financial management
□Applicable √Inapplicable
No such case during the reporting period
4. Other significant contracts
□Applicable √ Inapplicable
The Company has no other significant contracts in the reporting period.
XIII. Other significant events
√Applicable □ Inapplicable
1. The controlling shareholder of the Company disclosed and implemented the plan to increase the company's shares.
On October 16, 2023, the Company received a notice from the Company's controlling shareholder, China
Electronics Technology HIK Group Co., Ltd. (hereinafter referred to as "CETHIK"), that CETHIK intended to
increase its holdings of the Company's shares through centralized bidding, block trading or other trading methods
permitted by laws and regulations through the Shenzhen Stock Exchange trading system, within 6 months from
October 17, 2023. The total amount of the increased shareholding would not be less than RMB 200 million and not
more than RMB 300 million, and the proposed increase price should not be higher than RMB 40 per share (inclusive).
Specifically, 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 centralized bidding trading through the Shenzhen Stock Exchange trading system, accounting for 0.0672%
of the company's total share capital at the trading day, and the amount of additional shares was RMB200,160,059.77
(excluding transaction fees), and therefore the shareholding increase plan was accomplished. For details, please
refer to 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
2. The person acting in concert of the controlling shareholder of the Company disclosed and implemented the plan
41
Hikvision 2024 Half Year Report
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 intended 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 not more than
RMB600 million (including the amount of increase on January 16, 2024). There would be no fixed price range for
this increase plan, and CETC Investment would 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 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 total share capital at the trading day, and the amount of additional shares was RMB400,027,006.81
(excluding transaction fees), and therefore the shareholding increase plan was accomplished. 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.
XIV. Significant events of the Company's subsidiaries
√Applicable □ Inapplicable
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
42
Hikvision 2024 Half Year Report
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 issued 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.
On January 15, 2024, Shenzhen Stock Exchange issued the Letter on the Implementation of the Opinions of the
Review Center on the Application of Hangzhou Hikrobot Co., Ltd. for Initial Public Offering of Shares and Listing
on the ChiNext board (Inquiry Letter (2024) No. 010010).
43
Hikvision 2024 Half Year 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) 222,167,673 2.38% 114,940 114,940 222,282,613 2.38%
1)State holdings
2)Shares held by State-owned corporate
3) Other domestic shares 222,031,673 2.38% 114,940 114,940 222,146,613 2.38%
Including: held by domestic corporates
held by domestic natural person 222,031,673 2.38% 114,940 114,940 222,146,613 2.38%
4) Foreign shares 136,000 0.00% 136,000 0.00%
Including: held by overseas corporates
held by overseas natural person 136,000 0.00% 136,000 0.00%
2. Shares without restriction 9,108,433,258 97.62% -114,940 -114,940 9,108,318,318 97.62%
1) RMB common shares 9,108,433,258 97.62% -114,940 -114,940 9,108,318,318 97.62%
44
Hikvision 2024 Half Year 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
2) Domestically listed foreign shares
3) Foreign shares listed overseas
4) Others
3. Total 9,330,600,931 100.00% 0 0 9,330,600,931 100.00%
Reason for the changes in share capital
□Applicable√ Inapplicable
Approval for changes in share capital
□Applicable □√ Inapplicable
Transfer for changes in share capital
□Applicable√ Inapplicable
Information about the implementation of share repurchase
□Applicable √ Inapplicable
The implementation progress of reducing and repurchasing shares by centralized bidding
□Applicable √ Inapplicable
45
Hikvision 2024 Half Year Report
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
2. Changes in restricted shares
√ Applicable □ Inapplicable
Unit: Share
Number of Number of Number of Number of
restricted shares at restricted shares restricted shares restricted shares
Name of shareholder Restriction reasons Unlock date
the beginning of unlocked during increased during at the end of the
the period the period the period period
Grantees of restricted It has been repurchased
share incentive plan 97,402,605 0 0 97,402,605 Equity Incentive Restricted Shares and cancelled on August
(consolidated) 15, 2024
Hu Yangzhong 116,727,358 0 0 116,727,358 Restricted shares for directors, supervisors and senior executives
Xu Peng 11,466 0 0 11,466 Restricted shares for directors, supervisors and senior executives
Wang Qiuchao 26,250 0 0 26,250 Restricted shares for directors, supervisors and senior executives
According to the
He Lihong 248,625 0 0 248,625 Restricted shares for directors, supervisors and senior executives
relevant provisions of
Pu Shiliang 176,925 0 0 176,925 Restricted shares for directors, supervisors and senior executives shares management for
Guo Xudong 15,855 0 22,500 38,355 Restricted shares for directors, supervisors and senior executives directors, supervisors
and senior executives
Bi Huijuan 177,075 0 0 177,075 Restricted shares for directors, supervisors and senior executives
Xu Ximing 80,925 0 7,500 88,425 Restricted shares for directors, supervisors and senior executives
Huang Fanghong 257,125 0 22,500 279,625 Restricted shares for directors, supervisors and senior executives
46
Hikvision 2024 Half Year Report
Number of Number of Number of Number of
restricted shares at restricted shares restricted shares restricted shares
Name of shareholder Restriction reasons Unlock date
the beginning of unlocked during increased during at the end of the
the period the period the period period
Jin Yan 188,250 0 0 188,250 Restricted shares for directors, supervisors and senior executives
Cai Changyang 82,125 0 0 82,125 Restricted shares for directors, supervisors and senior executives
Qu Liyang 11,812 0 0 11,812 Restricted shares for directors, supervisors and senior executives
Wu Weiqi 6,514,342 0 0 6,514,342 Restricted shares for directors, supervisors and senior executives
Xu Lirong 227,250 0 0 227,250 Restricted shares for directors, supervisors and senior executives
Jin Duo 82,125 0 0 82,125 Restricted shares for directors, supervisors and senior executives
Total 222,230,113 0 52,500 222,282,613 -- --
Note1: Senior management officers who are grantees under incentive restricted shares scheme, his/her holding incentive restricted shares are counted in the total
incentive restricted shares (consolidated statistics).
Note 2: The Company’s senior management officers of, Guo Xudong, Xu Ximing, and Huang Fanghong increased their holdings of the Company by 30,000 shares,
10,000 shares, and 30,000 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.
Note 3: The Company actually granted 97,402,605 shares under the 2021 Restricted Share Incentive Scheme, and these shares were repurchased and cancelled on
August 15, 2024.
Note 4: The Company has completed the re-election process by August 2, 2024, and Qu Liyang, Wu Weiqi, Xu Lirong, and Jin Duo have all reached the end of their
terms and left their positions.
II. Issuance and listing of securities
□Applicable √ Inapplicable
There were no securities issues during the reporting period
47
Hikvision 2024 Half Year Report
III. Total number of shareholders and their shareholdings
Unit: Share
Total number of common shareholders at the end of the Total number of preferred shareholders with voting rights restored at the end of
337,099 0
reporting period the current reporting period (if any)
Particulars about shares held by common shareholders with a shareholding percentage over 5% or the Top 10 of them (Excludes shares lent through refinancing)
The number of Pledged or frozen
Share- Total common Increase/ The number of
common shares
holding shares held at the decrease during common shares
Name of shareholder Nature of shareholder held with Shares'
percentage end of the the reporting held without Amount
trading Status
(%) reporting period period trading restrictions
restrictions
China Electronics
State-owned
Technology HIK Group 36.55% 3, 410,150,909 6,271,400 - 3, 410,150,909 Pledged 50,000,000
corporation
Co., Ltd.
Gong Hongjia Overseas individual 10.32% 962,504,814 - - 962,504,814 Pledged 172,188,700
Hangzhou Weixun Equity Domestic
Investment Partnership non-state-owned 4.83% 450,795,176 - - 450,795,176 Pledged 18,700,,000
(Limited Partnership) corporation
Shanghai Perseverance
Asset Management
Partnership (Limited
Other 4.42% 412,000,000 -15,000,000 - 412,000,000 - -
Partnership) - Perseverance
Adjacent Mountain 1
Yuanwang Fund
CETC Investment
State-owned corporation 2.63% 245,161,568 12,853,665 - 245,161,568 -
Holdings Co., Ltd.
48
Hikvision 2024 Half Year Report
Hangzhou Pukang Equity Domestic
Investment Partnership non-state-owned 1.96% 182,510,174 - - 182,510,174 Pledged 51,980,000
(Limited Partnership) corporation
The 52nd Research Institute
at China Electronics State-owned
1.94% 180,775,044 - - 180,775,044 - -
Technology corporation
Group Corporation
Hu Yangzhong Domestic Individual 1.67% 155,636,477 - 116,727,358 38,909,119 - -
Hong Kong Securities
Clearing Company Overseas corporation 0.78% 72,520,937 18,800,501 - 72,520,937 - -
Ltd.(HKSCC)
Central Huijin Investment
State-owned corporation 0.69% 64,700,691 - - 64,700,691 - -
Co., Ltd.
China Electronics Technology HIK Group Co., Ltd., CETC Investment Holdings Co., Ltd. and The 52 nd Research Institute at China
Electronics Technology Group Co., Ltd. are all subject to control of China Electronics Technology Group Co. Ltd. Chen Chunmei,
limited partner of Hangzhou Pukang Equity Investment Partnership (Limited Partnership), is the spouse of Gong Hongjia, foreign
Explanation on associated relationship or concerted
individual shareholder of the Company. Hu Yangzhong, domestic individual, is holding shares in both Hangzhou Weixun Equity
actions among the above-mentioned shareholders:
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 Administration of the Takeover of Listed Companies Procedures.
Particulars about shares held by the Top 10 common shareholders holding shares that are not subject to trading restriction
(Excludes loaned shares through refinancing and lock-up shares of senior executives)
Number of common shares without Type of shares
Name of shareholder trading restrictions held at the
Type Number
period-end
China Electronics Technology HIK Group Co., Ltd. 3,410,150,909 RMB common shares 3,410,150,909
Gong Hongjia 962,504,814 RMB common shares 962,504,814
Hangzhou Weixun Equity Investment Partnership (Limited Partnership) 450,795,176 RMB common shares 450,795,176
49
Hikvision 2024 Half Year Report
Shanghai Perseverance Asset Management Partnership (Limited Partnership) -
412,000,000 RMB common shares 412,000,000
Perseverance Adjacent Mountain 1 Yuanwang Fund
CETC Investment Holdings Co., Ltd. 245,161,568 RMB common shares 245,161,568
Hangzhou Pukang Equity Investment Partnership (Limited Partnership) 182,510,174 RMB common shares 182,510,174
The 52nd Research Institute at China Electronics Technology Group Co. Ltd. 180,775,044 RMB common shares 180,775,044
Hong Kong Securities Clearing Company Ltd.(HKSCC) 72,520,937 RMB common shares 72,520,937
Central Huijin Investment Co., Ltd. 64,700,691 RMB common shares 64,700,691
Industrial and Commercial Bank of China Co., Ltd. - Huatai Pinebridge CSI
44,238,656 RMB common shares 44,238,656
300 ETF Securities Investment Fund
China Electronics Technology HIK Group Co., Ltd., CETC Investment Holdings Co., Ltd. and The 52 nd Research Institute at China
Explanation on associated relationship and concerted Electronics Technology Group Co., Ltd. are all subject to control of China Electronics Technology Group Co. Ltd. Chen Chunmei,
actions among top ten common shareholders holding limited partner of Hangzhou Pukang Equity Investment Partnership (Limited Partnership), is the spouse of Gong Hongjia, foreign
shares without trading restrictions, and among top ten individual shareholder of the Company. Hu Yangzhong, domestic individual, is holding shares in both Hangzhou Weixun Equity
common shareholders and top ten common Investment Partnership (Limited Partnership) and Hangzhou Pukang Equity Investment Partnership (Limited Partnership). Except
shareholders holding shares without trading restrictions 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 Administration of the Takeover of Listed Companies Procedures.
Information on Top 10 shareholders of ordinary shares
participating in margin trading and short selling Inapplicable
business
Shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares participate in the lending of shares
in the refinancing business
√ Applicable □Inapplicable
Unit: share
Shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares participate in the lending of shares in the refinancing
business
Period-beginning common Period-beginning refinancing Period-end common Period-end refinancing
Shareholder Name (Full Name)
account and credit account lending shares that have not yet account and credit account lending shares that have not
50
Hikvision 2024 Half Year Report
holdings been returned holdings yet been returned
Shares Percentage Shares Percentage Shares Percentage Shares Percentage
Industrial and Commercial Bank of China Co., Ltd. -
Huatai Pinebridge CSI 300 ETF Securities Investment 27,920,756 0.30% 15,900 0.00% 44,238,656 0.47% 0 0.00%
Fund
Changes of the top 10 shareholders and the top 10 shareholders that are not subject to trading restriction compared with the previous period due to refinancing,
lending/repayment issues
□ 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?
□ Applicable √ Inapplicable
No such case during the current reporting period.
IV. Shareholding changes of directors, supervisors, senior management personnel
√ Applicable □ Inapplicable
Number of Number of
Shares Shares Number of
Shares held at restricted restricted
increased decreased restricted
Shares held at the the end of the stocks stocks held at
during the during the stocks held at
Tenure beginning of the current granted in the end of the
Name Title current current the beginning
status current reporting reporting the current current
reporting reporting of the current
period (shares) period reporting reporting
period period reporting
(shares) period period
(shares) (shares) period (shares)
(shares) (shares)
Hu Yangzhong Chairman Incumbent 155,636,477 0 0 155,636,477 0 0 0
Xu Peng Director Incumbent 108,622 0 0 108,622 70,000 0 70,000
Wang Qiuchao Director Incumbent 35,000 0 0 35,000 0 0 0
51
Hikvision 2024 Half Year Report
Number of Number of
Shares Shares Number of
Shares held at restricted restricted
increased decreased restricted
Shares held at the the end of the stocks stocks held at
during the during the stocks held at
Tenure beginning of the current granted in the end of the
Name Title current current the beginning
status current reporting reporting the current current
reporting reporting of the current
period (shares) period reporting reporting
period period reporting
(shares) period period
(shares) (shares) period (shares)
(shares) (shares)
Independent
Wu Xiaobo Incumbent 0 0 0 0 0 0 0
Director
Independent
Hu Ruimin Incumbent 0 0 0 0 0 0 0
Director
Lu Jianzhong Supervisor Chairman Incumbent 0 0 0 0 0 0 0
Senior Deputy General
He Hongli Incumbent 331,500 0 0 331,500 0 0 0
Manager
Senior Deputy General
Pu Shiliang Incumbent 355,900 0 0 355,900 90,000 0 90,000
Manager
Senior Deputy General
Guo Xudong Incumbent 21,140 30,000 0 51,140 0 0 0
Manager
Senior Deputy General
Bi Huijuan Incumbent 236,100 0 0 236,100 0 0 0
Manager
Senior Deputy General
Xu Ximing Incumbent 227,900 10,000 0 237,900 90,000 0 90,000
Manager
Senior Deputy General
Chen Junke Incumbent 0 0 0 0 0 0 0
Manager
Huang Senior Deputy General
Incumbent 449,500 30,000 0 479,500 80,000 0 80,000
Fanghong Manager
Senior Deputy General
Jin Yan Incumbent 331,000 0 0 331,000 80,000 0 80,000
Manager
52
Hikvision 2024 Half Year Report
Number of Number of
Shares Shares Number of
Shares held at restricted restricted
increased decreased restricted
Shares held at the the end of the stocks stocks held at
during the during the stocks held at
Tenure beginning of the current granted in the end of the
Name Title current current the beginning
status current reporting reporting the current current
reporting reporting of the current
period (shares) period reporting reporting
period period reporting
(shares) period period
(shares) (shares) period (shares)
(shares) (shares)
Senior Deputy General
Cai Changyang Incumbent 109,500 0 0 109,500 0 0 0
Manager
Chen Zongnian Chairman Left the post 0 0 0 0 0 0 0
Qu Liyang Director Left the post 15,750 0 0 15,750 0 0 0
Wu Weiqi Director Left the post 8,685,789 0 0 8,685,789 0 0 0
Li Shuhua Independent Director Left the post 0 0 0 0 0 0 0
Guan Qingyou Independent Director Left the post 0 0 0 0 0 0 0
Hong Tianfeng Supervisor Chairman Left the post 0 0 0 0 0 0 0
Xu Lirong Supervisor Left the post 303,000 0 0 303,000 0 0 0
Senior Deputy General Left the post
Jin Duo 109,500 0 0 109,500 0 0 0
Manager
Total -- -- 166,956,678 70,000 0 167,026,678 410,000 0 410,000
Note 1: Number shares held at the beginning of the period, shares increased during the period, shares decreased during the period for directors, supervisors, and
senior management personnel above are all shares directly held by them accordingly, including restricted shares.
Note 2: The Company has completed the re-election process on August 2, 2024, with Chen Zongnian, Qu Liyang, Wu Weiqi, Li Shuhua, Guan Qingyou, Hong
Tianfeng, Xu Lirong, and Jin Duo having all reached the end of their terms and left their positions.
Note 3: The restricted shares mentioned above have been repurchased and cancelled on August 15, 2024.
V. Changes in controlling shareholders or actual controllers
Change of the controlling shareholder during the reporting period
53
Hikvision 2024 Half Year Report
□ Applicable √ Inapplicable
The Company's controlling shareholder has not changed during the reporting period.
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
No such change during the reporting period.
54
Hikvision 2024 Half Year Report
Section VIII Information of Preferred Shares
□ Applicable √ Inapplicable
There is no preferred share existed for the Company during the current reporting period.
