Chinese-funded enterprises in the United States was again suppressed, the traditional security companies how to break out?

The European and American markets have always been a difficult bone to chew, especially in the field of security. Although the technology has been overtaken by China in recent years, but the bones of the local security enterprise trust still exists, ADT, DSC, OPTEX and other high-end brands occupy most of the market share, Chinese enterprises in Europe and the United States struggled.

Recently, the British FTSE Russell Index issued an announcement, from the relevant index to remove the shares of Hikvision and other 8 Chinese companies, the decision has been December 21 effective. The eight Chinese companies include Hikvision, China Railway Construction, China Satellite, China Communications Construction, China National Nuclear Construction, China National Railway Corporation, Sinotruk, Sinochem and Sinochem.

Not coincidentally, a month ago President Donald Trump signed an executive order banning U.S. companies and individuals from holding directly or through investment funds shares in companies that the U.S. government believes contribute to China's military development. The ban will come into effect on January 11 next year, and the list of prohibited investments involves 31 Chinese companies, including the eight mentioned above.

As early as October last year, Hikvision was included in the U.S. Department of Commerce's "Entity List" of export controls. Chinese companies included in the "Entity List" will be prohibited from purchasing parts and components from U.S. companies without the approval of the U.S. government.

Intel, Nvidia, Ambarella, Western Digital, and Seagate Technology are all major suppliers to Hikvision and Dahua, and the ban is bound to have a negative impact on related technology companies on both the supply and demand sides.

Domestically, Hikvision's momentum isn't much better.

In 2020, the domestic security market is in the wind. a large number of new technologies such as AI, IoT, 5G, cloud computing, etc. are developing rapidly, adding more competitive dimensions to the security industry. "AI four dragons" and a large number of AI companies have appeared, have layout security. The wave of the Internet as a whole To B, is to promote the Internet giants strong kill in the field of security.

Overall, the squeeze from new technologies and new organizations, so that traditional security manufacturers such as Hikvision are like a man in the back. Not only that, the hardware advantage of traditional security manufacturers is also gradually weakened. Some data show that the security chips produced by Huawei Haisi accounted for about 70-80% of the global market share.

Root statistics, 2010-2019 Haikang's revenue growth rate of 71.57%, 45.10%, 37.89%, 48.96%, 60.37%, 46.64%, 26.32%, 31.27%, 18.93%, 15.69%, and the net profit growth rate of 49.07%, 40.81%, 44.28%, 43.51%, 52.13%, 25.80%, 26.46%, 26.79%, 20.64%, 9.35% respectively, the net profit growth rate.

As can be seen, Hikvision's revenue growth rate and net profit growth rate have declined significantly. In the recent third quarter of 2020, for example, its revenue growth rate of 11.53% (the historical high since listing is 71.57%), net profit growth rate for the first time fell below 0.12% (the historical high since listing is 52.13%).

Haikang is still so, a host of other security vendors are even more difficult to escape the fate of the leek. Want to survive in the current era, the only way to build intelligent security.

Simply put, the core area of security is video surveillance, and the core of intelligent security is the integration of video structuring technology and video big data. If you can integrate video big data and social big data, you will be able to build a wide range of IOT perception platform, and form a strong smart security ecosystem by linking multiple links together.

Haikang obviously also realized the importance of building an ecosystem is much higher than the development of hardware, but easy to know and difficult to implement, the actual implementation of the effect is not ideal. Do video, do building, do access control, do hard disk, and even started to do computers, but big and all whether big and strong? The problem is thought-provoking.

From the transformation of traditional domestic security enterprises, Hikvision and Dahua is currently the transformation of intelligent security to a representative enterprise; the second echelon to the UV, Tiandi Weiye, Suzhou Koda, Kuangshi, etc.; the third echelon of small and medium-sized enterprises (SMEs), and the vast majority of SMEs have fallen in the transformation of the road.

2020, security head manufacturers return to single-digit growth, SMEs generally negative growth. Transformation is difficult, difficult to upgrade, behind the glorious transformation, is the failure of a large number of enterprises. Competition in the security market is becoming increasingly white-hot, and the industry reshuffle is intensifying.

The development of intelligent security technology for security leading enterprises to build greater advantages at the same time, but also to the small and medium-sized security enterprises to bring greater pressure to survive. Only an objective understanding of the current situation of the company, clear strategic focus of the company's development, and partners *** with the construction of the ecological, small and medium-sized enterprises may be successful transformation and upgrading.

In the short term, by the impact of this year's epidemic, coupled with the end of the snow project and some of the large infrastructure, the government market slowed down in the short term. But security as the infrastructure of modern society, the industry market as a key area, still has more room for growth.

The Internet of Things, AI, big data, 5G and other new technology updates and intelligent upgrades to solve the traditional security pain points, the future will bring hundreds of billions of dollars of incremental security industry, intelligence will become a major trend in the security industry.

At the end of this year, the country has introduced a new security program, planning for the next few years in the construction of intelligent security. For example, Kunming's "three-year action plan for the construction of intelligent security district", Qingdao's "2020-2022 intelligent security community plan", etc. For many small and medium-sized security enterprises, this is not an opportunity.

At present, due to China's smart security there is a late start, brand awareness is not high, the lack of localized services and other issues, most of the security companies in Europe and the U.S. security market is still in the groping stage, but this can not hide the huge demand for security market in Europe and the United States.

I believe that with the development of new technologies, the international situation changes, the domestic market will be renewed vigor, Chinese security companies in Europe and the United States will get a new round of development.