Hangzhou Hikvision Digital Technology Co., Ltd.
2024 Annual Report
April 19, 2025
To ShareholdersIn response to the complicated and dynamic business climate in 2024, the Company tapped intothe potential of the Chinese security market and more actively expanded its security business overseas,while remaining committed to scenario-based digitization and innovative businesses. In 2024, thecombined revenue of our overseas main businesses and innovative businesses surpassed the revenueof our domestic main businesses, that is, the total revenue of three businesses groups - PBG, EBGand SMBG - for the first time in our history.The Company is determined to bolster its investment in R&D. Seeing the rise of large AI models,we actively expand the development of AIoT-powered large multimodal model technology. It is ourbusiness tenet to identify target markets, align with the advancement of cutting-edge technology, andincorporate new technologies into software and hardware products. The Company will keep growingits product lines and increasing application scenarios based on its persistent efforts to develop sensingtechnologies utilizing full electromagnetic waves, mechanical waves, and multi-band fusion. Since2018, the Company has maintained a steady increase in R&D investment, actively responding to thecontinuously deteriorating global operating environment through technological innovation.
The Company will readily adapt itself to the times. In the years to come, we will shift our focusfrom faster expansion to higher efficiency, ensuring strong performance for all existing businesses.Moreover, the Company plans to modify its operating mechanism and optimize its organizationalstructure to better adapt to changes in the external business environment, while leveraging digitaltechnology to increase operational efficiency both internally and externally.The Company's commitment to global development will not change. Amid the ongoing politicaland economic turbulence worldwide, the Company is subject to standing, severe repression in someforeign countries, and is expected to face new challenges in the future. However, we are resolute inconsistently increasing our investment in overseas marketing and expanding the percentage ofoverseas revenue – thanks to the indomitable spirit we have developed over the last 20 years inoverseas market development.
The Company will always be customer-centric and create value for customers regardless of how
the business environment changes. Finally, we wish to express our gratitude to all shareholders fortheir trust in and support for the Company!
See far, go further!
Board of Directors of Hangzhou Hikvision Digital Technology Co., Ltd.
April, 2025
Section I Important Notes, Contents and DefinitionsThe Board of Directors, Board of Supervisors, directors, supervisors and senior managementguarantee that the information presented in this report is true, accurate and complete without falserecords, misleading statements or material omissions, and will undertake individual and joint legalliabilities.Hu Yangzhong, the Company's legal representative, Jin Yan, the person in charge of theaccounting work, and Zhan Junhua, the person in charge of accounting department (accountingsupervisor) hereby declare and warrant that the financial statements in this annual report are true,accurate and complete.All directors of the Company have attended the board meeting to review this report.The profit distribution proposal passed upon deliberation at the meeting of the Board of Directorsis set out as follows: Based on the total share capital (excluding shares held in the Company'srepurchase account) as of the record date for the implementation of the 2024 annual profit distributionplan, the Company proposed to distribute cash dividend of RMB7.00 (tax inclusive) per each 10shares to all shareholders, bonus share and share distribution from capital reserve is nil.
Note:
This document is a translated version of the Chinese version 2024 Annual Report ("2024年年度报告"), and the published announcements in the Chinese version shall prevail. The complete publishedChinese 2024 Annual Report may be obtained at www.cninfo.com.cn.
Please read the full annual report and pay particular attention to the following risk factors:
1) Domestic Economic Transformation Risks: The domestic market is undergoing continuous adjustments infiscal spending and real estate investment, leading to a need for improvement in societal expectations foreconomic development. Additionally, some overseas nations are implementing trade protectionist policies,which pose challenges to the export capabilities of domestic enterprises. The economy remains in a transitionalphase of upgrading and transformation. The Company empowers economic and social digital transformationwith AIoT technologies and products, driving new developments in productivity. However, the process oftransformation and upgrading cannot be achieved overnight, and long-term structural pressures on the economyand society persist. Fluctuations during this process will continue to impact the company's operations.
2) Global Economic Downturn Risks: Growth in key economies has decelerated, regional development remainsunbalanced worldwide, and macroeconomic volatility persists. The Company mitigates operational risks inspecific regions through its diversified business footprint, tailoring strategies to local conditions. However,should a global economic recession occur, the company's operations may still face material impacts.
3) Geopolitical Environment Risks: The global political system is evolving toward multipolarity, with stability
and predictability continuously diminishing, while conflictsin certain regions persist unresolved. In recentyears, the Company has strengthened risk management and enhanced response capabilities, adjusting resourceallocations in line with operational environments. Nevertheless, should geopolitical conditions deteriorateabruptly, the Company's operations in certain countries and regions may still face adverse impacts.
4) Technological Obsolescence Risks: Technologies such as artificial intelligence, big data, the Internet of
Things (IoT), and cloud computing are advancing rapidly, with iterative updates accelerating. The Companyhas established a certain level of expertise in areas such as IoT sensing, AI, and big data, and has maintainedtechnological advancement through extensive commercial practices. However, if the Company fails to closelymonitor the evolution of cutting-edge technologies or maintain innovation and expansion within itstechnological framework, the uncertainty risks associated with future development will intensify.
5) Internal Management Risks: The Company's expanding operational scale, continuous diversification of
products and services, and increasing internal complexity are elevating new challenges to governancecapabilities. Through institutionalization and process standardization, the Company codifies managementexpertise while emphasizing talent pipeline development. However, should management capabilities fail tokeep pace with business growth, operational performance could be compromised.
6) Financial Risks Caused by Customers' Reduced Ability to Pay: The liquidity of commercial transactionsis susceptible to economic volatility, with the Company's capital turnover being closely tied to the operationalconditions of partners across the value chain. While maintaining robust collection mechanisms, prudentoperations, and substantial cash reserves with low financing costs, the Company may still face slower paymentrecovery and operational disruptions should overall market liquidity risks escalate.
7) Legal and Compliance Risks: Multilateral trade mechanisms are significantly impacted by political events,
and the laws and regulations that commercial activities must comply with are complex and vary from countryto country. There is a trend towards stricter data regulations globally, which poses higher demands on theCompany's legal and compliance capabilities. The Company has established an effective legal and compliancemanagement system through practical experience and has undergone multiple business tests domestically andinternationally. However, if the Company's legal and compliance capabilities cannot keep up with the evolvingsituation, it may still have a negative impact on operations.
8) Supply Chain Risks: Some countries are using supply chains as a means of international competition, and theglobal supply system has been continuously impacted by geopolitical events in recent years. Despite efforts toestablish diversified supply networks and properly manage inventory, the Company may still be affected by awidespread supply chain disruption, which could impact its business stability.
9) Cybersecurity Risks: The Company consistently emphasizes cybersecurity capabilities and system
development, actively implementing measures to enhance product and system security. However, incidentssuch as computer viruses, malware, and hacker attacks may still occur, potentially damaging the Company'ssystems or products and creating cybersecurity vulnerabilities.10) Exchange Rate Volatility Risks: The Company conducts operations in multiple countries and regions
overseas, primarily settling transactions in foreign currencies. While employing reasonable financialinstruments for risk hedging, inherent foreign currency exposure from sales, procurement, and financingactivities remains. Exchange rate fluctuations may consequently affect the Company's financial performance.
11) Intellectual Property Risks: The Company maintains substantial R&D investments yielding numerous
technological achievements, supported by relatively comprehensive intellectual property protection measures.Nevertheless, risks of intellectual property disputes and infringement persist.The above-mentioned alerts do not include all the potential risks for the Company. Investors are advised to investwith caution.
CONTENTS
To Shareholders ...... 1
Section I Important Notes, Contents and Definitions ...... 3
Section II Corporate Profile & Key Financial Data ...... 8
Section III Management Discussion and Analysis ...... 14
Section IV Corporate Governance ...... 143
Section V Environmental and Social Responsibility ...... 181
Section VI Significant Events ...... 182
Section VII Changes in Shares and Information about Shareholders ...... 204
Section VIII Information of Preferred Shares ...... 217
Section IX Bonds ...... 218
Section X Financial Report ...... 219
Section XI Documents Available for Reference ...... 369
Definitions
| Term | Definition |
| Reporting Period | From January 1, 2024 to December 31, 2024 |
| Articles of Associations | Articles of Associations for Hangzhou Hikvision Digital Technology Co., Ltd |
| Hikvision, the Company, our Company, the Group | Hangzhou Hikvision Digital Technology Co., Ltd. |
| CETC | China Electronics Technology Group Corportation, the actual controller of the Company |
| CETHIK | China Electronics Technology HIK Group Ltd., the controlling shareholder of the Company |
| EZVIZ, EZVIZ Network | Hangzhou EZVIZ Network Co., Ltd.(According to the context, also refers to the corresponding business) |
| HikRobot, Robotic business | Hangzhou Hikrobot Technology Co., Ltd. (According to the context, also refers to the corresponding business) |
| Sensortech, HikAuto | Shijiazhuang Sensortech Smart Technology Ltd. (According to the context, also refers to the corresponding business) |
| HikMicro, Micro Sensing, Thermal imaging business | Hangzhou Hikmicro Sensing Technology Ltd. (According to the context, also refers to the corresponding business) |
| HikSemi, HikStorage, Storage business | 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, HikSecurityCheck | Hangzhou Rayin Technology Ltd. (According to the context, also refers to the corresponding business) |
| Innovative 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 Staff Investment in Innovative Business (www.cninfo.com.cn). In this report, innovative business also refers to EZVIZ, HikRobot, HikAuto, HikMicro, HikSemi, HikImaging, HikFire, Rayin and their related business or products. |
Section II Corporate Profile & Key Financial DataI. Corporate Information
| Stock abbreviation | HIKVISION | Stock code | 002415 |
| Stock exchange where the shares of the Company are listed | Shenzhen Stock Exchange | ||
| Name of the Company in Chinese | 杭州海康威视数字技术股份有限公司 | ||
| Abbr. of the Company name in Chinese | 海康威视 | ||
| Name of the Company in English (if any) | HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO., LTD | ||
| Abbr. of the Company name in English (if any) | HIKVISION | ||
| Legal representative | Hu Yangzhong | ||
| Registered address | No. 555 Qianmo Road, Binjiang District, Hangzhou, Zhejiang Province | ||
| Postal code of Registered address | 310051 | ||
| Changes in the Company's registered address | The Company was listed on the Shenzhen Stock Exchange on May 28th 2010. The original registered address was No. 36 MachengRoad, Xihu District, Hangzhou, Zhejiang Province. In 2016, the Company's registered address was changed to No. 555 Qianmo Road, Binjiang District, Hangzhou, Zhejiang Province. | ||
| Business address | No. 518 Wulianwang Street, Binjiang District, Hangzhou | ||
| Postal code of Business address | 310051 | ||
| Company website | www.hikvision.com | ||
| market@hikvision.com; ir@hikvision.com | |||
II. Contacts and Contact Information
| Board Secretary | Securities Affairs Representative | |
| Name | Feng Wei | Cai Chao |
| Address | No. 518 Wulianwang Street, Binjiang District, Hangzhou | No. 518 Wulianwang Street, Binjiang District, Hangzhou |
| Tel. | 0571-88075998 ; 0571-89710492 | 0571-88075998 ; 0571-89710492 |
| Fax | 0571-89986895 | 0571-89986895 |
| hikvision@hikvision.com | hikvision@hikvision.com |
III. Information Disclosure and Place of the Report
| The securities exchange website for the disclosure of the Annual Report | www.szse.cn |
| Media and website for the disclosure of the Annual Report | Securities Times, China Securities Journal, Shanghai securities Journal, www.cninfo.com.cn |
| Place where the Annual Report is available for inspection | Office of the Board of Directors of the Company |
IV. Company Registration and Alteration
| Unified Social Credit Identifier | 91330000733796106P |
| Changes in principle business activities since the Company was listed (if any) | The Company's business scope covers: licensed items: production of Class II and Class III radiation devices; sales of Class II and Class III radiation devices; radioisotope production (except the radiopharmaceuticals for positron emission computed tomography ); sales of Class II, Class III, Class IV and Class V radioactive sources; engineering and construction activities; type II value-added telecommunications services; online data processing and transaction processing services (operating e-commerce); Internet information services; general aviation services. (as for the items which by law are subject to approval, business activities can be carried out only after having been approved by the relevant departments, and the specific operation items are subject to the terms of the approval). General items: manufacturing of digital video surveillance systems; sales of digital video surveillance systems; manufacturing of security equipment; sales of security equipment; manufacturing of IoT equipment; sales of IoT equipment; manufacturing of intelligent unmanned aerial drones; sales of intelligent unmanned aerial drones; manufacturing of computer software and hardware and peripherals; wholesale of computer software and hardware and auxiliary equipment; manufacturing of communication equipment; sales of communication equipment; manufacturing of network equipment; sales of network equipment; manufacturing of display devices; sales of display devices; manufacturing of intelligent mobile equipment; sales of intelligent mobile equipment; manufacturing of auto parts and accessories; wholesale of auto parts and accessories; manufacturing of electric signal appliances and devices; sales of electric signal appliances and devices; manufacturing of mechanical and electrical equipment; sales of mechanical and electrical equipment; manufacturing of special labor protective supplies; sales of special labor protective supplies; sales of electronic products; sales of digital cultural and creative technological equipment; sales of second-class medical device; sales of charging pile; technical services, technical development, technical consultation, technical knowledge exchange, technology transfer and technology promotion; software development; development of network and information security software; information system integration services; computer system services; research and development of IoT technologies; IoT technology services; IoT application services; big data services; data processing and storage support services; security system monitoring services; security technology defense system's design and construction services; electronic and mechanical equipment maintenance (excluding special equipment); general equipment repairmen; centralized fast-charging station; parking lot services; digital cultural and creative content application services; health consulting services (excluding diagnostic and treatment services); environmental protection monitoring; marketing planning; business training (excluding education and vocational training that require licensing); import and export of goods; import and export |
| of technology (Except for items which by law are subject to approval, the Company can determine and carry out operational activities in accordance with the law by virtue of its business license). | |
| Changes of controlling shareholders of the Company (if any) | No change during the reporting period |
V. Other Relevant Information
Accounting firm engaged by the Company
| Name of the accounting firm | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
| Business address of the accounting firm | 30F Bund Center 222 Yan An Road East Shanghai |
| Name of accountants for writing signature | Chen Yan, Liu Ying |
Sponsor institution engaged by the Company to continuously perform its supervisory function during the ReportingPeriod
□ Applicable √ Inapplicable
Financial advisor engaged by the Company to perform the duties of continuous supervision during the reportingperiod
□ Applicable √ Inapplicable
VI. Key Accounting Data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
√ Yes □ No
Reasons for retrospective adjustment or restatement of previous accounting data
√ Consolidation under Common Control
Unit: RMB
| 2024 | 2023 | YoY Change (%) | 2022 | |||
| Before the adjustment | After the adjustment | After the adjustment | Before the adjustment | After the adjustment | ||
| Revenue (RMB) | 92,495,525,118.30 | 89,339,856,855.68 | 89,341,177,610.40 | 3.53% | 83,166,321,681.14 | 83,167,244,665.69 |
| Net profit attributable to shareholders of the Company (RMB) | 11,977,327,023.54 | 14,107,621,359.66 | 14,107,726,276.26 | -15.10% | 12,837,704,462.49 | 12,837,782,699.68 |
| Net profit attributable to shareholders of the Company excluding non-recurring gains and losses (RMB) | 11,814,861,641.16 | 13,665,962,325.65 | 13,665,962,325.65 | -13.55% | 12,331,058,280.04 | 12,331,058,280.04 |
| Net cash flows from operating activities (RMB) | 13,264,092,022.73 | 16,623,254,305.92 | 16,622,209,721.05 | -20.20% | 10,164,135,382.38 | 10,165,498,912.07 |
| 2024 | 2023 | YoY Change (%) | 2022 | |||
| Before the adjustment | After the adjustment | After the adjustment | Before the adjustment | After the adjustment | ||
| Basic earnings per share (RMB/share) | 1.297 | 1.520 | 1.520 | -14.67% | 1.370 | 1.370 |
| Diluted earnings per share (RMB/share) | 1.297 | 1.520 | 1.520 | -14.67% | 1.370 | 1.370 |
| Weighted average ROE | 15.34% | 19.64% | 19.64% | -4.30% | 19.62% | 19.62% |
| At December 31, 2024 | At December 31, 2023 | YoY Change (%) | At December 31, 2022 | |||
| Before the adjustment | After the adjustment | After the adjustment | Before the adjustment | After the adjustment | ||
| Total assets (RMB) | 132,016,200,156.14 | 138,848,007,548.55 | 138,858,122,879.55 | -4.93% | 119,234,833,850.69 | 119,244,597,584.64 |
| Net assets attributable to shareholders of the Company (RMB) | 80,668,661,062.88 | 76,354,265,540.14 | 76,354,265,540.14 | 5.65% | 68,389,337,524.32 | 68,389,337,524.32 |
The Company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years isnegative, and the audit report of the most recent year shows that there is uncertainty about the Company's ability tocontinue operations
□ Yes √ No
Net profit before and after deducting extraordinary gains and losses is negative
□ Yes √ No
The total share capital of the Company as of the previous trading day of the annual report disclosure:
| The total share capital of the Company as of the previous trading day of the annual report disclosure (share) | 9,233,198,326 |
Fully diluted earnings per share calculated with the latest share capital
| Fully diluted earnings per share (RMB/share) calculated with the latest share capital | 1.297 |
VII. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in the Financial Report of Net Profits and Net Assets According to the Disclosure ofInternational 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 OverseasAccounting 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 OverseasAccounting Standards and China Accounting Standards in the reporting period.
3. Explanation of the Differences in Accounting Data under Domestic and Overseas Accounting Standards
□ Applicable √ Inapplicable
VIII. Key Quarterly Financial Indicators
Unit: RMB
Note: During the year, business combination(s) under common control occurred, and the quarterly data wasretrospectively adjusted in accordance with the accounting standards for business enterprises.Whether there is significant difference between the above individual or aggregate financial indicators and that ofwhat disclosed in the quarterly report, half-year report
□ Yes √ No
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Inapplicable
Unit: RMB
| Item | 2024 | 2023 (Restated) | 2022 (Restated) |
| Profits or losses from disposal of non-current assets (including the write-off for the impairment provision of assets) | -14,862,769.68 | -10,507,192.80 | -18,617,582.10 |
| The government subsidies included in the current profits and losses (excluding the government subsidy that are closely related to the Company's normal business operations, in line with national policies and regulations, enjoyed in accordance with the determined standards, and have a continuous impact on the | 566,828,064.11 | 518,953,527.79 | 726,269,569.92 |
| 1st Quarter (Restated) | 2nd Quarter (Restated) | 3rd Quarter | 4th Quarter | |
| Revenue (RMB) | 17,817,550,424.43 | 23,391,545,781.93 | 23,782,371,582.09 | 27,504,057,329.85 |
| Net profit attributable to shareholders of the Company | 1,915,795,733.79 | 3,148,323,123.50 | 3,043,629,637.17 | 3,869,578,529.08 |
| Net profit attributable to shareholders of the Company excluding non-recurring gains and losses | 1,760,276,683.16 | 3,482,729,220.56 | 2,908,130,076.06 | 3,663,725,661.38 |
| Net cash flows from operating activities | -3,965,909,130.83 | 3,776,273,089.93 | 2,793,361,115.70 | 10,660,366,947.93 |
| Item | 2024 | 2023 (Restated) | 2022 (Restated) |
| Company's profit and loss) | |||
| Apart from the effective hedging activities related to the company's normal business operations, the fair value changes in financial assets and financial liabilities held by non-financial enterprises, as well as the gains or losses from the disposal of these financial assets and liabilities. | 41,760,525.08 | -67,516,075.30 | -99,112,871.09 |
| The current period net profit or loss of the subsidiary from the beginning of the period to the date of merger under common control | -295,677.15 | 218,576.25 | 162,994.14 |
| Gains and losses from debt restructuring | 101,109,433.26 | - | - |
| Share-based payment expenses recognized in one-time due to the cancellation or modification of the equity incentive plan | -471,167,293.91 | - | - |
| Investment gains and losses on disposal of subsidiaries and other business units | - | - | 3,550,851.71 |
| Gains and losses from a business combination achieved in stages not under common control | - | 116,433,610.45 | - |
| Other non-operating income and expenditures except the items mentioned above | 53,766,054.09 | 69,942,462.96 | 72,446,008.81 |
| Other profit or loss items that meet the definition of non-recurring profit or loss | - | 1,106,664.51 | - |
| Less: Impact of income tax | 20,093,234.14 | 64,745,616.43 | 74,392,826.66 |
| Impact of the minority interests (after tax) | 94,579,719.28 | 122,122,006.82 | 103,581,725.09 |
| Total | 162,465,382.38 | 441,763,950.61 | 506,724,419.64 |
Details of other gain/loss items that meet the definition of non-recurring gains and losses:
□ Applicable √ Inapplicable
The Company did not have other gain/ loss items that meet the definition of non-recurring gains and losses.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the <ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and Losses> as a recurrent gain/loss item
□ Applicable √ Inapplicable
The Company did not classify an item as a non-recurring gain/loss according to the <Explanatory AnnouncementNo. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains andLosses> into a recurrent gain/loss item.