55
Hikvision 2024 Half Year Report
Section IX Bonds
□ Applicable √ Inapplicable
56
Hikvision 2024 Half Year Report
Section X Financial Report
I. Audit report
Whether audit has been performed on the half year report
□ Yes √ No
The Company's 2024 Half Year Report has not been audited
57
Hikvision 2024 Half Year Report
On June 30, 2024
Consolidated Balance Sheet
Unit: RMB
Item Notes On June 30, 2024 On December 31, 2023 (Restated)
Current Assets:
Cash and bank balances (V)1 34,126,501,664.33 49,638,158,662.54
Held-for-trading financial assets (V)2 6,812,406.08 37,380.00
Notes receivable (V)3 2,159,264,517.06 2,606,071,375.74
Accounts receivable (V)4 36,783,112,910.26 35,816,573,511.44
Receivables for financing (V)6 1,762,830,566.46 1,594,219,832.62
Prepayments (V)7 607,213,882.47 508,151,405.92
Other receivables (V)8 3,420,307,271.32 571,912,035.93
Inventories (V)9 19,036,775,398.88 19,211,444,296.82
Contract assets (V)5 1,195,004,401.26 1,173,312,415.20
Non-current assets due within one year (V)10 1,023,256,341.23 1,079,721,006.23
Other current assets (V)11 1,086,913,155.01 961,593,616.75
Total Current Assets 101,207,992,514.36 113,161,195,539.19
Non-current Assets:
Long-term receivables (V)12 465,441,001.04 538,698,618.76
Long-term equity investment (V)13 1,096,209,035.64 1,151,104,887.85
Other non-current financial assets (V)14 484,766,776.92 472,184,937.66
Fixed assets (V)15 13,152,617,644.44 11,508,312,342.17
Construction in progress (V)16 3,630,236,850.80 4,307,651,074.46
Right-of-use assets (V)17 460,246,699.21 521,061,396.66
Intangible assets (V)18 1,853,002,350.78 1,810,476,551.45
Goodwill (V)19 311,622,064.59 311,353,640.88
Long-term deferred expenses (V)20 156,444,171.34 177,361,533.93
Deferred tax assets (V)21 2,014,769,110.59 1,978,373,012.15
Other non-current assets (V)22 2,952,698,511.18 2,920,349,344.39
Total Non-current Assets 26,578,054,216.53 25,696,927,340.36
Total Assets 127,786,046,730.89 138,858,122,879.55
58
Hikvision 2024 Half Year Report
On June 30, 2024
Consolidated Balance Sheet-continued
Unit: RMB
Item Notes On June 30, 2024 On December 31, 2023 (Restated)
Current Liabilities:
Short-term borrowings (V)24 1,310,349,077.28 2,118,952,026.06
Held-for-trading financial liabilities (V)25 7,047,477.76 38,079,755.04
Notes payable (V)26 1,099,859,319.83 1,163,687,279.58
Accounts payable (V)27 14,783,618,410.40 19,163,485,888.09
Contract liabilities (V)28 3,071,483,493.77 2,977,990,775.40
Payroll payable (V)29 4,123,759,835.12 6,120,471,280.78
Taxes payable (V)30 1,435,109,185.43 1,622,550,187.86
Other payables (V)31 3,683,039,193.72 3,911,612,841.06
Including: dividends payable (V)31.2 300,184,420.58 253,957,413.29
Non-current liabilities due within one year (V)32 8,102,855,879.79 5,814,660,214.96
Other current liabilities (V)33 2,944,572,465.38 1,481,222,044.19
Total Current Liabilities 40,561,694,338.48 44,412,712,293.02
Non-current Liabilities:
Long-term borrowings (V)34 5,680,041,584.23 8,940,122,961.01
Lease liabilities (V)35 308,658,409.00 344,005,866.13
Long-term payables (V)36 13,785,687.09 15,526,169.45
Provisions (V)37 239,531,133.79 213,084,038.31
Deferred income (V)38 846,631,548.46 966,259,592.34
Deferred tax liabilities (V)21 157,936,641.04 129,866,978.18
Other non-current liabilities (V)39 30,261,509.73 1,672,933,103.20
Total Non-current Liabilities 7,276,846,513.34 12,281,798,708.62
Total Liabilities 47,838,540,851.82 56,694,511,001.64
Owners' Equity
Share capital (V)40 9,330,600,931.00 9,330,600,931.00
Capital reserves (V)41 8,552,905,686.54 7,864,903,763.52
Less: Treasury shares (V)42 2,650,324,882.05 2,737,987,226.55
Other comprehensive income (V)43 166,552.56 44,667,516.16
Surplus reserves (V)44 4,715,460,312.00 4,715,460,312.00
Retained earnings (V)45 53,803,198,263.40 57,136,620,244.01
Total owners' equity attributable to owner of the
73,752,006,863.45 76,354,265,540.14
Company
Minority equity 6,195,499,015.62 5,809,346,337.77
Total Owners' Equity 79,947,505,879.07 82,163,611,877.91
Total Liabilities and Owners' Equity 127,786,046,730.89 138,858,122,879.55
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Legal Representative: Hu Yangzhong；Person in Charge of the Accounting Work: Jin Yan;
Person in Charge of the Accounting Department: Zhan Junhua
59
Hikvision 2024 Half Year Report
On June 30, 2024
Balance Sheet of the Parent Company
Unit: RMB
Item Notes On June 30, 2024 On December 31, 2023
Current Assets:
Cash and bank balances 23,109,104,168.14 36,366,610,163.17
Notes receivable 146,477,231.26 214,433,654.20
Accounts receivable (XVI)1 25,339,866,635.62 19,016,777,665.77
Receivables for financing 27,664,544.95 44,650,466.33
Prepayments 149,897,410.51 53,649,708.62
Other receivables (XⅥ)2 7,742,330,526.14 3,061,246,174.74
Including: dividends receivable (XⅥ)2.2 94,430,000.00 41,423,446.39
Inventories 185,318,255.27 199,049,157.84
Contract assets 11,957,229.40 10,490,078.61
Non-current assets due within one year 117,348,399.88 157,086,525.60
Other current assets 1,362,668,058.41 1,676,541,190.03
Total Current Assets 58,192,632,459.58 60,800,534,784.91
Non-current Assets:
Long-term accounts receivable 1,499,773,720.02 3,633,588,076.55
Long-term equity investment (XⅥ)3 8,889,576,465.41 8,681,387,048.75
Other non-current financial assets 351,349,603.50 338,767,764.24
Fixed assets 3,390,997,435.39 3,392,288,906.32
Construction in progress 21,517,441.01 17,377,463.50
Right-of-use assets 60,415,459.34 124,744,108.19
Intangible assets 168,410,841.97 96,021,508.25
Long-term deferred expenses 33,052,712.03 39,437,083.99
Deferred tax assets 309,949,419.94 322,869,398.52
Other non-current assets 156,047,532.46 146,216,939.94
Total Non-current Assets 14,881,090,631.07 16,792,698,298.25
Total Assets 73,073,723,090.65 77,593,233,083.16
60
Hikvision 2024 Half Year Report
On June 30, 2024
Balance Sheet of the Parent Company - continued
Unit: RMB
Item Notes On June 30, 2024 On December 31, 2023
Current Liabilities:
Accounts payable 762,266,262.54 1,050,518,329.53
Contract liabilities 191,873,222.73 218,875,534.52
Payroll payable 2,606,895,441.69 3,644,152,847.04
Taxes payable 810,111,983.29 944,807,901.59
Other payables 2,288,319,619.30 738,553,487.03
Including: dividend payable 243,506,512.50 155,844,168.00
Non-current liabilities due within one year 4,683,852,702.85 1,523,328,743.28
Other current liabilities 2,688,309,835.37 1,134,059,460.70
Total Current Liabilities 14,031,629,067.77 9,254,296,303.69
Non-current Liabilities:
Long-term borrowings 1,789,000,000.00 5,887,380,000.00
Lease liabilities 21,891,524.12 66,330,125.99
Provisions 103,591,073.13 97,586,882.51
Deferred income 353,160,980.23 410,243,110.75
Other non-current liabilities - 1,642,792,335.93
Total Non-current Liabilities 2,267,643,577.48 8,104,332,455.18
Total Liabilities 16,299,272,645.25 17,358,628,758.87
Owners' Equity
Share capital 9,330,600,931.00 9,330,600,931.00
Capital reserves 6,390,011,815.03 5,776,371,174.04
Less: Treasury shares 2,650,324,882.05 2,737,987,226.55
Surplus reserves 4,715,460,312.00 4,715,460,312.00
Retained earnings 38,988,702,269.42 43,150,159,133.80
Total Owners' Equity 56,774,450,445.40 60,234,604,324.29
Total Liabilities and Owners' Equity 73,073,723,090.65 77,593,233,083.16
61
Hikvision 2024 Half Year Report
For the reporting period from January 1, 2024 to June 30, 2024
Consolidated Income Statement
Unit: RMB
Amount for the
Amount for the
Item Notes prior period
current period
(Restated)
I. Total Revenue (V)46 41,209,096,206.36 37,571,352,435.63
Less: Total operating costs (V)46 22,643,709,573.16 20,594,523,514.10
Business taxes and surcharges (V)47 359,300,410.42 350,538,039.96
Selling expenses 5,562,524,020.03 4,887,451,798.48
Administrative expenses 1,464,347,813.80 1,275,014,764.20
Research and Development (R&D) expenses 5,698,043,754.07 5,285,435,437.59
Financial expenses (V)48 (250,188,701.72) (567,385,030.82)
Including: Interest expenses 251,713,545.47 194,501,879.71
Interest income 617,390,094.88 494,004,497.35
Add: Other income (V)49 1,234,679,673.52 1,028,736,340.28
Investment income (losses) (V)50 (104,162,185.92) 10,766,562.60
Including: Investment losses in associates and joint ventures (78,368,251.31) (42,240,571.07)
Gains from changes in fair values (V)51 50,389,142.62 46,589,010.96
Credit impairment losses (V)52 (419,420,246.23) (435,735,151.53)
Impairment losses of assets (V)53 (204,108,927.43) (195,555,997.08)
Asset disposal losses (11,772,875.69) (2,699,436.97)
II. Operating Profit 6,276,963,917.47 6,197,875,240.38
Add: Non-operating income (V)54 36,803,721.87 58,542,916.96
Less: Non-operating expenses (V)55 12,247,046.91 9,634,567.46
III. Profit Before Taxes 6,301,520,592.43 6,246,783,589.88
Less: Income tax expenses (V)56 660,855,881.81 490,214,292.26
IV. Net Profit 5,640,664,710.62 5,756,569,297.62
4.1 Classification by continuous operation
(a) Net profit on continuous operation 5,640,664,710.62 5,756,569,297.62
(b) Net loss on terminated operation - -
4.2 Classification by attribution of ownership
(a) Net profit attributable to owners of parent company 5,064,118,857.29 5,337,937,850.82
(b) Profit or loss attributable to minority interests 576,545,853.33 418,631,446.80
V. Other Comprehensive Income, Net of Income Tax (V)43 (97,804,683.71) 209,956,944.59
Other comprehensive income attributable to owners of the
(44,500,963.60) 99,752,243.47
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
(44,500,963.60) 99,752,243.47
loss in subsequent periods
1. Exchange differences arising on conversion of financial
(44,500,963.60) 99,752,243.47
statements denominated in foreign currencies
Other comprehensive income attributable to minority interests, net
(53,303,720.11) 110,204,701.12
of tax
62
Hikvision 2024 Half Year Report
Amount for the
Amount for the
Item Notes prior period
current period
(Restated)
VI. Total Comprehensive Income 5,542,860,026.91 5,966,526,242.21
Total comprehensive income attributable to owners of the parent
5,019,617,893.69 5,437,690,094.29
company
Total comprehensive income attributable to minority interests 523,242,133.22 528,836,147.92
VII. Earnings Per Share
(I) Basic earnings per share (Chinese yuan per share) (XVII)2 0.539 0.568
(II) Diluted earnings per share (Chinese yuan per share) (XⅦ)2 0.539 0.568
During the current period, a business combination under common control occurred. The net loss realized by the acquired
company before the merger was RMB295,677.15, and the net profit realized by the acquired company in the previous
period was RMB145,487.38.
63
Hikvision 2024 Half Year Report
For the reporting period from January 1, 2024 to June 30, 2024
Income statement of the parent company
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Total Revenue (XVI)4 10,889,673,181.86 10,893,419,484.81
Less: Total operating costs (XⅥ)4 1,889,813,449.56 1,814,681,256.69
Business taxes and surcharges 129,252,038.04 135,605,667.88
Selling expenses 1,929,987,487.04 1,760,677,203.45
Administrative expenses 393,153,953.37 410,460,246.76
Research and Development (R&D) expenses 3,192,983,560.32 3,318,060,585.94
Financial expenses (392,850,941.84) (278,123,487.18)
Including: Interest expenses 101,425,072.09 62,806,306.98
Interest income 467,654,103.79 403,066,666.24
Add: Other income 732,986,740.12 660,498,375.34
Investment income (XⅥ)5 181,907,046.48 126,146,127.23
Including: Investment losses in associates
(74,947,950.25) (41,007,402.96)
and joint ventures
Gains from changes in fair values 12,581,839.26 30,092,421.70
Credit impairment losses (61,208,801.49) (82,668,082.79)
Losses on asset impairment (404,775.02) (754,499.20)
Asset disposal losses (5,767,598.87) (2,346,292.25)
II. Operating Profit 4,607,428,085.85 4,463,026,061.30
Add: Non-operating income 6,163,369.20 11,925,331.88
Less: Non-operating expenses 547,316.92 346,891.03
III. Profit Before Taxes 4,613,044,138.13 4,474,604,502.15
Less: Income tax expenses 376,960,164.61 323,849,611.21
IV. Net Profit 4,236,083,973.52 4,150,754,890.94
V. Other Comprehensive Income, Net of Income Tax - -
VI. Total Comprehensive Income 4,236,083,973.52 4,150,754,890.94
64
Hikvision 2024 Half Year Report
For the reporting period from January 1, 2024 to June 30, 2024
Consolidated Cash Flow Statement
Unit: RMB
Amount for the
Amount for the
Item Notes prior period
current period
(Restated)
I. Cash Flows from Operating Activities:
Cash received from sale of goods or rendering of services 43,685,841,357.81 40,253,202,797.63
Receipts of tax refunds 1,923,827,807.30 1,610,890,116.54
Other cash receipts relating to operating activities (V)57(1) 1,081,675,311.98 993,449,809.49
Sub-total of cash inflows from operating activities 46,691,344,477.09 42,857,542,723.66
Cash payments for goods purchased and services received 29,083,745,897.22 26,311,838,365.94
Cash paid to and on behalf of employees 11,179,470,547.06 9,875,382,327.92
Payments of various types of taxes 3,144,916,924.84 2,810,447,097.43
Other cash payments relating to operating activities (V)57(1) 3,472,847,148.87 2,834,085,286.01
Sub-total of cash outflows from operating activities 46,880,980,517.99 41,831,753,077.30
Net Cash Flows from Operating Activities (V)58(1) (189,636,040.90) 1,025,789,646.36
II. Cash Flows from Investing Activities:
Cash receipts from recovery of investments 1,448,420,444.02 2,310,444,356.94
Net cash receipts from disposals of fixed assets, intangible assets and
4,440,202.05 5,400,328.59
other long-term assets
Other cash receipts relating to investing activities (V)57(2) 43,213,496.63 29,888,320.03
Sub-total of cash inflows from investing activities 1,496,074,142.70 2,345,733,005.56
Cash payments to acquire or construct fixed assets, intangible assets and
1,918,115,772.39 2,010,569,857.72
other long-term assets
Cash paid to acquire investments 1,481,184,774.81 2,376,037,040.30
Net cash paid to acquire subsidiaries and other business units - 43,992,651.82
Sub-total of cash outflows from investing activities 3,399,300,547.20 4,430,599,549.84
Net Cash Flows from Investing Activities (1,903,226,404.50) (2,084,866,544.28)
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions - 1,020,000.00
Including: Cash receipts from capital contributions from minority
- 1,020,000.00
owners of subsidiaries
Cash receipts from borrowings 5,056,939,782.59 4,663,907,463.39
Sub-total of cash inflows from financing activities 5,056,939,782.59 4,664,927,463.39
Cash repayments of borrowings 6,769,443,615.22 1,541,428,965.29
Cash payments for distribution of dividends or profits or settlement of
8,770,143,921.98 6,729,347,458.52
interest expenses
Including: Dividends and profits paid by subsidiaries to minority
227,685,337.21 127,750,000.00
shareholders
Other cash payments relating to financing activities (V)57(3) 2,877,677,608.10 789,007,637.60
Sub-total of cash outflows from financing activities 18,417,265,145.30 9,059,784,061.41
Net Cash Flows from Financing Activities (13,360,325,362.71) (4,394,856,598.02)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
(20,581,446.24) 160,538,952.06
Equivalents
V. Net Decrease in Cash and Cash Equivalents (V)58(1) (15,473,769,254.35) (5,293,394,543.88)
Add: Opening balance of cash and cash equivalents (V)58(2) 49,427,967,355.78 39,825,124,107.52
VI. Closing Balance of Cash and Cash Equivalents (V)58(2) 33,954,198,101.43 34,531,729,563.64
65
Hikvision 2024 Half Year Report
For the reporting period from January 1, 2024 to June 30, 2024
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 5,802,621,350.99 11,829,923,118.88
Receipts of tax refunds 640,459,310.31 606,043,131.31
Other cash receipts relating to operating activities 762,033,834.24 446,076,065.24
Sub-total of cash inflows from operating activities 7,205,114,495.54
12,882,042,315.43
Cash payments for goods acquired and services received 2,531,474,071.63 2,126,147,201.65
Cash payments to and on behalf of employees 4,767,733,359.12 4,702,719,220.93
Payments of various types of taxes 1,618,060,086.39 1,130,558,774.42
Other cash payments relating to operating activities 2,889,471,304.92 2,634,043,593.74
Sub-total of cash outflows from operating activities 11,806,738,822.06 10,593,468,790.74
Net Cash Flows from Operating Activities (4,601,624,326.52) 2,288,573,524.69
II. Cash Flows from Investing Activities:
Cash receipts from recovery of investments 2,614,000,000.00 60,000,000.00
Cash receipts from investment income 204,500,079.51 147,708,123.70
Net cash receipts from disposals of fixed assets, intangible assets and
593,172.97 10,509,290.74
other long-term assets
Net cash receipts from disposals of subsidiaries and other business units - 15,902,073.63
Other cash receipts relating to investing activities 35,687,843,665.65 32,317,830,897.43
Sub-total of cash inflows from investing activities 38,506,936,918.13 32,551,950,385.50
Cash payments to acquire or construct fixed assets, intangible assets and
293,896,986.69 67,100,494.72
other long-term assets
Cash payments to acquire investments 2,370,752,620.00 1,951,697,070.00
Other cash payments relating to investing activities 33,804,567,230.17 33,595,043,024.46
Sub-total of cash outflows from investing activities 36,469,216,836.86 35,613,840,589.18
Net Cash Flows from Investing Activities 2,037,720,081.27 (3,061,890,203.68)
III. Cash Flows from Financing Activities
Cash receipts from borrowings 1,241,000,000.00 2,480,000,000.00
Other cash receipts relating to financing activities 6,653,381,408.49 6,093,399,604.70
Sub-total of cash inflows from financing activities 7,894,381,408.49 8,573,399,604.70
Cash repayments of borrowings 2,138,781,600.00 14,436,600.00
Cash payments for distribution of dividends or profits or settlement of
8,397,792,104.62 6,508,940,764.63
interest expenses
Other cash payments relating to financing activities 8,053,515,462.64 5,025,058,701.85
Sub-total of cash outflows from financing activities 18,590,089,167.26 11,548,436,066.48
Net Cash Flows from Financing Activities (10,695,707,758.77) (2,975,036,461.78)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
(1,262,457.91) 1,467,220.03
Equivalents
V. Net Decrease in Cash and Cash Equivalents (13,260,874,461.93) (3,746,885,920.74)
Add: Opening balance of cash and cash equivalents 36,354,702,554.38 27,771,201,246.40
VI. Closing Balance of Cash and Cash Equivalents 23,093,828,092.45 24,024,315,325.66
66
Hikvision 2024 Half Year Report
For the reporting period from January 1, 2024 to June 30, 2024
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
Amount for the first half of 2024
Owner's equity attributable to the parent company
Items Other Minority Total owners'
Less: Treasury
Share capital Capital reserves comprehensive Surplus reserve Retained earnings interests equity
share
income
I. Closing Balance of the Prior
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
Year
Add: consolidation under
- - - - - - - -
Common Control
II. Opening Balance of the
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 9,330,600,931.00
III. Increase or Decrease in the (2,216,105,998.8
- 688,001,923.02 (87,662,344.50) (44,500,963.60) - (3,333,421,980.61) 386,152,677.85
Current Period 4)
(I) Total comprehensive income - - - (44,500,963.60) - 5,064,118,857.29 523,242,133.22 5,542,860,026.91
(II) Owners' contributions and
- 688,001,923.02 - - - - 49,160,544.63 737,162,467.65
reduction in capital
1. Capital contribution from
- - - - - - - -
shareholders
2. Share-based payment
- 672,863,123.68 - - - - 59,662,030.85 732,525,154.53
recognized in owners' equity
3. Others - 15,138,799.34 - - - - (10,501,486.22) 4,637,313.12
(III) Profit distribution - - (87,662,344.50) - - (8,397,540,837.90) (186,250,000.00) (8,496,128,493.40)
1. Transfer to surplus reserves - - - - - - - -
2. Distributions to shareholders - - (87,662,344.50) - - (8,397,540,837.90) (186,250,000.00) (8,496,128,493.40)
3. Others - - - - - - - -
IV. Closing Balance of the
9,330,600,931.00 8,552,905,686.54 2,650,324,882.05 166,552.56 4,715,460,312.00 53,803,198,263.40 6,195,499,015.62 79,947,505,879.07
Current Period
Amount for the first half of 2023
Owner's equity attributable to the parent company
Items Other Minority Total owners'
Less: Treasury
Share capital Capital reserves comprehensive Surplus reserve Retained earnings 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
Add: changes due to alternation in
- - - - - (483,408.98) 966,008.71 482,599.73
accounting policies
II. Opening Balance of the
9,430,920,624.00 10,141,153,435.32 5,316,033,650.24 (42,587,158.81) 4,715,460,312.00 49,459,757,577.51 4,581,965,427.53 72,970,636,567.31
Current Period
III. Increase or Decrease in the (1,607,616,325.84
(66,987,835.00) (2,135,399,349.45) 99,752,243.47 - (1,216,884,935.42) 465,104,160.75 (191,233,342.59)
Current Period (Restated) )
(I) Total comprehensive income
- - - 99,752,243.47 - 5,337,937,850.82 528,836,147.92 5,966,526,242.21
(restated)
(II) Owners' contributions and (66,987,835.00) (1,607,616,325.84 (2,043,885,225.35) - - - 64,093,666.27 433,374,730.78
67
Hikvision 2024 Half Year Report
reduction in capital )
1. Capital contribution from
- - - - - - 1,020,000.00 1,020,000.00
shareholders
2. Share-based payment
- 349,027,199.43 - - - - 24,501,363.63 373,528,563.06
recognized in owners' equity
(1,956,643,525.27
3. Others (66,987,835.00) (2,043,885,225.35) - - - 38,572,302.64 58,826,167.72
)
(III) Profit distribution (restated) - - (91,514,124.10) - - (6,554,822,786.24) (127,825,653.44) (6,591,134,315.58)
1. Transfer to surplus reserves - - - - - - - -
2. Distributions to shareholders - - (91,514,124.10) - - (6,554,752,952.30) (127,750,000.00) (6,590,988,828.20)
3. Others - - - - - (69,833.94) (75,653.44) (145,487.38)
IV. Closing Balance of the
9,363,932,789.00 8,533,537,109.48 3,180,634,300.79 57,165,084.66 4,715,460,312.00 48,242,872,642.09 5,047,069,588.28 72,779,403,224.72
Current Period (Restated)
68
Hikvision 2024 Half Year Report
For the reporting period from January 1, 2024 to June 30, 2024
Statement of Changes in Owners' Equity of the Parent Company
Unit: RMB
Amount for the first half of 2024
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained earnings Total owners' equity
I. Opening 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
II. Increase or Decrease in the Current Period - 613,640,640.99 (87,662,344.50) - (4,161,456,864.38) (3,460,153,878.89)
(I) Total comprehensive income - - - - 4,236,083,973.52 4,236,083,973.52
(II) Owners' contributions and reduction in capital - 613,640,640.99 - - - 613,640,640.99
1. Owners' contributions in capital - - - - - -
2. Share-based payment recognized in owners' equity - 600,198,684.30 - - - 600,198,684.30
3. Others - 13,441,956.69 - - - 13,441,956.69
(III) Profit distribution - - (87,662,344.50) - (8,397,540,837.90) (8,309,878,493.40)
1. Distributions to shareholders - - (87,662,344.50) - (8,397,540,837.90) (8,309,878,493.40)
IV. Closing Balance of the Current Period 9,330,600,931.00 6,390,011,815.03 2,650,324,882.05 4,715,460,312.00 38,988,702,269.42 56,774,450,445.40
Amount for the first half of 2023
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained earnings 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
Add: Changes due to alternation in accounting policies - - - - (909,206.34) (909,206.34)
II. Opening 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
III. Increase or Decrease in the Current Period (66,987,835.00) (1,709,793,482.42) (2,135,399,349.45) - (2,403,998,061.36) (2,045,380,029.33)
(I) Total comprehensive income - - - - 4,150,754,890.94 4,150,754,890.94
(II) Owners' contributions and reduction in capital (66,987,835.00) (1,709,793,482.42) (2,043,885,225.35) - - 267,103,907.93
1. Owners' contributions in capital - - - - - -
2. Share-based payment recognized in owners' equity - 330,841,112.32 - - - 330,841,112.32
3. Others (66,987,835.00) (2,040,634,594.74) (2,043,885,225.35) - - (63,737,204.39)
(III) Profit distribution - - (91,514,124.10) - (6,554,752,952.30) (6,463,238,828.20)
1. Distributions to shareholders - - (91,514,124.10) - (6,554,752,952.30) (6,463,238,828.20)
IV. Closing Balance of the Current Period 9,363,932,789.00 6,554,591,297.88 3,180,634,300.79 4,715,460,312.00 36,625,530,634.26 54,078,880,732.35
69
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 scope of the Company and its subsidiaries (hereinafter referred to as "the Group") include
manufacturing and selling security equipment, network equipment, and smart devices; manufacturing and wholesaling
automotive parts and accessories; selling electronic products; providing construction engineering services; technical
services, technology development, technical consulting, software development, information system integration services,
data processing and storage support services, etc.
