HANGZHOU HIKVISION DIGITAL
TECHNOLOGY CO., LTD.
2018 Quarter 1 Report
January to March 2018
April 21st 2018
Hikvision 2018 Q1 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.
The Company’s chairman Chen Zongnian, and director Gong Hongjia, Qu Liyang,
Hu Yangzhong, Wu Weiqi, independent director Cheng Tianzong , Lu Jianzhong,
Wang Zhidong attend the board meeting to review this report in person. Independent
director Hong Tianfeng was on a business trip and not able to attend the board
meeting in person, and Hong authorized independent director Cheng Tianzong to
attend and exercise the voting right for him.
Chen Zongnian, the Company's legal representative, Jin Yan, the person in
charge of the accounting department and the chief accountant and of the Company
(Chief Accounting Officer) hereby declare and warrant that the financial statements
in this report are authentic, accurate and complete.
Note:
This document is a translated version of the Chinese version 2018 Q1 Financial Report (“2018 年第
一季度报告全文”), and the published Q1 report in the Chinese version shall prevail. The complete
published Chinese 2018 Q1 Financial Report may be obtained at http://www.cninfo.com.cn.
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Hikvision 2018 Q1 Report
Section II Corporate Profile
I. Key Accounting Data and Financial Indicators
Whether the Company performed a retroactive adjustment to or restatement of previous accounting data
√ Yes □No
The reason for retroactive adjustment or restatement of previous accounting data: business merger involving enterprises under the common control
Change(%) between 2017 Q1 and
2017 Q1
2018 Q1 2018 Q1
Before Adjustments After Adjustments After Adjustments
Operating income (RMB) 9,364,828,201.00 7,043,724,101.73 7,043,724,101.73 32.95%
Net profits attributable to shareholders of the Company (RMB) 1,815,964,569.77 1,480,816,885.32 1,480,780,632.01 22.64%
Net profits attributable to shareholders of the Company
1,808,323,790.71 1,440,574,125.37 1,440,574,125.37 25.53%
excluding non-recurring gains and losses (RMB)
Net cash flows from operating activities (RMB) -3,856,064,680.53 -3,034,652,490.36 -3,035,286,557.20 -27.04%
Basic earnings per share (RMB/share) 0.199 0.163 0.163 22.09%
Diluted earnings per share (RMB/share) 0.197 0.162 0.162 21.60%
Weighted average Return on Equity (ROE) 5.80% 5.91% 5.91% -0.11%
Change(%) between December 31st
At December 31st 2017
At March 31st 2018 2017 and March 31st 2018
Before Adjustments After Adjustments After Adjustments
Total assets (RMB) 50,208,262,128.64 51,570,963,466.61 51,570,963,466.61 -2.64%
Net assets attributable to shareholders of the Company (RMB) 32,230,376,028.30 30,358,072,874.22 30,358,072,874.22 6.17%
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Hikvision 2018 Q1 Report
Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Inapplicable
Unit：RMB
Item January 1st –March 31st 2018
Profit or loss from disposal of non-current assets (including the write-off for the
3,430,565.03
impairment 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
17,139,444.49
and government subsidy based on standard quota or quantification application
according to the state industrial policy.)
Profits and losses attributed to change in fair value for held-for-trading financial
assets, held-for-trading financial liabilities, and investment income in disposal of
held-for-trading financial assets and liabilities and available-for sale financial -20,691,634.72
assets, excluding the effective hedging business related to the regular business
operation of the Company.
Other non-operating income and expenditures except the items mentioned above 9,447,774.84
Less: Impact of income tax 1,398,922.45
The impact of the minority interests (after tax) 286,448.13
Total 7,640,779.06
Explain the reasons if the Company classifies an item as a non-recurring gain/loss according to the definition in
the , or classifies any non-recurring gain/loss item mentioned in the
aforementioned note as a recurrent gain/loss item
□ Applicable √ Inapplicable
In the reporting period, the Company did not classify an item as a non-recurring gain/loss according to the
definition in the , or classifies any non-recurring gain/loss item
mentioned in the aforementioned note as a recurrent gain/loss item
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Hikvision 2018 Q1 Report
II. Total Number of Shareholders at the end of the reporting period and Information for Top 10 Shareholders
1. Total number of common shareholders and preferred shareholders with resumed voting rights and information about top 10 shareholders
Unit: Share
Total number of common shareholders at the end of the reporting period 137,437
Particulars about shares held by Top 10 shareholders
Share- Total shares held at the Number of restricted Pledged or frozen
Name of shareholder Nature of shareholder
holding percentage (%) period-end shares held Share Status Amount
China Electronics Technology HIK Group Co., Ltd. State-owned corporation 39.60% 3,653,674,956 Pledged 50,000,000
Gong Hongjia Overseas individual 13.60% 1,255,056,700 1,038,792,525 Pledged 237,700,000
Hong Kong Securities Clearing Company
Overseas corporation 10.86% 1,001,811,817
Ltd.(HKSCC)
Xinjiang Weixun Investment Management Limited Domestic non-state-owned Pledged
4.89% 450,795,176 166,100,000
Partnership corporation
Domestic non-state-owned Pledged
Xinjiang Pukang Investment Limited Partnership 1.98% 182,510,174 138,410,000
corporation
Hu Yangzhong Domestic Individual 1.97% 182,186,477 136,639,858 Pledged 81,830,000
The 52nd Research Institute at China Electronics
State-owned corporation 1.96% 180,775,044
Technology Group Corporation
Domestic non-state-owned
CITIC Securities Company Limited 1.49% 137,861,187
corporation
UBS AG Overseas corporation 1.11% 102,517,315
Central Huijin Investment Ltd. State-owned corporation 0.71% 65,818,800
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Hikvision 2018 Q1 Report
Particulars about shares held by the Top 10 shareholders holding shares not subject to trading restriction(s)
Type of shares
Name of shareholder Number of tradable shares held at the period-end
Type Number
China Electronics Technology HIK Group Co., Ltd. 3,653,674,956 RMB ordinary shares 3,653,674,956
Hong Kong Securities Clearing Company RMB ordinary shares
1,001,811,817 1,001,811,817
Ltd.(HKSCC)
Xinjiang Weixun Investment Management Limited RMB ordinary shares
450,795,176 450,795,176
Partnership
Gong Hongjia 216,264,175 RMB ordinary shares 216,264,175
Xinjiang Pukang Investment Limited Partnership 182,510,174 RMB ordinary shares 182,510,174
The 52nd Research Institute at China Electronics RMB ordinary shares
180,775,044 180,775,044
Technology Group Corporation
CITIC Securities Company Limited 137,861,187 RMB ordinary shares 137,861,187
UBS AG 102,517,315 RMB ordinary shares 102,517,315
Central Huijin Investment Ltd. 65,818,800 RMB ordinary shares 65,818,800
Hu Yangzhong 45,546,619 RMB ordinary shares 45,546,619
China Electronics Technology HIK Group Co., Ltd. and The 52nd Research Institute at China Electronics Technology Group Corporation
are all subject to control of China Electronics Technology Group Corporation. Ms. Chen Chunmei, limited partner of Xinjiang Pukang
Explanation on associated relationship and Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual shareholder of the Company. Hu Yangzhong,
concerted actions among top ten shareholders without domestic individual, is holding shares in both Xinjiang Weixun Investment Management Limited Partnership and Xinjiang Pukang
trading restrictions, and among top ten shareholders Investment Limited Partnership.