Section III Management Discussion and AnalysisI. The Industry Situation and Main Business of the Company during the Reporting Period
1. Business Overview:
Artificial intelligence (AI) is undergoing revolutionary changes, as the advancement of large language models(LLMs) has provided a significant boost to the widespread use of AI and the rise of large multimodal models (LMMs)has accelerated the deep fusion of the physical and digital worlds. Amid this technological transformation, Hikvisionremains committed to expanding the boundaries of IoT perception based on its expertise in the sector of AI-poweredInternet of Things (AIoT), promote the application of LMMs, and establish an end-to-end loop of applications withbig data and software capabilities, in an effort to facilitate the digital transformation of society.IoT perception technology, which records everything digitally, serves as the "bridge" connecting thephysical world with the digital. With visible light at the core, Hikvision has built a multi-dimensional perceptionsystem that encompasses the electromagnetic spectrum from millimeter waves, infrared rays, lasers and X-rays toultraviolet rays, and integrates sound waves, vibrations, temperature/humidity, pressure, magnetism and othersensing technologies. This leads to a complete IoT data portal. The persistent development of multi-dimensionalperception capabilities has increased the breadth of data acquisition, and the continuous upgrade of perceptionproduct performance has improved the depth and accuracy of data, rendering everything perceptible and accessible.AI, which converts raw perception records into neatly structured data and interprets them, is the key tounderstanding scenarios and businesses. Abundant IoT perception materials provide a high-quality datafoundation for the training of large models, powering the iteration and improvement of Hikvision's AI algorithms.Hikvision's large models - Guanlan has developed capabilities related to large IoT perception models, large languagemodels and large multimodal models to serve the technological chain from perception to cognition. In the realm ofperception, Guanlan enables accurate analysis and comprehension of IoT data; in terms of cognitive capabilities,knowledge-enhanced large language models allow it to significantly improve the capabilities of semanticunderstanding, predictive inference and optimized decision-making in complex scenarios.Big data and software, which enable the organization and induction of IoT data, are the secret tounleashing the value of IoT data. Leveraging its profound expertise in cloud computing, big data and other
technical domains, Hikvision has built a capability architecture that "integrates cloud and edge, IoT and informationnetwork, digitalization and intelligence" to support efficient data processing and analysis. Hikvision's unifiedsoftware technology architecture supports a component-based approach to software development. The vast softwarecomponent library and high component reuse rate greatly reduce the development and maintenance costs for users,helping with agile development and rapid iteration of software applications in different industries.Hikvision has been leading the way in the AIoT sector for over two decades. It has gradually built a soundtechnical framework centered on IoT perception, AI, and big data. Based on this, it has developed more than 30,000different AIoT products. The Company serves two business segments: security and scenario-based digitization andfuels the digital transformation of the whole society via three business groups and eight innovative businesses, aswell as two marketing systems - domestic and overseas.
Under the leadership of the Enterprise Business Group (EBG), the scenario-based digitization business hastaken shape across the organization in recent years, unleashing new growth space for the Company. The rise in theproportion of overseas revenue results in a more balanced core business structure, indicating the ongoing expansionof Hikvision's worldwide brand power. Innovative business has maintained rapid development, which constantlydevelops new capabilities and injects fresh momentum into the Company, advancing Hikvision's steady pathwaytowards AIoT. Hikvision will continuously reinforce its advantages in multi-dimensional perception technology,
enhance the integration and innovation of large models and industry expertise, and unlock the value of IoT data withmore robust big data capabilities. In doing so, the Company hopes to contribute to precise and convenient socialgovernance, sound and efficient business operations, and a smart and healthy lifestyle, continuing to lead the newfuture of AIoT.
2. Product System
With video perception technology as the starting point, Hikvision continues to expand its IoT perceptioncapabilities in more dimensions. Over the past more than 20 years, it has built a multi-dimensional perception systemthat encompasses electromagnetic waves and mechanical waves, and integrates physical sensing technologies basedon temperature, humidity, pressure and magnetism. With an extensive perception capacity and multi-dimensionalperception integration capabilities, Hikvision has established an IoT perception technology platform that supportsgrowing innovative applications in the field of scenario-based digitization.Hikvision has seen its AI technology continuing to develop and its software and hardware products embracinggreater intelligence. In 2023, the Guanlan Large Model was released. Based on the Guanlan, Hikvision's AIalgorithm capabilities have expanded from visual algorithms to multimodal algorithms, catalyzing multi-dimensional upgrades of software and hardware applications.Guanlan pushes the limits of perception intelligence: Hikvision's large IoT perception models include largevision, optical fiber, audio, and X-ray models. Thanks to these large models, target identification tasks incomplicated contexts have seen a notable rise in sensitivity and accuracy. For instance, the large vision model hasreduced false alarms by 90% in perimeter prevention, the large millimeter wave model has achieved an 86%reduction in missed detection of prohibited goods via safety gates, the large optical fiber model for auscultation hasa relative reduction of 72% in false alarms, and the large X-ray model has reduced missed detection by 75% in therecognition of prohibited goods.Guanlan expands the boundaries of perception capabilities: Large multimodal models allow for thedetection and identification of everything through natural language definitions. Based on multimodal search, imagefeatures and text features are aligned to enable easy text search. The perception and inference capabilities of largemultimodal models can be used to disrupt the conventional development paradigm of visual perception plus artificiallogical inference, achieve end-to-end inference through text description, and facilitate the understanding of complexevents.
Guanlan increases cognitive intelligence applications: In the field of cognitive intelligence, the largelanguage model serves as the "brain," which combines industrial expertise to develop a specialized agent,empowering the digital upgrade of the industry. A new paradigm of human-machine interaction driven by naturallanguage is established to allow for accurate response to fuzzy needs. Semantic understanding and logical inferencecapabilities are strengthened for accurate knowledge extraction and dynamic matching. All of these advancementslead to vertical applications such as traffic congestion diagnosis, wind power prediction, and supply chainscheduling optimization.
Hikvision continues to improve and expand its IoT perception technology reserves and raise the intelligencelevel of its products. In response to scenario-based needs, Hikvision has worked hard to develop innovative technicalsolutions and efficient and practical products. This results in a comprehensive portfolio of AIoT software andhardware products that represent viable pathways to digital transformation across society.
2.1 New Digital Products
Starting with visible light perception, Hikvision continues to push the boundaries of perception technology. Itcombines its diverse array of perception technologies such as radar perception, infrared perception, X-ray perception,spectrum perception, laser perception, and sound wave perception with extensive product engineering capabilities,to consistently introduce innovative digital products that satisfy market demands. The Company's innovative digitalproducts make digital information that was previously impossible or difficult to perceive readily accessible - fromthe microstructure to the composition of a substance, from the height, quantity to the volume of a material, from therunning speed, vibration, temperature to the pressure, sound of a device, from the appearance flaws to the internaldefects of a product, from the monitoring data of public utilities to natural environment... These products help
address specific problems on the site in each real-world scenario and fuel the digital transformation of thousands ofindustries.
2.1.1 Visible light perception
Hikvision's vast expertise in visible light imaging serves as the foundation for its ongoing product innovation.Through hardware structure design and algorithm capability optimization, it develops digital solutions for scenariosbeyond security, represented by manufacturing, environmental monitoring, and equipment management.In the element collection stage, Hikvision integrates visible light imaging with data from sensors such asvisibility meters, GNSS (global navigation satellite systems), accelerometers, and gyroscopes to develop multi-dimensional perception capabilities; in the intelligent analysis stage, capabilities such as high sensitivity, highaccuracy, and convenient configuration are enabled leveraging breakthroughs in the application of large visionmodels; and in the stage of scenario application, through new materials and processes like self-cleaning technology,remote automatic adjustment technology, and vibration-absorbing materials, Hikvision has ensured the adaptabilityof products to special environments and created truly easy-to-operate and maintenance-free smart cameras.
Visibility meters: On expressways and highways, reduced visibility increases the risk of traffic accidents.Individual visibility sensors are susceptible to rain, snow, dust, water mist and other environmental factors, andwhen anomalous data is produced, maintenance costs might be considerable. In order to precisely detect changes inmist and eliminate false alarms, Hikvision uses visibility detecting sensors that meet national standards inconjunction with sensors for temperature, humidity, air pressure, and rainfall. Moreover, spider-web-free, auto
rotating and wiper features are included to enable self-cleaning and eliminate the need for maintenance,guaranteeing long-term, stable operation.
Cameras for robotic arm collision avoidance: As industrial robotic arms generate huge energy when running,unauthorized access to the operating area may cause safety accidents. In three-dimensional space, traditionalprotective measures like fences and gratings are ineffective in providing complete protection. Hikvision's camerafor robotic arm collision avoidance is powered by binocular stereo vision imaging technology and embedded witha large model algorithm for people categorization and identification. The camera can accurately identify individualswith the use of billions of data sets for preliminary training and algorithm optimization based on the safe operatingscenarios of robotic arms. When an individual enters and remains in a robotic arm's operating area, the camera willrespond quickly with a prompt alarm to avoid human-machine collision caused by improper operation of the roboticarm, guaranteeing scenario-specific safety with high accuracy and high reliability.
Anti-vibration and anti-shake cameras: Apart from steel manufacturing and overhead crane remote control,Hikvision has improved its range of anti-vibration and anti-shake cameras for application at ports and rail yardsthrough continued technological innovation. For container lifting, the Company has launched a series of anti-corrosion and anti-vibration cameras that use wrap-around vibration-reducing materials and patented self-lockingvibration-resistant lenses to withstand the strong impact from hoists. These cameras are placed on four corners of ahoist to accurately present the details of lockholes, assist in remote control and efficient stacking, and improve thethroughput efficiency of terminals. Regarding gantry cranes at ports, Hikvision provides an innovative self-stabilizing camera that is equipped with a hydraulic damping bracket structure. With a mobile perimeter algorithmbased on large models, the camera can monitor individual intrusion in an accurate and thorough manner and offer24/7 visual support for remote crane control, thereby ensuring port safety and operational efficiency.
High-precision measurement cameras for visual structures: Based on optical imaging principles and visualimaging technology, the Company has introduced a series of high-precision measurement cameras for visualstructures. The camera is designed to image the target and calculate the target's pixel change. Combined with a pre-calibrated matrix algorithm, it converts pixel displacement into physical space displacement to enable contactlessmeasurement. The solution outperforms traditional measurement approaches with visible outcomes, easyinstallation and easy maintenance. In particular, the vision‐based displacement measurement camera applies a sub-pixel vision‐based displacement detection algorithm to monitor the target pixel changes on the target object andcalculate the horizontal and vertical displacement change values of the measured target at the target position. As analternative to hydrostatic level measurement, it offers high-frequency detection of 50 times per second andmeasurement with 0.1mm precision. The image-based crack meter, with a built-in image-based intelligent crackdetection and measurement algorithm, performs image preprocessing on the identified concrete cracks, andprecisely measures crack width through edge finding, outlining, positioning, segmentation, point-by-pointmeasurement and other processes. Then crack encoding and a dynamic error calibration algorithm are used to trackcrack changes in sub-millimeters point-by-point. This series of high-precision measurement cameras for visualstructures have wide uses such as bridge structural health monitoring, building settlement, and creeps of rail,providing intelligent solutions for the digital construction of infrastructure such as transportation facilities andstructures.
PDAs for scanning: Hikvision has launched a number of professional PDAs based on in-house specializedscanners and a deep learning-based barcode recognition algorithm. These include: a long-distance scanner thatmakes long-distance scanning easier under conditions like high shelves; a color barcode scanner that scans codesand stores color images simultaneously in post stations, improving the efficiency of finding express packages; avolumetric measurer that makes cargo volume measurement more efficient during delivery package collection; PDAmade of novel materials, which may withstand corrosion and be used for extended periods of time in corrosiveenvironments. There are also PDAs that serve many other purposes such as OCR (optical character recognition),DPM (direct part mark), cold chain transport, pressure ulcer treatment, delivering data collection and intelligentrecognition solutions to logistics and express, retail e-commerce, healthcare, manufacturing, public services and
other industries.
Ultra-depth-of-field 3D digital microscopes: The solution, which features AI-based image augmentation andhigh-resolution imaging, allows blur-to-clear conversion with a single click. Without requiring a manual lens change,it has all-electric magnification switches that can be adjusted from 30 to 6000 times using the mouse and handle.The microscope's innovative ultra-depth-of-field synthesis and multi-mode 3D stitching technology enable it toprecisely restore the three-dimensional morphology of samples. This makes it a perfect tool for detectingmicroscopic defects in industries like semiconductors, lithium batteries, and automobiles, as well as an intelligentupgrading method for scientific research, industrial quality inspection, and other fields.
Industrial barcode scanners: Barcodes are becoming increasingly important and widely used in productproduction, circulation and quality control. HikRobot, which specializes in industrial production process traceabilityand logistics sorting, has developed a full range of industrial barcode scanners, including fixtures, handheld gunsand barcode scanning modules. This series is equipped with a high-performance hardware platform, and adopts adeep learning-based decoding solution and multicolor light imaging optimization technology. This leads to a highand stable recognition rate as well as exceptional decoding performance and efficiency in response to less readablebarcodes caused by broken needles, ink overflow and other issues. These products are compact, highly protective,
and adaptable to a variety of challenging conditions. Most of them fulfill primary industrial protocols andcommunication requirements.
AI-based industrial cameras: Smart industrial camera is a kind of machine vision product that combinesimage acquisition, light source, image processing, and communication equipment. It is extensively used in manyindustrial scenarios. HikRobot has developed a full lineup of smart cameras with built-in, exclusive, high-performance machine vision processing algorithms. Upon easy setup, the camera can perform visual inspectionwithout the need for programming thanks to its modular design and user-friendly interface. It is highly integrated,compact, and easy to maintain, making it ideal for installation in confined locations. In addition to detection forpresence, front/back, position, size, and defects, the product is also embedded with AI registration and learning, AIcharacter recognition/code reading and other edge learning and deep learning detection algorithms, offering superiorfunctions and high cost performance in quality inspection for conventional equipment production and otherapplications.
2.1.2 Millimeter wave perception
Millimeter wave radars, which accurately measure a target's distance, speed, angle and other attributes, havebecome an indispensable technical means in many fields. Hikvision is dedicated to multiple technical routes suchas millimeter wave radars and radar-video fusion. Driven by dual wheels - technological innovation and scenario-based demands, the Company has introduced radar products beyond the realm of security. These offerings are widelyand creatively applied in transportation, industrial manufacturing and other domains, bolstering the intelligentupgrade of all sectors.
Millimeter-wave radars are widely used in the industrial field. In 2024, Hikvision applied its 1D–4D productmatrix in over 100 scenarios across industries like cement, building materials, chemicals, steel, metallurgy,electricity, mining, food, breeding, pharmaceuticals, ports and other industries. These include high-temperatureclinker warehouses, highly corrosive sulfuric acid tanks, highly dusty lime silos, explosion-proof coal silos, low-dielectric-constant PTA storage tanks, strong-clutter alumina silos, and low-temperature strong-water-vapor slaggrab cranes, among other harsh settings. Hikvision's solution improves productivity and lowers operating costs byaddressing issues such as low accuracy of material measurement, unstable detection, inefficient spatial scanning,and high failure rate, creating substantial value for a variety of sectors.
Positioning radars: Precise positioning devices are necessary for the unattended operation of heavy equipment,including overhead cranes, hoists, and port machinery, in industries such as coal mining, steel metallurgy, and ports.Large machinery become intelligent thanks to Hikvision's radars, which can pinpoint their location with centimeter-level precision. This enables accurate route planning and efficient operations. The positioning radar, based on theprinciple of secondary radar and a distributed control form, facilitates incoherent, full-duplex "communication +perception." With direct wave, measurements may be made more precisely and steadily over a greater distance. So
far, the solution has been used in real-world scenarios such as slag grab cranes and material shed stacker-reclaimers.Fast imaging radars: Dynamic real-time material level monitoring is essential for industrial silos with high-speed, mass material flow. Overstock or understock may result from delayed feedback of material height or volume,which directly compromises safety and reduces the industrial chain's collaborative efficiency. To address this,Hikvision has iterated minute-level imaging radars and pioneered in applying optical communication technology tomillimeter-wave scanning imaging, eliminating the need for physical slip ring structures in two-dimensionalscanning. Coupled with the calibration process that unifies two-dimensional and three-dimensional coordinates, thescanning time is greatly reduced from minutes to within 10 seconds. Thus, the usage of imaging radars has expandedfrom basic back-end monitoring services to front-end industrial control, enabling users to manage material pilewarehouses, equipment, and statistical reports in a more accurate and intuitive manner. These radars are now usedin a variety of sectors, including cement, building materials, food, breeding, metallurgy, electricity, and ports.Radar level meters: An 80GHz high-frequency radar that has a 120m range, a 3° beam angle, and ±2mmprecision can be used for continuous, non-contact and accurate level measurement of solid materials and liquids inindustrial silos, piles, tanks, pools, and more. An AI-based false echo suppression algorithm integrated into thedevice automatically scans and marks sources of interference such as stirring parts and beams in a tank, intelligentlysuppresses and shields them, and outputs the exact level value on site. The Company operates a laboratory dedicatedto testing radar level meters in a range of hard working situations, guaranteeing that its products maintain accuratemeasurement under challenging settings including high temperature, high pressure, corrosion, dust, foam, andadhesion. Hikvision's radar level meters have been widely used in chemical, power generation, steel, cement, foodand other industries.Radar-video integrated devices for intelligent transportation: Hikvision's radar-video integrated device forintelligent transportation extracts and fuses radar and video features prior to target detection. In other words, itdirectly extracts multi-frame video images and real-time radar point cloud features for feature-level pre-fusion, andthen obtains the target's speed, distance, direction, unique identification code and other information. The "feature-level pre-fusion" eliminates the constraints of individual sensors, allowing for the simultaneous collection, labeling,and fusion of multi-dimensional data. This is accompanied by a higher matching rate of radar-video fusion and amore continuous target detection trajectory, endowing the product with ultra-long-distance, high-precision vehicleand traffic trajectory detection capabilities. Compared with vision or radar sensors, Hikvision's radar-video assistedproducts exhibit consistent performance in both daytime and night, as well as in rainy and foggy environments, and
have been extensively used.Radar-video assisted FOD (foreign object debris) detectors: High-resolution radar detection combined withvideo review leads to a higher accuracy of foreign object detection. The device can detect foreign objects on airportrunways such as mechanical parts, stones, plastics, birds, and metal devices, with centimeter-level precision(20mm*20mm). The combination of radar detection and video review allows for 24/7 detection of foreign objectdebris on runways - even in bad weather such as rain, snow and fog, with an accuracy of more than 95%.