The Company's and consolidated financial reports were approved for issuance by the 2nd meeting of the 6th session of the
Board of Directors of the Company on August 16, 2024.
II. Basis of preparation of financial statements
Basis of preparation of financial statements
The Group has 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.
Going concern
The Group has evaluated its going concern for 12 months going forward starting from June 30, 2024, 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.
70
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 Disclosure:
The Group has established specific accounting policies and estimates based on the actual production and operational
characteristics, targeting the determination methods and selection basis for the materiality standard, provision for credit
losses on accounts receivable, inventory write-down, fixed asset depreciation, revenue recognition, and aggregation of
R&D expenses. The important judgments and accounting estimates applied by the Group in recognizing significant
71
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
accounting policies, as well as their key assumptions, are detailed in Note Ⅲ (34) of the financial statements.
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 the Company's and
consolidated financial position as of June 30, 2024, the Company's and consolidated results of operations, the Company's
and consolidated changes in shareholders' equity, and the Company's and consolidated cash flows for the first half of 2024
truly and completely.
2. Accounting period
The Group has adopted the calendar year as its accounting year from January 1 to December 31 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's 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 end of the reporting period
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
6. Accounting treatment methods for business combinations under common control and non-common control
72
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Business combinations are divided into those under common control and those not 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 account balances as recorded by the combining entities
at the date of the combination. The difference between the account balance of the net assets obtained and the account
balance 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 involving enterprises under non-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 in stages 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.
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
73
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 methods for preparing 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.
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.
74
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 is 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 account balances 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
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.
75
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
qualifies 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
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
76
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 are reclassified to profit or loss under current period.
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
77
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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 and 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
78
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 receivables and certificate of
creditor’s right of account receivables 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 merger
not under common 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 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
79
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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.
80
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 operating 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
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:
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Hikvision 2024 Half Year Report
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For the reporting period from January 1, 2024 to June 30, 2024
(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
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
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For the reporting period from January 1, 2024 to June 30, 2024
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 assets 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-
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:
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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.
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 account balance and the fair value is recognized in other comprehensive income.
12. Notes receivables
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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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.
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 for financing
14.1 Method of determining expected credit losses on receivables financing and its accounting treatment
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 account balance 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
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.
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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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.
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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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.
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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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
account balance 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 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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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Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 account
balance 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 account balance 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:
Residual value rate Annual depreciation rate
Class Depreciation method Depreciation period
(%) (%)
Buildings and constructions Straight-line depreciation 20 years 10 4.5
General-purpose equipment Straight-line depreciation 3-5 years 10 18.0-30.0
Special-purpose equipment Straight-line depreciation 3-5 years 10 18.0-30.0
Means of transportation Straight-line depreciation 5 years 10 18.0
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
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disposal of the asset net of the account balance 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
Buildings and Constructions
a state of practical usability.
Equipment to be installed and Relevant equipment and other supporting facilities have been installed; after debugging, the equipment
commissioned can maintain normal and stable operation for a period of time.
21. Borrowing costs
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.
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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:
Salvage value
Class Amortization method Service life Determination basis
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 -
Franchised operating
Franchise Straight-line method Franchise contract duration -
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.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization method at the end of the
period, and makes adjustments when necessary.
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.
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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
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 account balance, 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
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For the reporting period from January 1, 2024 to June 30, 2024
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.
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.
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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
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.
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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.
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
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For the reporting period from January 1, 2024 to June 30, 2024
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
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
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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.
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 account balance 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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For the reporting period from January 1, 2024 to June 30, 2024
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
current or anticipated contract; (2) The cost increases the Group's resources for fulfilling performance obligations in the
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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 asset
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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For the reporting period from January 1, 2024 to June 30, 2024
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;
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.
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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 re-measures 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 re-measures
the lease liability at the present value calculated based on the modified lease payments and the revised discount rate;
In the event of any change in the amount expected to be payable based on the residual value guarantees, the Group
re-measures the lease liability at the present value calculated based on the changed lease payments and the original
discount rate.
32.1.4 Short-term lease and lease 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-
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Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 re-
measures 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 account balance 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 re-measured due to other lease modifications,
the Group adjusts the account balance 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
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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 account
balance 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.
32.2.3 Lease modification
In case of a medication 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 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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
For temporary differences between the account balances of certain assets or liabilities and their tax base, or between the
nil account balance 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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 account balance of goodwill.
At the balance sheet date, the account balance 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.
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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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 June 30, 2024, 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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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.
IV. Taxes
1. 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 6%, 9%, 13% and simple
VAT and its domestic subsidiaries are ordinary Value-added Tax payers; the VAT collection rate of 5%, 3%
payable is the balance of input tax after deducting the deductible output tax. (Note 3)
City maintenance and
Actual payable turnover tax 7%, 5%
construction tax
Education surcharges Actual payable turnover tax 3%
Local education
Actual payable turnover tax 2%
surcharges
Note 1: Except that the Company and subsidiaries in China are applicable to the following tax preference, the 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 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 with a valid term of 3 years and the
preferential tax period is 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 (2023: 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 4, 2024 to pay the 2023 annual corporate income tax at the rate of 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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
basis of a reduced tax rate of 15% in the current reporting period (2023: 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. As of the approval date of this report, Fuyang Baotai and Hikstorage Technology are still in the
application stage for the re-examination of the high-tech enterprise qualification for the year 2024. According to the
Announcement of the State Administration of Taxation on Issues Concerning the Implementation of Preferential Tax
Policies for High-tech Enterprises, during the year when the high-tech enterprise qualification expires, before passing
the re-determination, its corporate income tax may be prepaid temporarily at a tax rate of 15%. Therefore, the
enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period
(2023: 15%).
(4) In accordance with the List of High-tech Enterprises Recognized by Zhejiang Provincial Identification Institution in
2022 issued by the leading group office of Zhejiang high-tech enterprise identification management work on
December 24, 2022, the Company's subsidiaries, Hangzhou Hikvision System Technology Ltd. (hereinafter referred
to as "Hangzhou System") and Hangzhou Kuangxin Technology Co., 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 a high-tech
enterprise and was valid for 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 (2023: 15%).
(5) In accordance with 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 is 3 years, and the preferential tax period is
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 (2023: 15%).
(6) In accordance with 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 is 3 years, and the preferential tax period is
from 2023 to 2025. Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
15% in the current reporting period (2023: 15%).
(7) In accordance with 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 is 3 years, and the preferential tax period is 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 2024 is the second year of HikRobot making profits and is exempted from enterprise income
tax (2023: tax-exempted)
(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 2024 is the fourth year of Hikmicro Sensing making profits and enjoyed enterprise income tax at half of the
25% statutory tax rate (2023: half of the 25% statutory tax rate).
(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 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.
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, Hikmicro Sensing 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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
to fifth years. The year of 2024 is fifth year of Hikmicro Sensing making profits and enjoyed the preferential enterprise
income tax at half of the 25% statutory tax rate.
According to the preferential tax policies for the integrated circuit industry and the software industry, Hikmicro
Sensing was approved by the tax authority in May 2024 for exemption from corporate income tax for the year 2023.
(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 (2023: 15%).
(11) In accordance with 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 is 3 years, and the preferential tax period is 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 2024 is fifth year of EZVIZ Software making profits and enjoyed the preferential enterprise
income tax at half of the 25% statutory tax rate (20223 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., and Sensortech Hebei, 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 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
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
deductible input tax for production and living services taxpayers will continue to be deducted by 5% and 10% of the tax
payable respectively. This policy was valid until December 31, 2023.
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., ( hereinafter referred to as "Hua'an Security Services"), Urumqi HaiShi Xin'An
Electronic Technology Ltd., Chengdu Hikvision Digital Technology Ltd., Hangzhou EZVIZ Software, Hangzhou branch
of Zhejiang Hikfire Technology 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, and ceased to offer benefits in 2024.
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.
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
V. Notes to items in the consolidated financial statements
1. Cash and bank balances
Unit: RMB
Closing balance Opening balance (Restated)
Item Exchange Exchange
Foreign currency Foreign currency
rate for RMB amount rate for RMB amount
amount amount
conversion conversion
Cash：
RMB - - 6.90 - - 1,678.63
EUR 206,533.89 7.6617 1,582,400.72 147,128.30 7.8592 1,156,310.77
USD 16,584.05 7.1268 118,191.20 30,104.54 7.0827 213,221.43
Other
- - 686,131.91 - - 414,544.09
currencies
Bank balance：
RMB - - 29,576,634,485.51 - - 45,212,743,399.98
USD 329,385,453.73 7.1268 2,347,464,251.64 348,625,559.51 7.0827
2,469,210,250.34
EUR 166,363,979.84 7.6617 1,274,630,904.34 113,802,623.62 7.8592 894,397,579.52
Other
- - 716,139,812.75 - - 824,341,197.50
currencies
Other
currency
funds:
RMB - - 160,357,115.95 - - 179,985,499.57
USD 2,439,742.11 7.1268 17,387,554.10 2,700,309.07 7.0827 19,125,479.05
EUR 653,647.98 7.6617 5,008,054.71 565,119.25 7.8592 4,441,385.18
Other
- - 26,492,754.60 - - 32,128,116.48
currencies
Total 34,126,501,664.33 49,638,158,662.54
Including:
deposited in 904,712,903.88 942,602,817.26
overseas banks
Details of other currency funds:
Unit: RMB
Closing balance Opening balance
Item Foreign Exchange Foreign Exchange
currency rate for RMB amount currency rate for RMB amount
amount conversion amount conversion
Capitals with limitations：
Deposits for letter of credit - - 17,079,438.19 - - 5,807,814.00
Bank acceptance bills - - 9,641,059.33 - - 5,729,976.08
Deposits for letter of
- - 139,292,129.41 - - 150,406,759.09
guarantee
Other security deposits - - 3,535,402.04 - - 17,821,752.36
119
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Other capitals with limitations - - 2,755,533.93 - - 30,425,005.23
Subtotal 172,303,562.90 210,191,306.76
Capitals without
limitations:
Deposits in payment
instrument provided by third-
- - 35,236,607.50 - - 25,453,125.41
party and in securities
account
Other currency funds in USD 205,564.12 7.1268 1,465,014.37 - - -
Other currency funds in EUR 31,363.09 7.6617 240,294.59 4,586.74 7.8592 36,048.11
Subtotal 36,941,916.46 25,489,173.52
Total 209,245,479.36 235,680,480.28
2. Held-for-trading financial assets
Unit: RMB
Item Closing balance Opening balance
Derivative financial assets 6,812,406.08 37,380.00
Total 6,812,406.08 37,380.00
3. Notes receivable
3.1 Categories of notes receivable
Unit：RMB
Category Closing balance Opening balance
Bank acceptance bill 1,876,203,374.14 2,199,710,776.69
Finance company acceptance bill 103,227,668.20 123,274,741.72
Commercial acceptance bill 179,833,474.72 283,085,857.33
Total 2,159,264,517.06 2,606,071,375.74
3.2 As of June 30, 2024, the pledged notes receivable by the Group is nil.
3.3 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 June 30, 2024
Bank acceptance bill 1,065,251,301.10
Finance company acceptance bill 43,283,218.53
Commercial acceptance bill 4,387,180.75
Total 1,112,921,700.38
120
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
As of June 30, 2024, the Group gave RMB1,017,010,975.47 (2023: RMB1,075,118,808.52 ) undue bank acceptance bill to
suppliers for endorsement, RMB43,283,218.53 (2023: RM47,808,575.05) undue acceptance bill of the finance company
to suppliers for endorsement. There was no (2023: RMB500,000.00) undue commercial acceptance bill to suppliers for
endorsement. The Group discounted the bankacceptance bill of RMB 48,240,325.63 (2023: RMB34,566,243.97) that has
not yet matured to the bank, and discounted commercial acceptance bill of RMB4,387,180.75 (2023: nil) that has not yet
matured to the bank. 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.
3.4 Classified disclosure by method of provision for bad debts
Unit：RMB
Closing balance
Category Account balance Credit loss provision Carrying amount
Proportion Proportion
Amount Amount Amount
(%) (%)
Provision for bad debts of notes receivables
by portfolios
Including: Bank acceptance bill 1,876,203,374.14 86.83 - - 1,876,203,374.14
Non-bank acceptance bill 284,530,990.94 13.17 1,469,848.02 0.52 283,061,142.92
Total 2,160,734,365.08 100.00 1,469,848.02 0.07 2,159,264,517.06
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:
Unit：RMB
Expected average loss Closing balance
Item
ratio (%) Account balance Credit loss provision Carrying amount
Non-bank acceptance bill
0.52 284,530,990.94 1,469,848.02 283,061,142.92
portfolio
Total 0.52 284,530,990.94 1,469,848.02 283,061,142.92
3.5 Situation of provision.
Unit：RMB
Amount changed in the current reporting period Difference due
to foreign
Opening Closing
Category Recover or currency
balance Provision /Recollect or Reverse balance
write-off statement
translation
Notes receivable 2,492,390.65 (1,022,542.63) - - 1,469,848.02
Total 2,492,390.65 (1,022,542.63) - - 1,469,848.02
4. Accounts receivable
4.1 Disclosure by aging
Unit: RMB
121
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Aging Closing balance Opening balance (Restated)
Within credit period 19,661,131,966.02 21,238,508,394.91
Within 1 year after exceeding credit period 14,934,353,752.60 12,622,668,221.07
1-2 years after exceeding credit period 2,730,617,431.53 2,520,053,396.18
2-3 years after exceeding credit period 1,226,385,568.76 1,029,311,890.05
3-4 years after exceeding credit period 603,591,303.51 579,297,343.23
Over 4 years after exceeding credit period 1,150,354,407.71 1,018,167,722.39
Accounts receivable 40,306,434,430.13 39,008,006,967.83
Less: Credit impairment provision 3,523,321,519.87 3,191,433,456.39
Carrying amount 36,783,112,910.26 35,816,573,511.44
4.2 Classified disclosure of credit loss provision by methods
Unit: RMB
Closing Balance
Category Account balance Credit loss provision Carrying amount
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 40,306,434,430.13 100.00 3,523,321,519.87 8.74 36,783,112,910.26
Total 40,306,434,430.13 100.00 3,523,321,519.87 8.74 36,783,112,910.26
Beginning Balance (Restated)
Category Account balance Credit loss provision Carrying amount
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 39,008,006,967.83 100.00 3,191,433,456.39 8.18 35,816,573,511.44
Total 39,008,006,967.83 100.00 3,191,433,456.39 8.18 35,816,573,511.44
Provision for credit loss by portfolios
Unit: RMB
Closing balance
Customer
Account balance Credit loss provision Proportion (%)
Portfolio A 4,300,761,390.30 89,763,669.72 2.09
Portfolio B 27,358,814,430.41 3,173,226,499.52 11.60
Portfolio C 8,646,858,609.42 260,331,350.63 3.01
Total 40,306,434,430.13 3,523,321,519.87 8.74
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.
122
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
As of June 30, 2024 and January 1, 2024, the credit risk and expected credit losses during the duration of accounts receivable from portfolio A are as follows:
Unit: RMB
Closing balance Opening balance (Restated)
Aging Estimated average Credit loss Estimated average Credit loss
Account balance Carrying amount Account balance Carrying amount
loss rate (%) provision loss rate (%) provision
Within credit period 0.06 3,230,272,330.98 2,036,255.73 3,228,236,075.25 0.02 3,907,968,313.68 852,571.17 3,907,115,742.51
Within 1 year after exceeding credit period 2.16 948,079,623.50 20,432,263.26 927,647,360.24 1.90 676,630,538.84 12,829,329.20 663,801,209.64
1-2 years after exceeding credit period 30.56 72,571,895.48 22,178,217.94 50,393,677.54 30.36 50,103,162.12 15,213,054.67 34,890,107.45
2-3 years after exceeding credit period 63.76 13,025,959.02 8,305,351.47 4,720,607.55 63.25 12,070,966.60 7,635,014.88 4,435,951.72
3-4 years after exceeding credit period 100.00 9,021,813.57 9,021,813.57 - 100.00 20,084,869.22 20,084,869.22 -
Over 4 years after exceeding credit period 100.00 27,789,767.75 27,789,767.75 - 100.00 11,222,150.03 11,222,150.03 -
Total 2.09 4,300,761,390.30 89,763,669.72 4,210,997,720.58 1.45 4,678,080,000.49 67,836,989.17 4,610,243,011.32
As of June 30, 2024 and January 1, 2024, the credit risk and expected credit losses during the duration of accounts receivable from portfolio B are as follows:
Unit: RMB
Closing balance Opening balance
Aging Estimated average Credit loss Estimated average Credit loss
Account balance Carrying amount Account balance Carrying amount
loss rate (%) provision loss rate (%) provision
Within credit period 0.73 9,407,228,326.57 69,079,177.05 9,338,149,149.52 0.80 10,001,831,444.99 80,372,286.33 9,921,459,158.66
Within 1 year after exceeding credit period 4.75 12,662,333,721.22 600,834,027.17 12,061,499,694.05 4.69 10,816,276,812.71 506,914,857.87 10,309,361,954.84
1-2 years after exceeding credit period 20.79 2,519,697,753.88 523,724,336.97 1,995,973,416.91 23.34 2,416,434,272.21 564,052,271.46 1,852,382,000.75
2-3 years after exceeding credit period 46.64 1,174,862,865.61 547,957,435.30 626,905,430.31 42.77 993,475,956.99 424,940,431.68 568,535,525.31
3-4 years after exceeding credit period 71.18 565,770,747.73 402,710,507.63 163,060,240.10 69.63 522,837,171.09 364,030,874.76 158,806,296.33
Over 4 years after exceeding credit period 100.00 1,028,921,015.40 1,028,921,015.40 - 100.00 920,056,259.62 920,056,259.62 -
Total 11.60 27,358,814,430.41 3,173,226,499.52 24,185,587,930.89 11.14 25,670,911,917.61 2,860,366,981.72 22,810,544,935.89
123
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
As of June 30, 2024 and January 1, 2024, the credit risk and expected credit losses during the duration of accounts receivable from portfolio C are as follows:
Unit: RMB
Closing balance Opening balance
Aging Estimated average Carrying Account Credit loss Estimated average Credit loss
Carrying Balance Account balance Carrying Balance
loss rate (%) balance provision loss rate (%) provision
Within credit period 0.27 7,283,699,102.98 19,676,814.93 7,264,022,288.05 0.28 7,328,708,636.24 20,812,836.46 7,307,895,799.78
Within 1 year after exceeding credit period 6.41 1,164,390,303.23 74,678,072.56 1,089,712,230.67 6.19 1,129,760,869.52 69,879,355.77 1,059,881,513.75
1-2 years after exceeding credit period 50.79 62,891,654.50 31,939,746.86 30,951,907.64 50.85 53,515,961.85 27,212,412.79 26,303,549.06
2-3 years after exceeding credit period 92.07 23,200,306.67 21,359,474.24 1,840,832.43 92.83 23,764,966.46 22,060,264.82 1,704,701.64
3-4 years after exceeding credit period 100.00 19,854,089.19 19,854,089.19 - 100.00 36,375,302.92 36,375,302.92 -
Over 4 years after exceeding credit period 100.00 92,823,152.85 92,823,152.85 - 100.00 86,889,312.74 86,889,312.74 -
Total 3.01 8,646,858,609.42 260,331,350.63 8,386,527,258.79 3.04 8,659,015,049.73 263,229,485.50 8,395,785,564.23
4.3 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 3,191,433,456.39 380,342,339.94 (18,434,892.06) (29,890,577.77) (128,806.63) 3,523,321,519.87
Total 3,191,433,456.39 380,342,339.94 (18,434,892.06) (29,890,577.77) (128,806.63) 3,523,321,519.87
124
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
4.4 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 RMB2,486,643,979.13, accounting for 5.73% of the total closing 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 RMB194,559,113.08.