and top ten shareholders without trading restrictions Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert
parties in accordance with the Measures for Management of the Disclosure of the Shareholding Changes of Shareholders of the Listed
Company.
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Hikvision 2018 Q1 Report
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducts any agreed buy-back in the reporting period?
□ Applicable √ Inapplicable
No such cases in the reporting period.
2. Total number of preferred shareholders and information about Top 10 preferred shareholders
□ Applicable √ Inapplicable
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Hikvision 2018 Q1 Report
Section III Significant Events
1. Information and explanation about variations in key financial statement items and financial indicators during the reporting period.
√Applicable □Inapplicable
1.1 Explanation for variations in balance sheet items
Balance at March 31st Balance at January 1st
Item YoY change (%) Note of Changes
2018 (RMB) 2018 (RMB)
2017 year-end bonus were distributed in the current quarter and
Cash and bank balances 11,426,551,711.46 16,468,430,702.64 -30.62%
payments for procurements
Fixed Assets 4,053,256,047.58 3,024,025,496.31 34.04%
Mainly due to transferring Internet Security Industry Base project from
Construction in process 677,459,209.86 1,436,319,118.30 -52.83% construction in process to fixed assets
Intangible assets Purchase of land use right for Chengdu Science and Technology Base
761,104,185.60 429,160,982.63 77.35%
project during the current reporting quarter.
Short-term borrowing 1,516,332,857.77 97,114,655.91 1461.38% Increase in bank borrowings due to temporary capital turnover
Financial liabilities at fair value through
55,059,240.22 15,946,836.46 245.27% Changes in fair value for foreign exchange hedging products
current period profit and loss
Notes Payable 1,128,796,061.85 845,397,427.92 33.52% Increase in outstanding balance for supplier notes payable
Account Payable 6,742,022,841.40 10,039,943,012.26 -32.85% Increase in payments for supplier account payables due
Payroll Payable 431,026,744.53 1,391,291,256.90 -69.02% 2017 year-end bonus were distributed in the current quarter
Dividends payable 63,706,416.92 94,857,139.16 -32.84% Dividends paid for second unlocking of 2014 Restricted Share Scheme
Bond Payable - 3,120,920,000.00 -100% The principal of Euro bond will be due within one year, and was
Non-current liabilities due within one year 4,653,521,621.62 1,546,407,270.89 200.92% categorized into current asset.
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Hikvision 2018 Q1 Report
1.2 Explanation for variations in income statement items
Item 2018 Q1 (RMB) 2017 Q1 (RMB) YoY Change (%) Note of changes
Total Operating Income 9,364,828,201.00 7,043,724,101.73 32.95% Operating Income increased with the steady increase of market demands.
Selling expenses increase with the Company’s continuous increasing
Selling expenses 1,084,628,143.59 700,619,566.15 54.81%
investments on domestic and overseas sales network
Administrative expenses 995,059,473.35 747,961,910.46 33.04% The Company’s increasing investments in R&D
Financial expense 257,430,070.75 21,617,777.72 1090.83% Increase in foreign currency exchange losses
Gains from changes in fair values -42,253,561.30 4,304,484.96 -1081.62% Change in fair value of foreign exchange hedging products
1.3 Explanation for variations in cash flow statement items
Item 2018 Q1 (RMB) 2017 Q1 (RMB) YoY Change (%) Note of changes
Mainly due to payments for material procurements, tax payables, and
Net cash flow from operating activities -3,856,064,680.53 -3,035,286,557.20 -27.04%
2017 year-end bonus distribution.
Mainly due to increase in principal-guaranteed financial product
Net cash flow from investment activities -1,744,035,918.57 3,054,411,538.19 -157.10%
investments
Net cash flow from financing activities 1,018,223,066.41 2,324,978,732.03 -56.21% Mainly due to decrease in bank loans
2. Progress and influence of significant events, analysis and explanation of corresponding solutions.
□ Applicable √ Inapplicable
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Hikvision 2018 Q1 Report
3. Incomplete commitments from the related committed parties such as the Company’s actual controller, shareholders, related parties,
acquirer(s), and the Company during the reporting period
√Applicable □ Inapplicable
Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
1. Commitments in non-competition within the industry: In the period as controlling shareholders of
the Hikvision, CETHIK and its controlling subsidiaries (excluding Hikvision and its subsidiaries, the
same below) will not be engaged in such business that is competitive to Hikvision and its
subsidiaries directly or indirectly.