2.1.3 Infrared perception
Infrared perception technology, which is based on the infrared radiation characteristics of objects, enablesprecise monitoring and intelligent analysis through non-contact temperature imaging. Combining infrared thermalimaging technology with MEMS technology, the Company has been engaged in the iteration and upgrading oftechnology and products to meet the demands of industrial production, industrial firefighting, scientific researchand other fields. The aim is to help improve productivity and safety, and provide standardized temperature sensorsfor industrial quality control and multidisciplinary basic research.PTZ cameras for high-precision positioning: PTZ cameras for high-precision positioning, powered by dualclosed-loop optical image stabilization technology (collaborative control by motor + encoder), plus space perceptionand attitude perception modules, can locate a fire point within a distance of 3km, with an accuracy of ≤50m (basedon test data in Tai'an project). This provides a solid foundation for precise positioning and rescue decisions in theearly stages of the fire. The full-scenario, self-cleaning system features innovative semiconductor-basedcondensation water spraying technology that enables air-to-water and remote control of wiper cleaning. Thiseffectively mitigates imaging blur caused by lens contaminants, ensuring consistent image clarity in diverseenvironmental conditions. The product is equipped with a one-button calibration system to reduce the manualcalibration of fire points, greatly shorten the equipment debugging cycle, and lower installation and debugging costs.In outdoor fire prevention scenarios such as forest fire prevention, it provides sound technical support for holisticrisk management.
Linglong shortwave thermometers: In high-temperature processes such as steel rolling and single-crystalsilicon growth furnaces, traditional temperature measuring equipment has shortcomings such as bulky size andnarrow field of view, resulting in inflexible deployment and large blind spots. The Linglong shortwave thermometerseries developed by HikMicro has a weight reduction of more than 30% and a larger field of view. With two-colorinfrared technology, it measures temperature over a wide range of 300~3200℃. Also, the AI-ISP is applied toaddress overexposure and color cast in high/low temperature settings and restore the true color and details of moltenpools and crystal growth furnace thermal fields, thus assisting with accurate judgment during manufacturingprocesses.
Anti-fouling and high-temperature-resistant thermal detector-imagers: In view of mold release agentspray failure caused by oil mist pollution and uneven temperature field on the mold surface in the die-casting process,the anti-fouling and high-temperature-resistant thermal detector-imagers use non-contact, real-time temperaturefield imaging to rapidly locate cold and hot defects on molds, ensuring precise temperature control and improved
productivity. The mechanical protection cover (which opens only at the time of temperature measuring) and high-pressure airtight anti-fouling technology are intended to prevent oil mist intrusion; coupled with the detachablegermanium sheet protection layer and air cooling system, the device is suitable for long-term operation in a high-temperature environment of 150°C with a long service life. It is expected to increase the yield rate and standardizeprocesses in scenarios like die-casting the structural components of new energy vehicles (NEVs).
Microscopic thermal detector-imagers: HikMicro's microscopic thermal detector-imagers are designed tomonitor the temperature field of micron-level targets (such as solder joints of electronic components and meltingpoints of optical fibers). With one-button switch between regular/macro modes, the device supports a minimumdetection distance of 35μm (about 1/3 the diameter of a hair), and can quickly change the observation scale withoutremoving the lens; ±1°C or ±1% high-precision temperature measurement (with a range of -20~150°C) and 8-hourcontinuous, adaptive, block-free environmental data acquisition reduce the possibility of missing data frames.Integrated with real-time/offline analysis and one-click generation of standardized reports, the device can serve asa standardized temperature perception tool for multidisciplinary basic research and industrial quality control infields such as electronic information, materials, biomedicine, chemistry, and electricity.
Flame detectors for industrial fire protection: Industrial fire protection has higher requirements for detectionaccuracy, response time, protection, stability and other metrics. With ongoing efforts to develop more flamedetection methods and improve detection accuracy, HikFire has launched flame detectors for the purpose ofindustrial fire prevention. Using multi-dimensional perception + video, the solution can accurately detect thetemperature, smoke, flame and other features of different objects when they burn, and eliminate false alarms causedby typical industrial production conditions such as high temperature. In particular, infrared imaging-based firedetectors enable intelligent fire identification with higher accuracy (0.1m
fire panel, within a distance of up to
150m), and the false alarm rate is reduced by more than 30%. Three-band infrared flame detectors can accuratelydetect the combustion of organic matter against environmental interference such as sunlight. Therefore, they maybe further applied to semi-outdoor and outdoor settings such as industrial storage tank areas and rail platforms.Infrared-ultraviolet fusion flame detectors, which can perceive the 4-micron band of the combustion of specialmaterials such as metals, are suitable for sheet metal processing, electric welding, hot work and other uses.
Industrial shortwave infrared cameras: HikRobot's industrial shortwave infrared camera is a high-performance industrial infrared camera equipped with an InGaAs sensor. Thanks to its wide coverage from 400nm-1700nm visible light to shortwave bands, one camera can meet the need for both visible light and shortwave infrareddetection, coupled with lower system costs, higher processing speed, and a broader detection range. The camera isequipped with multiple image pre-processing functions and also a TEC (thermo electric cooler) to maintain itstemperature below room temperature 25℃, thus reducing the noise of prolonged operation and long exposure andensuring image quality. Moreover, with a number of trigger modes and incident outputs supported, the solutionflexibly adapts to different industrial settings spanning new energy, semiconductors, laser spots, agriculture, foodand medicine, material sorting, printing and other industries.
2.1.4 X-ray perception
An X-ray is a form of high-energy electromagnetic radiation with an extremely short wavelength and it ishighly penetrating. Given the different absorption of X-rays by materials, the radiation can clearly distinguishminute size variations and subtle structural changes for the purpose of high-precision detection. Leveraging itsextensive expertise in radioscopic testing in industrial production, the Company has developed high-precisionradioscopic detection capabilities ranging from macro (millimeter level) to micro (micron level), from 2D imagingto 3D imaging, and launched products around its two key businesses - component counting and defect detection, inan effort to help customers improve detection quality, enhance detection efficiency, and strengthen management.
X-ray component counters: In an efficiently operating SMT (surface mount technology) workshop, accuratecomponent counting is essential to the efficiency and accuracy of electronics assembly. Due to the wide variety andlarge quantity of components, traditional manual counting is not only time-consuming and labor-intensive, but alsoprone to errors and omissions. HikRayin's X-ray intelligent counter can finish counting four trays of components in8 seconds, with an accuracy of up to 99.99%. The counting outcomes may be connected to MES to enable multi-dimensional control over factory production data, contributing to the intelligent transformation of warehousing.
X-ray defect detectors: Taking the quality inspection of integrated circuits in NEVs as an example,conventional 2D detection cannot identify defects in the circuit board welding process (such as Head-in-Pillow in
BGA and immersion tin in PTH) due to imaging interference; and due to the high output, large batches, and stringentinspection requirements, traditional sampling often takes a long time. HikRayin's online 3D CT inspection deviceemploys three-dimensional imaging technology to perform 360-degree radioscopic imaging and cross-sectionalanalysis both globally and locally. This allows for the intuitive discovery of defects and their locations. Whencombined with a fast detection algorithm, the solution is able to detect defects in an efficient and automatic manner.
When it comes to the production of vehicle sensors, it is important to detect defects in internal sensingcomponents, but due to plastic housings, it is impossible to identify them with the naked eye. However, thecombination of X-ray high-definition radioscopic imaging and AI algorithms can show whether the needles insideare skewed or incompliant in length. By automatically detecting faults in batches and removing faulty items, thesolution greatly improves detection efficiency and overcomes the challenge of complicated and inefficient humandetection. Based on a customized barcode scanning function, the barcode of each component is linked to its X-rayimage to allow for the tracking and tracing of defective products, as an effective approach to ensuring high-qualityproduction.X-ray foreign matter detectors: Food safety has always been a topic of great social concern. For example, itis difficult to identify tiny bone fragments during the quality control of chicken breast. HikRayin's X-ray dual-energy intelligent foreign matter detection system employs X-ray detection, the new Raytina image enhancementengine, artificial intelligence technology and a dual-energy detection algorithm to detect the density and substanceof a product and accurately identify bone fragments. Paired with an automated removal system, the efficientdetection solution serves as a booster for productivity and quality assurance in factories.
2.1.5 Spectral fusion perception
Harnessing its full-spectrum sensing technology, Hikvision has established a material composition analysisand detection system that identifies the type of a material, detects its safety, and identifies environmental pollutionthrough a qualitative and quantitative analysis of the composition, structure, and properties of the material. Byadvancing the visible light and multi-spectral fusion technology, the Company drives the digital upgrade ofenvironmental monitoring and production quality control through full-domain sensing capabilities, and helpscustomers improve production processes and productivity. In 2024, Hikvision continued to expand its spectralproduct portfolio by launching a new color detection range and miniaturized TDLAS (tunable diode laser absorptionspectroscopy) products designed specifically for industrial enterprises, contributing to improved productionprocesses and higher production safety.Color detection: In the manufacturing process, color detection, as a key stage for product quality control,quantifies color differences to check if products meet standards. Hikvision has launched two series of color detectionproducts. The automatic liquid absorbance analyzer acquires the absorption spectrum of a liquid through spectralanalysis and detects the concentration, dyeing rate and other related information during production to resolve theproblem of invisible and undetectable black box processes such as textile vat dyeing and ink feeding and help controlthe quality of the production process. The area-array multi-spectral color and color difference detection system,based on the spectral calculation and analysis technology, performs accurate color and color difference detectionthat is not influenced by the observation angle, light source type, or metamerism. The acquisition speed of 30fpsensures high image acquisition capabilities. The system is equipped with an edge processing and computingplatform and supports both online and offline processing. It is used for color quality control of devices beforedelivery, color consistency control of dyes and coatings, as well as food appearance quality inspection, classification
and quality control of textiles before delivery. Through the simultaneous detection of multiple samples, it greatlyimproves the efficiency of quality inspection.
Gas monitoring: Hikvision provides a multi-faceted and multi-scenario gas monitoring product matrix - fromeconomical products that analyze a single gas to premium products that apply to hundreds of gases - to address thechallenge of gas leak detection and positioning in industries such as petroleum, chemical, and natural gas. In 2024,the Company introduced a new non-explosion-proof TDLAS product for methane monitoring by industrial andcommercial enterprises like tobacco and textile manufacturers. Featuring a 4kg lightweight and easy-to-deploymodel, it can detect methane leaks within 50m, monitor leaks in real time online, and transmit information back tothe gas leak monitoring platform to guarantee production safety. A four-in-one portable gas monitor has beenintroduced to ensure personal safety in industrial production and gas detection. The device, which is directly wornon the chest of staff, will promptly notify administrators to take the appropriate protective measures when theconcentration of the released gas on site reaches the preset value. It is suitable for emergencies such as fire rescue,process monitoring such as industrial experiment, and industrial environmental safety monitoring for productionworkers.
Environmental surveillance: Hikvision is committed to environmental preservation. The hyperspectral waterquality monitor is equipped with a full-spectrum fill light to enable all-weather contactless water quality monitoring,which requires no reagents and generates a response in seconds, for monitoring related to hydrology and waterconservancy, including hydrological stations, rivers, and lakes. The system can be connected to a platform forintelligent analysis of water quality changes, and also to dome cameras for real-time monitoring of the surroundingenvironment to help the water environment stay clean for a longer time. For vegetation monitoring, the multispectral
vegetation monitor provides an "intelligent physical examination" for vegetation around the clock, with a 32x opticalmagnification. It clearly monitors everything from a vast farmland to a single plant. The solution protects vegetationhealth through tree and farmland monitoring, ensures marine safety through floating objects and algae identification,and helps promote the digital upgrade of agriculture and forestry by providing intuitive access to vegetation growthtrends via all-weather real-time high-frequency monitoring.Ultra-high performance liquid chromatography: With it, the composition and content of a wide range ofindustrial products and food can be determined through a single test. The organic components in a sample are firstseparated according to the chromatographic separation theory prior to testing. Then the organic matters containedin the sample as well as the content of each component are detected with higher efficiency. Most trace compoundsthat contain a substance less than 1 ppm can be detected quickly and accurately. For example, if 1mL of beverageis diluted in 1,000mL of water, the composition and content of the beverage can be quickly known with the help ofultra-high performance liquid chromatography. By reducing the sample separation time, the high-performance andefficient material separation and analysis technology enables the faster detection of composition and content.Spectral fusion-based rapid coal quality analyzers: The Company has pioneered in introducing spectralfusion technology to coal quality analysis. Given that near-infrared spectroscopy (NIRS) has a good response tomolecules in coal, and X-ray fluorescence (XRF) has a good response to atoms in coal, the solution has combinedthe two sensing approaches and also included artificial intelligence algorithms. It can detect the calorific value, totalsulfur, ash content, total water and other indicators of a 6mm coal sample online and obtain the test results ofsampled coal in just 2 minutes. Now the solution has been used in a wide range of scenarios such as coal washplants, ports, and power plants by companies such as Hebei Company, Zhejiang Company, Port Company, ShendongCoal, and Shengli Energy of the CHN Energy Group.
2.1.6 Laser perception
Hikvision boasts a wide range of laser perception products, encompassing laser sensors, fiber optic sensors,and LiDARs.
The Company has focused on laser profile sensors and extended to point laser displacement sensors, 2K/3K/4Kseries laser profile sensors, and galvo laser stereo cameras. This leads to a complete range of full-stack 3D high-precision detection and vision guidance solutions featuring dynamic + static and point + line + surface. Moreover,ToF single-point ranging sensors and area-array ToF (time of fly) stereo cameras based on VCSEL (vertical-cavitysurface-emitting laser) and the time-of-flight principle have been launched. With uses in the fields of industrialsensing and stereo perception, these products have further expanded the application scope of laser perception.
Laser displacement sensors: Using high-precision and high-frame-rate laser scanning technology, the sensorcan simultaneously measure the displacement, height or height difference of multiple points of a target object, obtainaccurate data on multiple measurement points in real time, and quickly acquire the geometric features of the targetobject, such as step height, gap width, relative position, and so on, while suppressing secondary reflectioninterference. This optimal solution for precision measurement is widely used in product contour detection, qualitycontrol and automated assembly, such as the measurement of auto connector pins and chip capacitance/ resistanceand thickness of printed circuit boards.
Laser profile sensors: For high-precision measurement, the sensor has a built-in high-precision 3D algorithmin the hardware to produce point cloud data, depth map and brightness map data with a high frame rate and micron-level precision in real time, collect the three-dimensional profile information of a target object, and enable three-dimensional measurement and detection such as flatness, warping, segment gap and surface profile. The 2K, 3Kand 4K series have been launched to suit different application scenarios. Combining the sensors with the VisionMaster 3D algorithm platform, Hikvision has developed solutions for a number of complex applications. Thesesolutions are extensively used in online, non-contact, and high-precision 3D measurement scenarios in the PCB, 3C,lithium-ion battery, and other sectors.
Galvo laser stereo cameras: Using galvo laser technology, the camera integrates high-performance opticalsystems, high-performance processing chips, and high-strength materials to enable high-precision and high-stability3D imaging under a variety of working conditions with interference such as light absorption, high reflection, andambient light. This range includes several models for short-, medium- and near-distance detection, suitable fortypical applications like parts, workpieces, material frames, and pallets. Combined with the robot 3D visionguidance platform, it is widely used in vehicles, auto parts, heavy industry, home appliances, photovoltaics andother sectors to drive industrial upgrading.
ToF single-point ranging sensors: The sensor, which is based on the time-of-flight principle, can detect avariety of materials and scenes across long distances with the use of lasers and point light spots. Its core advantagesinclude fast response and high-precision measurement, which ensures stable operation in complex environments.With strong resistance to ambient light interference, the solution is widely used in sectors such as robotics, logistics,and production safety, significantly enhancing production efficiency and safety.
Area-array ToF stereo cameras: The camera features high resolution, high precision and fast response. It is
designed to obtain the complete three-dimensional geometric information of a target object in real time. It may alsobe applied outdoor within a certain distance. In the field of industrial automation, the camera can be used forenvironmental perception, navigation and obstacle avoidance, material counting, three-dimensional objectrecognition and others; in the logistics industry, it can be used for parcel volume measurement, volumetricmeasurement, guided parcel induction and other applications. In addition, it is suitable for intelligent applicationssuch as three-dimensional reconstruction and gesture recognition.With distributed positioning optical fiber products as the starting point, Hikvision continues to enhance itsdevelopment capabilities surrounding core laser devices and optics-related embedded software, and graduallyexpands the family of distributed positioning optical fibers for vibration sensing, temperature measurement, andauscultation. In addition, the Company has launched a point-type fiber Bragg grating demodulator for real-time andaccurate monitoring of physical attributes such as load and temperature.Fiber Bragg grating demodulators: The product performs point-type high-precision monitoring based on thefiber Bragg grating principle. It monitors minor changes in various physical quantities in real time by connecting todifferent sensors. For example, it can monitor the load of wind turbine blades when combined with strain sensors,and the temperature of high-voltage switch cabinets when combined with temperature sensors. With exceptionalresistance to interference, intrinsic safety, and passive front end, it protects equipment safety through 24/7 stablemonitoring in complicated electromagnetic environments.
Distributed positioning optical fibers for vibration sensing: Hikvision has introduced a new cost-efficientproduct for perimeter intrusion prevention in restricted areas. Along with video technology and a false alarmreduction algorithm, it offers a multi-dimensional perception and perimeter monitoring solution, promoting the useof vibration detecting optical fibers for perimeter security. A multi-channel positioning optical fiber for vibrationsensing has been introduced to provide continued monitoring and guard against external damage to operators'communication networks and oil and gas pipelines, with lower single-channel monitoring costs. The optical fibermay also be coupled with a specific algorithm for avoiding external damage to intelligently identify the type ofdamage. The product has now been put into use in the optical cable external damage prevention project of Fuzhousubsidiary of China Telecom to protect on-site safety through precise vibration perception.Distributed positioning optical fibers for temperature measurement: Hikvision has been continuouslyexpanding the range in order to adapt to more settings. A 10km fire certification model is offered for scenarios thatrequire fire certification, such as fire protection, petrochemical, metro tracks, tunnels and pipe galleries. An intrinsic-safety mining model is available for usage in coal mines and other environments; besides a professional miningcertification, it can directly interact with a visualized host underground, efficient and safe. For applications such aspower distribution cabinets and energy storage cabinets that do not require a long distance, there is a 2.5km short-distance economic model featuring a modular design; lighter and smaller, it can be directly pre-installed inequipment and function as an intelligent monitoring system for the equipment.Distributed positioning optical fibers for auscultation: For belt roller monitoring in industries such as coal,steel, ports, cement, and thermal power, each single-channel optical fiber auscultation device can inspect a 1.2kmlong belt. The device is integrated with the HIK-DAS patented acoustic detection algorithm and an AI recognitionalgorithm to precisely pinpoint any abnormal roller position and automatically identify the fault among commonroller faults. This improves the efficiency of belt operation and maintenance (O&M) through real-time remotemonitoring. The product has been used in many large projects. For example, Nanjing Steel Group Co., Ltd. hasapplied distributed positioning optical fibers for auscultation to perform all-weather inspections on over 3,000 beltrollers, in order to ensure the efficient operation of the transportation system at the steel mill.LiDAR performs non-contact measurement and environmental perception by emitting laser beams andreceiving reflected signals. Thanks to laser's short wavelength, narrow emission angle, and minimal multipath effect,LiDAR features high measurement accuracy, high resolution, and outstanding shape recognition, and has beenwidely used in various industries. In the industrial sector, Hikvision has launched a series of products such as single-
line, 4-line, 16-line, 32-line, and 96-line LiDARs, which are applied to perimeter intrusion prevention in designatedoperating areas, obstacle avoidance of large operating machinery, obstacle avoidance and navigation ofAGVs/forklifts, three-dimensional volume measurement, container grabbing by port machinery, and unmannedloading by robotic arms, to contribute to industrial automation and intelligent upgrades. In the field of transportation,the high-precision and high-resolution three-dimensional point cloud data produced by LiDAR serves as a powerfulperception tool for intelligent traffic management.Scanning & imaging LiDARs: With a 98% accuracy rate in volume measurement, the LiDAR can createhigh-precision models with 70,000 valid sample points per second. Thanks to its advantages such as high-precisionmeasurement, three-dimensional imaging and multi-functional integration, it supports static target detection withina spatial range, i.e., measures accurately and in real time the shape, volume, and level of bulk solids, powders, andother materials. It is mostly used in warehouses with high inventory accuracy. It can also be applied to robotic armcontrol settings for the key control point scanning and global coordinate detection of gripped objects or vehicletargets. Hikvision is also the first to apply large model technology to three-dimensional volume imaging in order toidentify and remove vehicles, operating machinery and other targets in the scene and to mitigate interference withvolume measurement accuracy. Additionally, the solution has a window design to lessen the effect of ambient duston the measurement outcomes.