5. Contract assets
5.1 Details of contract assets
Unit: RMB
Closing Balance Opening Balance
Items Provisions for
Account balance Provisions for impairment Account balance Account balance Account balance
impairment
Constructions 2,834,307,982.70 22,260,203.76 2,812,047,778.94 2,847,993,321.71 21,993,021.25 2,826,000,300.46
Maintenance services 239,677,917.86 1,897,160.68 237,780,757.18 227,366,849.25 1,945,550.21 225,421,299.04
Less:
Contract assets that are
included in other non- 1,870,037,693.12 15,213,558.26 1,854,824,134.86 1,893,506,565.03 15,397,380.73 1,878,109,184.30
current assets (Note (V)
22)
Total 1,203,948,207.44 8,943,806.18 1,195,004,401.26 1,181,853,605.93 8,541,190.73 1,173,312,415.20
5.2 The classification and disclosure of the method of provision for impairment of contract assets
Unit: RMB
Closing Balance
Items Account balance Provisions for impairment Account balance
Amount Proportion (%) Amount Provision proportion (%) Amount
Provision for impairment on a single item - - - - -
Provision for impairment by portfolio 3,073,985,900.56 100.00 24,157,364.44 0.79 3,049,828,536.12
Total 3,073,985,900.56 100.00 24,157,364.44 0.79 3,049,828,536.12
125
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Opening Balance
Items Account balance Provisions for impairment Account balance
Amount Proportion (%) Amount Provision proportion (%) Amount
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
5.3 Provision for bad debts of contract assets (including the part included in other non-current assets) in the current period
Unit: RMB
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
Contract assets 23,938,571.46 218,792.98 - - 24,157,364.44
Total 23,938,571.46 218,792.98 - - 24,157,364.44
6. Receivables for financing
6.1 Receivables for financing by categories
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 1,637,962,981.80 1,594,219,832.62
Certificate of creditor’s right of account receivables 124,867,584.66 -
Total 1,762,830,566.46 1,594,219,832.62
6.2 At the end of the current reporting period, the Group had no pledged receivables for financing.
6.3 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.
126
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: RMB
Item Derecognized amount as of June 30, 2024
Bank acceptance bill 1,532,433,560.86
Certificate of creditor’s right of account receivables 1,350,000.00
Total 1,533,783,560.86
6.4 The Group believes that the acceptor credit rating of the receivables for financing held is high, and there is no significant credit risk, so no loss provision is made.
7. Prepayments
7.1 Prepayments by aging analysis
Unit: RMB
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 545,610,580.31 89.85 439,229,846.71 86.44
1-2 years 48,250,542.98 7.95 54,598,580.98 10.74
2-3 years 10,243,993.88 1.69 9,132,956.08 1.80
Over 3 years 3,108,765.30 0.51 5,190,022.15 1.02
Total 607,213,882.47 100.00 508,151,405.92 100.00
7.2 Details of closing balances of top five prepayments parties
As of June 30, 2024, the Group's top five balances of prepayments amounted to RMB69,025,993.66, accounting for 11.37% of total closing balance of prepayments.
8. Other receivables
127
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
8.1 Other receivables by aging
Unit: RMB
Aging Closing balance Opening balance (Restated)
Within contract period 3,332,538,880.25 497,353,510.04
Within 1 year 69,430,262.48 58,190,602.54
1-2 years 17,545,715.05 20,606,423.68
2-3 years 14,908,736.73 4,357,328.94
3-4 years 2,260,411.64 3,216,083.19
Over 4 years 19,891,453.59 20,110,646.73
Total 3,456,575,459.74 603,834,595.12
Less: Credit impairment provision 36,268,188.42 31,922,559.19
Carrying amount 3,420,307,271.32 571,912,035.93
8.2 Details of other receivables by nature of the payment
Unit: RMB
Item Closing balance Opening balance (Restated)
Payments for repurchase of restricted shares 2,891,643,860.76 169,968,816.44
Guarantee deposits 230,250,956.64 217,477,539.62
Temporary payments for receivables 137,033,359.69 109,941,412.72
certificate of creditor’s right of account receivables 118,022,705.33 27,765,998.37
Others 79,624,577.32 78,680,827.97
Total 3,456,575,459.74 603,834,595.12
8.3 Accrual for bad debts of other receivables
128
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: RMB
Stage 1 Stage 2 Stage 3
Provision for credit loss 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, 2024 2,161,771.42 5,709,846.71 24,050,941.06 31,922,559.19
Balance on January 1, 2024
in the current reporting period
--Transfer into stage 2 (301,782.04) 301,782.04 - -
--Transfer into stage 3 - (2,500,297.84) 2,500,297.84 -
-- Provision in the current reporting period 479,514.36 3,088,693.31 902,342.93 4,470,550.60
Derecognition of financial assets (including direct
- - (52,751.22) (52,751.22)
write-downs) and transfer out
Other changes (72,170.15) - - (72,170.15)
Balance on June 30, 2024 2,267,333.59 6,600,024.22 27,400,830.61 36,268,188.42
8.4 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 31,922,559.19 5,655,921.48 (1,185,370.88) (52,751.22) (72,170.15) 36,268,188.42
Total 31,922,559.19 5,655,921.48 (1,185,370.88) (52,751.22) (72,170.15) 36,268,188.42
8.5 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 RMB137,069,028.79, accounting for 3.97% of the total balance of other
receivables at the end of the reporting period, and the provision for bad debts amounted to RMB364,479.40.
129
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
9. Inventories
9.1 Categories of inventories
Unit: RMB
Closing balance Opening balance (Restated)
Provision for decline in value of Provision for decline in value of
Category
Account balance inventories/ Impairment provision Carrying amount Account balance inventories/ Impairment provision Carrying amount
for contract performance cost for contract performance cost
Raw materials 7,322,781,378.31 370,945,563.45 6,951,835,814.86 7,912,250,689.30 368,431,917.68 7,543,818,771.62
Work-in-progress 767,683,014.42 - 767,683,014.42 561,630,556.81 - 561,630,556.81
Finished goods 11,740,809,970.23 917,764,219.58 10,823,045,750.65 11,653,219,740.75 950,498,742.24 10,702,720,998.51
Contract performance cost 501,951,562.52 7,740,743.57 494,210,818.95 409,869,715.64 6,595,745.76 403,273,969.88
Total 20,333,225,925.48 1,296,450,526.60 19,036,775,398.88 20,536,970,702.50 1,325,526,405.68 19,211,444,296.82
9.2 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 368,431,917.68 80,188,827.49 77,675,181.72 - 370,945,563.45
Finished goods 950,498,742.24 170,122,911.14 186,318,654.79 (16,538,779.01) 917,764,219.58
Contract performance cost 6,595,745.76 2,149,741.66 1,004,743.85 - 7,740,743.57
Subtotal 1,325,526,405.68 252,461,480.29 264,998,580.36 (16,538,779.01) 1,296,450,526.60
The write-offs of provision for inventories in the current reporting period are due to use or sale of inventories.
130
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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) 1,023,256,341.23 1,079,721,006.23
Total 1,023,256,341.23 1,079,721,006.23
11. Other current assets
Unit: RMB
Item Closing balance Opening balance
Deductible VAT input 779,601,365.64 733,273,484.32
Prepaid corporate income tax 174,590,734.02 132,978,082.06
Prepaid tariff 25,935,858.36 32,945,213.90
Others 106,785,196.99 62,396,836.47
Total 1,086,913,155.01 961,593,616.75
12. Long-term receivables
12.1 Details of long-term receivables
Unit: RMB
Closing balance Opening balance
Item
Account balance Loss provision Carrying amount Account balance Loss provision Carrying amount
Financial leases receivables 275,475,189.60 59,122,740.49 216,352,449.11 265,985,187.99 53,601,885.63 212,383,302.36
Including: Unrealized income from financing 6,579,944.13 - 6,579,944.13 7,730,078.24 - 7,730,078.24
Installments business 1,160,988,426.74 284,317,562.38 876,670,864.36 1,191,642,272.96 235,773,626.86 955,868,646.10
Including: Unrealized income from financing 20,458,727.13 - 20,458,727.13 26,937,454.05 - 26,937,454.05
Employee housing loan 395,674,028.80 - 395,674,028.80 450,167,676.53 - 450,167,676.53
Including: Unrealized income from financing 39,238,301.40 - 39,238,301.40 42,598,988.47 - 42,598,988.47
131
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Subtotal 1,832,137,645.14 343,440,302.87 1,488,697,342.27 1,907,795,137.48 289,375,512.49 1,618,419,624.99
Less: Non-current assets due within one year (Note (V) 10) 1,365,317,478.36 342,061,137.13 1,023,256,341.23 1,367,395,229.26 287,674,223.03 1,079,721,006.23
Total 466,820,166.78 1,379,165.74 465,441,001.04 540,399,908.22 1,701,289.46 538,698,618.76
12.2 Disclosure by method of provision for bad debts
Unit: RMB
Closing balance Opening balance
Item
Account balance Loss provision Carrying amount Account balance Loss provision Carrying amount
Provision for bad debts by portfolio (including bad debts due
1,832,137,645.14 343,440,302.87 1,488,697,342.27 1,907,795,137.48 289,375,512.49 1,618,419,624.99
within one year)
Including: Portfolio of employee 395,674,028.80 - 395,674,028.80 450,167,676.53 - 450,167,676.53
Portfolio of financial leasing and installment
1,436,463,616.34 343,440,302.87 1,093,023,313.47 1,457,627,460.95 289,375,512.49 1,168,251,948.46
collection customers
Total 1,832,137,645.14 343,440,302.87 1,488,697,342.27 1,907,795,137.48 289,375,512.49 1,618,419,624.99
Portfolio of employee
The Group believes that the employees corresponding to the 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 no loss of provision is made.
Portfolio of financial leasing and installment collection customers
As of June 30, 2024, the credit risk and expected credit losses of long-term receivables relating to financial leasing and installment collection customers are as follows:
132
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: RMB
Closing balance
Aging
Account balance Bad debts provision Forecast average loss rate (%)
Within credit period 502,275,999.41 3,566,159.60 0.71
Within 1 year after exceeding credit period 241,399,866.08 11,031,973.88 4.57
1-2 years after exceeding credit period 249,332,857.51 47,348,309.64 18.99
2-3 years after exceeding credit period 195,319,981.16 77,561,564.51 39.71
3-4 years after exceeding credit period 138,534,436.28 94,331,819.34 68.09
Over 4 years after exceeding credit period 109,600,475.90 109,600,475.90 100.00
Total 1,436,463,616.34 343,440,302.87 23.91
12.3 Bad debt provision
Amount of changes in the current reporting period Difference due to
Aging Opening balance foreign currency Closing balance
Provision Recollect or reverse Write-off statement translation
Long-term receivables 289,375,512.49 54,327,672.25 (262,881.87) - - 343,440,302.87
Total 289,375,512.49 54,327,672.25 (262,881.87) - - 343,440,302.87
13. Long-term equity investment
Unit: RMB
Increase/Decrease in the current reporting period
Closing
Investment Profit
Adjustment: Declaration of balance
Opening (Loss) Other Closing
The invested entity Additional Investment Other cash dividends Impairment for
Balance recognized under Changes others Balance
Investments reduction comprehensive or profit provision impairment
the equity in equity
income distribution provision
Method
1. Joint ventures
Hangzhou Haikang Intelligent
791,356,253.14 - - (73,326,262.47) - - - - 731,063,620.25 -
Industrial Equity Investment Fund
133
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Increase/Decrease in the current reporting period
Closing
Investment Profit
Adjustment: Declaration of balance
Opening (Loss) Other Closing
The invested entity Additional Investment Other cash dividends Impairment for
Balance recognized under Changes others Balance
Investments reduction comprehensive or profit provision impairment
the equity in equity
income distribution provision
Method
Partnership (L.P.) (Note 1) 13,033,629.58
Zhejiang City Digital Technology
29,635,485.61 - - (1,680,160.98) - - - - - 27,955,324.63 -
Ltd.
Zhejiang Haishi Huayue Digital
14,067,281.65 - - 150,212.68 - - - - - 14,217,494.33 -
Technology Ltd.
Guangxi Haishi Urban Operation
12,450,335.88 - - (331,162.11) - - - - - 12,119,173.77 -
Management Ltd.
Xuzhou Kangbo Urban Operation
11,052,348.36 - - 220,581.10 - - - - - 11,272,929.46 -
Management Service Ltd.
Other 5,172,387.15 6,500,000.00 - (6,943,137.78) - - - - - 4,729,249.37 -
Subtotal 863,734,091.79 6,500,000.00 - (81,909,929.56) - 13,033,629.58 - - - 801,357,791.81 -
2. Associates
Beijing Taifang Technology LLC 36,942,210.69 - - (2,172,898.00) - - - - - 34,769,312.69 -
Jiaxing Haishi JiaAn Zhicheng
27,941,495.40 - - (1,665,643.64) - - - - - 26,275,851.76 -
Technology Ltd.
Zhiguang Hailian Big Data
23,245,373.00 - - 1,463,593.37 - - - - - 24,708,966.37 -
Technology Ltd.
Terapark (Nanjing) Ltd. 18,257,785.52 - - (693,979.57) - - - - - 17,563,805.95 -
Other（Note1） 180,983,931.45 - - 6,610,606.09 - 3,938,769.52 - - - 191,533,307.06
Subtotal 287,370,796.06 - - 3,541,678.25 - 3,938,769.52 - - - 294,851,243.83 -
Total 1,151,104,887.85 6,500,000.00 - (78,368,251.31) - 16,972,399.10 - - - 1,096,209,035.64 -
Note 1: The changes in other equity in the period were caused by the changes in equity of the investee due to additional investments from other shareholders or share-based payments
granted by the investee.
134
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
14. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Investments in equity instruments (Note) 484,766,776.92 472,184,937.66
Total 484,766,776.92 472,184,937.66
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 company.