2. Commitments in decrease and regulation of transactions with related party: Zhejiang Haikang
Group Co., Ltd (hereinafter referred to as Haikang Group or actual controller) as the controlling
shareholders of Hangzhou Hikvision Digital Technology Co., Ltd (hereinafter referred to as
"Hikvision" or "Listed Company") are committed as below for the transactions with Hikvision:
(1) Haikang Group will not make use of the controlling power to offer more favorable conditions to
Hikvision than those to any independent third party in any fair market transactions in the cooperation
with Hikvision.
Commitments (2) Haikang Group will not make use of the controlling power to obtain the prior right to complete
in offering the transaction with Hikvision. 29th
Strict
documents or CETHIK Group Co., Ltd. (3) Haikang Group will not deal with Hikvsion in not fair terms comparing to the market prices to October, Long-term
performance
shareholding prejudice the Company’s interests. 2013
alterations For unavoidable related transactions, the Company will observe the principles of justice and
fairness to deterimine prices according to the market on the basis of equality, voluntarily. The
Company will obey the Articles of Association and other regulatory documents related to the
avoiding of issues about related transactions. The related transactions will go through approval
procedures in accordance with related rules and complete legal procedures, fulfilling the information
disclosure obligations in respect to the related transactions
3. Commitment to the maintenance of the independence of the listed Company
3.1 Commitment to Personnel Independence of the listed Company
(1) Commitment that our general manager, deputy general manager, chief financial officer, secretary
of the board and other members of senior management shall not assume any positions other than
directors and supervisors or get any remuneration in CETHIK and/or any of its controlled entities;
(2) Commitment in keeping the management of labor, human resources and issues related to
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Hikvision 2018 Q1 Report
Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
remuneration of the listed Company independent from that of CETHIK;
3.2 Commitment to the independence of the asset of the listed Company
(1) Commitment to independent and complete asset of the listed Company
(2) Commitment free of unlawful use of cash and asset of the listed Company by the controlling
shareholders
3.3 Commitment to financial independence of the listed Company
(1) Commitment to an independent finance department with a team and accounting system;
(2) Commitment to a regulated, independent accounting system and financial management system of
the branches and subsidiaries
(3) Commitment to maintaining accounts with banks independently of and not sharing any bank
account with our controlling shareholders
(4) Commitment that the financial staff shall not assume any positions in CETHIK
(5) Commitment to paying taxes independently according to the law;
(6) Commitment to implementing financial decisions independently
3.4 The Company has set up an independent organizational structure which maintains its independent
operations which is independent from that of CETHIK.
3.5 Commitment to business Independence of the listed Company
(1) The Company has the asset, personnel, aptitude and management capability for independent and
complete business operation. The Company has the ability to operate independently in the market.
(2) Commitment in independence in both business and operations
4. Regarding plans for the development and relevant commitment for the listed Company, Haikang
Group has committed as below for the subsequent development of Hikvsion according to the
Securities Acts and relevant laws and rules,
4.1 Currently the Company has no plan to change or make significant adjustments for principal
business in the next 12 months;
4.2 Currently the Company has no plan to sell, merge or operate with another Company for the assets
and business of the listed Company or its subsidiaries in the next 12 months.
4.3 Currently the Company has no plan to alter the Board of the Directors and senior management
and no agreement with other shareholders about the appointment and removal of the directors or
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Hikvision 2018 Q1 Report
Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
senior management. The team of Board of Directors and senior management will remain unchanged
for the foreseeable future.
4.4 Currently the Company has no plan to make significant changes to the Articles of Association for
the listed Company.
4.5 Currently the Company has no plan to make significant changes to the existing employee
recruitment for the listed Company.
4.6 Currently the Company has no plan to make significant changes for the dividend distribution plan
for the listed Company.
4.7 Currently the Company has no plan to make significant changes for business and organizational
structure for the listed Company.
During Hu Yangzhong, Wu Weiqi, JiangHaiqing, Zhou Zhiping, Xu Lirong, Cai Dingguo, He
Hangzhou Weixun Investment
Hongli, Zheng Yibo, Hu Dan,、Jiang Yufeng, Liu Xiang, Wang Ruihong, Chen Junke’s tenure of the
Management Limited Partnership
Company’s board of directors, supervisors and senior management personnel, the annual transfer of 17th May, Strict
（later renamed as Xinjiang Long term
Hikvision’s total shares should not exceed 25% of total number of shares held under Weixun; within 2010 performance
Weixun Investment Management
6 months after abovementioned personnel’s dimission, should not transfer hikvision’s shares held
Limited Partnership）
under Weixun.
Commitments Hangzhou Pukang Investment During Hu Yangzhong, Wu Weiqi, Gong Hongjia’s tenure of the Company’s board of directors,
in Initial
Limited Partnership（later supervisors and senior management personne, the annual transfer of Hikvision’s total shares should 17th May, Strict
Public Long term
Offering or renamed as Xinjiang Pukang not exceed 25% of total number of shares held under Pukang; whithin 6 months after 2010 performance
re-financing Investment Limited Partnership） abovementioned personnel’s dimission, should not transfer hikvision’s shares held under Pukang.
The Company's directors,
supervisors and executive: During their tenure of the Company’s board of directors, supervisors and senior management
HuYangzhong,Wu Weiqi, Jiang personnel, the annual shares transfer should not exceed 25% of total number of shares held under 17th May, Strict
Long term
Haiqing, Zhou Zhiping，Xu Weixun; whthin 6 months after their dimission, they should not transfer their shares held under 2010 performance
Lirong, Cai Dingguo, He Hongli, Weixun.