Long-distance single-line LiDARs: Automatic gain control technology is used to eliminate the accuracy errorcaused by scanning high-reflective materials. This significantly improves the performance of LiDAR in scenariossuch as steel coil positioning and automatic picking, container shape recognition and alignment. The innovativecircuit design has led to an industry-leading speed resolution ratio and a ±2cm ranging accuracy, ensuring better
performance in the shape and contour recognition of large objects like ship loaders and unloaders as well as materialparticle size recognition. The product's capacity to adapt to challenging situations like dust and water mist hassignificantly increased thanks to system-level optimization in hardware circuits, software, and algorithms.LiDAR-video integrated devices: Primarily used for measuring vehicle length, width, and height andidentifying vehicle model and license plate, the product adopts an intensive design to resolve vehicle model datamatching errors caused by separate wiring and networking as well as timing errors in the "laser + video" splitsolution. In addition, GMOS sensor + intelligent vision algorithm is used to prevent false alarms and improve theaccuracy of vehicle model and license plate recognition.
2.1.7 Acoustic wave perception
Harnessing its acoustical device R&D capabilities and professional algorithm team, Hikvision has developedsuperior acoustic wave perception technology and products that are widely used in the industrial field. In 2024, theCompany released a new ultrasonic product range as well as an online soundprint monitoring system for substationequipment. These more accurate solutions for process quality inspection and equipment and facility O&Mmanagement demonstrate the Company's commitment to special-purpose scenarios.Non-destructive phased array ultrasonic testing: Phased array ultrasonic testing can be used to check forinternal welds, holes, bubbles and other defects in the early stages of production and manufacturing of parts such aspipes, bars, plates, fan blades, NEV water cooling plates and motor cylinders. The solution has flexible control overthe beam through electronic deflection and focusing. Hikvision has introduced a full range of ultrasonic testingproducts, including standalone three-axis automated detection systems, portable ultrasonic, linear automated
scanning devices, as well as phased array ultrasonic boards with integratable, built-in AI analysis capabilities andprobes of different forms and purposes, which are suitable for a variety of scenarios. Additionally employed is anAI-based defect identification mechanism that incorporates a number of defect models. As a result, the solutionallows for intelligent scanning and synchronous output of detection results, together with the recording of defecttypes. Also, it supports image-based review as well as periodic defect analysis and optimization. While loweringthe operating threshold, the solution improves both monitoring efficiency and production quality.
Online soundprint monitoring products: The online acoustic imager combines ultrasonic arrays and opticallenses with a sound localization algorithm to monitor faults and visualize sound, as a way of supporting the detectionof partial discharge and gas leaks in crucial equipment in substations, power plants, factory pipe galleries, and valvechambers. Hikvision has introduced a new State Grid-certified online soundprint monitoring kit to help the customermonitor partial discharges of substation equipment. Each host is paired with three measurement-purposemicrophones for efficient, real-time monitoring. An AI-based diagnostic algorithm is applied to determine the faulttype, and data access and traceability are made possible on a dedicated platform to guarantee substation safety.Sound, vibration and temperature monitoring products: Hikvision's sound, vibration and temperaturemonitoring range integrates the three-modal data of sound waves, vibration and temperature to perform long-term,multi-dimensional data monitoring of dynamic equipment such as pumps, motors, and wind turbines. AI algorithmsare also used for equipment health assessment and fault diagnosis. The O&M platform employs three-dimensional
modeling technology to build equipment models for remote immersive O&M management.
Ultrasonic flow meters: HikMicro's ultrasonic flow meter has creatively integrated the Doppler and timedifference methods into one, in contrast to conventional devices that are based on a single measurement principle.Through adaptive switches depending on the cleanliness of fluids, it eliminates the impact of foam and solid particlesin the fluid on the flow measurement accuracy in industrial settings. According to the diameter, wall thickness andmaterial of different pipelines on the site, the ultrasonic flow meter can perform automatic scanning and select theoptimal detection frequency of the pipeline without manual correction. This makes it appropriate for a range ofoperating conditions. Compared with pipe segment flow meters, the clamp design allows for non-contactmeasurement and eliminates the need for downtime during pipe cutting and installation. This effectively cutsinstallation and maintenance costs in scenarios with large pipeline diameters and high sealing requirements. Nowthe solution has been used for flow measurement in a variety of applications, including water treatment, energymetering, and production control in the power generation, water, steel, and chemical sectors.
2.1.8 Other physical sensing solutions
Using its multi-dimensional physical sensing technologies, including electromagnetic, thermal, andpiezoresistance, the Company has developed a measuring technology system encompassing electromagnetic, mass,pressure, and so on in the area of industrial process perception. It continues to push the limits of high-precisionperception against complex media and strong interference through hardware innovation and algorithm-basedoptimization, meeting the demands of high-precision measurement in sectors like pharmaceuticals, food andbeverage, and petrochemicals.
Electromagnetic flow meters: HikMicro's electromagnetic flow meter has further improved its ability toperceive and process tiny signals (small flow, low conductivity) through hardware optimization and algorithm co-design. Multi-frequency excitation technology, combined with different frequency bands, enables noise immunity,zero stability and faster response, guaranteeing stability in high-concentration slurry measurement scenarios suchas coal slurry and papermaking. A cutting-edge tiny signal extraction algorithm is used to convert tiny flow signalsinto accurate and reliable flow values, making small flow measurement more accurate. With a minimumconductivity of 1μS/cm, the solution is suitable for measurement in sectors of pharmaceuticals, food and beverages,
pure water, deionized water, and more.
Mass flow meters: HikMicro's mass flow meter, based on the proprietary full digital solution technology,offers 8,000 times/second sampling and operation together with a significantly reduced reaction time, guaranteeingconsistent results even for tiny batch samples and short filling periods. With a 0.1% accuracy, the flow meter iswidely used for measuring the mass flow, volume flow and concentration of liquid and gas in trade settlement,proportioning and metering, precision control and other scenarios across the petrochemical, food and beverages,pharmaceutical and other industries.Pressure transmitters: HikMicro's pressure transmitter is based on high-precision silicon technology with anaccuracy of up to ±0.05%. The ultra-thin film, special structure design, high-precision stress control process coupledwith a real-time compensation algorithm, lead to a minimum micro differential pressure measurement of ±50pa.The dual overload protection diaphragm design makes the transmitter safer. The overload resistance up to 1,166times the range and 100:1 range ratio provide wider adaptability, making it suitable for measuring various gaspipelines, liquid pipelines, gas buffer tanks, liquid storage tanks and more.
2.2 Hardware Product Family: Comprehensive Edge Node Perception + Edge Domain Scenario Intelligence+ Central Intelligent Storage and Computing
In addition to launching new digital products, Hikvision has continuously promoted technological innovationand breakthroughs in different segments such as edge nodes, edge domains, and cloud centers, and expanded itsproduct family to better meet the needs of customers in various industries.
2.2.1 Edge node products: comprehensive perception and growing product mix
In terms of perception products, Hikvision has constructed a diverse and competitive product matrix that
provides solid support for numerous industry applications by consolidating its technological advantages andimproving its IoT perception capabilities.
1) Front-end cameras
Hikvision's front-end cameras are centered on the AIoT business. Driven by technological innovation andscenario-specific requirements, the Company focuses on innovation in three domains: large vision model, multi-camera full FOV, and adaptive, intelligent O&M.
Large vision model: While improving the incident detection sensitivity and accuracy, large models can alsogreatly reduce the difficulty of adaptation and deployment, expand the application scope of products, and meet thespecific needs of various industry scenarios; also, the scenario-based learning ability offered by large models isexpected to optimize image quality. Multi-camera full FOV: Technologies such as horizontal and vertical splicingbreak the limitations of traditional field of view and enable panoramic coverage and intelligent linkage betweendifferent scenes. Adaptive, intelligent O&M: Adaptive and intelligent O&M cameras are developed throughinnovation in technology, materials and processes, which greatly reduces the cost of manual maintenance.
Based on the Hikvision Guanlan large model technology system, the Company has developed large visionmodel cameras that are better suited for AIoT scenarios by designing model structures with consideration for modellightweight, computing efficiency enhancement, and computing resource saving. The large vision model camerahas overcome the challenges like weak universality, difficult recognition of complex targets, complex O&Mdebugging, and lengthy algorithm customization cycles. With many benefits such as strong generalization, high
performance ceiling, powerful scene comprehension, and fast deployment, it allows for the intelligent recognitionof more targets, improves sensitivity, accuracy, and deployment convenience, and enhances image quality.Leveraging its extensive expertise in technology and products, Hikvision has developed a range of large visionmodel cameras that have been applied in several scenarios such as intelligent perimeter detection, incident detection,equipment and facility inspection, helping users improve quality, reduce costs, and increase efficiency.
Large vision model: accurate and timely incident detectionDuring the actual usage of cameras, different scenes, lighting conditions, and weather may generate a largenumber of false alarms, resulting in increased O&M costs and reduced user trust in cameras' response. The Companyhas employed its abundant industry expertise to develop a large pre-training model and added data on various real-world, dynamic scenes (such as rain, snow, fog, strong light flashing, animal movement, and vibration) in the pre-training phase to remove interference factors in incident detection. Moreover, large models' excellent generalizationand sensitive detection of difficult targets allow for a high detection rate and high accuracy during the intelligentrecognition of different targets.For the purpose of perimeter detection, compared with traditional video devices, the large model-basedperimeter detection cameras provide a longer recognition distance and an over 90% reduction in false alarms(according to measured data in projects). So far, the Company has developed a complete range of large model-basedperimeter detection cameras such as monocular cameras, multi-lens cameras, and dome cameras.
Large vision model: flexible detection, versatile applicationThe implementation of traditional intelligent products necessitates the training of distinct recognitionalgorithms for various targets, presenting challenges such as high sampling expenses, low scalability, and longtraining cycles. Hikvision's front-end camera has been integrated with an open-source large target detection modelon the end side. Combined with comprehension of a variety of segmented scenes, the camera calls standardizedmodules for rapid configuration. This allows for "zero-shot" detection and agile deployment with higher detectionprecision in applications such as guarding, garbage detection, safety helmet detection, work uniform detection, andfire engine access occupancy detection. Moreover, the out-of-the-box design enhances the customer and userexperience.
Large vision model: situational learning, enhanced image quality
Hikvision's large vision model camera, powered by a deep fusion of "hardware + algorithm," can improveimage quality in low-light and strong-interference settings through situational understanding. Its benefits includeprofessional large aperture lenses and high-sensitivity sensors. Leveraging its expertise in low-illumination scenes,the Company has developed an end-to-end intelligent large model algorithm to effectively distinguish signals fromnoise in images, accurately remove noise, and improve the signal-to-noise ratio of night vision images. Based ontargeted training for scenes such as heavy rain, haze, overexposure, and color cast, the solution also supports scene-defined image quality featuring more details and more true-to-life colors, providing better video images forintelligent applications.
Multi-camera full FOV: flexible splicing, pushing FOV limits
In addition to large model capabilities, Hikvision insists on developing multi-directional, multi-camerasolutions, expanding the boundaries of FOV through technological innovation. Its multi-camera lineup, whichincludes 720° panoramic cameras, blind spot-free eagle eye cameras, and ultra-HD splicing cameras, featuresflexible splicing in different directions, flexible viewing in multiple angles, and high adaptability in varied scenarios.By flexibly adapting these solutions to various settings, Hikvision is committed to providing customers with moreaccurate and broader monitoring FOVs, as well as robust assistance for developing an all-around, multi-level visualperception system.
Adaptive, intelligent O&M: reduced O&M expenses, improved adaptabilityIn response to customers' and users' scene-based demands as well as expectations for O&M-free products,Hikvision continues to enhance the intelligent adjustability and scene adaptability of products and mitigate O&Mpressure through innovative processes and technologies such as hydrophobic coating, nano masking, and cyclonedust removal. The Company has introduced a series of new products such as spider-web-free cameras, anti-freezingcameras, anti-oil cameras, self-cleaning and dust removal cameras, and self-cleaning cameras to satisfy scenario-specific demands and lower customers' O&M costs.
2) Intelligent transportation and mobility products
Hikvision has established a large intelligent transporation model dedicated to industry-specific scenarios basedon its years of experience in the intelligent transportation sector as well as its Guanlan large model technologysystem.
Large intelligent transportation model-based capture units: For traffic violation detection, the Companyhas released an eco-friendly 12-megapixel capture unit that is integrated with large model algorithms. Its new 1.1-inch image sensor greatly expands the vertical dimension of the images captured and increases picture details. Thesolution effectively resolves the limitations of the previous generation of traffic enforcement cameras andcheckpoints. A single device is enough to capture large/small vehicles and non-motor vehicles, or large vehicledetails + panoramic views, plus richer features in photos of vehicle windows. Supported by the large vision modeltechnology, the product has made a substantial progress in the analysis of occupant violations (e.g., failure to wearseat belts, and using a mobile phone while driving). The accuracy of seat belt and phone detection has been greatlyraised, with a 75% decrease in the false detection rate. Moreover, it has also made significant improvements in sub-
segments such as helmet detection for non-motor vehicle drivers, and vehicle feature detection for dangerous goodsvehicles and dregs transportation trucks.
Large intelligent transportation model-based incident detection products: The Company has built datamodels dedicated to industrial scenarios such as road incidents and integrated them with intelligent hardware toaccurately detect abnormal road incidents. The new-generation incident detection products include radar-videofused devices, smart cameras, and servers. Based on its Guanlan large model system, Hikvision performs industryexpertise pre-training and fine-tuning to infuse expert-level incident detection capabilities into the large intelligenttransportation model. Compared with the conventional convolutional neural network algorithm in the industry, themodel based on the Transformer architecture features a deeper network architecture as well as better capabilities ofglobal feature extraction, context modeling and generalization. Also, the false alarm rate of incidents under harshconditions such as low contrast, occlusion, and complex postures is reduced by more than 60%. These improvementslead to a comprehensive upgrade of product benefits. In the future, the Company will continue to research on thelarge model technology and utilize the image and text understanding and inference capabilities of the Guanlanmultimodal large model to expand the application of its products in various traffic scenarios and fuel the intelligent
upgrade of the industry.
Intelligent signal control systems: In the field of intelligent traffic signal control, the Company has continuedto enhance its technological advantages across the industrial chain, including perception equipment, intelligentalgorithms, and control devices. While iterating its radar-video assisted vehicle inspection devices, it has alsooptimized its traffic parameter collection function. Regarding system delivery, Hikvision has introduced anautomated configuration mechanism to make setup and debugging more efficient. Taking the radar-video assistedvehicle inspection device as an example, the new radar-vision fusion algorithm removes the need for radarconfiguration and debugging by automatically mapping the visual configuration to the radar. As a result, thedebugging time of a radar-video assisted vehicle inspection device is shortened from 35-40 minutes to about 5minutes. Thanks to the Company's in-house signal control algorithm, the radar-video assisted vehicle inspectiondevice is undergoing iteration and optimization. The collection accuracy of information such as vehicle flow andqueue length required for signal control is greatly improved, making signal control timing more automated andintelligent.
As part of its sustained efforts to empower digital and intelligent traffic, Hikvision has introduced ranges oftraffic volume investigation, expressway toll inspection, non-motor vehicle control, and ship checkpoint, in a bid toensure safe and smooth traffic by strengthening road traffic order management and road risk prevention and control.
Vehicle access and parking products: With intelligent video at its heart, Hikvision consistently improves itsdigital solutions, boosts user experience, and assists clients in making parking management more efficient. Itsproducts span a variety of segments, including vehicle access, parking lots, street parking, and others. In scenariossuch as NEV parking space application management and transparent workshops in 4S stores, continuous efforts arespared to upgrade intensive and intelligent systems, enhance products' technical profile, and improve the efficiencyand services of urban parking.Charging stations: With the boom of the NEV market, the significance of charging stations as infrastructureis growing. In order to maximize product performance and boost charging efficiency, Hikvision has continuouslydedicated itself to the R&D of charging station technology and products. With a focus on portable chargers, ACcharging piles and high-power fast chargers, it keeps improving charging management systems and solutions inboth home charging and public charging scenarios, hoping to provide users with smarter, safer and more stablecharging products through product and technological innovation.
Mobile devices: In domains such as industrial wearables and handheld PDAs, Hikvision continuesadvancing technological innovation and business applications. In terms of industrial wearables, the Companyhas been actively engaged in sectors such as law enforcement, the workplace, and healthcare, and has madeinnovations in technical fields such as professional audio, multimodal image stabilization, and ultra-long batterylife. Handheld PDAs, driven by advancements in AI technology, have embraced better barcode scanningperformance and innovative application scenarios. The Company has launched a wide range of professional PDAssuch as general-purpose intelligent OCR devices, devices made of anti-corrosion materials, video-based volumemeasurement devices, and ultra-small barcode recognition devices. In conjunction with online shopping malls andservice platforms, we provide data collection, scene-based intelligent recognition and analysis capabilities formanufacturing, express and logistics, retail e-commerce, healthcare and public services, and other industries,thereby enhancing customers' digital management capabilities. In the domains of mobile portable devices, drones
and defense products, we leverage AI capabilities and take into account scenario-specific demands to constantlyiterate and improve products and solutions.
3) Access control, intercom and alarm products
Harnessing its extensive expertise in perception, connection, credentials and control technologies, theCompany is actively engaged in service design and product innovation centered on personnel access, personnelstatus, code of conducts and compliance management in a wide variety of application environments from open toclosed spaces. By constantly expanding the application of its products in segmented scenarios, it has established ascenario-based solution suite covering access control, attendance, visitors, elevator control, building intercom,healthcare intercom, entrance and exit management, intrusion alarm, perimeter prevention, real-name managementand office consumption.
Hikvision's access control products, represented by MinMoe, are a result of the integrated application of audio,video, multimodality and other basic technologies that are used to create products for digital and intelligent identityrecognition and professional access management. The Company continues to enhance its two access control productsystems - intelligent and traditional, covering all kinds of general and professional scenarios, and upgrades segment-specific products and solutions with an array of new products such as those featuring compliance with nationalcryptographic standards, explosion resistance, violence resistance, and a distributed architecture, providingcustomers with more diverse solutions.