15. Fixed Assets
15.1 Details of fixed assets
Unit: RMB
Building and General-purpose Special-purpose Transportation
Items Total
construction equipment equipment vehicles
I. Original cost
1. Opening balance (restated) 10,718,244,713.16 2,063,240,112.41 3,621,135,777.30 106,962,561.92 16,509,583,164.79
2. Increase in the current 1,691,400,129.15 261,492,984.13 381,391,117.29 5,390,922.26 2,339,675,152.83
reporting period
1) purchase 268,522.48 261,267,506.84 246,317,210.28 5,390,922.26 513,244,161.86
2) transferred from 1,691,131,606.67 225,477.29 134,803,156.61 - 1,826,160,240.57
construction in progress
3) transferred from - - 270,750.40 - 270,750.40
inventory
3. Decrease in the current - 20,916,173.81 55,478,770.18 3,665,381.41 80,060,325.40
reporting period
1) disposal or write-off - 20,916,173.81 55,478,770.18 3,665,381.41 80,060,325.40
4. Difference due to foreign (12,088,704.28) (9,034,911.60) 917,280.43 (1,603,576.47) (21,809,911.92)
currency statement translation
5. Closing balance 12,397,556,138.03 2,294,782,011.13 3,947,965,404.84 107,084,526.30 18,747,388,080.30
II. Accumulated depreciation
1. Opening balance (restated) 1,900,211,554.76 1,066,700,552.92 1,961,192,410.16 73,166,304.78 5,001,270,822.62
2. Increase in the current 244,348,493.22 151,688,784.37 260,290,462.38 5,104,627.23 661,432,367.20
reporting period
1) accrual 244,348,493.22 151,688,784.37 260,290,462.38 5,104,627.23 661,432,367.20
3. Decrease in the - 17,503,969.98 42,911,493.76 3,257,910.66 63,673,374.40
current reporting
period
1) disposal or - 17,503,969.98 42,911,493.76 3,257,910.66 63,673,374.40
write-off
4. Difference due to foreign (852,360.19) (3,544,208.72) 831,575.80 (694,386.45) (4,259,379.56)
currency statement translation
5. Closing balance 2,143,707,687.79 1,197,341,158.59 2,179,402,954.58 74,318,634.90 5,594,770,435.86
III. Carrying amount
1. Carrying amount at the 10,253,848,450.24 1,097,440,852.54 1,768,562,450.26 32,765,891.40 13,152,617,644.44
end of the period
2. Carrying amount at the 8,818,033,158.40 996,539,559.49 1,659,943,367.14 33,796,257.14 11,508,312,342.17
beginning of the period
(restated)
135
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
15.2 As of June 30, 2024, the carrying amount of special-purpose equipment leased by the Group through operating leases
is RMB63,958,980.34
15.3 Fixed assets of which certificates of title have not been granted as of June 30, 2024 are as follows:
Unit: RMB
Item Carrying amount Reason for certificates of title not granted
Office building for branches 11,628,708.32 In the process of obtaining the real estate certificates
Wuhan Intelligence Industrial Park (Phase I) 932,253,766.56 In the process of obtaining the real estate certificates
EZVIZ Smart Home Product Industrial Base 668,018,541.40 In the process of obtaining the real estate certificates
Project
Shijiazhuang Science and Technology Park 356,913,939.48 In the process of obtaining the real estate certificates
Project (Phase II)
Zhengzhou Science and Technology Park 340,614,047.24 In the process of obtaining the real estate certificates
Chongqing Science and Technology Park 322,547,240.66 In the process of obtaining the real estate certificates
Project (Phase III)
Total 2,631,976,243.66
136
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
16. Construction in progress
16.1 Details of construction in progress
Unit: RMB
Closing balance Opening balance
Item
Account balance Provision Carrying amount Account balance Provision Carrying amount
Xi'an Science and Technology Park Project 1,289,744,549.82 - 1,289,744,549.82 1,189,310,650.73 - 1,189,310,650.73
EZVIZ Intelligent Manufacturing Chongqing Base
859,784,275.39 - 859,784,275.39 628,214,692.80 - 628,214,692.80
Project (Infrastructure Part)
HikRobot Intelligent Manufacturing (Tonglu) Base
197,524,958.64 - 197,524,958.64 20,299,490.56 - 20,299,490.56
Project
HikRobot Product Industrial Base Construction
88,873,615.17 - 88,873,615.17 61,417,606.81 - 61,417,606.81
Project
Infrared Thermal Imaging Products Industrial Base 82,657,207.56 - 82,657,207.56 70,932,363.98 - 70,932,363.98
Wuhan Industrial Park Product (Phrase II) 6,416,709.64 - 6,416,709.64 5,671,116.16 - 5,671,116.16
Shijiazhuang Science and Technology Park Project
- - - 276,247,602.73 - 276,247,602.73
(Phrase II)
Chongqing Science and Technology Park Project
- - - 257,682,402.52 - 257,682,402.52
(Phrase III)
Others 1,105,235,534.58 - 1,105,235,534.58 1,797,875,148.17 - 1,797,875,148.17
Total 3,630,236,850.80 - 3,630,236,850.80 4,307,651,074.46 - 4,307,651,074.46
16.2 Changes in significant construction in progress during the current reporting period
Unit: RMB
Transferred to fixed Amount invested as Construction in
Budget Increase in the current
Item
(RMB0,000)
Opening balance
reporting period
assets during the current Closing balance proportion of budget Progress Source of funds
reporting period amount (%) (%)
Xi'an Science and Technology
161,276.00 1,189,310,650.73 100,433,899.09 - 1,289,744,549.82 79.97% 79.97% Self-fund
Park Project
EZVIZ Intelligent Manufacturing
Chongqing Base Project 117,011.00 628,214,692.80 231,569,582.59 - 859,784,275.39 73.48% 73.48% Self-fund/ raised fund
(Infrastructure Part)
HikRobot Intelligent
Manufacturing (Tonglu) Base 107,105.00 20,299,490.56 177,225,468.08 - 197,524,958.64 18.44% 18.44% Self-fund
Project
HikRobot Product Industrial Base
101,346.00 61,417,606.81 27,456,008.36 - 88,873,615.17 8.77% 8.77% Self-fund
Construction Project
137
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Infrared Thermal Imaging
75,803.00 70,932,363.98 11,724,843.58 - 82,657,207.56 10.90% 10.90% Self-fund
Products Industrial Base
Wuhan Industrial Park Product
140,394.00 5,671,116.16 745,593.48 - 6,416,709.64 0.46% 0.46% Self-fund
(Phrase II)
Shijiazhuang Science and
Technology Park Project (Phrase 37,483.00 276,247,602.73 80,666,336.75 356,913,939.48 - 95.22% 100.00% Self-fund
II)
17. Right-of-use assets
Unit: RMB
Items Houses and Buildings General Equipment Special-purpose equipment Transportation vehicles Total
I. Original cost
1. Opening balance 923,239,274.81 11,431,418.12 117,800,728.19 23,818,132.30 1,076,289,553.42
2. Increased 137,449,860.46 109,760.36 - 2,559,441.87 140,119,062.69
(1) New Lease 137,449,860.46 109,760.36 - 2,559,441.87 140,119,062.69
3. Decreased 144,232,392.07 34,333.38 - 1,815,186.17 146,081,911.62
(1) The lease contract expires or terminates early 144,232,392.07 34,333.38 - 1,815,186.17 146,081,911.62
4. Difference due to foreign currency statement translation (10,943,209.95) (860,369.42) - (642,687.09) (12,446,266.46)
5. Closing balance 905,513,533.25 10,646,475.68 117,800,728.19 23,919,700.91 1,057,880,438.03
II. Accumulated depreciation
1. Opening balance 450,980,701.22 300,315.09 89,996,638.11 13,950,502.34 555,228,156.76
2. Increased 131,302,614.45 5,347,124.65 3,230,835.29 2,480,016.27 142,360,590.66
(1) Provisions 131,302,614.45 5,347,124.65 3,230,835.29 2,480,016.27 142,360,590.66
3. Decreased 91,372,113.90 34,333.38 - 1,815,186.17 93,221,633.45
(1) The lease contract expires or terminates early 91,372,113.90 34,333.38 - 1,815,186.17 93,221,633.45
4. Difference due to foreign currency statement translation (6,070,114.80) (321,818.79) - (341,441.56) (6,733,375.15)
5. Closing balance 484,841,086.97 5,291,287.57 93,227,473.40 14,273,890.88 597,633,738.82
III. Carrying amount
1. Carrying amount at the end of the period 420,672,446.28 5,355,188.11 24,573,254.79 9,645,810.03 460,246,699.21
2. Carrying amount at the beginning of the period 472,258,573.59 11,131,103.03 27,804,090.08 9,867,629.96 521,061,396.66
18. Intangible assets
138
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
18.1 Details of intangible assets
Unit: RMB
Item Land use right Intellectual property right Application software Franchise Total
I. Original cost
1. Opening balance 1,715,411,561.60 274,154,371.83 416,681,260.92 110,245,727.75 2,516,492,922.10
2. Increased 68,549,293.29 447,845.02 22,668,753.54 699,763.53 92,365,655.38
(1) Purchase 68,549,293.29 447,845.02 22,668,753.54 699,763.53 92,365,655.38
3. Decreased - - 5,281,583.71 - 5,281,583.71
(1) Disposal or write-off - - 5,281,583.71 - 5,281,583.71
4. Difference due to foreign currency statement translation - (49,763.07) (372,026.69) 6,920.32 (414,869.44)
5. Closing balance 1,783,960,854.89 274,552,453.78 433,696,404.06 110,952,411.60 2,603,162,124.33
II. Accumulated amortization
1. Opening balance 170,369,804.14 98,491,176.89 370,414,597.74 24,706,728.39 663,982,307.16
2. Increased 18,626,652.01 17,704,313.72 11,106,790.76 2,409,091.50 49,846,847.99
(1) Accrual 18,626,652.01 17,704,313.72 11,106,790.76 2,409,091.50 49,846,847.99
3. Decreased - - 5,281,583.71 - 5,281,583.71
(1) Disposal or write-off - - 5,281,583.71 - 5,281,583.71
4. Difference due to foreign currency statement translation - (43,266.97) (383,762.69) 5,168.28 (421,861.38)
5. Closing balance 188,996,456.15 116,152,223.64 375,856,042.10 27,120,988.17 708,125,710.06
III. Impairment provision
1. Opening balance - - - 42,034,063.49 42,034,063.49
2. Closing balance - - - 42,034,063.49 42,034,063.49
VI. Carrying amount
1. Carrying amount at the end of the period 1,594,964,398.74 158,400,230.14 57,840,361.96 41,797,359.94 1,853,002,350.78
2. Carrying amount at the beginning of the period 1,545,041,757.46 175,663,194.94 46,266,663.18 43,504,935.87 1,810,476,551.45
18.2 At the end of the current reporting period, the Group does not have any land use rights that have not been issued with certificates
139
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
19. Goodwill
Unit: RMB
Increased Decreased Difference due to
The name of the investee or the matter Opening Business combination Liquidation foreign currency
Closing balance
that forming a goodwill balance not involving enterprises & statement
under common control cancellation translation
Wuhu Sensortech Intelligent
Technology Ltd. and its subsidiaries
92,088,117.87 - - - 92,088,117.87
(hereinafter referred to as the
"Sensortech")
SISTEMAS Y SERVICIOS DE
81,236,394.36 - - 505,813.46 81,742,207.82
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 4,726,554.16 - - (118,777.29) 4,607,776.87
SIA “BK Latvia” 4,719,995.03 - - (118,612.46) 4,601,382.57
Total 311,353,640.88 - - 268,423.71 311,622,064.59
20. Long-term deferred expenses
Unit: RMB
Difference due to
Other foreign currency
Item Opening balance Increased Amortized Closing balance
decreased statement
translation
Improvement expenditure
134,762,545.46 23,687,531.92 40,594,811.42 - (649,396.02) 117,205,869.94
for leased fixed asset
Employee housing loan
42,598,988.47 3,489,981.37 6,319,039.47 531,628.97 - 39,238,301.40
deferred interest
Total 177,361,533.93 27,177,513.29 46,913,850.89 531,628.97 (649,396.02) 156,444,171.34
21. Deferred tax assets/deferred tax liabilities
21.1 Deferred tax assets that are not presented on net off basis
Unit: RMB
Closing balance Opening balance
Item Deductible Deductible
temporary Deferred tax assets temporary Deferred tax assets
differences differences
Provision for impairment losses of assets 1,165,324,326.02 287,298,345.79 1,127,769,340.63 278,268,231.18
Provision for credit loss 3,703,605,091.73 773,309,017.31 3,364,947,416.28 704,178,085.23
Share-based payments - - 93,168,926.31 16,404,683.77
Provisions 196,885,378.85 37,898,505.77 135,644,054.99 24,189,557.95
Accrued but unsettled liabilities 2,379,790,570.77 398,600,910.20 2,515,576,691.84 426,431,441.31
Unrealized profit from inter-group
2,704,590,172.27 405,688,525.82 2,578,365,430.99 367,414,352.61
transactions
Changes in the fair value of derivative 7,012,520.26 1,753,130.07 38,079,755.04 9,519,938.76
financial instruments
Deferred income 838,382,626.60 114,179,745.39 940,537,242.40 127,045,105.84
Changes in the fair value of other non- 19,814,911.50 2,972,236.73 32,396,750.76 4,859,512.61
current financial assets
Depreciation difference of fixed assets and 141,650,903.01 22,629,578.31 199,086,488.75 32,012,352.33
140
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
amortization difference of intangible assets
Deductible losses 1,002,564,677.50 162,756,257.68 1,205,938,357.65 184,742,525.11
Lease liabilities 487,194,033.07 100,517,494.18 517,071,628.81 81,703,353.99
Others 80,778,423.57 23,842,753.74 79,735,281.12 23,121,972.50
Total 12,727,593,635.15 2,331,446,500.99 12,828,317,365.57 2,279,891,113.19
21.2 Deferred tax liabilities that are not presented on net off basis
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Depreciation difference of fixed assets and 1,636,682,532.32 292,656,357.72 1,446,155,125.82 257,662,359.02
amortization difference of intangible assets
Investment in joint venture measured by equity 131,063,620.25 19,659,543.04 191,356,253.14 28,703,437.97
method - partnership
Changes in the fair value of derivative financial 6,812,406.08 1,703,101.52 37,380.00 9,345.00
instruments
Changes in the fair value of other non-current 19,420,700.00 4,855,175.01 19,420,700.00 4,855,175.00
financial assets
Right-of-use assets 460,246,699.21 96,241,994.83 521,061,396.66 80,828,988.24
Valuation and appreciation of assets of business 156,908,571.40 39,227,142.85 174,342,857.16 43,585,714.29
combinations not under common control
Others 61,238,747.46 20,270,716.47 47,107,004.45 15,740,059.70
Total 2,472,373,276.72 474,614,031.44 2,399,480,717.23 431,385,079.22
21.3 Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset
Unit: RMB
Closing balance Opening balance
Offset amount at the Deferred tax assets or Offset amount at the Deferred tax assets or
Item
end of the reporting liabilities at the net beginning of the liabilities at the net
period amount after offset reporting period amount after offset
Deferred tax assets 316,677,390.40 2,014,769,110.59 301,518,101.04 1,978,373,012.15
Deferred tax liabilities 316,677,390.40 157,936,641.04 301,518,101.04 129,866,978.18
22. Other non-current assets
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Account balance Carrying amount Account balance Carrying amount
provision provision
Contract assets 1,870,037,693.12 15,213,558.26 1,854,824,134.86 1,893,506,565.03 15,397,380.73 1,878,109,184.30
Prepayments for 960,287,198.87 - 960,287,198.87 962,718,172.95 - 962,718,172.95
real estate
Prepayments for 17,817,637.86 - 17,817,637.86 1,049,973.59 - 1,049,973.59
acquisition of
land
Prepayments for 111,292,577.90 - 111,292,577.90 68,421,659.50 - 68,421,659.50
equipment
Prepayments for 6,459,242.80 - 6,459,242.80 8,032,635.16 - 8,032,635.16
infrastructure
Others 2,017,718.89 - 2,017,718.89 2,017,718.89 - 2,017,718.89
Total 2,967,912,069.44 15,213,558.26 2,952,698,511.18 2,935,746,725.12 15,397,380.73 2,920,349,344.39
141
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
23. Assets with Restriction in Ownership or Use Rights
Unit: RMB
Book value at the end of the current
Item Cause of restriction
reporting period
Cash and bank balances 172,303,562.90 Various guarantee deposits and other restricted funds
Notes receivable 1,112,921,700.38 Endorsed to the supplier, discounted to the bank
Accounts receivable 364,011,946.79 Pledged for long-term borrowings
Contract assets 138,746,685.24 Pledged for long-term borrowings
Fixed assets 63,958,980.34 Fixed assets leased out under operating leases
Intangible assets 36,404,952.72 Pledged and mortgage for long-term borrowings
Other non-current assets 1,470,880,090.19 Pledge for long-term borrowings
Total 3,359,227,918.56
Book value at the end of the current
Item Cause of restriction
reporting period
Cash and bank balances 210,191,306.76 Various guarantee deposits and other restricted funds
1,172,749,062.48 Endorsed to the supplier, discounted to the bank, and
Notes receivable
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
24. Short-term borrowings
24.1 Categories of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Fiduciary loan 1,257,721,570.90 2,084,385,782.09
Discounted but not expired notes 52,627,506.38 34,566,243.97
Total 1,310,349,077.28 2,118,952,026.06
24.2 As of June 30, 2024, 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 7,047,477.76 38,079,755.04
total 7,047,477.76 38,079,755.04
26. Notes payable
List of accounts payable
142
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 1,099,859,319.83 1,163,687,279.58
Total 1,099,859,319.83 1,163,687,279.58
As of June 30, 2024, the Group did not have any unpaid matured notes payable.
27. Accounts payable
27.1 List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payments for goods 14,053,398,794.80 18,669,058,955.74
Payments for engineering equipment 730,219,615.60 494,426,932.35
Total 14,783,618,410.40 19,163,485,888.09
27.2 As of June 30, 2024, the Group did not have any significant accounts payable with aging above one year.
28. Contract liabilities
28.1 List of contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advanced receipts from sales of products 2,401,319,185.39 2,411,948,613.09
Advanced receipts for construction settlement payment 290,860,059.86 267,231,078.24
Advanced receipts from other services 409,565,758.25 328,951,851.34
Subtotal 3,101,745,003.50 3,008,131,542.67
Less: contract liabilities included in other non-current liabilities 30,261,509.73 30,140,767.27
(Note (V),39)
Total 3,071,483,493.77 2,977,990,775.40
28.2 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
143
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
29. Payroll payable
29.1 Details of payroll payable
Unit: RMB
Opening balance Increase in the current Decrease in the current
Item Closing balance
(Restated) reporting period reporting period
1. Short-term remuneration 6,031,274,769.74 8,452,252,899.92 10,458,701,781.02 4,024,825,888.64
2. Termination benefits – defined 89,196,511.04 750,818,894.59 741,081,459.15 98,933,946.48
contribution scheme
Total 6,120,471,280.78 9,203,071,794.51 11,199,783,240.17 4,123,759,835.12
29.2 List of short-term remuneration
Unit: RMB
Opening balance Increase in the current Decrease in the current
Item Closing balance
(Restated) reporting period reporting period
1. Wages or salaries, bonuses, 5,563,702,232.42 7,122,628,214.66 9,161,116,196.49 3,525,214,250.59
allowances and subsidies
2. Staff welfare 612,991.96 154,112,072.71 154,540,748.08 184,316.59
3. Social insurance contributions 38,766,515.01 364,038,999.42 361,861,639.70 40,943,874.73
Including: 36,814,275.30 344,246,982.77 342,580,259.15 38,480,998.92
Medical insurance
Injury insurance 1,744,358.44 16,961,256.13 16,270,928.11 2,434,686.46
Maternity insurance 207,881.27 2,830,760.52 3,010,452.44 28,189.35
4. Housing funds - 682,216,336.94 681,029,727.75 1,186,609.19
5. Labor union and education fund 428,193,030.35 129,257,276.19 100,153,469.00 457,296,837.54
Subtotal 6,031,274,769.74 8,452,252,899.92 10,458,701,781.02 4,024,825,888.64
29.3 List of defined contribution plan
Unit: RMB
Opening balance Increase in the Decrease in the
Item Closing balance
(Restated) current period current period
1. Basic pension insurance 87,283,204.70 727,280,325.98 719,166,443.58 95,397,087.10
2. Unemployment insurance 1,913,306.34 23,538,568.61 21,915,015.57 3,536,859.38
Subtotal 89,196,511.04 750,818,894.59 741,081,459.15 98,933,946.48
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.
30. Taxes payable
144
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: RMB
Item Closing balance Opening balance
Enterprise income tax 745,304,989.00 990,235,254.45
Value-added tax 483,192,173.57 476,152,883.91
City construction and maintenance tax 35,478,473.16 28,555,595.11
Education surcharges 14,967,602.97 11,969,432.94
Local education surcharges 9,466,813.82 8,314,407.76
Others 146,699,132.91 107,322,613.69
Total 1,435,109,185.43 1,622,550,187.86
31. Other payables
31.1 By categories
Unit: RMB
Item Closing balance Opening balance
Dividend payable 300,184,420.58 253,957,413.29
Other payables 3,382,854,773.14 3,657,655,427.77
Total 3,683,039,193.72 3,911,612,841.06
31.2 Dividends payable
Unit: RMB
Item Closing balance Opening balance
Dividends of incentive restricted shares 243,506,512.50 155,844,168.00
Dividends payable to minority shareholders 56,677,908.08 98,113,245.29
Total 300,184,420.58 253,957,413.29
31.3 Other payables
31.3.1 List of other payables according to the nature of the payment
Unit: RMB
Item Closing balance Opening balance
Accrued expenses 1,547,469,189.02 1,682,496,005.40
Unexpired commercial acceptance bills that were endorsed
1,060,294,194.00 1,123,427,383.57
(Note (V)-3)
Guarantee and deposit fees 477,459,723.27 445,461,469.36
Collection and payment on behalf 250,340,816.32 294,323,679.79
Other expense payable 47,290,850.53 111,946,889.65
Total 3,382,854,773.14 3,657,655,427.77
31.3.2 As of June 30, 2024, the Group did not have any significant other payables aging over one year.
145
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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) 7,916,435,794.61 5,627,525,836.16
Lease liabilities due within one year (Note (V) 35) 184,642,739.47 184,722,447.43
Long-term payables due within one year (Note (V) 36) 1,777,345.71 2,411,931.37
Total 8,102,855,879.79 5,814,660,214.96
33. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription payment of restricted shares 2,650,324,882.05 1,095,194,890.62
Output VAT to be transferred 294,247,583.33 386,027,153.57
Total 2,944,572,465.38 1,481,222,044.19
34. Long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan (Note 1) 1,205,428,078.41 1,259,495,605.29
Mortgage loan (Note 2) 331,363,642.54 320,694,296.02
Fiduciary loan (Note 3) 12,056,685,657.89 12,959,458,895.86
Other borrowing (Note 4) 3,000,000.00 28,000,000.00
Less：Long-term loans due within one year (Note (V) 32) 7,916,435,794.61 5,627,525,836.16
Total 5,680,041,584.23 8,940,122,961.01
Note 1: As of June 30, 2024, the pledged loan was mainly obtained by the Group with all the rights and benefits under
related PPP projects pledged. The maturity date interval is from June 20, 2028 to March 26, 2040, and the annual interest
rate of the above loans is floating interest rate, and the annual interest rate ranges from 4.00% to 4.25%.
Note 2: As of June 30, 2024, 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 September 19, 2024 to February 8,
2028, and the annual interest rate ranges from 1.75% to 3.7%
Note 4: During 2016, the Group and CDB Development Fund Ltd. (CDBDF) jointly inject 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 is required to redeem the CDBDF's equity investment 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 of Hangzhou Electronics held by CDBDF redeemed by the Group is RMB187 million, and
the balance of the loan is 3 million (December 31, 2023: RMB 28 million).
35. Lease liabilities
146
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: RMB
Item Closing balance Opening balance
Lease liabilities 493,301,148.47 528,728,313.56
Less: Lease liabilities due within one year (Note (V), 32) 184,642,739.47 184,722,447.43
Total 308,658,409.00 344,005,866.13
36. Long-term payables
Unit: RMB
Item Closing balance Opening balance (Restated)
Purchase goods in installments 5,813,463.20 8,188,531.22
Lending 9,749,569.60 9,749,569.60
Less: Long-term payables due within one year (Note (V), 32) 1,777,345.71 2,411,931.37
Total 13,785,687.09 15,526,169.45
37. Provisions
Unit: RMB
Item Closing balance Opening balance
Product quality warranty 221,442,603.82 197,386,826.08
Return payment payable 18,088,529.97 15,697,212.23
Total 239,531,133.79 213,084,038.31
38. Deferred income
Unit: RMB
Increase in current Decrease in current
Item Opening balance Closing balance
reporting period reporting period
Government Subsidies 966,259,592.34 46,194,441.49 165,822,485.37 846,631,548.46
(Note (VIII), 1)
Total 966,259,592.34 46,194,441.49 165,822,485.37 846,631,548.46
39. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Payment for restricted stocks - 1,642,792,335.93
Contract liabilities (Note (V), 28) 30,261,509.73 30,140,767.27
Total 30,261,509.73 1,672,933,103.20
40. Share capital
Unit: RMB
Changes for the current reporting period
Opening
New issue Bonus Transfer from Closing balance
balance Others Subtotal
of shares issue Capital Reserve
Total shares 9,330,600,931.00 - - - - - 9,330,600,931.00
147
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 premium 6,989,138,129.40 1,144,384,872.71 16,479,345.35 8,117,043,656.76
Other capital reserves 875,765,634.12 704,359,823.69 1,144,263,428.03 435,862,029.78
Total 7,864,903,763.52 1,848,744,696.40 1,160,742,773.38 8,552,905,686.54
Note 1: The increase in equity premium of RMB1,144,263,428.03 in the current period was due to the transfer of equity
reserves from other capital reserves to equity premiums due to the exercise of equity-settled share-based payments.