Zheng Yibo, Hu Dan, Jiang
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Hikvision 2018 Q1 Report
Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
Yufeng, Liu Xiang, Wang
Ruihong, Chen Junke
During their tenure of the Company’s board of directors, supervisors and senior management
Directors, executive officers of
personnel, the annual shares transfer should not exceed 25% of total number of shares held under 17th May, Strict
the Company: Long term
Pukang; whthin 6 months after their dimission, they should not transfer their shares held under 2010 performance
Hu Yangzhong, Wu Weiqi
Pukang.
During Gong Hongjia’s tenure of the Company’s board of directors, supervisors and senior
The Company’s director Gong management personnel, Chen’s annual shares transfer should not exceed 25% of total number of 17th May, Strict
Long-term
Hongjia’s spouse, Chen Chunmei shares held under Pukang; whthin 6 months after the dimission of Gong Hongjia,Chen should not 2010 performance
transfer her shares held under Pukang.
China Electronics Technology To avoid any loss of the Company and other shareholders arising from any competing business,
18th
Group Corporation (later renamed China Electronics Technology Group Corporation, the actual controller of the Company, issued Strict
September, Long term
as China Electronics Technology Commitment Letter about Avoiding the Competition within the Same Industry (《避免同业竞争的承 performance
2008
Group Co., Ltd.) 诺函》) on 18th September, 2008.
Gong Hongjia；
XinJiang WeiXun Investment To avoid any loss of the Company and other shareholders arising from any competing business,
Management Limited Gong Hongjia, Hangzhou WeiXun Investment Management Limited Partnership, ZheJiang Orient
Partnership； Holdings Co., Ltd and Hangzhou KangPu Investment Management Limited Partnership, the
th
Strict
XinJiang KangPu Investment promoters of the Company, issued Commitment Letter about Avoiding the Competition within the 10 July, Long term
performance
Management Limited Same Industry (《避免同业竞争的承诺函》) on 10th July, 2008. 2008
Partnership；ZheJiang Orient
Holdings Co., Ltd.
Whether the
undertaking
Yes
is fulfilled in
time
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Hikvision 2018 Q1 Report
4. Guidance on the Company’s operational results from January 1st 2018 to June 30th 2018.
Guidance on the Company’s operational performance from January 1st 2018 to June 30th 2018: Net profits attributable to shareholders of the Company are positive,
and situation of turning losses into gains is not applicable.
Estimated YoY change (%) of net profits attributable to shareholders of the Company from
15% to 35%
January 1st 2018 to June 30th 2018
Estimated variation interval of net profits attributable to shareholders of the Company from
378,527.80 to 444,358.72
January 1St 2018 to June 30th 2018 (0,000 RMB)
Net profits attributable to shareholders of the Company from January 1 st 2017 to June 30th
329,154.61
2017 (0,000 RMB)
Note of change in operational results The Company’s operating performance continues to have a steady and healthy growth.
5. Financial Assets measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
Profits or losses on
Cumulative fair
the changes in fair Purchase during the Sales during the Cumulative investment
Category Initial investment cost value change Closing balance Source of funds
value in current reporting period reporting period income
charged to equity
period
Financial derivative
1,400,293,692.23 -42,253,561.30 2,405,449,774.00 15,885,274.53 2,282,076,237.00 Company's own funds
instruments
Total 1,400,293,692.23 -42,253,561.30 2,405,449,774.00 15,885,274.53 2,282,076,237.00 --
6. Illegal provision of guarantees for external parties
□ Applicable √ Inapplicable
No such case in the reporting period.
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Hikvision 2018 Q1 Report
7. The Company’s funds used by the controlling shareholder or its related parties for non-operating purposes
□ Applicable √ Inapplicable
No such case in the reporting period.
8. Schedule for the reception activities including research, communication and interviews during the report period
√ Applicable □ Inapplicable
8.1 Reception of research activities during 2018 Q1
Time of reception Method of reception Type of reception object Index of basic situation of the research
Site Research and telephone
From January 1st 2018 to February 2nd 2018 Institutional investors CNINF, Investor Relations Activity Record: From January 1st 2018 to February 2nd 2018
communication
Site Research and telephone
From February 5th 2018 to March 2nd 2018 Institutional investors CNINF, Investor Relations Activity Record: From February 5th 2018 to March 2nd 2018
communication
Site Research and telephone
From March 5th 2018 to March 16th 2018 Institutional investors CNINF, Investor Relations Activity Record: From March 5th 2018 to March 16th 2018
communication
8.2 Participation of conferences for investor relationship activities during 2018 Q1
Time of conference Location Conference Name Type of reception object Method of reception
January 2018 Shanghai Ever-Bright Securities 2018 Investment Conference All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
January 2018 Las Vegas Nomura@CES 2018 All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
January 2018 Beijing Morgan Stanley China TMT Conference All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
January 2018 Beijing 16th Annual DBAccess China Conference All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
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Hikvision 2018 Q1 Report
Time of conference Location Conference Name Type of reception object Method of reception
January 2018 New York Bank of America Merrill Lynch 2018 A-share Conference All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
January 2018 New York-Boston US NDR- via Bank of America Merrill Lynch All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
January 2018 Hong Kong CICC TMT Forum 2018 All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
March 2018 Taibei Bank of America Merrill Lynch APAC TMT Conference 2018 All kinds of investors One-on-One, One-on-multi, small group Meetings, and etc.
8.3 Investor relations activity statistics during 2018 Q1
Number of daily research received (Site and telephone conference, times) 78
Number of institutional investors received (ppl) 453
Number of investor relations conference participated 8
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Hikvision 2018 Q1 Report
Section IV Financial Reports
4.1 Financial Reports
1. Consolidated Balance Sheet
Prepared by Hangzhou Hikvision Digital Technology Co., Ltd.