Hikvision's visual intercom products mark a step further towards the scenario-based intelligent application ofaudio and image technologies. The Company has improved its two-wire bus technology and released a series ofproducts suitable for construction and renovation projects worldwide. Through the integration of subsystems suchas intrusion alarm, elevator control, network cameras, and access control, it has combined community security withscene control to provide customers with one-stop solutions. Healthcare intercom and emergency intercom solutionsare continuously iterated and optimized based on large multimodal models to increase their uses in segmentedindustries.
Hikvision's speed gates and turnstiles, as a result of continued breakthroughs in technical fields such asequipment networking, space detection, motor control and materials and processes, provide customers and userswith a better installation/debugging/use experience, coupled with higher management efficiency and easierentrance/exit. In response to differentiated applications and market segments, the Company has developed fourproduct ranges: Rigorous, Simplified, Traditional and Specialized, to meet the needs of different customer groups.
Hikvision continues to innovate detection technology for alarm products, and has released its first professional-grade detector. Through ongoing research on wireless transmission and low-power technologies, it has developednew solutions for scenarios without electricity or networks. Systems for indoor intrusion detection, outdoorperimeter detection, video detection and others are integrated to provide one-stop security management solutionsand more valuable services for customers. The Company continues to expand its cloud service applications andoffers exclusive application tools to different users, making product access more convenient, management moreefficient, and O&M less stressful.
4) Interactive audio products
Hikvision has been devoted to considerable research in the realm of audio since 2016. Thanks to such efforts,it has developed three product systems: professional audio, broadcasting audio, and security audio. It now boastsR&D capabilities ranging from acoustic construction, hardware, algorithms to systems, committed to the networked,intelligent, and array-based development of audio technology. With intelligent algorithms that push the boundariesof sound quality, it delivers a more convenient audio management and debugging experience and a one-stop digitalaudio solution. In 2024, Hikvision, leveraging its full-scenario audio technology matrix, was committed to theintelligent upgrade of audio in scenarios such as conferences, audio amplification for teaching purposes, andcommand centers. As a member of the High-Performance Audio Network (HAN) Transmission TechnologyApplication Industry Alliance, the Company works with industry partners to promote the networked, digitaltransformation of audio in China.
Professional audio:
Hikvision produces industry-leading hardware and software by using its intelligent production lines andinternationally certified acoustic labs. It has released an audio product family including the 8000N flagship series,4000 dedicated series and 2000 general series.The 8000N flagship series, built on a full-link networked architecture, uses the in-house AES67 transmissionprotocol to enable low latency at the millisecond level and high-precision synchronization at the nanosecond level.It has thus established a full-process digital closed loop from signal acquisition, AI algorithm processing to soundamplification and output. The system has deeply integrated intelligent algorithms. Over 50 patented algorithms havebeen applied to enable sound localization, noise suppression and adaptive sound field control, significantlyimproving the voice clarity and sound field uniformity in complex settings. The 128 ceiling array microphonesupports ultra-long-distance audio pickup up to 10 meters with its 128-MEMS super-large microphone arrayarchitecture. It effectively addresses complex noise interference in the environment through over 300 built-instationary/non-stationary AI-based noise reduction algorithms. A single device supports local sound amplificationand remote conferencing at the same time, and flexibly switches between conference modes without an audioprocessor. The array square tube microphone features a distinctive "1+6" array heterogeneous design, a built-inbeamforming algorithm, and a horizontal beam angle that can switch among narrow, medium and wide, enablingaccurate audio pickup over a long distance. Built on innovations and upgrades in audio transmission and processingtechnologies, the network array column speaker can accurately meet the requirements of diverse acoustic spaceslike conference halls and multi-function rooms thanks to its unique single-body three-beam control and multi-devicecascade connection and independent adjustment technology. The 8000N series has been applied in a wide range ofhigh-end conference and classroom settings such as universities, group enterprises, and financial buildings. The
Company has worked with the School of Continuing Education of Zhejiang University on the AIoT-Center - anintelligent application and joint training base to develop unfettered audio pickup and amplification solutions anddeliver a new teaching experience.
Broadcasting audio:
Hikvision offers a complete set of scenario-based solutions and services centered on broadcasting audio, whichare divided into three product ranges: analog broadcast, network broadcast, and explosion-proof broadcast. Theycan be outfitted with an intelligent broadcast management platform for unified management and maintenance. Thesesolutions suit a wide range of business scenarios such as education and teaching, chain stores, group enterprises,and special-purpose settings.
For school uses, the Company has developed a bi-switch listening backup system with analog network faultdetection and two-way fast signal switching. The system has been applied in many schools such as Yiyang No. 1Middle School and No. 1 Experimental School of Suqian Economic Development Zone, and showed reliableperformance in several listening tests. Hikvision's intelligent broadcasting platform, which is designed to centrallymanage broadcasting devices in different locations, has helped 72 schools in Henan Province with broadcastingnetworking and transformation for online collaboration and efficient management. For chain stores, a localsimplified solution, a local premium solution and a Cloud Eyes unified management solution have been introducedto address single audio source playback management and difficult supervision, and provide chain store customerswith exclusive scenario-based products and customized functions. A networking management solution that allowsthe headquarters to remotely supervise and centrally train its branches has been introduced for group companies.With audio-video integrated surveillance and rapid response to incidents, a closed loop of management can beestablished to create a digital industrial park. For refining and chemical pipelines, special-purpose manufacturingand other scenarios, a range of explosion-proof and corrosion-resistant products are available. Explosion-proofcolumn speakers have been applied together with explosion-proof cameras in the oil pipeline corridor of QingdaoDongjiakou Port. The devices are centrally managed by a comprehensive security management platform to monitorscene safety in a timely manner.
2.2.2 Edge domain products: empowerment of large models, upgraded AI capabilities of products
Hikvision's edge domain products continue to embrace improved AI capabilities. Relying on the Guanlan largemodel technology system, Hikvision has advanced from large CV models to large multimodal models andconsistently upgraded its products to meet the demands of various application scenarios and create more value forcustomers.
1) Integrated devices for intelligent applications
NVR - A core storage product for edge domain:
Hikvision NVR insists on technology-driven product innovation. In response to the latest trends in thedevelopment of large model technology, the Company has deeply integrated large image and text multimodalmodels with large quantities of parameters and samples with embedded intelligent hardware and released a rangeof Wensou (meaning text based search) storage products based on large multimodal models. These significanttechnological innovations have boosted the extensive application of large multimodal models in the security sector.
The Wensou storage products enable the cross-modal information search and retrieval of natural language andvideo images. By simply typing a sentence or a word, a user can find the target image in seconds, so that securityvideo retracing is no longer limited to time and space as well as conventional alarm and other retrieval methods.This significantly increases the effectiveness of target and event searches, resulting in more intelligent and efficientsecurity management. For example, you can enter a semantic description such as "a red electric scooter," "a whitevan," "riding an electric scooter without a helmet," "a bicycle," "a trolley," and "a puppy" in the search box to searchfor relevant targets. The search range is broad, including high-frequency targets in security settings such as people,motor vehicles, and non-motor vehicles. And it also supports feature searches such as specific items and target status.
The range represents a breakthrough in application by fusing large multimodal model algorithms withembedded intelligent hardware. Platform-oriented model design, large and small model distillation, cross-layermixed-precision quantization and other large model deployment technologies and innovative design of embeddedintelligent hardware are employed to apply large multimodal models to lightweight embedded hardware platformsand allow for the inclusive application of large multimodal model technology, so that more industries and users canbenefit from the intelligence and convenience brought by large models.
By using a large model perimeter protection algorithm that substantially improves the accuracy of video-assisted perimeter intrusion detection, Hikvision NVR has advanced the application of fundamental intelligentsecurity. Customers are satisfied with the more efficient and convenient search experience that the image searchtechnology offers thanks to its innovation and optimization.
With the prevalence of HD video surveillance, the storage space required for video recording is growing. In2024, Hikvision launched a high-density NVR that incorporates cutting-edge technologies such as controllerarchitecture, modular design, and intelligent sensor-based heat dissipation. The solution satisfies customer demand
for HD and long-cycle video recording while also offering a bigger storage capacity, enhanced stability, anddependability, in addition to much better storage and network performance.Over the past dozens of years, Hikvision NVR has consistently driven product changes with advancedtechnology to generate more value for customers. The resulting diverse products can be applied to a wide range ofintelligent security surveillance contexts.
Hikvision DeepinMind - An intelligent computing product for edge domain:
Hikvision offers a broad variety of intelligent computing products that encompass all scenarios from edge todomain center, with an aim to function as an edge domain brain. It continuously improves its six capabilities of"perception access, domain-end management, fusion and convergence, multi-dimensional storage, edge computing,and intelligent applications" and conducts extensive research on large visual and multimodal model technologies tofurther boost AI performance as well as new application experience, so that AI can truly create value for customers.Based on the Guanlan large model technology system, the Company has launched Wensou DeepinMind andWensou Host - a comprehensive line of Wensou computing products spanning from the edge to the center. Thesolution supports efficient search and real-time warning with only a sentence or a word entered. This allows usersto search for everything, including people, cars, and incidents, with exponentially improved efficiency, a broadersearch scope, higher accuracy and more flexible application. In addition, a large model for universal detection isembedded into the intelligent computing products, which greatly upgrades their detection and recognitioncapabilities. Everything - whether it is moving people, cars, animals in videos, or static billboards, trash cans,flowers, plants and trees - can be identified, suggesting more comprehensive perception.
The Wensou computing range supports customized text-based warnings. Making use of large models' capacityto integrate and process multimodal information, the solution provides real-time warnings and reminders for specificincidents and targets based on any sentence or word entered, such as "two people riding an electric bike," "full trashcans," and "climbing over guardrails." By making management more timely and effective, it assists thousands ofindustries with more intelligent and efficient security management. Intelligent computing products powered by largemodels have leaped from providing specialized functions to providing open capabilities, so that they can better meetthe diverse management needs of users.With the introduction of DeepinMind, which incorporates large patrol inspection models, Hikvision shows anin-depth application of large multimodal model technology in the fields of work safety and compliance oversight.Embracing open collaboration, Hikvision is growing its AI open platform's algorithm models and functionalities.This has led to the creation of the AI Open Platform (AIOP), which significantly increases the accuracy ofalgorithms in fragmented intelligent application scenarios. Furthermore, the Company has launched HEOP2.0,which has upgraded hardware open capabilities based on the Hikvision Embedded Open Platform (HEOP), offeringcustomers additional options for computing power sharing and cooperation.
2) Smart displays and video conferencing products
Hikvision's smart displays and video conferencing products are optimal solutions for conferencing andeducation. The Company continuously optimizes design, iterates software and hardware functions, and improvesthe application experience in accordance with scene-specific requirements, drawing on its expertise in color display,interactive touch, communication and connectivity, audio and video processing, and large AI model technology.This facilitates the digital transformation and upgrading of scenes such as conference rooms and classrooms andprovides customers and users with professional and intelligent solutions.
Conferencing products: Hikvision's conference tablet has embraced a constantly evolving operating system,
enhanced projection and connectivity capabilities, and a new projection group function. The seminar room solutionsupports the collaboration between a primary display and several auxiliary displays, as well as one-click contentsharing, making discussion and interaction more convenient. A new Type-C projector with driver-free and quickstart features has been introduced to upgrade the projection experience. The efficiency of the entire meeting processis enhanced by large AI models. For example, a new AI conference assistant is now available, which is designed toinitiate a voice call before the meeting, transcribe and translate in real time during the meeting, and automaticallygenerate minutes and to-do lists after the meeting. Additionally, efforts are made to continuously improve the qualityof video conferences. Audio and video algorithms are trained using large models to improve voice quality and visualdisplay during meetings, even when there is an unreliable connection.Teaching products: The Company keeps developing and upgrading its new products centered on teachingprocess, teacher growth, and education governance. The new-generation Classroom Connection solution, combinedwith lightweight large AI model capabilities, significantly improves teaching efficiency via seamless informationcollection and intelligent analysis of the teaching process. AI-enabled one-click courseware development, intelligentQ&A, and other features are available via the Yijiaoxue software platform, which is built on professional largeteaching models. Combined with the Classroom Connection and supporting products, it can improve teachingexperience as well as lesson preparation efficiency. Hikvision has continuously upgraded its overseas smart displayand released the most recent Android version. Simpler and more intelligent education is made possible by the in-house operating system and whiteboard software, which are linked to general large multi-language models toprovide rapid AI-based search, context analysis, quick Q&A, auto subtitles, minutes summary, and other AIapplications.
Upgraded solutions of intelligent conference rooms: Hikvision's conference management platform hasfurther upgraded to a full-stack digital solution. With three features: omni-network, integrated display control, andunified conference management, the solution is expected to contribute to the digital transformation of conferencerooms, which are divided into four categories - general conference rooms, video conference rooms, paperlessconference rooms, and multi-functional halls. Unlike a conventional single-node network, an omni-network allowsfor direct network connectivity at every layer, from the platform to the sub-device layer. Without analog lines orcontrol lines, it allows for easy deployment and operation. With integrated display control, all operations of amultimedia conference room - instead of only equipment switches - are integrated into a tablet, simple and efficient.Unified conference management is made possible by a unified architecture that integrates all subsystems andequipment, including video conferencing, paperless conferences, recording and broadcasting, and central control. It
guarantees both unified access and unified O&M management.
3) Network products
Hikvision's network product portfolio is centered on IoT scenarios, including integrated monitoring networksolutions. The range covers a variety of products such as switches, routers, wireless bridges, WLAN products, alloptical networks, and network management platforms. In particular, the Company's industrial switches are widelyused in wind power generation, solar power generation, and synchronized public utility construction; and industrialbridges allow for wireless data transmission in both line-of-sight and non-line-of-sight environments.
In 2024, the Company established the centralized and unified administration of IT+IoT devices by using itsIoT perception capabilities at both front and back ends in combination with networks. "Video-network connectivity"becomes possible through the globally visible topology structure. The threshold of network O&M is lowered andO&M efficiency is improved in three ways: quick start, convenient management, and efficient O&M. Moreover,the IoT switches represented by the light network management series are more suitable solutions for network accessin IoT scenarios.
Hikvision's IoT-focused network solutions, which are built on unified administration of IT + IoT networks,assist customers in creating networks that are secure, dependable, and intelligent.
2.2.3 Cloud center products: establishment of an IoT-information network base, provision of abundantfeasible solutions
High-performance and more secure IT infrastructure becomes essential given the rapid development oftechnologies such as AI, big data, cloud computing, and cloud storage. Hikvision provides a complete range ofcloud center solutions including servers, storage, cybersecurity, display control, network and data security, securingcomprehensive, secure, and advanced basic IT facilities for the Internet of Things.
1) General computing products
Hikvision's general server series is a result of in-house research by Hikvision based on high-performanceprocessors. Continuous improvements have been made in high-speed signal design, overall performance tuning,energy saving and noise reduction, and BMC/BIOS's basic firmware development. Moreover, the range has beenfurther expanded to include more product forms such as rack servers, edge servers, and tower servers, as a proactiveresponse to market demand.
2) Intelligent computing products
Hikvision's intelligent server family offers a wide range of products, high GPU card scalability, strongcompatibility, and superior cost performance. The solutions allow for the real-time processing of massive videodata and the parallel computing of various types of algorithms, coupled with improved analysis efficiency and lowercosts. Furthermore, by supporting the collaboration between edge computing and center terminals, they reducebandwidth pressure and improve support efficiency, ensuring timely data output. In addition to satisfying the generaldemands of the information industry, these solutions provide a robust and reliable infrastructure for intelligentcomputing centers, cloud computing and big data. They deliver a high-performance, and highly reliable and secureinfrastructure to a variety of sectors such as government, the Internet, energy, finance, operators and others.
3) Central storage products
Central storage products are one of Hikvision's core portfolios, as well as the cornerstone of data infrastructure.They are responsible for the storage, processing and distribution of massive video/image data. To make better useof view data and extract valuable information from massive data, Hikvision has introduced natural language andlarge multimodal video/image models into high-performance storage centers and launched the Wensou CVR(product name: AcuSeek CVR) storage solution. Apart from storing data, it enables the large multimodal modelingof massive video/image data, which helps to make the data more comprehensible. Natural language may be used tosearch for targets and incidents, greatly improving the efficiency of locating targets in massive video recordings.Thanks to this new technological breakthrough in central storage devices, Hikvision now boasts a leading positionin the industry.
Hikvision's central storage products were completely upgraded in 2024. A new-generation hardware platformwith a modular architecture and comprehensively improved performance is now available. It is the first in theindustry to support 30T hard drives. The new hardware comes with more APIs, making it more scalable andcompatible for a greater variety of applications. It has cutting-edge designs that make installation and maintenancesimple, such tool-free disassembly and assembly and visible operation monitoring. The solution is also energy-saving, smart and eco-friendly thanks to intelligent sensing-based speed control fans and low-noise design.Advanced technologies such as system safes and trusted startup enabled by TPM (trusted platform module) areemployed to greatly improve system security and reliability. Hikvision's central storage solutions have advanced toa new level of quality and competitiveness via substantial technical innovation, and they are now prepared to createmore value for customers in a wide range of industries.
Based on the Company's new-generation distributed file systems, Hikvision has introduced two new products:
a standard cloud storage solution and a lightweight cloud storage solution. They adopt a completely symmetrical
architecture and are integrated with new-generation hardware, which leads to less weight, better performance, moreflexible management, and more secure data. This makes them optimal storage cloud solutions in the securityindustry. In order to meet the diverse needs of new scenarios for data storage in the age of AIoT, Hikvision hasreleased a range of IoT converged storage products. This set of systems support the converged storage of videos,images, files, objects and other data. With high storage efficiency and fast and convenient data retrieval, the solutionis expected to assist industrial enterprises with digital transformation.
In addition, Hikvision has released a number of storage products that comply with the SM4 cryptographicalgorithm under China's Commercial Cryptographic Algorithm Standards. They meet the security assessmentstandards of data centers and provide holistic solutions to ensure data security and integrity for users.
Hikvision's general storage products are under continuous upgrade and iteration. The product line is nowavailable in centralized, distributed, and hyper-converged architectures and supports a wide range of storagetechnologies, including SAN, NAS, and object storage. Thanks to its cutting-edge expertise in storage technologyas well as persistent R&D, Hikvision has made significant breakthroughs in the integration of private cloud andpublic cloud solutions and developed user-specific hybrid cloud application capabilities. Powered by a hybridstorage solution that fuses SSD and HDD as well as innovative read and write algorithms, the range provides amuch quicker response performance under high-density access. The solution also supports erasure coding (EC) forthe efficient separation of hot and cold data. Furthermore, Hikvision's central storage solutions have shown to behighly efficient in a number of crucial areas, including office automation (OA), database hosting, productionmanagement, and Internet data center (IDC) construction.
4) Large-screen display and control products
Under the overarching strategy of "scenario-driven, digital operation, and integrated display and control,"Hikvision is constantly and thoroughly upgrading its large-screen display and control products and solutions. Aspart of its ongoing efforts to develop Mini LEDs, COB LEDs and energy-saving LEDs, the Company has builtproduction facilities in Tonglu and Wuhan with full-chain, in-house intelligent manufacturing capabilities. Thisallows it to overcome major technological challenges in LED production, and continuously improve productioncapacity and yield. With better color consistency and higher resolution, these products are more competitive in thehigh-end commercial display market.In line with the strategy of integrated display and control, the Company has developed a video processing andLED display control system utilizing technologies for video processing, intelligent image processing, encoding anddecoding, and intelligent interaction. Integrated with LED display features, the solution supports full-chain high-definition audio and video technology and has the computing power to process in real time the data on videos withhigh frame rate, high bit depth, wide color gamut, and high dynamic range. This ensures lossless presentation ofvideo images, and provides users with a more delicate and true-to-life display experience.