The increase in share capital premium of RMB121,444.68 in the current period was due to the Group's acquisition of the
equity interests held by the original minority shareholders of its subsidiaries HuaAn Baoquan Electronics, HuaAn Baoquan
Intelligence and HuaAn Baoan, and the Group's shareholding ratio increased to 100% after the acquisition.
The increase in other capital reserve for the period of RMB689,342,469.03 was formed by share-based payment settled
by equity; RMB15,017,354.66 is formed by the change in other equity interests of the investee in the long-term equity
investment accounted for by the equity method.
Note 2: The decrease of RMB16,479,345.35 in the share premium for the period was due to the minority shareholders’
part of the equity-settled share-based payment for the period.
42. Treasury shares
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance reporting period reporting period Closing balance
(Note 1) (Note 2)
Restricted shares incentive scheme 2,737,987,226.55 - 87,662,344.50 2,650,324,882.05
Total 2,737,987,226.55 - 87,662,344.50 2,650,324,882.05
Note 1: During the current reporting period, treasury shares were reduced by RMB87,662,344.50, due to the Company's
provision of restricted stock cash dividends.
43. Other comprehensive income
Unit: RMB
Amounts occurred in the current reporting period
Less: transfer
The before- to current
income-tax Less: Attributable to Attributable to
Opening period P/L
Item amount incurred income owner of the minority Closing balance
balance from previous
during the tax parent company shareholders
current other expense (after tax)
(after tax)
reporting period comprehensiv
e income
Other incomes
that may be
reclassified
44,667,516.16 (97,804,683.71) - - (44,500,963.60) (53,303,720.11) 166,552.56
subsequently
to profit or
loss
Included:
Effect on
translation of 44,667,516.16 (97,804,683.71) - - (44,500,963.60) (53,303,720.11) 166,552.56
financial
statements
148
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
denominated
in foreign
currencies
Other
comprehensiv 44,667,516.16 (97,804,683.71) - - (44,500,963.60) (53,303,720.11) 166,552.56
e income
44. Surplus reserves
Unit: RMB
Increase in the Decrease in the
Item Opening balance current reporting current reporting Closing balance
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 Company's Articles of Association, the
parent company shall withdraw the statutory surplus reserve fund at 10% of the annual net profit, and when the
accumulated amount of the statutory surplus reserve fund reaches more than 50% of the registered capital, it may not be
withdrew. 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 First half of 2024 First half of 2023
Retained Earnings at the close of the prior reporting period 57,136,620,244.01 49,460,240,986.49
before adjustment
Add: Impact of changes in accounting policies - (483,408.98)
Retained earnings at beginning of period after adjustment 57,136,620,244.01 49,459,757,577.51
Add: Net profit attributable to owners of the Company for 5,064,118,857.29 5,337,937,850.82
the current reporting period
Less: Transfer to surplus reserve - -
Dividends payable on common shares (Note 1) 8,397,540,837.90 6,554,752,952.30
Others (Note 2) 69,833.94
Retained earnings at the end of the current reporting period 53,803,198,263.40 48,242,872,642.09
Note 1: According to the resolution of 2023 Annual General Meeting held on May 10, 2024, based upon the total capital
share of the Company on the equity distribution date, for each 10 common shares, the Company distributed cash
dividends of RMB9 (tax inclusive), the rest of retained earnings were all carried forward for future distributions.
Note 2: EZVIZ Network, a subsidiary of the Group, and China Electronics Technology HIK Group Co., Ltd (“CETHIK”),
the parent company of the Group, entered into an entrusted management agreement during the reporting period, pursuant
to which EZVIZ Network exercised the actual operation and management rights of Hangzhou Furui Technology Co.,
Ltd. ("Furui Technology") and obtained 100% of its distributable profits, and the transaction constituted a business
combination under commoncontrol. The agreement stipulates that EZVIZ Network will pay the capital occupation fee to
CETHIK on the basis of the audited net assets of Furui Technology as of December 31, 2023 and the agreed capital
occupation rate. Accordingly, the net profit attributable to the owners of the Company generated by Furui Technology
in the previous period was actually owned by CETHIK, as detailed in Note (VI), 1.
46. Revenue and operating costs
46.1 Revenue and operating cost
Unit: RMB
Item First half of 2024 First half of 2023 (Restated)
149
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Revenue Cost Revenue Cost
Major business 40,917,942,552.86 22,473,590,238.51 37,300,729,580.38 20,483,188,439.76
Other business 291,153,653.50 170,119,334.65 270,622,855.25 111,335,074.34
Total 41,209,096,206.36 22,643,709,573.16 37,571,352,435.63 20,594,523,514.10
46.2 Revenue (categorized by product or business type)
Item First half of 2024 First half of 2023 (Restated)
Products and services for main business (Note) 30,229,701,063.88 28,634,854,717.12
Constructions of main business 651,214,618.73 748,219,037.49
Innovative businesses 10,328,180,523.75 8,188,278,681.02
Including: Robotic business 2,744,389,603.14 2,278,447,297.18
Smart home business 2,448,684,604.42 2,183,062,932.81
Thermal imaging business 1,829,997,676.77 1,475,222,288.91
Auto electronics business 1,605,885,368.24 1,001,472,278.41
Storage business 1,311,887,493.34 792,630,227.93
Other innovative businesses 387,335,777.84 457,443,655.78
Total 41,209,096,206.36 37,571,352,435.63
Note: Main business refers to the business parts other than the innovative businesses.
46.3 Major business (by business type)
Unit: RMB
First half of 2024
Item
Revenue Cost
Product sales 39,158,134,715.94 21,510,029,917.65
Construction contract 651,214,618.73 514,054,139.49
Provide services 1,108,593,218.19 449,506,181.37
Total 40,917,942,552.86 22,473,590,238.51
46.4 Major business (by the time of revenue recognition)
Unit: RMB
First half of 2024
Item
Revenue Cost
Recognized at a point in time 39,158,134,715.94 21,510,029,917.65
Recognized over time 1,759,807,836.92 963,560,320.86
Total 40,917,942,552.86 22,473,590,238.51
47. Business Taxes and Surcharges
Unit: RMB
Items First half of 2024 First half of 2023
City construction and maintenance tax 151,816,573.26 156,223,720.16
150
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Items First half of 2024 First half of 2023
Education surcharges 66,319,653.41 67,679,309.37
Real estate tax 47,598,375.46 40,573,777.76
Local education surcharges 44,213,102.45 45,119,539.57
Stamp duty 36,207,653.33 35,735,215.66
Tax on use of land 11,506,221.38 4,058,891.61
Tax on use of vehicle and vessel 83,439.17 90,406.44
Others 1,555,391.96 1,057,179.39
Total 359,300,410.42 350,538,039.96
48. Financial Expenses
Unit: RMB
First half of 2023
Items First half of 2024
(Restated)
Interest expenses 240,795,611.48 189,625,292.12
Interest expense on lease liabilities 16,733,448.67 9,297,983.31
Less: Interest income 617,390,094.88 494,004,497.35
Foreign exchange losses (gains) 81,443,309.39 (285,146,313.96)
Less: Capitalized specific loan interests and foreign
5,815,514.68 4,421,395.72
exchange differences on specific loan
Others 34,044,538.30 17,263,900.78
Total (250,188,701.72) (567,385,030.82)
49. Other income
Unit: RMB
First half of 2023
Items First half of 2024
(Restated)
VAT refund 836,335,027.54 782,559,408.82
Special subsidies 351,147,745.61 228,252,374.13
Tax refund/ relief 47,196,900.37 17,924,557.33
Total 1,234,679,673.52 1,028,736,340.28
50. Investment income (losses)
Unit: RMB
Items First half of 2024 First half of 2023
Investment losses in associates and joint ventures (78,368,251.31) (42,240,571.07)
Investment losses from disposal of held-for-trading financial assets (26,264,330.79) (63,426,476.78)
Net gain from multi-step transaction of business combination not under common
- 116,433,610.45
control
Others 470,396.18 -
Total (104,162,185.92) 10,766,562.60
51. Gains from changes in fair values
Unit: RMB
Sources of gains (losses) from changes in fair values First half of 2024 First half of 2023
Held-for-trading financial assets 6,775,026.08 (1,858,710.03)
Including: gains and losses on the changes in fair value of derivative financial
6,775,026.08 (1,858,710.03)
instruments
Gains from changes in fair value of other non-current financial assets 12,581,839.26 30,092,421.70
151
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Held-for-trading financial liabilities 31,032,277.28 18,355,299.29
Including: gains on the changes in fair value of derivative financial
31,032,277.28 18,355,299.29
instruments
Total 50,389,142.62 46,589,010.96
52. Credit impairment loss
Unit: RMB
Items First half of 2024 First half of 2023
Credit impairment losses of accounts receivable (361,907,447.88) (382,111,246.61)
Credit impairment gains or losses of notes receivable 1,022,542.63 (1,904,367.67)
Credit impairment losses of other receivables (4,470,550.60) (1,917,720.26)
Credit impairment losses of long-term receivables (54,064,790.38) (49,801,816.99)
Total (419,420,246.23) (435,735,151.53)
53. Impairment losses of assets
Unit: RMB
Items First half of 2024 First half of 2023
Losses on inventory devaluation (203,890,134.45) (199,797,440.25)
Contract assets impairment gains (losses) (218,792.98) 4,241,443.17
Total (204,108,927.43) (195,555,997.08)
54. Non-operating income
Unit: RMB
Items The amount booked into current period
First half of 2024 First half of 2023
non-recurring profits and losses
Fines and confiscations 27,691,136.30 51,204,267.88 27,691,136.30
Government subsidies 560,762.64 352,034.41 560,762.64
Others 8,551,822.93 6,986,614.67 8,551,822.93
Total 36,803,721.87 58,542,916.96 36,803,721.87
55. Non-operating expenses
Unit: RMB
The amount booked into current period non-
Items First half of 2024 First half of 2023
recurring profits and losses
Local water conservancy construction fund 1,655,486.04 1,410,890.77 -
Others 10,591,560.87 8,223,676.69 10,591,560.87
Total 12,247,046.91 9,634,567.46 10,591,560.87
56. Income tax expenses
Unit: RMB
Items First half of 2024 First half of 2023
Current income tax expenses 1,019,741,807.14 1,030,881,689.99
Deferred income tax expenses (19,198,745.64) (143,004,387.17)
Differences in filing and payment of income tax in previous reporting years (339,687,179.69) (397,663,010.56)
Total 660,855,881.81 490,214,292.26
57. Notes to consolidated cash flow statement items
152
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
57.1 Cash relating to operating activities
Other cash receipts relating to operating activities
Unit: RMB
Items First half of 2024 First half of 2023 (Restated)
Interest income 562,225,054.99 433,308,997.85
Government subsidies 232,080,464.37 170,623,695.43
Others 287,369,792.62 389,517,116.21
Total 1,081,675,311.98 993,449,809.49
Other cash payments relating to operating activities
Unit: RMB
Item First half of 2024 First half of 2023 (Restated)
Office expenses and business expenses 942,944,604.61 797,192,324.36
Advertising and Selling services 756,539,170.44 606,833,876.02
R&D expenses 708,840,100.60 659,721,480.90
Travelling expenses 385,658,461.60 339,884,727.61
Shipping and transportation expenses 222,787,187.81 226,255,040.46
Rental expenses 36,886,482.65 58,070,114.51
Others 419,191,141.16 146,127,722.15
Total 3,472,847,148.87 2,834,085,286.01
57.2 Cash relating to investing activities
Other cash receipts relating to investing activities
Unit: RMB
Item First half of 2024 First half of 2023
Receipts of financing lease payments 43,213,496.63 29,888,320.03
Total 43,213,496.63 29,888,320.03
Other cash payments relating to financing activities
Unit: RMB
Item First half of 2024 First half of 2023
Repurchase of restricted shares 2,721,675,044.32 613,496,083.59
Repayment of lease liabilities 139,467,522.24 125,111,554.01
Consideration paid for acquisition of minority interests 10,380,041.54 50,400,000.00
Others 6,155,000.00 -
Total 2,877,677,608.10 789,007,637.60
58. Supplementary information about cash flow statement
58.1 Supplementary information about cash flow statement
Unit: RMB
First half of 2023
Supplementary information First half of 2024
(Restated)
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 5,640,664,710.62 5,756,569,297.62
Add: Impairment losses of assets 204,108,927.43 195,555,997.08
153
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
First half of 2023
Supplementary information First half of 2024
(Restated)
Credit impairment losses 419,420,246.23 435,735,151.53
Fixed assets depreciation 661,432,367.20 555,970,738.82
Right-of-use assets depreciation 142,360,590.66 138,196,837.05
Amortization of intangible assets 49,846,847.99 35,446,202.53
Long-term deferred expenses amortization 46,913,850.89 41,676,441.92
Losses on disposal of fixed assets, intangible assets and other long-term assets 11,772,875.69 2,699,436.97
Obsolescence losses of fixed assets 173,873.26 527,310.75
Gains from changes in fair value (50,389,142.62) (46,589,010.96)
Financial expenses 141,874,947.35 109,325,790.05
Investment income (Losses) 104,162,185.92 (10,766,562.60)
Share-based payment based on equity settlement 732,525,154.53 373,528,563.06
Decrease of restricted funds 37,887,743.86 53,835,939.99
Increase in deferred income tax assets (36,396,098.44) (153,758,959.24)
Increase in deferred income tax liabilities 26,114,618.42 1,208,557.08
Increase in inventories (12,953,207.87) (541,945,868.02)
Increase in operating receivables (1,468,125,265.31) (2,393,937,014.55)
Decrease in operating payables (6,721,403,222.83) (3,469,508,489.61)
Decrease in deferred income (119,628,043.88) (57,980,713.11)
Net cash flows from operating activities (189,636,040.90) 1,025,789,646.36
2. Net changes in cash and cash equivalents:
Closing balance of cash 33,954,198,101.43 34,531,729,563.64
Less: Opening balance of cash 49,427,967,355.78 39,825,124,107.52
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net decrease in cash and cash equivalents (15,473,769,254.35) (5,293,394,543.88)
58.2 Constituents of cash and cash equivalents
Unit: RMB
Opening balance
Item Closing balance
(Restated)
Cash 33,954,198,101.43 49,427,967,355.78
Including: Cash on hand 2,386,730.73 1,785,754.92
Bank deposit for payment at any time 33,914,869,454.24 49,400,692,427.34
Other monetary capital for payment at any time 36,941,916.46 25,489,173.52
Cash equivalents - -
Closing balance of cash and cash equivalents 33,954,198,101.43 49,427,967,355.78
59. Monetary items of foreign currencies
Unit: RMB
Balance in foreign currency at Exchange rate for Balance of RMB converted at the
Items
the end of the reporting period conversion end of the reporting period
Cash and bank balances
Including: USD 324,347,962.60 7.1268 2,311,563,059.88
EUR 152,824,310.18 7.6617 1,170,894,017.31
154
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Balance in foreign currency at Exchange rate for Balance of RMB converted at the
Items
the end of the reporting period conversion end of the reporting period
Accounts receivable
Including: USD 256,980,971.29 7.1268 1,831,451,986.19
EUR 149,718,510.81 7.6617 1,147,098,314.27
Short-term borrowings
Including: USD 5,902,962.45 7.1268 42,069,232.78
Accounts payable
Including: USD 33,907,048.87 7.1268 241,648,755.89
EUR 665,096.51 7.6617 5,095,769.93
Non-current liabilities due within
one year - long-term borrowings
Including: EUR 140,031,111.11 7.6617 1,072,876,364.00
60. Lease
60.1 As lessee
The company leases a number of assets, including houses and buildings s, general-purpose equipment, special-purpose equipment and
transportation 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
RMB47,090,864.02 (the first half of 2023: RMB65,275,536.47).
The total lease-related cash outflows for the reporting period is RMB 186,558,386.26 (the first half of 2023: RMB190,387,090.48).
60.2 As a lessor
Operating lease as a lessor
Unit: RMB
Including: income related to variable lease payments
Item Income from leasing
that are included in lease receipts
Special-purpose equipment 51,210,075.32 -
Total 51,210,075.32 -
The Group's operating lease as a lessor relates to Special-purpose equipment.
Finance lease as a lessor
Unit: RMB
Income related to variable lease
Item Profits on sales Profits on financing payments that are not included
in net lease investments
Special-purpose equipment 14,956,407.20 2,319,918.00 -
finance lease
Total 14,956,407.20 2,319,918.00 -
As a lessor, the Group entered into financial lease contracts with customers in relation to Special-purpose equipment.
155
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
60.3 Gains and losses on finance lease as a manufacturer
Unit: RMB
Item Income on sales Costs on sales Gains on finance lease
Special-purpose equipment
42,999,428.29 28,043,021.09 14,956,407.20
finance lease
Total 42,999,428.29 28,043,021.09 14,956,407.20
VI. Changes in consolidation scope
1. Business combination under common control
1.1 Business combination under common control at the reporting period
Hangzhou Furui Technology Ltd. ("Furui Technology")
On April 10, 2024, EZVIZ Network, a subsidiary of the Group, signed an entrusted management agreement with CETHIK,
the parent company of the Group, according to which CETHIK entrusted EZVIZ Network to exercise the actual operation
and management right of Furui Technology, and was fully responsible for the production, operation and management of
Furui Technology, and EZVIZ Network got 100% of the distributable profits of Furui Technology. At the same time,
EZVIZ Network paid the capital occupation fee to CETHIK on the basis of the audited net assets of Furui Technology as
of December 31, 2023 and the agreed capital occupation rate. Therefore, EZVIZ Network has reached control of Furui
Technology. Since CETHIK is the controlling shareholder of the Group and Furui Technology, and EZVIZ Network is a
subsidiary of the Group, the entrusted management of Furui Technology constitutes a business combination under common
control.
Unit: RMB
Income of the Net loss of the
Income of Net profit (loss)
Equity Reason for Basis for acquiree from acquiree from
acquiree from of acquiree from
considering the determining the beginning of the beginning
Name of the acquisition Date of the acquisition the acquisition
ratio transactions as the the current of the current
acquiree acquisition data to the end data to the end
combination under acquisition reporting period reporting period
(%) of the reporting of the reporting
the same control date to the acquisition to the
period period
date acquisition date
Before and after the
business
combination, the
The effective
controlling
date of the
Furui shareholder of the April 10,
48% entrusted - (295,677.15) 566,037.74 145,487.38
Technology Group and Furui 2024
management
Technology was
agreement
CETHIK, and such
control was not
temporary
Note: the Group hold 48% of the merger EZVIZ Network’s capital shares.
1.2 Cost of business combination and goodwill
Unit: RMB
Cost of business combination Furui Technology
Long-term payables 9,749,569.60
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
1.3 Acquiree's book value of assets and liabilities at the date of acquisition
Unit: RMB
Furui Technology
Date of acquisition Beginning of the reporting period
Assets:
Cash and bank balances 9,642,829.41 8,689,008.08
Accounts receivable - 1,400,000.00
Other receivable 6,387.00 6,387.00
Inventories 9,911.50 9,911.50
Fixed assets 8,845.06 10,024.42
Total assets 9,667,972.97 10,115,331.00
Liabilities:
Payroll payable 65,107.62 216,788.50
Taxes payable 148,972.90 148,972.90
Total liabilities 214,080.52 365,761.40
Net assets acquired: 9,453,892.45 9,749,569.60
1.4 The Group has no contingent liabilities of the acquiree that need to be assumed in connection with the merger.
2. Business consolidation for other reasons - scope changes
Newly established subsidiaries which are included in the scope of consolidation in the reporting period are as follows:
Name for the subsidiaries Date of establishment Registration capital
Hangzhou Hikimaging Electronics Ltd. (Note) March 2024 RMB10,000,000
Hangzhou Rayin Detection Technology Ltd.
April 2024 RMB50,000,000
(Note)
Note: At the end of the period, Hangzhou Hikimaging Electronics Ltd. and Hangzhou Rayin Detection Technology Ltd. had not completed the
payment of their registration capital.