March 31st 2018
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Cash and bank balances 11,426,551,711.46 16,468,430,702.64
Balances with clearing agencies
Placements with banks and other financial
institutions
Financial assets at fair value through profit
959,500.00 4,100,657.54
and loss
Derivative financial assets
Notes receivable 3,961,977,210.26 3,636,961,616.03
Accounts receivable 15,970,671,829.27 14,705,210,072.81
Prepayments 527,897,944.12 527,576,857.11
Premiums receivable
Amounts receivable under reinsurance
contracts
Reinsurer's share of insurance contract
reserves
Interests receivable
Dividends receivable
Other receivables 580,057,359.21 583,681,240.81
Financial assets purchased under resale
agreements
Inventories 5,309,146,630.80 4,940,332,311.65
Held-for-sale assets
Non-current assets due within one year 80,707,361.52 66,566,230.12
Other current assets 4,696,676,281.48 3,720,449,532.88
Total Current Assets 42,554,645,828.12 44,653,309,221.59
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Hikvision 2018 Q1 Report
Item Closing balance Opening balance
Non-current Assets:
Loans and advances to customers
Available-for-sale financial assets 287,466,813.00 287,466,813.00
Held-to-maturity investments
Long-term receivables 32,655,340.30 23,375,680.61
Long-term equity investment 130,817,506.06 130,474,733.58
Investment properties
Fixed assets 4,053,256,047.58 3,024,025,496.31
Construction in progress 677,459,209.86 1,436,319,118.30
Materials for construction of fixed assets
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 761,104,185.60 429,160,982.63
Development expenditures
Goodwill 248,964,102.97 248,964,102.97
Long-term prepaid expenses
Deferred tax assets 479,160,529.33 479,070,649.49
Other non-current assets 982,732,565.82 858,796,668.13
Total Non-current Assets 7,653,616,300.52 6,917,654,245.02
Total Assets 50,208,262,128.64 51,570,963,466.61
Current Liabilities:
Short-term borrowings 1,516,332,857.77 97,114,655.91
Loans from the central bank
Customer deposits and deposits from
banks and other financial institutions
Capitals taking from banks and other
financial institutions
Financial liabilities at fair value through
55,059,240.22 15,946,836.46
profit and loss
Derivative financial liabilities
Notes payable 1,128,796,061.85 845,397,427.92
Accounts payable 6,742,022,841.40 10,039,943,012.26
Receipts in advance 454,788,920.44 570,573,208.60
Financial assets sold under repurchase
agreements
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Hikvision 2018 Q1 Report
Item Closing balance Opening balance
Fees and commissions payable
Payroll payable 431,026,744.53 1,391,291,256.90
Taxes payable 1,144,321,376.05 1,453,515,065.77
Interests payable
Dividends payable 63,706,416.92 94,857,139.16
Other payables 500,015,015.62 401,861,078.67
Amounts payable under reinsurance
contracts
Insurance contract reserves
Funds from securities trading agency
Funds from underwriting securities agency
Held for sale liabilities
Non-current liabilities due within one year 4,653,521,621.62 1,546,407,270.89
Other current liabilities 738,027,880.89 744,583,627.22
Total Current Liabilities 17,427,618,977.31 17,201,490,579.76
Non-current Liabilities:
Long-term borrowings 190,000,000.00 490,000,000.00
Bonds payable 3,120,920,000.00
Including: Preferred share
Perpetual bond
Long-term payables 2,437,038.62
Long-term employee benefits payable
Special payables
Provisions 64,785,927.34 63,068,638.49
Deferred income 82,798,403.45 88,925,771.65
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 337,584,330.79 3,765,351,448.76
Total liabilities 17,765,203,308.10 20,966,842,028.52
Owners’ Equities
Share capital 9,227,270,473.00 9,228,865,114.00
Other equity instruments
Including: Preferred share
Perpetual debt
19
Hikvision 2018 Q1 Report
Item Closing balance Opening balance
Capital reserves 1,853,623,008.66 1,819,397,715.63
Less: Treasury stock 738,027,880.89 744,583,627.22
Other comprehensive income -10,525,753.10 -27,677,939.35
Special reserves
Surplus reserve 3,483,742,918.53 3,483,742,918.53
General risk reserve
Retained profits 18,414,293,262.10 16,598,328,692.63
Total owners' equity attributable to owner of
32,230,376,028.30 30,358,072,874.22
the Company
Minority interests 212,682,792.24 246,048,563.87
Total owners' equity 32,443,058,820.54 30,604,121,438.09
Total liabilities and owners' equity 50,208,262,128.64 51,570,963,466.61
Legal Representative: Chen Zongnian Person in Charge of the Accounting Department: Jin Yan Chief Accountant: Jin Yan
2. Balance Sheet of the Parent Company
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Cash and bank balances 8,781,868,807.23 12,304,090,713.99
Financial assets at fair value through profit
and loss
Derivative financial assets
Notes receivable 238,923,781.24 345,651,612.11
Accounts receivable 15,807,051,713.50 12,505,683,317.78
Prepayments 434,957,182.68 94,545,948.67
Interests receivable
Dividends receivable 2,550,000.00 2,550,000.00
Other receivables 1,486,831,362.46 709,592,493.72
Inventories 282,649,470.87 376,776,045.69
Held-for-sale assets
Non-current assets due within one year
Other current assets 4,239,645,805.13 3,296,055,941.42
Total Current Assets 31,274,478,123.11 29,634,946,073.38
Non-current Assets:
Available-for-sale financial assets 287,456,813.00 287,456,813.00
20
Hikvision 2018 Q1 Report
Item Closing balance Opening balance
Held-to-maturity investments
Long-term receivables
Long-term equity investment 3,401,570,474.89 3,367,076,734.95
Investment properties
Fixed assets 2,787,030,319.03 1,757,777,870.77
Construction in progress 2,836,776.13 914,859,063.00
Materials for construction of fixed assets