In 2024, upgraded versions of the SmartWall Client and the ShowOS Large Screen Management Platform werereleased, marking a full revamp of intelligent display and control platforms. When paired with industry-specificplatforms and a cloud platform, the solution provides a rich set of functions such as content management andinteraction management of display devices, and delivers scenario-specific management services in various display-based settings. The product matrix, which spans more than 30 segments such as education, culture and tourism,industrial parks, and healthcare, offers a comprehensive suite of full-stack, in-house, multi-system integrated, omni-
network, and scenario-based solutions. In the future, the Company will continue to foster the standardized andintelligent development of the display and control industry, accelerate the integration and innovation of "display +AI + computing power," and build a full-scenario intelligent display and control ecosystem.
5) Cybersecurity and data security products
IoT perception data has emerged as a key production driver propelling businesses intelligent upgrades in themidst of digital transformation. While the value of IoT data increases, the associated security challenges becomeincreasingly severe. Harnessing its years of practical experience in IoT security protection as well as research andinnovation outcomes on cryptographic technology, Hikvision has established a set of full-domain cybersecurity anddata security systems covering "cloud-edge-end," securing reliable protection and security support for users' digitalupgrades.
Cybersecurity products: Hikvision's cybersecurity products are dedicated to AIoT security scenarios. Thiscomplete range of AIoT security solutions suit the needs of multiple applications such as endogenous security,access security, boundary security, security audits, and analysis and early warning.
In light of industrial features such as the vast number of IoT devices and the increasingly blurred networkboundaries, Hikvision has built a security system that integrates dynamic defense, real-time detection, intelligentanalysis, coordinated response and continuous monitoring. It hopes to offer users a safe and reliable intelligentInternet of Things by providing security capabilities such as terminals' intrinsic safety, asset mapping and securityissue inventory, equipment access security and threat blocking, and quick risk identification and disposal.
Data security products: Hikvision's data security products are centered on cryptographic technology and
classified into four ranges: devices that enable commercial cryptographic algorithms, cryptographic application,cryptographic management and cryptographic operation. It provides users with all-round, multi-level data securityproducts and services throughout the entire life cycle of AIoT systems, from data collection, transmission, storageto application.
Based on its in-house design, R&D, and production skills for cryptographic products, the Company iscommitted to technical research and innovation upon analysis of the application features and needs of cryptographicproducts in AIoT scenarios. This allows it to significantly improve the ease of use, stability, robustness andconcurrent processing capabilities of cryptographic products in AIoT environments. Moreover, Hikvision haspioneered in the intelligent application of cryptography by combining intelligent technology with cryptographictechnology. Its related products and solutions have successfully addressed various security threats such ascounterfeit attacks, data theft, and data forgery, providing all-round data protection in a wide range of industriessuch as public security, government, judiciary, education, and healthcare.
2.3 Software Product Family: Software Platforms + Data Models + Business Services
Hikvision's software product family is composed of software platforms, data models and business services.
2.3.1 Software platforms: Basic platforms + general platforms + industry-specific platformsBasic software platforms: Hikvision continues to improve its basic software in four categories: storage andcomputing, IoT, intelligence, and data.
Storage and computing software includes the Cloud Computing Platform and the Cloud Storage Platform. TheCloud Storage Platform is a unified storage foundation built on the in-house Honghu distributed file system, andsupports the quick development of new-generation video storage, object storage, and IoT storage products in agileresponse to the needs of technology and business development. The Cloud Computing Platform continues toimprove in basic capabilities such as high availability and multi-type storage access as well as lightweightarchitecture. While enabling enterprises' cloud operations, it also provides multi-scenario high-availability disasterrecovery solutions to assure business continuity.
IoT software includes the AIOT PNP, iOMS-IOT and related products, providing device access and networkingand integrated O&M service capabilities for various IoT applications.
AI software includes the Training Platform, the Inference Platform, the Large Model Integration Platform andother related products that provide capabilities of intelligent algorithm generation and application, as well as low-code intelligent application development for a wide range of scenarios.
Big data software includes the Bigdata Platform, the iDataFusion-Ent, BI Modeling and Application Platform,Data Integration Software, and Model Warehouse Software, among other relevant products, providing capabilitiesof data storage and computing, data aggregation and governance, data openness and sharing, data modeling and
application, and data model management for a broad range of data applications.General software platforms: Hikvision provides general software functionalities across a number ofindustries, including comprehensive security software, multimedia interactive software, fusion empowered software,and scientific instrument software. Taking comprehensive security software as an example, it includes platforms forcomprehensive security management, canteen consumption management, smart broadcast management, smart largescreen management and so on. Based on Hikvision's large model technology, the new software for scientificinstruments and apparatus like chromatography, fusion spectroscopy, and microscopes, offers integrated intelligentapplications for data collection, analysis, and reports for key businesses in a variety of industries, both offline andonline.
Industry-specific software platforms: Hikvision is committed to addressing users' pain points while servingmore than 80 sub-industries. It seeks to use AIoT technology to continually broaden the digital application scenariosin these segments. For example, for essential urban utilities, it has introduced specialized applications such asdrainage and flood prevention, gas monitoring, and digital management of irrigated areas; and applications rangingfrom enterprise security, industrial park logistics, work safety to production administration have been launched toserve businesses.
2.3.2 Data models: Industry data library governance models + professional business application models
Hikvision has established enterprise data resource standards and data model description specifications andemployed model library software for data model management, to address inconsistent standards and high executionand delivery expenses in data governance and application. Data models are divided into two categories by use cases:
industry data governance models and professional business application models.
The industry data governance models are designed to establish industry data library standards in line withthe professional specifications of various industries, consolidate all kinds of data governance processes, and boostthe efficiency and quality of data governance. Examples include the data governance models for the transportationsector, the emergency management sector, smart tourist destinations, and higher vocational colleges.
The professional business application models are based on AIoT perception data and integrate business dataacross several domains. They support applications such as monitoring, prediction, diagnosis, and decision-makingthrough statistical analysis, data visualization, and machine learning technology. For instance, primary models forthe transportation sector include: a fusion analytics model for road traffic conditions, a visual spatiotemporal
distribution model for OD (Origin Destination) of bus passenger flows, a real-time detection model for stop pointsof hazardous chemicals vehicles, a prediction model for road congestion spreading, a traffic prediction model formetro stations, a behavior warning model for unlicensed drivers, a diagnostic model for road traffic operationefficiency, an analysis model for spatiotemporal feature correlation of vehicles with fake license plates, a dynamiccontrol strategy model for reversible lanes, a level-to-level control model for commercial vehicle risks, and anidentification model for illegal commercial vehicles.
2.3.3 Business services: System O&M + data engineering + AI engineering + business operations
System O&M services: Through its AIoT system, Hikvision provides customers with all-round supportservices for devices, systems, and businesses in the after-sales stage of its products or projects to ensure theavailability, security, and reliability of system operation and secure more robust support for systems.
Data engineering services: Hikvision provides data engineering services such as data aggregation andgovernance and data model implementation for some industry users to tap into the value of data and support businessapplications.
AI engineering services: Hikvision provides the customers and users of its AI Open Platform with solutionsconsultation, algorithm design, effect optimization suggestions and other services, so as to ensure that users cancreate their exclusive scenario-specific solutions on the AI Open Platform.
Business operations services: Hikvision offers more than ten business operation services via its Internetoperation platform and private deployment methods. Specifically, its urban parking operation solution has now beenapplied in more than 500 cities, and it is continuously spreading to other places; the number of cities using the urbansignal timing solution has seen a further increase; and there is a growing number of users of the Company's businessoperation platforms such as fire protection operation, smart community operation, safety risk monitoring andwarning, and comprehensive monitoring of low-grade highways.
3. Business Layout
Data has emerged as a new production factor. The extensive IoT data collected by AI-powered Internet ofThings (AIoT) products facilitates iterative advancements in existing technologies and tools; optimizes workforceproductivity and operational efficiency; and unlocks the latent value embedded in land and capital. This drives thetransformation and upgrading of production models, lifestyles, and governance frameworks across society.
Hikvision has been serving for various domestic and international industries for many years, providing over350 solutions in 66 sub-industries across 10 industries related to enterprises and institutions, and over 300 solutionsin 37 sub-industries across 5 industries related to public services. Hikvision leverages its global marketing networkto deliver AIoT products and solutions to clients worldwide. Through years of dedicated efforts, the Company hasaccumulated profound implementation expertise in driving socioeconomic digital transformation.
3.1 Domestic Enterprise & Institutional Business: Driving Digital Transformation in ProductionManagement
In recent years, digital transformation has introduced systemic changes to the manufacturing industry, drivingcomprehensive optimization and continuous innovation in quality, efficiency, safety, and sustainability. This injectsrobust momentum into the high-quality development of manufacturing. During this process, digital technologiesand products centered on AIoT have become critical enablers for enterprises to achieve quantifiable management ofproduction factors and visualized control of production processes. Through the deep integration of digitaltechnologies, enterprises continue to enhance their value creation capabilities in production management.
Building on its expertise in AIoT technologies and a comprehensive digital product portfolio, Hikvisionaddresses core production scenarios by empowering enterprises to establish holistic digital management capabilities.The Company drives digital transformation in key areas such as human-machine collaboration, materialmanagement, process control, safety management, and enterprise operations. By creating end-to-end digitalproduction management systems, Hikvision helps enterprises significantly improve operational efficiency,achieving quality enhancement, cost reduction, and safety optimization, thereby providing robust support for high-quality development.
1) Helping to digitalize workforce and production tools
The digital transformation of production management constitutes a strategic priority for industrial enterprises,where workforce and equipment serve as critical components of manufacturing ecosystems. Their collaborativeefficiency directly determines production efficiency and product quality. Hikvision's AIoT-powered solutions deeplyintegrate large-model technology to enable scenario-specific digital transformation, ensuring operationalcompliance of personnel and operational stability of equipment, thereby establishing resilient, adaptable and
sustainable production frameworks.
As the primary productive force, workers' operational compliance fundamentally governs production qualityand efficiency. Hikvision's production line camera series, empowered by large-model technology, implement real-time monitoring and intelligent analysis of workforce operations. Through multi-dimensional interference filteringand multi-layered error-proofing mechanisms, these solutions guarantee precision-controlled production workflows.For example, during assembly operations, the system promptly identifies potential component misplacement oromission, while in packaging workflows, it detects misplaced or missing accessories. These solutions have been
implemented across diverse industries including computer/communication/consumer electronics, home appliances,automotive manufacturing, auto parts, equipment manufacturing, food & beverage, and pharmaceuticals, drivingoperational standardization and enhancing quality and efficiency.
The continuous advancement of manufacturing automation has elevated production equipment to corecomponents of industrial systems, where their operational status directly affects production continuity and stability.Leveraging its cutting-edge AIoT technologies, Hikvision has developed comprehensive status monitoring andintelligent analytics solutions through multi-modal large model algorithms. These solutions serve rotatingequipment, static installations, electrical systems, and instrumentation devices. Validated across pharmaceutical,logistics, machining, auto parts, electronics, iron & steel metallurgy, and petrochemical sectors, the system enhancesequipment health management while optimizing maintenance efficiency.
In equipment monitoring, Hikvision's sound-vibration-temperature series monitor temperature, vibration, andsound data of critical components (e.g., motors, bearings) in real time and provide anomaly alerts, significantlyimproving maintenance efficiency. The integration of fiber-optic monitoring solutions with large-model technologyeffectively warns against operational risks in long-distance conveyor belt rollers to ensure equipment stability.Additionally, the large model-powered meter recognition series automates data collection and reporting from
production equipment gauges.In human-machine collaboration applications, Hikvision utilizes multi-dimensional IoT perceptiontechnologies to establish secure and reliable remote auxiliary control systems, enhancing operational safety andefficiency. In industries such as steel metallurgy, machinery, manufacturing, and logistics terminals, cranes—ascritical production equipment—frequently encounter challenging operational environments characterized by dust,smoke, and vibrations. These conditions often result in operational constraints, reduced productivity, and elevatedsafety risks. Hikvision's anti-vibration camera series, featuring patented structural designs, effectively mitigateimage distortion caused by mechanical vibrations, providing crane operators with stable and clear visual feedback.Furthermore, the implementation of large-model technology enables strict adherence to the "man-free safetyprotocols" for crane operations. The system provides intelligent detection and real-time alerts for unauthorizedpersonnel intrusions within operational zones. Integrated with advanced intelligent hook-tracking algorithms, itdynamically monitors hook positions, offering operators intuitive and precise visual guidance to ensure safe andefficient crane operations.
2) Helping to digitalize material flow and inventory management
Material flow constitutes a mission-critical process throughout production cycles, where data accuracy ensurescomponent completeness and circulation efficiency. Hikvision's deep learning-based barcode/OCR technologypowers its comprehensive PDA portfolio – including full-touch, button-operated, DPM-specific, and cold-chainoptimized models – enabling precise identification of 1D/2D codes and alphanumeric data across diverse materialsurfaces. These devices enhance accuracy and efficiency in loading/unloading and material transfer operations,effectively reducing production anomalies caused by material mismatches. Furthermore, by integrating videocapabilities, Hikvision delivers end-to-end visibility and traceability of material flow data, empowering enterprisesto achieve closed-loop digital logistics management.
As vital corporate assets, the precise management of materials directly impacts production efficiency and orderfulfillment. Accurate inventory control is pivotal for production management, requiring comprehensive assetauditing systems for everything from miniature electronic components to bulk commodities like coal and cement.This helps ensure systematic production continuity.
In electronics manufacturing, Hikvision's X-ray intelligent component counter streamlines electronic remnantinventory. Using X-ray penetration technology, it achieves 99.99% accuracy in identifying quantities of componentsin trays. Meanwhile, the PDA series enables smart audits of electronic material storage, operating 7-8 times fasterthan manual methods. Widely adopted in SMT, LED, lithium battery, automotive electronics, and consumerelectronics sectors, the X-ray counter ensures efficient management of electronic materials.
In cement, steel, coal mining, chemical, and power generation industries, traditional manual inventory methodsstruggle with complex material varieties, irregular stacking patterns, inefficiency, high costs, and measurementinaccuracies - particularly for bulk materials like aggregates and ores. Hikvision's radar-based volume measurementsolutions overcome these challenges. Designed for high-temperature, high-dust environments including aggregateyards and clinker silos, the technology delivers precise volumetric measurements of irregular stockpiles. Thisenables scientific inventory management and supports data-driven production planning.
3) Helping to digitalize process execution and quality control
Comprehensive production monitoring enables real-time operational visibility, anomaly detection, and processoptimization. Hikvision helps enterprises establish visible, quantifiable, and traceable monitoring systems, shiftingmanagement from experience-driven to data-driven approaches. This transformation enhances quality control,operational efficiency, and cost-effectiveness across manufacturing execution.Visualization proves fundamental for production oversight. Traditional manual inspections face timeconstraints and limited coverage. Hikvision's AR/VR-enabled workshop solutions integrate multi-dimensional datavisualization, creating intuitive, accurate, and real-time monitoring dashboards. The system improves detection ofproduction risks such as workflow deviations or non-compliant operations, accelerates anomaly resolution, andprovides comprehensive data traceability for root-cause analysis.
To meet scenario-specific and personalized market demands, frequent production line adjustments are oftennecessary. However, this introduces challenges like rapid capacity ramp-up, equipment anomaly troubleshooting,remote maintenance, and inflexible paper-based work instructions. Hikvision's compact, industrial-grade productionline cameras support installation in confined spaces. High-definition, high-frame-rate video enables engineers toswiftly pinpoint equipment issues, optimize parameters, and enhance efficiency in capacity scaling, anomalyanalysis, and remote maintenance. Integrated with barcode scanning systems, these cameras link video data withproduct information for full-process quality traceability. Additionally, the ESOP (Electronic Standard OperatingProcedure) terminal consolidates process visualization, retrieval, and task distribution, dynamically updatinginstructions based on production orders. This delivers precise guidance and real-time reporting, elevating bothefficiency and output quality.
In manufacturing, product quality is a cornerstone of competitiveness. Hikvision's robust IoT perceptioncapabilities and innovative large-model algorithms empower enterprises to establish end-to-end quality controlsystems from raw materials to finished goods, thereby enhancing product competitiveness. For product assembly,vision-based large-model algorithms detect misassembled or missing components in real time, triggering immediate
alerts for packaging errors. For internal defects, Hikvision integrates X-ray industrial inspection systems with large-model technology to identify soldering voids and short circuits in circuit boards. This solution also excels in foreignobject detection for food and pharmaceuticals, ensuring superior product quality. In compositional analysis,Hikvision employs chromatography for precise substance profiling in food, environmental, pharmaceutical, andchemical sectors. Combined with spectral technology, the systems accurately measure coal's calorific value, ashcontent, sulfur levels, and moisture, with large-scale deployments in coal plants, power stations, coal-chemicalfacilities, cement plants, and metallurgical operations.
4) Helping to digitalize production safety management and emergency command
Safety production is the cornerstone of enterprise survival and development. Hikvision focuses on risks acrosspersonnel, materials, equipment, and environmental factors, enabling real-time monitoring of hazards throughoutproduction processes. This empowers enterprises to enhance risk identification capabilities, proactively detect safetythreats, and effectively reduce the likelihood of accidents.
Robotic arms, as critical automation tools in material handling, maintenance, and servicing, pose inherentsafety risks to nearby workers. Hikvision integrates deep learning AI algorithms with triple-lens cameras to
accurately detect personnel intrusions and trigger real-time alerts. The system interfaces with robotic controlsystems to enforce intelligent safety protocols, such as disabling robotic arm activation when personnel are present,ensuring safe human-machine collaboration.In industries such as oil, chemicals, and natural gas, gas leaks may cause material losses or catastrophicincidents involving flammable, explosive, or toxic substances. Hikvision deploys fixed gas detectors at criticalpoints such as valves, pipelines, and storage tanks for real-time monitoring of combustible and hazardous gases.Portable gas monitors worn by workers detect oxygen, methane, carbon monoxide, hydrogen sulfide, and otherhazardous gases, enabling on-site risk awareness. Hyperspectral Fourier gas remote sensors, installed at elevatedvantage points, remotely detect and map gas plumes from leaks, identifying over 490 hazardous substances likemethane and ethylene and visualizing gas dispersion patterns to guide rapid repair efforts.
Emergency command, as the final safeguard in safety management, forms a closed-loop system encompassingprevention, incident response, real-time mitigation, and post-event analysis. Hikvision unifies existingcommunication devices—audio, video, and conferencing systems—into an integrated platform for seamless andcentralized emergency command access and dispatch. Aligned with enterprise emergency protocols, the systemintegrates structured contingency plans, resource centralization, scenario-specific analysis, real-time "commanddashboard" visualization, and post-incident evaluations. Combined with dual-prevention mechanisms, it ensuresboth routine safety governance and agile crisis response across entire operations.
5) Helping to digitalize group-wide management and supply chain collaboration
Industrial parks, as core hubs for industrial growth, require digital upgrades to optimize enterprise-wideoperational efficiency. As businesses expand, managing multiple factories and parks poses significant challenges.Hikvision's group-wide chain solution establishes standardized, shared, and aligned management systems and
frameworks, transitioning from "single-park management" to "integrated group operations." This breaks silos,
enables cross-domain coordination, and creates unified governance models.