157
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
VII. Interest in other entities
1. Equity in subsidiaries
Composition of major subsidiaries of the Group
Name Location of operation Place of registration Nature of business Acquisition method
Hangzhou Hikvision System Technology Ltd. Hangzhou Hangzhou, Zhejiang System integration, Technology development Establishment
Hangzhou Hikvision Technology Ltd. Hangzhou Hangzhou, Zhejiang Manufacture Establishment
Hangzhou EZVIZ Network Co., Ltd. Hangzhou Hangzhou, Zhejiang Technology development Establishment
Hangzhou EZVIZ Software Ltd. Hangzhou Hangzhou, Zhejiang Technology development Establishment
Hangzhou Hikrobot Co., Ltd. Hangzhou Hangzhou, Zhejiang Technology development Establishment
Hangzhou Haikang Intelligent Technology Ltd. Hangzhou Hangzhou, Zhejiang Technology development Establishment
2. Changes in the share of owners' equity in subsidiaries and still controls the transactions of subsidiaries.
(1) Description of the change in the share of owners' equity in subsidiaries
Acquisition of minority shares of HuaAn Baoquan Intelligence, HuaAn Baoquan Electronics, and HuaAn Security Service.
On 30 April 2024, the Group and its subsidiaries, HuaAn Baoquan Intelligence and the original minority shareholders of HuaAn Baoquan Electronics, jointly entered into the Equity
Transfer Agreement in Relation to Henan HuaAn Baoquan Intelligence Development Co., Ltd. and Henan Haikang HuaAn Baoquan Electronics Co., Ltd., agreeing to acquire 6.14% of
the minority equity interests of HuaAn Baoquan and HuaAn Baoquan Electronics held by the original shareholders for RMB5,831,800 and RMB4,420,800 respectively. After the
completion of the acquisition, the Group would hold 100% equity interest in HuaAn Baoquan Intelligence and HuaAn Baoquan Electronics, respectively. These two parties completed
the equity delivery on May 31, 2024. As of 30 June 2024, the Group has completed the payment of the equity acquisition.
On 30 April 2024, HuaAn Baoquan Intelligence, a subsidiary of the Group, and the original minority shareholders of HuaAn Security Services, a subsidiary of HuaAn Baoquan Intelligence,
jointly entered into the Equity Transfer Agreement in Henan HuaAn Security Services Co., Ltd., agreeing to acquire a 10% minority shares of HuaAn Security Services held by the original
shareholders for RMB127,400. After the completion of the acquisition, HuaAn Security would hold 100% equity interest in HuaAn Security Services, and since the Group held 100%
equity interest in HuaAn Security Services, the Group would ultimately hold 100% equity interest in HuaAn Security Services in aggregate. These two parties would complete the equity
delivery on May 31, 2024. As of 30 June 2024, the Group has completed the payment of the equity acquisition.
Unit: RMB
158
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Henan HuaAn Baoquan Intelligence Henan Haikang HuaAn Baoquan Electronics Co., Henan HuaAn Security Service Co., Ltd. and its
Development Co., Ltd. and its subsidiaries Ltd. and its subsidiaries subsidiaries
-Cash 5,831,820.00 4,420,800.00 127,421.54
Cost of acquisition 5,831,820.00 4,420,800.00 127,421.54
Less:
Net assets of subsidiaries according to the 5,549,503.73 4,845,770.23 106,212.26
proportion of equity acquired
Balance adjusted capital surplus 282,316.27 (424,970.23) 21,209.28
3. Equity in joint ventures or associates
3.1 Aggregated financial information of insignificant joint-ventures and associates
Unit：RMB
Closing balance / Amount for the first half of 2024 Opening balance / Amount for the first half of 2023
Associates:
The aggregate carrying amount of investments in associates 294,851,243.83 287,370,796.06
The aggregate amount of the following items calculated based on the Company's equity share percentage
of the associates
- Net income (loss) 3,541,678.25 (9,900,682.45)
- Other comprehensive income - -
- Total comprehensive income (loss) 3,541,678.25 (9,900,682.45)
Joint Ventures:
Total investment book value 801,357,791.81 863,734,091.79
The aggregate amount of the following items calculated based on the Company's equity share percentage
of the associates
- Net loss (81,909,929.56) (32,339,888.62)
- Other comprehensive income - -
- Total comprehensive loss (81,909,929.56) (32,339,888.62)
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Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
3.2 There are no significant restrictions on the ability of the joint ventures or associates to transfer funds to the Group.
3.3 Unrecognized commitments related to investment in joint ventures or associates
Unit：000 RMB
Joint venture or associates Capital commitment (Note)
Shenzhen Haishi Urban Service Operation Co., Ltd. 4,000.00
Guangxi Haishi Urban Operation Management Co., Ltd. 2,440.00
Jiangsu Haishikaitai Technology Co., Ltd. 3,000.00
Note: The above capital commitments are the capital amounts that the Group has subscribed but not paid in to the above joint ventures or associates.
3.4 The Group has no contingent liabilities related to investments in joint ventures or associates.
VIII. Government subsidiaries
1. Liabilities relating to government subsidiaries
Unit: RMB
Amount at the open of the Transfer to other income in the Amount at the close of the
Liabilities Increase in the reporting period Asset-related /revenue-related
reporting period reporting period reporting period
Special subsidy 741,121,772.61 24,440,191.49 54,001,241.63 711,560,722.47 Asset-related
Special subsidy 225,137,819.73 21,754,250.00 111,821,243.74 135,070,825.99 Revenue-related
Total 966,259,592.34 46,194,441.49 165,822,485.37 846,631,548.46
2. Government subsidy recognized as gain or loss in the reporting period
Unit: RMB
Liabilities First half of 2024 First half of 2023
VAT refund 836,335,027.54 782,559,408.82
Special subsidy 351,708,508.25 228,604,408.54
Total 1,188,043,535.79 1,011,163,817.36
160
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
IX. Risks associated with financial instrument
The Group'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, some of other non-
current assets, borrowings, notes payable, accounts payable, other payables, some of other non-current liabilities, part of
other current liabilities, long-term payables, 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
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
Closing balance of the current Opening balance of the current
Items
reporting period reporting period (Restated)
Financial assets：
Measured at fair value through current profit and loss
Held-for-trading financial assets 6,812,406.08 37,380.00
Other non-current financial assets 484,766,776.92 472,184,937.66
Measured at fair value through other comprehensive income
Receivables for financing 1,762,830,566.46 1,594,219,832.62
Measured at amortized cost
Cash and bank balances 34,126,501,664.33 49,638,158,662.54
Notes receivable 2,159,264,517.06 2,606,071,375.74
Accounts receivable 36,783,112,910.26 35,816,573,511.44
Other receivables 410,640,705.23 571,912,035.93
Other non-current assets 2,017,718.89 2,017,718.89
Long-term receivables (including those due within one year) 1,488,697,342.27 1,618,419,624.99
Financial liabilities:
Measured at fair value through current profit and loss
Held-for-trading financial liabilities 7,047,477.76 38,079,755.04
Measured at amortized cost
Short-term borrowings 1,310,349,077.28 2,118,952,026.06
Notes payable 1,099,859,319.83 1,163,687,279.58
Accounts payable 14,783,618,410.40 19,163,485,888.09
Other payables 3,683,039,193.72 3,911,612,841.06
Other current liabilities - 1,095,194,890.62
Long-term borrowings (including those due within one year) 13,596,477,378.84 14,567,648,797.17
Long-term payables (including those due within one year) 15,563,032.80 17,938,100.82
Other non-current liabilities - 1,642,792,335.93
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.
161
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
1. Objectives, policies and procedures of risk management, and changes of the current 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 China 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.
At the end of the reporting period, except for monetary items of foreign currencies set out in Note (V) 59, 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
Assets Liabilities
Currencies
Closing balance Opening balance Closing balance Opening balance
USD 4,143,015,046.07 3,459,224,512.51 283,717,988.67 325,809,696.61
EUR 2,317,992,331.58 3,068,403,192.93 1,077,972,133.93 1,908,485,738.15
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 and
etc., 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
First half of 2024 First half of 2023
Change in foreign exchange rates Effect on shareholders' Effect on shareholders'
Effect on profit Effect on profit
equity equity
5% appreciation of USD against
192,964,852.87 192,964,852.87 121,335,897.94 121,335,897.94
functional currency
5% depreciation of USD against
(192,964,852.87) (192,964,852.87) (121,335,897.94) (121,335,897.94)
functional currency
5% appreciation of EUR against
62,001,009.88 62,001,009.88 33,175,547.66 33,175,547.66
functional currency
5% depreciation of EUR against
(62,001,009.88) (62,001,009.88) (33,175,547.66) (33,175,547.66)
functional currency
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.
162
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
The Group determines the relative proportion of fixed interest rate contracts and floating interest rate contracts based on
the prevailing market environment. On June 30, 2024, the Group's total long-term and short-term interest-bearing debts
bearing fixed interest rates amounted to RMB9,576,918,871.85 (December 31, 2023: RMB11,105,877,902.09) (Note (V)
24 and Note (V) 34). The total amount of long-term and short-term interest-bearing debts bearing floating interest rates is
RMB5,277,280,077.89 (December 31, 2023: RMB5,546,156,677.17) (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
investment in held-for-trading equity instruments and derivative financial instruments is not significant, and the risk
exposure due to changes in price of financial instruments as a result of change in valuation assumptions is not significant,
accordingly, no sensitivity analysis is conducted.
2.2 Credit Risk
As of June 30, 2024, 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 balance (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
163
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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
forthe 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.
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
June 30, 2024
Within one year 1-5 years More than five years Total
Non-derivative financial liabilities
Short-term borrowings 1,329,716,782.16 - - 1,329,716,782.16
Notes payable 1,099,859,319.83 - - 1,099,859,319.83
Accounts payable 14,783,618,410.40 - - 14,783,618,410.40
Other payables 3,683,039,193.72 - - 3,683,039,193.72
Long-term borrowings (including those due
8,086,338,055.76 5,314,126,806.00 698,439,705.57 14,098,904,567.33
within one year)
Long-term payables (including those due
2,021,446.61 4,270,142.86 9,749,569.60 16,041,159.07
within one year)
Derivative financial instruments
Forward foreign exchange contracts -
settled in the gross amount
- Cash inflow 874,760,541.30 - - 874,760,541.30
- Cash outflow 874,995,613.00 - - 874,995,613.00
- Net cash outflow 235,071.71 - - 235,071.71
164
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
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 - 1,762,595,494.78 484,766,776.92 2,247,362,271.70
(I) Held-for-trading financial assets - 6,812,406.08 - 6,812,406.08
1. Financial assets measured at fair value
- 6,812,406.08 - 6,812,406.08
through profit and loss
(II) Other non-current financial assets - - 484,766,776.92 484,766,776.92
1. Financial assets measured at fair value
- - 484,766,776.92 484,766,776.92
through profit and loss
(III) Receivables for financing - 1,762,830,566.46 - 1,762,830,566.46
1. Financial assets measured at fair value
- 1,762,830,566.46 - 1,762,830,566.46
through other comprehensive income
Total assets measured continuously at fair
- 1,769,642,972.54 484,766,776.92 2,254,409,749.46
value
(IV) Held-for-trading financial liabilities - 7,047,477.76 - 7,047,477.76
1. Financial liabilities measured at fair
- 7,047,477.76 - 7,047,477.76
value through profit and loss
Total liabilities measured continuously at
- 7,047,477.76 - 7,047,477.76
fair value
2. The valuation techniques and important parameters used for the Level 2 fair value measurement item
Unit: RMB
Fair value at
Estimation technique Inputs
June 30, 2024
Forward exchange rate
Forward foreign exchange contracts Discounted cash flow
6,812,406.08 Discounted rate that reflects the
(Assets) approach
credit risk of counterparty
Forward exchange rate
Forward foreign exchange contracts Discounted cash flow
(7,047,477.76) Discounted rate that reflects the
(Liabilities) approach
credit risk of counterparty
Discounted cash flow Discounted rate that reflects the
Receivables for financing 1,762,830,566.46
approach credit risk of counterparty
3. The valuation techniques and important parameters used for the Level 3 fair value measurement item
Unit: RMB
Fair value at
Items Valuation techniques Inputs
June 30, 2024
Comparable public companies' PB
Other non-current financial assets--
Market approach/Income (price/book value) ratio within the
Investment in equity instruments of private 484,766,776.92
approach same industry/Future cash flows,
companies
Discount rate
4. The adjustment information between the opening and closing book value of the Level 3 fair value measurement
item
Unit: RMB
Other non-current financial assets Amount
Book value on January 1, 2024 472,184,937.66
Changes in fair value booked into profit and loss during the current reporting period 12,581,839.26
165
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Other non-current financial assets Amount
Book value on June 30, 2024 484,766,776.92
The total amount included in profit or loss in the first half of 2024 includes unrealized gains of RMB12,581,839.26 (June
30, 2023: RMB30,092,421.70) related to financial assets measured at fair value at the end of the current reporting period,
and such gains or losses are included in the gains or losses from changes in fair value.
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, some of other current liabilities, non-current liabilities due within one year, long-term borrowings, long-
term payables and some 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
Shareholding ratio of Percentage of voting
Place of Nature of
Name Registered capital parent company in the rights of parent company
registration business
Company (%) to the Company (%)
China Electronics Technology
Hangzhou, Industrial
HIK Group Co., Ltd. RMB845 million 36.55 36.55
Zhejiang investment
(CETHIK)
The ultimate controlling party of the Company is China Electronics Technology Group Co., Ltd. ("CETC").
2. Information on the subsidiaries of the Company
For details of the 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 (Note 1) Associate
Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries (Note 2) Associate
Zhiguang Hailian Big Data Technology Ltd. and its subsidiaries (Note 2) Associate
Jiaxing Haishi JiaAn Zhicheng Technology Ltd. (Note 2) Associate
Sanmenxia Xiaoyun Vision Technology Ltd. (Note 2) Associate
Beijing Taifang Technology LLC. and its subsidiaries (Note 2) Associate
Guangxi Haishi City Operation Management Ltd. and its subsidiaries (Note 3) Joint venture
Shenzhen Haishi City Service Operation Ltd. and its subsidiaries (Note 3) Joint venture
166
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Name of the associates or joint ventures Relationship with the Company
Xuzhou Kangbo City Operation Management Service Ltd. (Note 3) Joint venture
Yunnan Yinghai Parking Service Ltd. (Note 3) Joint venture
Zhejiang City Digital Technology Ltd. (Note 3) Joint venture
Zhejiang Haishi Huayue Digital Technology Ltd. (Note 3) Joint venture
Note 1: During the period from December 2016 to February 2023, Sensortech is an associated company of the Company. On February 28,
2023, the Company obtained control right of Sensortech, and included Sensortech in the scope of the consolidated financial statements. During
the period from January 2023 to February 2023, this company is an associate of the Group.
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 (Note 1) Relationship
Close family member of the Company’s above 5% shareholder(s)
Shanghai Fullhan Microelectronics Co., Ltd. and its subsidiaries act(s) as controller(s) or person(s) acting in concert with the
controller(s) of this company
Shareholder(s) that hold(s) more than 5% shares of the Company
Shenzhen Guoteng'an vocational education Technology Ltd.
serve(s) as the director(s) of this company
The Group's senior management serve(s) as director(s) of this
Confirmware Technology (Hangzhou) Co., Ltd. and its subsidiaries
company
Zhejiang Fast Line data fusion Information Technology Co., Ltd. The Group's senior management serve(s) as director(s) of this
and its subsidiaries company
Chengdu Guoshengtianfeng Network Technology Ltd. and its The Group's senior management serve(s) as director(s) of this
subsidiaries company
The Group's independent director(s) serve(s) as director(s) of this
Ningbo Industrial Internet Research Institute Ltd.
company
INESA Group Ltd. and its subsidiaries The Group's supervisor(s) serve(s) as director(s) of this company
The Group's supervisor(s) serve(s) as independent director(s) of
Bank of Tianjing Co., Ltd. and its subsidiaries
this company
The Group's chairman(chairmen) of Board of the Supervisors
Shenzhen Zhongtu Instrument Co., Ltd. (Note 2）
was(were) the director(s) of this company
The Group's Supervisor(s) once served as the director(s) of this
Shanghai Vico Precision Mold & Plastics Co.,Ltd. (Note 3)
company
Under common control of the ultimate controlling party of the
Subsidiaries of CETC (Note 4)
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: Hong Tianfeng, the chairman of Board of the Supervisors of the Group, once served as a director of the company.
Hong Tianfeng departed the Company in April 2022. Therefore, this company was still recognized as a related party of
the Company during January 2023 to April 2023.
Note 3: Lu Jianzhong, the supervisor of the Group, once served as an independent director of the company. Lu Jianzhong
departed the company in June 2024. Therefore, this company was still recognized as a related party of the Company during
the reporting period.
Note 4: Subsidiaries of CETC, excluding Hikvision and its subsidiaries.
5. Related party transactions
167
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
5.1 Related party transactions regarding sales and purchases of goods, provision of services and receiving services
Purchase of commodities / receiving of services:
Unit: RMB
Amount occurred in the Amount occurred in the first
Related party Transaction type
first half of 2024 half of 2023
Purchase of materials and
Subsidiaries of CETC 988,472,383.82 975,912,021.92
receiving of services
Purchase of materials and
Joint ventures 2,663,322.56 755,956.76
receiving of services
Purchase of materials and
Associated companies 103,780,397.92 98,585,985.58
receiving of services
Purchase of materials and
Other related parties 505,168,081.89 602,307,517.40
receiving of services
Total 1,600,084,186.19 1,677,561,481.66
Sales of commodities / rendering of services:
Unit: RMB
Amount occurred in the Amount occurred in the first
Related party Transaction content
first half of 2024 half of 2023
Sales of products and 83,114,384.62
Subsidiaries of CETC 117,617,666.95
rendering of services
Sales of products and 22,738,452.57
Joint ventures 19,625,412.30
rendering of services
Sales of products and 16,232,611.27
Associated companies 27,862,625.23
rendering of services
Sales of products and 10,089,490.65
Other related parties 6,119,099.86
rendering of services
Total 132,174,939.11 171,224,804.34
5.2 Related party lease
Unit: RMB
Rental fee confirmed in the first half of Rental fee confirmed in the first half
Lessor Type of leased assets
2024 of 2023
Subsidiaries of CETC Equipment - 6,764,242.38
Subsidiaries of CETC House 1,670,579.23 1,076,516.38
Total 1,670,579.23 7,840,758.76
5.3 Transactions from other related parties
Statement of capital deposits
Unit: RMB
Related Party Balance at the end Amount occurred in
Content of related Amount occurred in Opening balance
of the current the first half of 2023
(Note) party transaction the first half of 2024 (Restated)
reporting period (Restated)
Deposit into
Subsidiaries of CETC (withdraw from) (3,013,329,055.47) 318,357.65 200,112,972.78 3,013,647,413.12
current deposits
Deposit into
Subsidiaries of CETC (withdraw from) 3,000,000,000.00 4,000,000,000.00 (200,000,000.00) 1,000,000,000.00
fixed deposits
Total (13,329,055.47) 4,000,318,357.65 112,972.78 4,013,647,413.12
168
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Note: For the deposits that the Group deposited into China Electronic Technology Finance Co., Ltd., the interest income
on deposits during the reporting period was RMB8,002,865.36 (the first half of 2023: RMB4,036,715.07)
Information on entrusted management
On 10 April 2024, EZVIZ Network, a subsidiary of the Group, and CETHIK, the parent company of the Group, entered
into an entrusted management agreement, according to which the entrusted management formed a business combination
under the same control, as detailed in (Note (VI.1)). At the same time, EZVIZ Network paid the capital occupation fee to
CETHIK on the basis of the audited net assets of Furui Technology as of December 31, 2023 and the agreed capital
occupation rate. During the period, the amount of the above-mentioned capital occupation fee was RMB117,368.41.
Information on entrusted loan
During the current reporting period, the Company issued entrusted loans of RMB2,290 million to its subsidiaries through
China Electronic Technology Finance Company Limited, and paid transaction fee of RMB229,000.00 to China Electronic
Technology Finance Company Limited.