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 168,107,042.75 154,604,755.69
Development expenditure
Goodwill
Long-term prepaid expenses
Deferred tax assets 200,147,031.89 200,147,031.89
Other non-current assets 20,290,484.46 16,925,712.83
Total Non-Current Assets 6,867,438,942.15 6,698,847,982.13
Total Assets 38,141,917,065.26 36,333,794,055.51
Current Liabilities:
Short-term borrowings 500,000,000.00
Financial liabilities at fair value through
profit and loss
Derivative financial liabilities
Notes payable
Accounts payable 303,870,679.44 286,629,255.35
Receipts in advance 342,367,744.36 216,747,866.68
Payroll payable 310,184,466.11 946,587,240.01
Taxes payable 942,168,281.29 1,219,102,007.88
Interests payable
Dividends payable 61,256,416.92 92,407,139.16
Other payables 1,216,120,625.91 708,051,044.04
Held-for-sale liabilities
Non-current liabilities due within one year 3,138,128,388.37 33,614,018.51
Other current liabilities 738,027,880.89 744,583,627.22
21
Hikvision 2018 Q1 Report
Item Closing balance Opening balance
Total Current Liabilities 7,552,124,483.29 4,247,722,198.85
Non-Current Liabilities:
Long-term borrowings
Bonds payable 3,120,920,000.00
Including: Preferred share
Perpetual bond
Long-term payables
Long-term employee benefits payable
Special payables
Provisions 43,024,784.70 43,024,784.70
Deferred income 48,141,063.01 62,903,600.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 91,165,847.71 3,226,848,384.70
Total liabilities 7,643,290,331.00 7,474,570,583.55
Owners' equity
Share capital 9,227,270,473.00 9,228,865,114.00
Other equity instruments
Including: Preferred share
Perpetual bond
Capital reserves 1,778,043,626.43 1,742,755,331.51
Less: Treasury share 738,027,880.89 744,583,627.22
Other comprehensive income
Special reserves
Surplus reserve 3,483,742,918.53 3,483,742,918.53
Retained profits 16,747,597,597.19 15,148,443,735.14
Total owners' equity 30,498,626,734.26 28,859,223,471.96
Total liabilities and owners' equity 38,141,917,065.26 36,333,794,055.51
Legal Representative: Chen Zongnian Person in Charge of the Accounting Department: Jin Yan Chief Accountant: Jin Yan
22
Hikvision 2018 Q1 Report
3. Consolidated Income Statement
Unit: RMB
Item 2018 Q1 2017 Q1
I. Total operating income 9,364,828,201.00 7,043,724,101.73
Including: Operating income 9,364,828,201.00 7,043,724,101.73
Interest income
Premiums earned
Fees and commissions income
II. Total operating costs 7,601,579,147.44 5,626,414,765.89
Including: Operating cost 5,144,866,014.52 4,030,635,978.64
Interest expense
Fees and commissions expenses
Surrender charge fee
Claims and policyholder benefits (net
of amounts recoverable from
reinsurers)
Insurance contract reserves (net of
reinsurers’ share)
Insurance policyholder dividends
Expenses for reinsurance accepted
Business taxes and levies 70,291,380.92 66,178,352.46
Selling expenses 1,084,628,143.59 700,619,566.15
Administrative expenses 995,059,473.35 747,961,910.46
Financial expense 257,430,070.75 21,617,777.72
Impairment losses of assets 49,304,064.31 59,401,180.46
Add: Gains from changes in fair values (Losses
-42,253,561.30 4,304,484.96
are indicated by "－")
Investment income (Loss is indicated by
21,904,699.06 26,616,724.90
"－")
Including: Income from investments in
342,772.48
associates and joint ventures
Foreign exchange gains (Losses
are indicated by “－”)
Gains from disposal of assets (Losses
3,430,565.03 115,205.81
are indicated by “－”)
Other income 398,225,011.54 339,941,433.93
III. Operating profit (Loss is indicated by
2,144,555,767.89 1,788,287,185.44
"－")
Add: Non-operating income 13,022,792.29 11,420,659.35
23
Hikvision 2018 Q1 Report
Item 2018 Q1 2017 Q1
Less: Non-operating expenses 1,536,336.10 896,504.71
IV. Total profit (total losses expressed with "-") 2,156,042,224.08 1,798,811,340.08
Less: Income tax expenses 373,754,038.72 318,461,864.25
V. Net profit (net loss expressed with "-") 1,782,288,185.36 1,480,349,475.83
(1) Net profit on continuous operation (net
1,782,288,185.36 1,480,349,475.83
losses expressed with "-")
(2) Net profit on terminated operation (net losses
expressed with "-")
Net profit attributable to owners of parent
1,815,964,569.77 1,480,780,632.01
company
Profit or loss attributable to minority interests -33,676,384.41 -431,156.18
VI. Other comprehensive income, net of
15,159,851.45 2,767,890.17
income tax
Other comprehensive income attributable to
17,152,186.03 3,799,340.09
owners of the Company, net of tax
(I) Items that will not be reclassified subsequently
to profit or loss
1. Changes in net liabilities or assets of
re-measurement of defined benefit
obligation
2. Amounts of other comprehensive income
attributes to investees that cannot be
reclassified into profit or loss under equity
method
(II) Other comprehensive income to be
reclassified to profit or loss in subsequent 17,152,186.03 3,799,340.09
periods
1. Amounts of other comprehensive income
attributes to investees that are to be
reclassified into profit or loss under equity
method
2. Gain or losses attributes to the changes in
fair value of available-for-sale financial
assets
3. Gains or losses through reclassifying
held-to-maturity financial assets to
available-for-sale financial assets
4.The effective part of gains and losses on cash
flow hedging
5. Exchange differences arising on conversion
of financial statements denominated in 17,152,186.03 3,799,340.09
foreign currencies
6. Others
Other comprehensive income attributable to
-1,992,334.58 -1,031,449.92
minority interests, net of tax
24
Hikvision 2018 Q1 Report
Item 2018 Q1 2017 Q1
VII. Total comprehensive income 1,797,448,036.81 1,483,117,366.00
Total comprehensive income attributable to