For personnel management, the system supports seamless access, precise attendance tracking, self-servicecafeteria payments, and streamlined dormitory check-ins across campuses. For vehicle management, it facilitatescross-campus entry/exit and parking for employee vehicles, coordinates cross-campus transportation scheduling andoperations for logistics fleets, and enables remote monitoring of weighbridge operations. In safety management, theplatform ensures unified security control across multiple campuses, implements tiered incident classification andreporting protocols, and activates group-wide emergency command during major incidents to safeguard operations.For inspections, the group replaces manual audits with AR/VR-enabled digital inspections for real-time visibility,data-driven control, and operational transparency.Supply chain management directly impacts operational efficiency, market competitiveness, and sustainability.Hikvision's Hik-Cloud Enterprise solutions enable digital supplier management, fostering collaborative models forproduction management, quality control, and channel alignment to strengthen supply chain ecosystems.In terms of production collaboration, multi-level remote visualization tools enable end-to-end transparencyfrom factories to production lines and equipment. The Hik-Cloud Enterprise SaaS platform provides real-timemonitoring of production statuses and process SOP compliance at critical control points, triggering instant anomalyto ensure process adherence. For quality collaboration, Hikvision replaces costly on-site supplier audits with remotequality inspections via the platform, ensuring precise control over raw material quality and end-to-end productintegrity. Regarding channel collaboration, Hikvision enables remote oversight of regional warehouse inventories,channel display standards, and service compliance, optimizing supply chain agility and accountability.
3.2 Domestic Enterprise & Institutional Business: Enabling Digital Transformation in Lifestyle
In recent years, digital technologies have found applications in various aspects of social life, enhancing people'sexperiences in daily necessities, housing, and transportation, and strengthening their sense of fulfillment andhappiness. Hikvision relentlessly explores new business opportunities for lifestyle improvement and upgrading, andcontinues to develop innovative digital life service applications to accelerate the digital transformation of lifestyle.
1) Education: Building intelligent, safe, and healthy learning environments
As the digital transformation of education advances, Hikvision leverages AIoT technologies and collaborateswith academic institutions to deliver premium digital services for teachers and students across all educational stages,aligning with the demand for high-quality educational development.
In higher education, Hikvision's "2+2+1" smart classroom solution features two intelligent control engines toenable holistic smart management and automated operation across diverse teaching spaces. Two non-intrusive audioamplification systems create immersive audiovisual environments, while an AI-powered recording and broadcastingsystem, integrated with large-model algorithms, supports innovative applications like classroom behavior analytics.The solution's fully networked, simplified architecture supports hybrid online-offline teaching models while drivingpedagogical innovation and teaching quality improvement.
In primary and secondary school campuses, video surveillance systems covering key areas are deployedalongside perimeter protection and climbing detection AI algorithms to analyze risky behaviors. Large visionmodels improve detection accuracy and reduces false alarms, significantly lowering safety management costs.
In sports facilities like playgrounds and gyms, smart sports terminals record exercise routines, providemovement analysis for skill improvement, support teaching and fitness assessments, and engage students throughinteractive challenges and performance rankings, boosting physical fitness and participation.
Hikvision's smart products and solutions have been adopted by leading institutions such as Shanghai Jiao TongUniversity and Wuhan University, as well as numerous K-12 schools nationwide, creating intelligent, secure, and
health-focused educational environments.
2) Smart healthcare: Elevating service quality and efficiency
In healthcare, where service quality critically impacts public health and well-being, Hikvision integrates IoT,AI analytics and cross-system data processing to develop closed-loop, full-process diagnostic and treatment models.Hikvision's smart ward solutions address the needs of medical staff, caregivers, and patients. Features likeCaregiver positioning, call transfer, and automated rounds check-ins streamline workflows and improve patientexperiences. For bedridden patients, 5G-enabled medical PDAs measure pressure ulcer areas and automaticallydocument results. Millimeter-wave perception radar products detect falls in real time while continuously monitoringpatients' breathing, heart rate, and movements for 24/7 patient safety. AI-powered infusion monitoring systems trackfluid levels and alert staff for timely interventions. To facilitate smart outpatient service, multi-format guidanceterminals and intelligent algorithms optimize the entire patient journey, automating triage and resource allocationto enhance clinic efficiency and orderliness. In digital operating rooms, video communication terminals integratemedical data to provide surgical references, improving team coordination. Intelligent telemedicine terminals enablecoordinated treatment between pre-hospital and in-hospital teams through video and audio interactions and multi-modal data transmission for pre-hospital emergency care, remote consultations, and cross-facility collaborations,effectively enhancing elevating treatment capabilities.
Hikvision remains committed to advancing healthcare through digital transformation and intelligent innovation,continuously enhancing service quality and operational efficiency. Its medical solutions empower healthcareinstitutions to deliver patient-centric care, with proven deployments at China's leading medical institutions,including Qilu Hospital of Shandong University, the First Affiliated Hospital of Ningbo University, West ChinaHospital of Sichuan University, and the First Affiliated Hospital of Zhengzhou University.
3) Trade and commerce: Enabling end-to-end digital transformation from warehouses to stores
Hikvision leverages its Hik-Cloud Chain platform and Guanlan Large Model to provide products and solutionsfor trade and commercial enterprises across chain stores, warehousing logistics, and production campuses. ThroughAI-powered store inspections, customer flow statistics, information broadcasting, visualized traceability, warehousemanagement, and vehicle yard management, the solutions enhance store operations and upstream production-distribution efficiency.
Hikvision's Hik-Cloud platform enables remote visual management of all stores through networked videosolutions. Trade and commerce-specific large models analyze employee uniform, operational procedures, sanitationstandards, and food safety protocols to ensure compliance and streamline inspections. Centralized digital signageand audio systems synchronize marketing campaigns and announcements across locations. Customer flow camerassupport multi-dimensional data analysis for footfall assessments and marketing optimization. Visual traceabilityplatforms links personnel, materials, and orders to resolve disputes and quality issues with credible evidence. PDAdevices accelerate inventory management, while digital dock and yard management systems (YMS) increaselogistics efficiency with higher utilization rates.
Hikvision's comprehensive AIoT portfolio drives digital transformation for trade and commercial enterprises.As of the end of 2024, Hik-Cloud Chain serves approximately 700,000 chain stores with over 6 million connecteddevices, maintaining rapid growth in both user adoption and ecosystem scale.
4) Real estate and property management: Advancing digitalization of property services through technology
and enhancing residential qualityHikvision leverages technology to serve communities, offering integrated solutions spanning marketing,facility support, and smart home services across the entire property lifecycle. These solutions support thedevelopment of high-quality residential projects by aligning with the full lifecycle of housing construction.
During construction, AI-powered cameras deployed on-site document construction progress and assistmanagers in monitoring timelines. Crane monitoring sensors prevent overload risks during hoisting operations.Commercial displays and irregular-shaped screens in sales centers showcase location advantages, floor plans, andsmart community features, driving digital customer engagement. Integrated smart public area and home solutionscover multiple living spaces, featuring smart access control, AI-enhanced security applications, and nine-categorysmart home services. Interactive tech experiences highlight project premiumness, boosting technological brandingand market value. Smart home demo rooms provide immersive tech interactions, enhancing purchase experiencesand decision-making efficiency. AI-powered inspection platforms standardize property services while reducing on-site workloads, achieving quality and efficiency improvements.
Hikvision has deepened its expertise in real estate through strategic collaborations with Binjiang Real EstateGroup, Shanghai Poly Property Services, and Yongsheng Property Management, fostering mutually beneficialpartnerships and innovation.
5) Cultural and museum venues: Preserving cultural heritage through digital-intelligence integrationChina's five-thousand-year cultural treasures demand not only preservation of heritage but also technologicalsafeguarding. Hikvision focuses on the preservation of cultural relics while enabling public access to the splendorof traditional culture through innovative digital solutions.Archaeologists utilize 3D super-depth microscopes to magnify surface structures of ceramics, bronzes, andtextiles, analyzing craftsmanship and degradation patterns to guide restoration plans. Multispectral fire detectors
protect ancient architecture by identifying fire risks at ultra-early stages, pinpointing ignition sources, and triggeringinstant responses. In humid or rainy regions, portable thermal imagers detect water seepage and hollowing in ancientwalls, uncovering hidden structural risks. Intelligent security gates at museum entrances identify prohibited metalitems (e.g., restricted knives) and alert staff for manual checks, ensuring visitor safety and order. An AIoT hubintegrates museum security systems, creating a digital twin through data interoperability. This 3D visualized securitymonitoring system consolidates all safety parameters onto a single interface, enabling holistic oversight.
Hikvision remains dedicated to preserving cultural heritage through digital-intelligence integration. Its solutionshave been deployed at the Palace Museum, Henan Museum, and other partner institutions, advancing thepreservation and inheritance of cultural legacy.
6) Tourism attractions: Crafting comfortable travel experiences through multi-dimensional enhancementsThe integration of culture and tourism serves as a vital pathway to fulfill people's aspirations for quality livingin the modern era, with digital technologies driving high-quality development in cultural tourism as a new qualityproductive force. Hikvision develops integrated intelligent solutions spanning service, experience, safety, andmanagement domains for tourist attraction scenarios.
At visitor service centers, interconnected ticketing systems and validation devices streamline entry processes—from reservation and online purchase to on-site pickup and multi-mode verification—reducing wait times. Tosafeguard natural resources in scenic areas, AIoT solutions enable geological displacement monitoring, thermalimaging, and water quality analysis to identify risks including geologic hazards, forest fires, floods/droughts, andhydrological anomalies. This technological integration elevates operational efficiency in environmental monitoringand hazard mitigation. Sound-vibration-temperature monitoring products monitor cableway motor health and detectanomalies in cableway facility operations. Smart meters automate equipment status checks during routine
inspections. Environmental/meteorological and tilt sensors track weather impacts on outdoor cableway operations.At operational command centers, Hikvision's solution aggregates multi-dimensional perception data (visitor flow,vehicle tracking, perimeter security, fire control) to establish a 3D digital twin-powered command platform. Thissystem enables real-time precision monitoring, equipment control, data analytics, emergency response coordination,and operational task management via an intuitive interface.
Hikvision's smart tourism solutions optimize destination management and services through scenario-baseddigital applications, elevating travel experiences. In collaboration with partners including Mount Tai in Shandongand the Sand Lake in Ningxia, the Company empowers intelligent, sustainable growth in the cultural tourism sector.
7) Financial services: Focusing on the "Five Key Financial Initiatives" to enable new service models
The "Five Key Financial Initiatives" — Technology Finance, Green Finance, Inclusive Finance, Elderly CareFinance, and Digital Finance — serve as critical pillars for financial institutions to support high-quality economicgrowth. Leveraging its technological strengths, Hikvision empowers financial institutions to enhance internal-external scenario management and drive business innovation.
Hikvision integrates LCD video walls, LED displays, and multi-format smart screens with theme-based designssuch as dual-carbon energy efficiency, senior-adaptive interfaces, rural revitalization, and wealth management.These solutions enable banks to establish specialized branches—green branches, elderly care branches, inclusivefinance outlets, and wealth centers—facilitating channel transformation and delivering specialized and tailoredfinancial services.
Hikvision's financial smart inspection system deploys edge computing devices such as compliance risk-controlterminals powered by large vision models, covering dozens of security and operational scenarios across financialinstitutions and office facilities. This system replaces traditional manual inspection methods with digital solutions,achieving significant cost reduction and efficiency gains.
Amid China's deepening aging population trends, Hikvision collaborates with banks and insurers to enhance
elderly financial services. Through devices such as life health radars, fall detection sensors, smart care terminals,and homecare wristbands, the Company supports insurers in digitizing community-based and in-home elderly caremodels under the "Insurance + Wellness" framework, elevating customer experiences.
These solutions have been deployed by institutions including Agricultural Bank of China, Industrial andCommercial Bank of China, China Postal Savings Bank, China Merchants Bank, Pacific Insurance, and TaikangInsurance, accelerating the implementation of the "Five Key Financial Initiatives".
3.3 Domestic Public Service Business: Facilitating Digital Transformation in Governance MethodsThe digital transformation of governance has become an irreversible trend in the digital age, with e-governmentinitiatives entering an accelerated development phase globally. Advancements in IoT perception, large models, bigdata, and cloud computing are driving intelligent digital governance, now recognized as a critical enabler for societaldigitalization and national governance modernization. Hikvision, grounded in its AIoT technological framework,continuously strengthens four foundational platforms - Perception Base, Intelligence Base, Data Base, andFusion Empowerment capabilities, and expands its five core industry verticals: security, mobility, ecology,governance, and service, striving to realize six strategic objectives: smarter cities, safer communities, moreefficient mobility, precision governance, targeted service delivery, and livable ecological environments.Hikvision deepens and enhances its foundational platform capabilities. In developing its perception base,Hikvision continuously advances full-spectrum and multi-dimensional perception technologies, expanding its
product portfolio. Guided by scientific deployment principles, it enhances scenario-specific perception terminals toaddress operational challenges, building intelligent, multi-layered urban IoT perception systems. To strengthen itsintelligence base, Hikvision integrates domain knowledge to develop industry-specific large models based on largeIoT perception models, large language models, and multi-modal large models. Its centralized AI model hub powersthe scenario-optimized Wensou series, improving detection accuracy for urban safety incidents, anomalousbehaviors, and smart scenarios, while enhancing interactive experiences. The platform supports GPU compatibility,unified model management, and autonomous algorithm training for new scenarios. In terms of its data base,Hikvision focuses on deep integration of visual and operational data. It enhances data governance efficiency andquality through automated tools, deeply mines data value via analytical automation, and builds a graph-dataconvergence system encompassing data aggregation, processing, governance, mining, and service delivery. Toenhance its fusion empowerment capability, Hikvision, entered on collaborative development, resource sharing,and cross-domain integration, integrates multi-source perception, AI, and data resources across industries and urbansystems. This enables cross-sector, cross-department, and cross-level coordination in infrastructure deployment,video sharing, algorithm co-management, capacity sharing, computing power integration, and event co-governance,driving rapid smart scenario implementation in diverse industries.Leveraging deep industry insights and practical expertise, Hikvision strengthens its professional servicecapabilities in AI engineering, data management, system operations, and solution maintenance. Through nationwideservice support teams, it enhances customer engagement across vertical markets. Hikvision continuously enhancesits PIDAM (Perception-Intelligence-Data-Application-Maintenance) framework capabilities, covering systemsdesign, development, integration, and project management. Through strategic collaboration with system integratorpartners, it delivers full-cycle project assurance for end users across industries.Hikvision broadens and deepens its industry applications. Hikvision continues to expand and solidify itspresence in security, mobility, ecology, governance, and service sectors. Leveraging industry-specific businessscenarios as implementation frameworks and building upon its AIoT capabilities, the Company delivers end-to-endsolutions through continuous advancements in its Guanlan Large Model and image-data integration technologies,enabling cross-industry intelligent innovation and operational efficiency enhancement. To date, the Company hasdeployed more than 2,000 business scenarios, over 100 large model algorithms, more than 150 business models,over 500 intelligent industry applications, and more than 300 industry solutions. These achievements span smartcities, public safety, emergency management, traffic control, social governance, smart parking, and smart water
conservancy, offering robust technological support for modernized urban governance.
1) Smarter cities
In the smart city sector, Hikvision integrates IoT and AI technologies to build an end-to-end intelligentgovernance system encompassing "perception-analysis-decision-execution". This system precisely monitors urbanoperational details, provides scientific decision-making support for city administrators, drives the transformation ofurban governance into data-driven models, and advances the development of smarter cities.Leveraging multi-modal foundation models, the Company enhances its fusion empowerment product suite tobuild secure, reliable, and interoperable city-level intelligent hubs. These systems enable dynamic catalogmanagement and cross-domain resource orchestration for million-scale IoT devices. Through advanced perceptiondata cognition capabilities, they improve accuracy in detecting regulatory violations and safety risks, whileestablishing intelligent incident dispatch mechanisms to meet multi-industry operational demands and empowerscenario-based smart applications.
Furthermore, Hikvision provides comprehensive and diverse solutions for grassroots urban administrators atvillage, neighborhood, and community levels.In the digital village sector, Hikvision advances its Five-Pillar Revitalization framework: industrial growth,ecological sustainability, governance modernization, service enhancement, cultural preservation. Focusing on ruralindustries, the Company delivers scenario-specific applications including crop growth monitoring systems andsmart tourism platforms, driving quality development in rural agriculture and tourism. Regarding rural ecology,Hikvision deploys intelligent monitoring systems for water quality management and automated village landscapeinspections, enhancing ecological protection and residential environment enhancement. In rural governance, theCompany implements intelligent systems for drowning prevention monitoring and community behavior scoring,optimizing rural governance operations. For rural services, Hikvision deploys smart elderly care systems and e-bikecharging infrastructure, expanding service accessibility across daily life, education, healthcare, and elderly care,thereby elevating rural living standards. To promote rural culture, Hikvision provides solutions for cultural resourcemanagement and agricultural skill training, supporting the sustainable inheritance of rural cultural heritage.
In the smart township sector, Hikvision continues to optimize its solutions with road condition monitoringsystems and scene analysis tools, effectively improving municipal management efficiency. Focusing on publicsafety initiatives, the Company provides fire safety supervision and dispute mediation applications to enhancesecurity management. For public services, smart publicity systems and intelligent broadcasting solutions strengthencommunity service capabilities. In ecological protection, flood prevention monitoring and forest fire surveillancesystems improve environmental conservation. Through law enforcement team management and evidence trackingtools, the Company supports the modernization of integrated grassroots law enforcement operations.In the smart community sector, Hikvision continues to advance its integrated management system solutions.In community governance, the Company provides scenario-based applications including non-motorized vehiclemanagement and high-rise littering management, promoting more precise, intelligent, and efficient governance. Forcommunity safety, intelligent access control systems and critical facility protection solutions help establishcomprehensive safety-fire prevention supervision systems, enhancing residents' security. Regarding communityservices, elderly care support and digital service guidance applications improve residents' well-being and serviceaccessibility. In integrated community management, centralized management dashboards and work order systemsstrengthen operational efficiency and service capabilities.
2) Safer communities
In the public safety domain, by following the core development path of "perception + intelligence", Hikvisionis committed to providing comprehensive "video-image intelligence-based" solutions and products. Empowered bythe Guanlan Large Model, Hikvision expands industry application scenarios and actively integrates videosurveillance with radar, infrared, vibration, and audio sensors to enhance environmental perception and earlywarning capabilities in complex scenarios, driving intelligent public safety upgrades and safeguarding the SafeChina initiative.In the road traffic safety sector, Hikvision deeply integrates IoT perception technology and big data analyticswith industry scenarios, delivering comprehensive safety solutions for expressways, national/provincial highways,and urban/rural roads. By analyzing traffic safety conditions and identifying risk factors, the Company implementsrefined governance for hazard scenarios and targeted control of key vehicles (e.g., heavy trucks, non-motorizedvehicles), supporting authorities in enhancing safety management. Additionally, Hikvision provides multi-dimensional capabilities including refined perception, data management, and analytical tools to regulate travelbehaviors and ensure operational safety, offering robust support for efficient and secure road traffic systems.
Taking road hazard management as an example: For highway traffic police stations, key vehicle alerts assistofficers in identifying expired inspections and cloned vehicles. On highway sections, the system detects speeding,low-speed driving, illegal parking, emergency lane violations, reversing, wrong-way driving, and illegal lanechanges in tunnels. In adverse weather zones, weather monitoring, road condition warnings, dynamic speed limits,tailgating detection, and merging alerts enhance safety. At uncontrolled intersections, village-crossing sections,sharp curves, and cliffside roads, oncoming vehicle alerts, speed warnings, and pedestrian crossing notificationsmitigate risks. These integrated capabilities establish comprehensive hazard management, improving trafficgovernance and road safety.
Furthermore, for regulating vehicle driving behaviors, Hikvision's traffic violation detection systemintegrates violation identification, data transmission, visual alerts, and application processing. At urban intersections,it detects red-light running, lane crossing, wrong-way driving, improper lane usage, and traffic restriction violations.On road segments, it monitors speeding, illegal parking, failure to yield to pedestrians, and phone use while driving.The system additionally identifies truck overloading, overcrowded vans, illegal honking, and license violations,providing real-time evidence for on-site safety education to standardize driving behaviors and ensure road safetyand efficiency.