6. Receivables from related parties and payables to related parties
6.1 Receivables from related parties
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Bad debt provision Carrying balance Bad debt provision
Accounts receivable Subsidiaries of CETC 613,770,260.73 259,592,787.39 640,493,055.77 220,124,781.15
Accounts receivable Joint ventures 53,688,973.47 1,951,712.61 59,425,217.10 1,625,142.58
Accounts receivable Associates 74,164,018.73 12,461,578.95 72,319,683.18 8,556,237.95
Accounts receivable Other related parties 9,817,147.84 188,411.65 7,442,685.65 154,865.50
Total 751,440,400.77 274,194,490.60 779,680,641.70 230,461,027.18
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Bad debt provision Carrying balance Bad debt provision
Note receivables Subsidiaries of CETC 36,971,006.03 252,791.30 176,267,380.85 1,197,255.34
Note receivables Joint ventures 303,200.00 - 400,000.00 -
Note receivables Associates 4,516,597.00 - 22,277,196.50 -
Note receivables Other related parties 600,464.17 - 1,215,030.00 -
Total 42,391,267.20 252,791.30 200,159,607.35 1,197,255.34
Unit: RMB
Closing balance Opening balance
:Item Related Party
Carrying balance Bad debt provision Carrying balance Bad debt provision
Other receivables Subsidiaries of CETC 520,000.00 500,142.00 1,649,910.00 561,932.90
Other receivables Joint ventures 140,967.57 12,783.87 191,713.33 6,768.82
Other receivables Associates - - 4,387,500.00 30,273.75
Total 660,967.57 512,925.87 6,229,123.33 598,975.47
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Bad debt provision Carrying balance Bad debt provision
Long-term receivables Subsidiaries
121,216.42 860.64 47,210.22 325.75
(including those due within of CETC
169
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Closing balance Opening balance
Item Related Party
Carrying balance Bad debt provision Carrying balance Bad debt provision
one year)
Long-term receivables
(including those due within Joint ventures 32,000,736.25 1,179,777.78 35,381,700.20 1,144,327.88
one year)
Total 32,121,952.67 1,180,638.42 35,428,910.42 1,144,653.63
Unit: RMB
Item Related Party Closing balance Opening balance
Prepayments Subsidiaries of CETC 1,961,170.91 7,831,067.74
Prepayments Associates 187,183.24 118,402.50
Total 2,148,354.15 7,949,470.24
6.2 Payables to related parties
Unit: RMB
Item Related Party Closing balance Opening balance
Accounts payable Subsidiaries of CETC 376,314,963.38 877,667,364.69
Accounts payable Joint ventures 3,890,566.04 4,068,366.04
Accounts payable Associated companies 66,682,996.35 43,869,241.50
Accounts payable Other related parties 274,276,080.14 410,242,953.80
Total 721,164,605.91 1,335,847,926.03
Unit: RMB
Item Related Party Closing balance Opening balance
Notes Payable Subsidiaries of CETC 9,189,262.23 1,224,954.15
Notes Payable Other related parties 3,239,190.64 4,390,639.49
Total 12,428,452.87 5,615,593.64
Unit: RMB
Item Related Party Closing balance Opening balance
Contract liabilities Subsidiaries of CETC 4,346,929.11 6,277,318.83
Contract liabilities Joint ventures 882,917.88 1,300,172.80
Contract liabilities Associated companies 169.14 -
Contract liabilities Other related parties 12,883.70 30,042.00
Total 5,242,899.83 7,607,533.63
Unit: RMB
Item Related Party Closing balance Opening balance
Other payables Subsidiaries of CETC 6,092,906.43 8,230,611.43
Other payables Associated companies 496,467.00 20,527,386.00
Other payables Other related parties 300,000.00 250,000.00
Total 6,889,373.43 29,007,997.43
Unit: RMB
Item Related Party Closing balance Opening balance
Lease liabilities (including
Subsidiaries of CETC 5,257,930.28 5,215,883.84
those due within one year)
Total 5,257,930.28 5,215,883.84
170
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: RMB
Opening balance
Item Related Party Closing balance
(Restated)
Long-term payables
(including those due Subsidiaries of CETC 9,749,569.60 9,749,569.60
within one year)
Total 9,749,569.60 9,749,569.60
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 at the relevant provisions of this plan.
On January 18, 2022, authorized by the 1st extraordinary general meeting of 2022, and reviewed and approved 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 will complete the equity registration work in February 2022.
171
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Unit: share
2021 Share Incentive Scheme First half of 2024 For the year of 2023
The number of equity instruments outstanding at the beginning of the
58,441,563 97,402,605
reporting period
The number of equity instruments granted (share dividend) during the
- -
current reporting period
The number of equity instruments vested during the current reporting
- -
period
The number of equity instruments forfeited during the current
58,441,563 38,961,042
reporting period (Note)
The number of equity instruments outstanding at the end of the
- 58,441,563
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 - RMB29.71/share & 36months
period of the contract
Note: For details of the termination of share-based payments in the current period, please refer to (Note (XII.4)).
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,
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, its branches and
subsidiaries, and 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 its branches and subsidiaries, and could participate in investment on
innovative business 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 Group 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.
In December 2020, Co-Investment Staff signed a Supplemental Agreement of Entrusted Investment Agreement (hereafter
referred to as "Supplemental Agreement") with Hikvision Labor Union. On December 25, 2020, the Company held the
20th meeting of the 4th session of the Board of Directors and reviewed and approved the Proposal on Amending the
Management Measures for Core Staff Co-Investment in Innovative Businesses. The new version of the Management
Measures for Core Staff Co-Investment in Innovative Business (hereinafter referred to as the "new version of the
Management Measures") added the confirmation of the shares held by employees in the co-investment plan and the rights
and interests indirectly held by employees in innovative business subsidiaries, clarified the approach of the co-investment
shares after the employees lost or cancelled the co-investment qualification, and added the Management Committee and
other systems.
On December 31, 2020, the Executive Management Committee of the Co-investment Plan adopted the Implementation
Rules for the Management Measures for Core Staff Co-Investment in Innovative Businesses (hereinafter referred to as the
"new version of the Rules"). According to the new version of the Management Measures and the new version of the Rules,
172
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
for the confirmed shares of plan A, the waiting period is the fifth anniversary of the employee's work in the Company or
its subsidiaries. For the confirmed shares of plan B, the waiting period is the fifth anniversary of the employee's work in
the innovative business subsidiary or its subordinate subsidiary company corresponding to the Plan B.
2. Information of the share-based payment through equity settlements
Restrictive Share Incentive Scheme
Unit: RMB
2021 Share Incentive Scheme
Method of determine the fair value of equity Determined based on stock price at the grant date and the costs of restricted shares
instruments at the grant date during lock-up period
Recognition basis of the number of the equity Determined based on the company’s performance and employee turnover rate of
instruments qualified for vesting each vesting period
Reasons of the significant difference between the
estimates of the current reporting period with that of None
the prior year
Accumulative amount of share-based payment
through equity settlement and further included in the 1,111,285,178.76
capital reserve
Total amount of the expenses recognized according
to share-based payment through equity settlement in 542,914,217.71
the current reporting period
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
Unit：RMB
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 Determined based on the company’s performance and
vesting employee turnover rate of each vesting period
Accumulative amount of share-based payment through equity settlement and
842,400,666.57
further included in the capital reserve
Total amount of the expenses recognized according to share-based payment
189,610,936.82
through equity settlement in the current reporting period
Among total amount of the expenses recognized according to share-based payment through equity settlement during the
current reporting period, amount of RMB59,662,030.85 was due to share distributions to minority shareholders.
3. There is no share-based payment through cash settlements
4. Amendment and termination of share-based payment during the current reporting period.
Restrictive Share Incentive Scheme
Since the business environment nowadays changes significantly compared to 3 years ago when the 2021 Restricted Stock
Plan was formulated, it is more difficult to continuously implement the restricted stock plan and to meet the expected
incentive purpose and effect. The Company held the 20th meeting of the 5th Board of Directors, the 18th meeting of the
5th Board of Supervisors, and the 2023 Annual General Meeting of Shareholders on May 10, 2024, to deliberate and pass
the Proposal on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasing and Canceling
Relevant Restricted Shares, and agreed to terminate the implementation of the 2021 Restricted Stock Plan and repurchase
and cancel all the restricted shares that have been granted but not yet unlocked under the 2021 Restricted Stock Plan. In
accordance with the relevant provisions of the Accounting Standards for Business Enterprises, the Company accelerated
the exercise of the restricted stock plan and recognized the share-based payment expenses of RMB471,167,293.91.
173
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
XIII. Commitments and contingencies
1. Significant commitments
1.1 Capital commitments
Unit: 000 RMB
Closing balance Opening balance
Contracted but not yet recognized in financial statements
- Commitment on construction of long-term assets 8,545,991 12,527,408
- Commitment on external investments 9,440 12,940
Total 8,555,431 12,540,348
2. Contingencies
The Group has no significant contingencies to be disclosed.
XIV. Events after the balance sheet date
1. Significant unadjusted events
As of August 16, 2024, the Company has no significant events after the balance sheet date that need to be disclosed
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.
External revenue by geographical area & non-current assets by geographical location
Unit: RMB
Item First half of 2024 First half of 2023 (Restated)
External revenue generated in domestic area 27,029,231,758.69 25,503,985,249.52
External revenue generated in overseas area 14,179,864,447.67 12,067,367,186.11
Total 41,209,096,206.36 37,571,352,435.63
Unit: RMB
Item (Note) On June 30, 2024 On January 1, 2024 (Restated)
Non-current assets in domestic area 21,702,765,705.91 20,706,538,602.69
Non-current assets in overseas area 814,102,586.43 850,027,281.25
Total 22,516,868,292.34 21,556,565,883.94
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.
174
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
XVI. Notes to major items of financial statements of the parent company
1. Accounts receivable
1.1 Disclosure by age
Unit: RMB
Closing book balance Opening book balance
Within credit period 10,505,136,797.86 9,090,405,506.46
Within 1 year after exceeding credit period 14,320,956,055.50 9,384,300,440.80
1-2 years after exceeding credit period 493,367,557.19 508,157,816.90
2-3 years after exceeding credit period 269,285,602.90 311,172,302.13
3-4 years after exceeding credit period 217,383,847.75 177,209,156.93
Over 4 years after exceeding credit period 263,938,284.52 215,593,619.38
Subtotal 26,070,068,145.72 19,686,838,842.60
Less: Bad debts provision 730,201,510.10 670,061,176.83
Carrying Amount 25,339,866,635.62 19,016,777,665.77
1.2 Classification and disclosure by bad debts provision methods
Unit: RMB
175
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Closing balance Opening balance
Account Balance Bad debts provision Carrying amount Account Balance Credit loss provision Carrying amount
Category
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount Amount Amount
(%) (%) (%) (%)
Provision
for bad
debts on a - - - - - - - - - -
single
basis
Provision
for bad
26,070,068,145.72 100 730,201,510.10 2.80 25,339,866,635.62 19,686,838,842.60 100.00 670,061,176.83 3.40 19,016,777,665.77
debts by
portfolios
Total 26,070,068,145.72 100 730,201,510.10 2.80 25,339,866,635.62 19,686,838,842.60 100.00 670,061,176.83 3.40 19,016,777,665.77
Provision for bad debts by portfolios
Unit: RMB
Closing balance
Customer
Account Balance Credit loss provision Proportion (%)
Subsidiaries in the Group 22,039,646,024.08 - -
Portfolio A 1,395,567.72 505,831.38 36.25
Portfolio B 4,028,903,074.99 729,572,199.79 18.11
Portfolio C 123,478.93 123,478.93 100.00
2.80
Total 26,070,068,145.72 730,201,510.10
Description of accounts receivables accrued for bad debts provision by portfolios:
As part of the Company's credit risk management, the Company divided account receivables into portfolio A, portfolio B and portfolio C according risk attributes of
176
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
different business area and target, and determines the expected credit loss for each portfolio with an impairment matrix based on the aging of accounts receivable over
the reporting period. With respect to account receivables arising from companies within the Group, the Company considers that the credit risk is low and is not necessary
for bad debts provisions, as payments are arranged by the Group according to the cash flow each companies within the Group,. The aging information can reflect the
solvency of these three types of customers when the accounts receivable are due.
1.3 Provision for bad debts
Unit：RMB
Changes in the reporting period Translation
differences for
Item Opening balance Closing balance
Accrual Recollect or Reverse Recover or write-off foreign currency
statements
Account receivables 670,061,176.83 60,230,212.17 - (89,878.90) - 730,201,510.10
Total 670,061,176.83 60,230,212.17 - (89,878.90) - 730,201,510.10
1.4 Top five debtors based on accounts receivable and contract assets (including other non-current assets) at the end of the reporting period
At the end of the reporting period, the aggregate amount of the Company's top five debtors of account receivables and contract assets was RMB22,030,951,792.99,
accounting for 84.38% of the total account receivables and contract assets at the end of the reporting period and the provision for bad debts amounted to
RMB84,615,887.07.
2. Other receivables
177
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
2.1 By categories
Unit：RMB
Category Closing balance Opening balance
Dividends receivable 94,430,000.00 41,423,446.39
Other receivables 7,647,900,526.14 3,019,822,728.35
Total 7,742,330,526.14 3,061,246,174.74
2.2 Dividends receivable
Unit：RMB
Investees Closing balance Opening balance
Subsidiaries of Hikvision 94,430,000.00 41,423,446.39
Total 94,430,000.00 41,423,446.39
2.3 Other receivables
2.3.1 Other receivables by aging
Unit: RMB
Item Closing balance Opening balance
Within contract period 7,614,212,409.13 2,989,035,526.46
Within 1 year 26,265,798.72 24,581,596.42
178
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
1-2 years 8,401,693.33 8,955,049.99
2-3 years 4,144,634.15 1,282,544.62
3-4 years 543,964.53 120,699.57
Over 4 years 927,944.19 961,843.47
Total 7,654,496,444.05 3,024,937,260.53
Less: Bad debt provision 6,595,917.91 5,114,532.18
Book value 7,647,900,526.14 3,019,822,728.35
2.3.2 Other receivables by nature of the payment
Unit: RMB
Nature Closing balance Opening balance
Payments by subsidiaries within the Group 4,651,611,294.17 2,761,272,567.36
Restricted stock repurchase funds 2,891,643,860.76 169,968,816.44
Guarantee deposit 53,943,168.85 54,134,994.62
Temporary payments for receivables 44,368,896.34 24,622,620.38
Others 12,929,223.93 14,938,261.73
Total 7,654,496,444.05 3,024,937,260.53
2.3.3 Bad debt provision for other receivables
Unit：RMB
179
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Changes in the reporting period Translation
differences for
Item Opening balance Closing balance
Accrual Recollect or Reverse Recover or write-off foreign currency
statements
Account receivables 5,114,532.18 1,481,385.73 - - - 6,595,917.91
Total 5,114,532.18 1,481,385.73 - - - 6,595,917.91
2.3.4 Top five debtors based on other receivables at the close of the reporting period
At the end of reporting period, the aggregate amount of the Company's top five debtors of other receivables was RMB3,490,767,612.43, accounting for 45.60% of the
total other receivables, and the company did not make provision for bad debts here.
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 7,948,997,797.96 - 7,948,997,797.96 7,687,757,432.17 - 7,687,757,432.17
Investments in associates and joint ventures 940,578,667.45 - 940,578,667.45 993,629,616.58 - 993,629,616.58
Total 8,889,576,465.41 - 8,889,576,465.41 8,681,387,048.75 - 8,681,387,048.75
3.1 Investment in subsidiaries
Unit：RMB
180
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Write-off of Balance of
Increase during Decrease during impairment impairment loss
Name of investee Opening balance the current the current Closing balance provision during the provision at the end
reporting period reporting period current reporting of the current
period reporting period
Hangzhou Hikvision System Technology Ltd. 871,010,043.28 32,755,718.20 - 903,765,761.48 - -
Hangzhou Hikvision Technology Ltd. 1,094,395,525.01 21,719,081.66 - 1,116,114,606.67 - -
Hangzhou EZVIZ Network Co., Ltd. 60,702,158.47 499,663.48 - 61,201,821.95 - -
Hangzhou EZVIZ Software Ltd. 32,363,130.04 255,276.01 - 32,618,406.05 - -
Hangzhou Hikrobot Technology Ltd. 137,754,908.94 1,663,630.09 - 139,418,539.03 - -
Hangzhou Haikang Intelligent Technology Ltd. 8,546,368.08 485,830.22 - 9,032,198.30 - -
3.2 Investments in associated enterprises and joint ventures
Unit：RMB
Increase/Decrease during the current reporting period
Balance of
Investment impairment loss
Other Other changes Declared cash
Name of investee Opening balance income (losses) Closing balance provision at the end
Additional Reduced comprehensi dividends or Provision for
recognized Others of the current
Investments Investments ve income in equity profit impairment
under the reporting period
adjustment distribution
equity method
1. Joint Ventures
Hangzhou Haikang
Intelligent Industrial
Equity Investment 791,356,253.14 - - (73,326,262.47) - 13,033,629.58 - - - 731,063,620.25 -
Fund Partnership
(L.P.)
Zhejiang City Digital
29,635,485.61 - - (1,680,160.98) - - - - - 27,955,324.63 -
Technology Ltd.
Zhejiang Haishi
Huayue Digital 14,067,281.65 - - 150,212.68 - - - - - 14,217,494.33 -
Technology Ltd.
Guangxi Haishi City
Operation 12,450,335.88 - - (331,162.11) - - - - - 12,119,173.77 -
Management Ltd.
181
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Xuzhou Kangbo City
Operation
11,052,348.36 - - 220,581.10 - - - - - 11,272,929.46 -
Management Service
Ltd
Others 5,172,387.15 6,500,000.00 - (6,943,137.78) - - - - - 4,729,249.37 -
Subtotal 863,734,091.79 6,500,000.00 - (81,909,929.56) - 13,033,629.58 - - - 801,357,791.81 -
2. Associated Companies
Zhiguang Hailian Big
23,245,373.00 - - 1,463,593.37 - - - - - 24,708,966.37 -
Data Technology Ltd.
Others 106,650,151.79 - - 5,498,385.94 - 2,363,371.54 - - - 114,511,909.27 -
Subtotal 129,895,524.79 - - 6,961,979.31 - 2,363,371.54 - - - 139,220,875.64 -
Total 993,629,616.58 6,500,000.00 - (74,947,950.25) - 15,397,001.12 - - - 940,578,667.45 -
3.3 As of June 30, 2024, there were no restrictions on the capability of transferring fund to the Company from investees in which the Company held long-term equity
investment.
182
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
4. Revenue and operating costs
Unit：RMB
First half of 2024 First half of 2023
Item
Revenue Cost Revenue Cost
Major business 9,222,842,780.60 1,770,505,909.83 9,370,837,249.86 1,733,392,550.35
Other business 1,666,830,401.26 119,307,539.73 1,522,582,234.95 81,288,706.34
Total 10,889,673,181.86 1,889,813,449.56 10,893,419,484.81 1,814,681,256.69
5. Investment income
Details of investment income
Unit：RMB
Item First half of 2024 First half of 2023
Long-term equity investment income measured by cost method 229,430,000.00 141,000,000.00
Long-term equity investment losses measured by equity method (74,947,950.25) (41,007,402.96)
Investment income from holding debt investment 27,424,996.73 10,251,456.56
Investment income from disposal of business assets - 15,902,073.63
Total 181,907,046.48 126,146,127.23
XVII. Supplementary information
1. Details of current non-recurring gains and losses
Unit：RMB
Item Amount Description
(11,946,748.95)
Profits and losses from disposal of non-current assets /
The government subsidies included in the current reporting period, 297,707,266.62
/
excluding government subsidies that are closely related to the
company's normal business operations, comply with national
policies and regulations, are enjoyed in accordance with
determined standards, and have a continuous impact on the
company's profit and loss
In addition to the Company's normal business related to the 24,124,811.83
/
effective hedging business, profits and losses on changes in fair
value arising from holding derivative financial assets, derivative
financial liabilities, other non-current financial assets, and
investment gains and losses from the disposal of the above-
mentioned financial assets/financial liabilities and receivables
financing
Share-based payment expenses recognized at one time due to (471,167,293.91)
cancellation or modification of the equity incentive plan
Profits and loss of business combination under the same control (295,677.15)
from the beginning of the reporting period to the date of acquisition
Other non-operating income and expense except the items 35,006,783.25
/
mentioned above
Impact of income tax (15,764,971.09) /
183
Hikvision 2024 Half Year Report
Notes to Financial Statements
For the reporting period from January 1, 2024 to June 30, 2024
Item Amount Description
The impact of minority equity (36,551,217.03) /
Total (178,887,046.43) /
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 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
6.51 0.539 0.539
Company
Net profit excluding non-recurring items of profit or loss
6.74 0.558 0.558
attributable to ordinary shareholders of the Company
184
Hikvision 2024 Half Year Report
Section XI Documents Available for Reference
1. The half year report was signed by the Company's legal representative.
2. 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.
3. Original copy of all the Company's documents and announcements were published on the newspapers
designated by CSRC within the reporting period.
The above documents are completely placed at the Company's Board of Directors' office.
Hangzhou Hikvision Digital Technology Co., Ltd.
Chairman: Hu Yangzhong
August 17, 2024
Note:
This document is a translated version of the Chinese version 2024 Half Year Report (“2024 年半年度报
告”), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2024 Half Year Report may be obtained at www.cninfo.com.cn.
185