1,833,116,755.80 1,484,579,972.10
owners of the parent company
Total comprehensive income attributable to
-35,668,718.99 -1,462,606.10
minority interests
VIII. Earnings per share
(I) Basic earnings per share 0.199 0.163
(II) Diluted earnings per share 0.197 0.162
Legal Representative: Chen Zongnian Person in Charge of the Accounting Department: Jin Yan Chief Accountant: Jin Yan
4. Income Statement of the Parent Company
Unit: RMB
Item 2018 Q1 2017 Q1
I. Total operating income 3,928,907,152.63 3,314,431,640.12
Less: Operating Cost 1,169,938,051.45 1,013,396,452.86
Business taxes and levies 51,940,799.46 41,140,628.13
Selling expenses 476,356,746.70 339,660,516.91
Administrative expenses 568,186,598.47 479,098,463.52
Financial expense 146,185,915.34 (23,589,269.29)
Impairment losses of assets
Add: Gains from changes in fair values (Losses
3,049,949.85
are indicated by "－")
Investment income (Loss is indicated by "－") -5,689,637.96 16,021,809.69
Including: Income from investments in
342,772.48
associates and joint ventures
Gains from disposal of assets (Loss is
3,494,397.51 100,441.79
indicated by "－")
Other Income 365,167,317.80 322,965,971.79
II. Operating profit (loss is indicated by "－") 1,879,271,118.56 1,806,863,021.11
Add: Non-operating income 2,193,088.96 4,861,345.77
Less: Non-operating expenses 346,091.67 491,918.69
III. Total profit (total loss is indicated by "－") 1,881,118,115.85 1,811,232,448.19
Less: Income tax expenses 281,964,253.80 256,704,288.39
IV. Net profit (Net loss is indicated by "－") 1,599,153,862.05 1,554,528,159.80
(1) Net profit on continuous operation (net
losses expressed with "-")
(2) Net profit on terminated operation (net losses
25
Hikvision 2018 Q1 Report
Item 2018 Q1 2017 Q1
expressed with "-")
V. Other comprehensive income, net of income
tax
(I) Items that will not be reclassified
subsequently to profit or loss not to be
reclassified to profit or loss in subsequent
periods
1. Changes in net liabilities or assets of
re-measurement of defined benefit
obligation
2. Amounts of other comprehensive
income attributes to investees that
cannot be reclassified into profit or
loss under equity method
(II) Other comprehensive income to be
reclassified to profit or loss in subsequent
periods
1. Amounts of other comprehensive
income attributes to investees that are
to be reclassified into profit or loss
under equity method
2. Gain or losses attributes to the changes
in fair value of available-for-sale
financial assets
3. Gains or losses through reclassifying
held-to-maturity financial assets to
available-for-sale financial assets
4.The effective part of gains and losses on
cash flow hedging
5. Exchange differences arising on
conversion of financial statements
denominated in foreign currencies
6. Others
VI. Total comprehensive income 1,599,153,862.05 1,554,528,159.80
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
Legal Representative: Chen Zongnian Person in Charge of the Accounting Department: Jin Yan Chief Accountant: Jin Yan
26
Hikvision 2018 Q1 Report
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2018 Q1 2017 Q1
I. Cash flows from operating activities:
Cash received from sale of goods
8,750,853,665.71 6,909,204,860.69
or rendering of services
Net increase in customer deposits and
deposits from banks and other financial
institutions
Net increase in borrowings from central bank
Net increase in placements from other
financial institutions
Cash receipts from premiums under direct
insurance contracts
Net cash receipts from reinsurance business
Net increase in the insurance deposit and
investment fund
Net cash receipts from disposal of financial
assets measured by fair value that changes in
fair value would be recognized in the current
period gains and losses
Cash received from interests, fees
and commissions
Net increase in capital taking from other
banks
Net increase in capital from repurchase
arrangements
Refund of tax and levies 900,802,467.84 780,612,675.68
Other cash received relating to
1,066,892,836.74 66,321,315.91
operating activities
Sub-total of cash inflows from operating
10,718,548,970.29 7,756,138,852.28
activities
Cash payments for goods purchased and
9,646,942,783.62 7,882,590,526.94
services received
Net increase in loans and advances
to customers
Net increase in balance with the central bank
and due to banks and other financial
institutions
Cash payments for claims and policyholders'
benefits under direct insurance contracts
Cash paid for interests, fees and commissions
Cash payment for insurance policy dividends
Cash paid to and on behalf of employees 2,157,265,649.41 1,532,543,739.35
27
Hikvision 2018 Q1 Report
Item 2018 Q1 2017 Q1
Payments of various types of taxes 1,270,538,915.89 795,842,952.84
Other cash paid relating to operating activities 1,499,866,301.90 580,448,190.35
Sub-total of cash outflows from operating
14,574,613,650.82 10,791,425,409.48
activities
Net Cash Flow from Operating Activities -3,856,064,680.53 -3,035,286,557.20
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery of
150,000,000.00 3,370,000,000.00
investments
Cash receipts from investment income 21,561,926.58 26,573,562.79
Net cash receipts from disposals of fixed
assets, intangible assets and other long-term 8,085,072.84 2,087,975.59
assets
Net cash receipts from disposals of
subsidiaries and other business units
Other cash received relating to
5,502,905.57
investing activities
Sub-total of cash inflows from investing
185,149,904.99 3,398,661,538.38
activities
Cash payments to acquire or construct fixed
assets, intangible assets and other long-term 822,308,036.28 299,250,000.19
assets
Cash paid to acquire investments 1,100,000,000.00
Net increase in pledged loans receivables
Net cash payments for acquisitions of
45,000,000.00
subsidiaries and other business units
Other cash paid relating to
6,877,787.28
investing activities
Sub-total of cash outflows from investing
1,929,185,823.56 344,250,000.19
activities
Net Cash Flow from Investment Activities -1,744,035,918.57 3,054,411,538.19
III. Cash flows from financing activities:
Cash receipts from capital contributions 127,400.00
Including: cash received by subsidiaries
from capital contributions from minority
owners
Cash receipts from borrowings 1,419,781,375.02 4,362,038,129.87
Cash receipts from bond issue
Other cash receipts relating to
437,630,760.68
financing activities
Sub-total of cash inflows from financing
1,419,908,775.02 4,799,668,890.55
activities
Cash repayments of amounts borrowed 304,081,731.11 1,700,387,852.71
28
Hikvision 2018 Q1 Report
Item 2018 Q1 2017 Q1
Cash payments for distribution of dividends
91,048,231.17 55,318,063.07
or profits or settlement of interest expenses
Including: payments for distribution of
dividends or profits to minority owners of
subsidiaries
Other cash payments relating to financing
6,555,746.33 718,984,242.74
activities
Sub-total of cash outflows from financing
401,685,708.61 2,474,690,158.52
activities
Net Cash Flow from Financing Activities 1,018,223,066.41 2,324,978,732.03
IV. Effect of Foreign Exchange Rate Changes
-332,933,205.11 -52,019,627.61
on Cash and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents -4,914,810,737.80 2,292,084,085.41
Add: Opening balance of Cash and Cash
16,029,010,345.59 13,522,337,697.28
Equivalents
VI. Closing Balance of Cash and Cash
11,114,199,607.79 15,814,421,782.69
Equivalents
Legal Representative: Chen Zongnian Person in Charge of the Accounting Department: Jin Yan Chief Accountant: Jin Yan
6. Cash Flow Statement of the Parent Company
Unit: RMB
Item 2018 Q1 2017 Q1
I. Cash Flows from Operating Activities::
Cash receipts from the sale of goods and the
1,502,210,097.61 2,387,618,586.65
rendering of services
Refund of tax and levies 350,404,780.81 316,965,971.79
Other cash receipts relating to operating
207,055,033.36 53,688,774.13
activities
Sub-total of cash inflows from operating
2,059,669,911.78 2,758,273,332.57
activities
Cash payments for goods acquired
1,659,187,618.03 413,238,143.37
and services received
Cash payments to and on behalf of
1,229,827,502.82 798,975,162.31
employees
Payments of all types of taxes 1,016,007,421.93 505,480,479.78
Other cash payments relating to operating
249,104,754.08 442,942,578.47
activities
Sub-total of cash outflows from operating
4,154,127,296.86 2,160,636,363.93
activities
Net Cash Flow from Operating Activities -2,094,457,385.08 597,636,968.64
II. Cash Flows from Investing Activities:
29
Hikvision 2018 Q1 Report
Item 2018 Q1 2017 Q1
Cash receipts from disposals and recovery of
150,000,000.00 3,350,000,000.00
investments
Cash receipts from investment income 3,961,618.03 25,951,538.48
Net cash receipts from disposals of fixed
assets, intangible assets and other long-term 8,003,034.22 581,194.84
assets
Net cash receipts from disposals of
5,971.53 70,271.21
subsidiaries and other business units
Other cash receipts relating to investing
4,231,842,800.02 612,698,996.79
activities
Sub-total of cash inflows from investing
4,393,813,423.80 3,989,302,001.32
activities
Cash payments to acquire or construct fixed
assets, intangible assets and other long-term 196,125,986.75 107,114,487.38
assets
Cash payments to acquire investments 1,100,000,000.00
Net cash payments for acquisitions of
33,000,000.00 900,000,000.00
subsidiaries and other business units
Other cash payments relating to investing
4,761,278,790.32 542,110,434.01
activities
Sub-total of cash outflows from investing
6,090,404,777.07 1,549,224,921.39
activities
Net Cash Flow from Investment Activities -1,696,591,353.27 2,440,077,079.93
III. Cash Flows from Financing Activities
Cash receipts from capital contributions
Cash receipts from borrowings 500,000,000.00 300,000,000.00
Cash receipts from issue of bonds
Other cash receipts relating to financing
activities
Sub-total of cash inflows from financing
500,000,000.00 300,000,000.00
activities
Cash repayments of amounts
borrowed
Cash payments for distribution of dividends
75,745,723.19 41,637,259.22
or profits or settlement of interest expenses
Other cash payments relating to financing
6,555,746.33
activities
Sub-total of cash outflows from financing
82,301,469.52 41,637,259.22
activities
Net Cash Flow from Financing Activities 417,698,530.48 258,362,740.78
IV. Effect of foreign exchange rate changes on
-148,871,705.11 -5,504,077.60
cash and cash equivalents
V. Net increase in cash and cash equivalents -3,522,221,912.98 3,290,572,711.75
30
Hikvision 2018 Q1 Report
Item 2018 Q1 2017 Q1
Add: Beginning balance of cash
12,304,082,533.11 10,245,969,003.13
and cash equivalents
VI. Closing Balance of Cash and Cash
8,781,860,620.13 13,536,541,714.88
Equivalents
Legal Representative: Chen Zongnian Person in Charge of the Accounting Department: Jin Yan Chief Accountant: Jin Yan
4.2 Audit Report
Whether audit has been performed on this 2018 Quarter 1 Report
□ Yes √ No
The Company’s 2018 Quarter 1 report has not been audited
HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO., LTD.
Chairman: Chen Zongnian
April 21st 2018
Note: This document is a translated version of the Chinese 2018 Quarter 1 Financial Report (“2018
年度第一季度报告”), and the published announcements in the Chinese version shall prevail. The
complete published Chinese 2018 Quarter 1 Financial Report document may be obtained at
http://www.cninfo.com.cn.
31