In emergency management, Hikvision provides IoT connectivity, risk monitoring, and intelligent earlywarning applications for hazardous chemicals, fireworks and firecrackers, non-coal mines, and industry and tradeenterprises, alongside specialized operation management tools for high-risk scenarios like hot work and confinedspaces to enhance safety oversight. For natural disasters such as forest/grassland fires, typhoons, floods, andgeological hazards, the system offers disaster risk monitoring, comprehensive assessment, early warning, andsituational analysis to strengthen disaster prediction capabilities. For risk-prone locations such as construction sites,small-scale commercial premises, dilapidated houses, and gas stations, multi-domain risk monitoring, assessment,and closed-loop control applications enable remote dynamic supervision, mitigating risks and supporting resilienturban safety. For sudden incidents, end-to-end emergency command capabilities including comprehensive analysis,
dispatch coordination, and post-event evaluation are deployed. Scenario-specific analysis tools further improveemergency response for hazardous chemical accidents, forest fires, urban waterlogging, and other critical disasters.
3) More efficient mobility
Hikvision integrates IoT perception technology with transportation scenarios including infrastructuredigitalization, operational reliability, traffic management, hub logistics, and mobility services. The Companyprovides refined perception capabilities and data-driven decision-making mechanisms to ensure secure and efficienttransportation systems.For congestion diagnosis and management, Hikvision deploys a variety of perception devices, control systems,and computing platforms to collect multi-dimensional intersection data, forming a digital perception base throughmulti-source fusion. Leveraging its traffic cognition engine, the Company provides control strategies, decision-making models, performance evaluation, and simulation tools. Traffic pattern analysis identifies recurrentcongestion points, while operational diagnostics analyze intersection inefficiencies to generate signal timingadjustments and lane configuration recommendations. Integrated intelligent systems including traffic signal control,traffic flow optimization, and dynamic route guidance regulate traffic demand through travel time allocation, laneutilization, and route planning. Signal timing optimization services with standardized workflows enhance urbantraffic management precision through system-service integration, achieving congestion mitigation goals.
Hikvision's smart traffic signal control platform delivers targeted capabilities across scenarios: For isolatedintersections, actuated control and adaptive algorithms resolve improper signal timing. For urban arterials,dynamic/fixed green wave coordination and short-zone coordination improve overall traffic flow efficiency. Forregional multi-intersection coordination, dynamic optimization achieves network-wide traffic flow maximization.For queue spillover risks, overflow prevention protocols maintain intersection functionality. For uneven turningflows, dynamic lane allocation balances lane utilization to reduce congestion.
Additionally, Hikvision provides comprehensive solutions for traffic management operations across diversesectors to ensure safe and efficient transportation systems.In highway transportation, Hikvision integrates multi-dimensional perception, AI, and large modeltechnologies to advance intelligent applications across construction, management, maintenance, and serviceoperations. The Guanlan Large Model enhances AI-driven precision monitoring for bridges, slopes, tunnels, serviceareas, construction sites, toll stations, mountain roads, and low-visibility zones. Project management toolsstreamline workflows, while AI-powered road inspection devices and maintenance decision systems optimizeinfrastructure upkeep. Multi-channel traveler information services improve journey safety and comfort, supportingefficient transportation networks.
For integrated transportation hubs, Hikvision addresses stakeholders' management and service needs bydelivering full-scenario monitoring and control capabilities for key areas including drop-off zones, ride-hailing/taxilots, public parking, and transfer concourses. Tailored to passenger arrival/departure flows, the system providesride-hailing dispatch alerts, taxi queue predictions, parking availability updates, and emergency assistance.
Scenario-specific IoT perception technologies empower hubs to function as critical urban mobility anchors.
In port management, Hikvision focuses on safety management, intelligent operations, equipmentmaintenance, and terminal zone governance. By integrating video, audio, radar, thermal imaging, and other multi-dimensional perception technologies with AI capabilities, it delivers comprehensive monitoring for hazard detection,conveyor belt inspections, crane CCTV/remote control, and gate management. These solutions accelerate digitaltransformation, ensure operational safety, optimize cargo handling efficiency, and advance the development of next-generation secure, smart, and sustainable ports.
In rail transit, Hikvision leverages multi-dimensional and AI technologies to address operational needsincluding station passenger flow management, facility maintenance, rail corridor patrols, and control centercoordination. The solutions feature abnormal behavior detection, crowd control, smart security screening, worksafety monitoring, automated corridor inspections, and operation status oversight. These capabilities support safeand efficient urban rail operations while enhancing passenger safety and comfort.
4) Precision governance
For critical urban infrastructure including gas pipelines, drainage systems, bridges, water supply networks,heating systems, and utility tunnels, Hikvision integrates IoT perception, risk assessment, decision support, digitaltwins, and scenario-specific applications. Through pipeline network modeling and multi-modal large models, theCompany develops digital monitoring platforms to enable precision management of underground utility networks.
Hikvision delivers a comprehensive risk assessment system for urban lifelines, enabling risk indicatormanagement through intelligent warnings and risk inventory control. Its digital twin applications support 3D
pipeline modeling, real-time data visualization, and predictive analysis via simulation engines. The decisioncommand system integrates pipeline data mapping, risk data overlay, and statistical analysis for real-time riskdetection, supported by a unified operational dashboard and emergency dispatch for visual and efficient incidentmanagement in underground utility networks. In drainage management, Hikvision deploys subsurface level andflow sensors to monitor drainage network operations in real time, providing urban waterlogging informationmanagement applications to support flood monitoring, early warnings, and situation analysis. For gas safety, fixedlaser methane detectors enable real-time gas concentration monitoring, with pipeline operation management toolsto facilitate risk identification. For bridge management, visual deformation sensors and traffic checkpoints correlatestructural data with vehicle traffic information, offering structural anomaly detection capabilities to enhance bridgesafety. For water supply, heating systems, and underground utility tunnels, leakage, pressure, flow, and water qualitymonitoring devices provide comprehensive operational monitoring and risk early warnings across criticalinfrastructure.Additionally, Hikvision offers comprehensive solutions for diverse urban governance needs. In urbanoperations management, its smart city management platform integrates urban management dome cameras, urbanmanagement panoramic PTZ cameras, AI analytics servers, and other devices to enable intelligent inspections ofurban appearance, urban waterlogging monitoring, illegal construction detection, construction waste transporttracking, centralized operations monitoring, and other applications. The platform provides warning and algorithmicscheduling capabilities for nearly 70 types of regulatory violations ranging from fixed-point monitoring to mobilepatrols, and from single-scenario to complex-area coverage, helping to create a clean, tidy and orderly urbanenvironment. In terms of environmental sanitation supervision, Hikvision provides a smart environmental sanitationplatform with a focus on scenarios such as sanitation worker and vehicle operation, garbage collection andtransportation, station management, and garbage classification.The platform allows worker and vehicle operationsupervision, garbage collection and transportation management, garbage classification management, stationoperation supervision and other applications through the use of intelligent vehicle terminals, garbage classificationcameras, intelligent analysis supercomputers and other devices, facilitating refined supervision of urban appearanceand environmental sanitation.
5) Targeted service delivery
Hikvision integrates industry-specific software platforms such as the smart elderly care platform, online marketsupervision platform, and urban parking operation management platform to provide complete solutions for business
areas including civil administration-led elderly support, market supervision, and smart parking, helping enhanceservice precision.In the field of civil administration-led elderly support, with a focus on scenarios such as institutional elderlycare, elderly caregiving, and service supervision, Hikvision implements applications such as smart caregiving andsmart wards through devices including nurse station hosts, bedside terminals, fall detection radars, and smart careterminals, facilitating the intelligent transformation of elderly care services.
Hikvision provides an intelligent elderly care application that conducts intelligent analysis of scenarios suchas falls, prolonged sitting/standing, and hand-raising assistance requests, delivers continuous health monitoring forthe elderly and builds health profiles, helping to create safer care environments. It offers a smart ward systemtailored to elderly care facility requirements, providing bed management, bedside call functions, and intelligentreminders to facilitate timely communication between medical staff and patients. Additionally, it delivers a safetymanagement system for elderly care institutions, featuring safety management archives, self-inspections, andpreventive measures, to enhance institutional safety management standards.In the field of market supervision, Hikvision has built an online market supervision platform for cateringbusinesses, elevators, agricultural markets, and other scenarios through the use of elevator health monitoringcameras, elevator safety gateways, anti-oil cameras, and other products, facilitating refined supervision services.The Company provides a catering online supervision application that conducts intelligent analysis of kitchen staffattire, pest control measures, and standardized operations, delivering visible, traceable, and transparent productionprocess services for regulators and the public to help create safer, more hygienic, and standardized cateringenvironments. Its elevator online supervision application enables oversight of elevator faults, maintenance quality,and annual inspections to support operational service upgrades, while also implementing video inspections and e-bike entry detection services to enhance elevator safety. In the area of smart parking, Hikvision provides a
management platform for urban parking operations with a focus on roadside parking, off-road closed parking lotsand other scenarios.The platform allows resource management, operation management, customer servicemanagement, financial management, operation and maintenance management, public services, and other urbanparking business applications through the use of parking space detection cameras, radar-video assisted parking posts,geomagnetic instruments, entrance and exit control equipment and other devices, providing professional parkingoperations services and promoting more efficient and convenient parking experience.
6) Livable ecological environments
Hikvision leverages technologies including multi-dimensional perception, large model-based intelligentanalysis, and digital twins to establish comprehensive ecological monitoring, management, and service systems forsectors such as natural resources, forestry and grassland, water resources, water management, ecologicalenvironment, and meteorology, aiming to make ecosystems more livable.In smart water governance, Hikvision leverages technologies such as digital twin water conservancy "Sky-Space-Earth-Water-Project" integrated monitoring and perception, multi-scale data platform construction, multi-modal large model intelligent analysis, and simulation to deepen its expertise in business areas includinghydrological monitoring and management, flood and drought disaster prevention, water resources management andallocation, water conservancy project construction and operation management, rural water infrastructuremanagement, and urban-rural water supply and drainage management, further advancing scenario-basedapplications of digital twin technology in water governance.
Hikvision provides a digital twin hydrological management platform that dynamically monitors rainfall, waterlevels, flow rates, and other hydrological elements, enabling flood prediction and forecasting, threshold-exceedingalerts, pre-simulation modeling, and digital contingency plan management to support scientific decision-making forflood control and drought prevention. The smart river-lake management platform automatically detects "fourviolations" (illegal sand mining, shoreline damage, waste dumping, water pollution) through AI analysis, enhancinglong-term river-lake protection and dynamic governance capabilities. The digital twin water conservancy projectmanagement platform implements applications including safety monitoring and early warning systems forreservoirs, sluice-pump stations, and dikes; electromechanical equipment status monitoring alerts; rainfall and watercondition monitoring alerts; an engineering safety status integrated dashboard; flood prevention across fourmeasures (prediction, warning, pre-simulation, contingency planning) and other applications for real-timeoperational safety oversight during flood seasons. The mountain torrent disaster early warning platform and floodcontrol command system deliver dynamic monitoring, alert notifications, GIS-based dispatching, conference-basedcoordination, and video-enabled command functions through "full-system access, network-wide connectivity, andsingle-screen visualization," ensuring immediate transmission of flood alerts and hazards to frontline units, verticalcoordination across command levels, and horizontal collaboration between departments The digital twin irrigationdistrict platform supports water measurement management, safety inspections, and water allocation functions(prediction, warning, pre-simulation, contingency) to support infrastructure expansion and modernization upgradesin irrigation districts. The intelligent water plant safety platform enables smart inspections and secures secondarywater supply pump rooms, ensuring production safety across water treatment facilities.
As the construction of digital economy, society and governments gains speed, IoT perception, large models,big data, and other technologies are rapidly integrating into urban and industrial application scenarios, graduallyfulfilling their value. Safety applications have expanded beyond traditional public security to encompass multi-dimensional safety management and digital governance scenarios such as public spaces, municipal facilities, trafficmanagement, emergency response, and natural resource conservation, with an increasingly mature intelligentapplication system based on all-scenario, round-the-clock, omnidirectional perception capabilities.
To better serve users, Hikvision adheres to a user value-centric approach, building a full-value-chain closed-loop ecosystem. Collaborating with partners across the AIoT domain including research institutes, product providers,algorithm developers, independent software vendors, system integrators, and distributors, Hikvision deeply analyzesuser value migration trends and precisely identifies core value demands. By opening foundational capabilities such
as perception base, intelligence base, and data base, the Company drives multi-dimensional collaboration intechnology, products, solutions, and services. This enables continuous iterative upgrades across products, systems,and services, ultimately delivering superior solutions for users in the public service sector.
3.4 Domestic SMB business: Advancing the digital transformation of SMB marketing-sales-serviceoperations to enhance industry-wide service capabilities
Hikvision is advancing the digital transformation of marketing, sales, and services for its SMB (Small andMedium-sized Business) segment, leveraging digital tools and platforms to better serve distributors and collaboratewith them in supporting installers of all types. This initiative helps distributors and installer clients improve servicequality, reduce costs, and increase efficiency, fostering healthy industry development. Together with ecosystempartners, the Company delivers cost-effective, lightweight, and customized solutions tailored to the specific needsof SMB users.
1) Capability building: Establishing a customer workbench to enhance full-chain collaboration efficiency
Leveraging Hikvision SMBG E-commerce and Hikvision SMBG HikLink, Hikvision connects and empowersdistributors and installers to reach and serve SMB users through digital marketing. This initiative builds an AIoTindustry collaboration network, driving industrial prosperity and accelerating digital transformation and upgrading.
Hikvision SMBG E-commerce: This is a digital empowerment platform for marketing-sales-service in thesecurity industry that primarily serves distributors and installers, enhancing efficiency across marketing, pre-sales,delivery, and operations and maintenance. Throughout the year, the platform has continuously optimized features,enabling professionals to swiftly search and compare products and solutions. It supports AI-driven intelligentmarketing, scenario-based product selection and configuration, rapid batch debugging, and project management,currently boasting millions of registered users. Simultaneously, the platform assists distributors in refining
omnichannel digital operations while building a service matching ecosystem between active service providers andqualified local distributors, exploring upgrades to new channel models to elevate SMB user experiences.
Hikvision SMBG HikLink: This is an AIoT cloud platform that serves SMB users. The platform mainlyprovides general IoT capabilities such as video surveillance, access control, alarm systems, attendance management,visitor management, public address, network management, smart fire protection, and information release. Throughcollaborations with ecosystem partners, it delivers scenario-specific solutions for SMBs in residential communities,factories, schools, construction sites, industrial parks, farms, and other settings. Leveraging human/vehicle detectionalgorithms as the foundation, the platform offers intelligent scenario algorithms and smart notifications to drivedigital and intelligent transformation for SMBs, democratizing intelligent technologies.
2) Business focus: Building a smart service network, upgrading channel models, and empowering partners
to deliver efficient professional services to end-users.Driving digital transformation for security professionals to enhance service capabilities
Hikvision SMBG E-commerce empowers security professionals across pre-sales, in-process, and post-salesprocesses through modules like configuration tools, product documentation, solution galleries, service hubs, anddevice setup/debugging. These features enhance content marketing and service support, already serving millions ofprofessionals with key functions utilized over tens of millions of times. The Company will further expandprofessional channels and build a nationwide service network to provide customers with diverse product optionsand timely local professional services.Delivering one-stop solutions and services to empower SMB digital transformationIn response to SMBs' needs for lightweight and user-friendly products and systems, Hikvision has createdHikvision SMBG HikLink, an AIoT cloud platform that provides compact yet efficient solutions and standardizedservices to make digital transformation more accessible, efficient, and cost-effective for SMBs. The platformintegrates multi-terminal capabilities, expands lightweight AI algorithms, and collaborates with ecosystem partnersto deploy vertical small scenario-specific solutions nationwide, with device deployments and user base maintainingrapid growth throughout the year.Looking ahead, Hikvision will uphold its collaborative win-win philosophy, working closely with partners todevelop more market-driven competitive solutions. The Company will continue to connect and serve SMB users,comprehensively supporting their digital transformation from optimizing operational processes to innovating
business models, ultimately building an interconnected IoT ecosystem to unlock new growth possibilities.
3.5 International business: Continuously enhancing global product and marketing-sales-service systems andbuilding a more open global collaboration ecosystem
Positioning its international operations as a "leading global provider of AIoT products and solutions",Hikvision implements country-specific and product-specific marketing strategies. Adapting to local conditionsbased on national development stages, the Company advances localized marketing strategies to continuouslyenhance overseas product competitiveness and localization alignment. Hikvision's business now spans more than180 countries and regions, delivering localized services to clients and end-users worldwide.1） Continuously building a solid and comprehensive AIoT product-technology-solution framework for
global operations
While consolidating its core video-centric business, Hikvision actively develops a second growth curve inoverseas markets. Centered on imaging technologies, AI capabilities, and multi-dimensional perception, theCompany continuously enhances its AIoT product portfolio tailored to international demands. With robustdistribution channels and strong brand influence, Hikvision steadily expands project markets while enrichingindustry-specific solutions. The synergistic development of channel-driven and project-driven markets establishesa sustainable long-term development path for its global business.
24/7 all-environment imaging technology: Leveraging next-gen AI-ISP technology, Hikvision continues tolaunch innovative products including ColorVu 3.0 and DarkerFighter 2.0 front-end devices, delivering ultra-clearcolor images with rich details under ultra-low illumination. The Company offers environmentally adaptive camerasfeaturing polymer anti-corrosion coatings, non-powered and network-independent operation, extreme temperatureresistance, self-cleaning, anti-vibration stabilization, and macro/telephoto capabilities, ensuring stable high-definition imaging in harsh conditions.
Precision AI applications: Powered by its Guanlan Large Model, Hikvision has debuted overseas-oriented AIproducts including DeepinView cameras and DeepinMind back-end systems. These solutions significantly improvetarget detection accuracy and reduce false alarms in perimeter security scenarios.
Expanding multi-dimensional perception capabilities: Building on visible light perception, Hikvisioncontinuously expands into multi-dimensional perception technologies including infrared, millimeter-wave radar, X-ray, and acoustic wave, further enriching IoT perception capabilities. The Company has launched a comprehensive
portfolio of perception products such as radar systems, thermal imaging devices, alarm systems, fiber-optic sensors,and X-ray solutions. By fusing visual perception technology with other perception technologies, the Companycontinues to enhance scenario-specific AIoT capabilities to develop innovative solutions such as radar-vision fusion
2.0 for ultra-long-range traffic incident detection and vibration-sensing fiber solutions for precise anomalylocalization in perimeters and pipelines.Catering to SMBs' needs for lightweight and user-friendly products and systems, Hikvision deliverscomprehensive yet easy-to-deploy scenario-specific solutions. These integrate multi-terminal capabilities throughunified platform management of CCTV, access control/attendance systems, intercoms, alarms, and networkdeployment, enabling efficient and cost-effective digital transformation. In video-centric business, the Companymaintains sustained high-quality growth by consolidating channel foundations and optimizing product portfolios.For non-video domains, while effectively leveraging existing channels, the Company actively expands into newones, with market share continuing to expand. Products including networking equipment, interactive displays, andLED solutions have achieved rapid growth.In overseas project markets, Hikvision capitalizes on viable opportunities by enhancing solution quality anddelivery capabilities to ensure large-scale project implementation. The Company proactively extends industry-specific AIoT solutions across transportation, commercial, retail, education, healthcare, manufacturing, and energysectors globally.In the transportation sector, leveraging visible light perception and radar technologies, the Company deliversprecise traffic flow analysis, prediction, and control solutions widely adopted across Southeast Asia, Central Asia,and the Americas, effectively alleviating congestion, optimizing management, and enhancing mobility efficiency.For retail, it pioneers AI-powered loss prevention solutions, deploying advanced algorithms to detect anomalieslike unattended item removal and unpaid exits, achieving rapid response capabilities. Partnerships with leadingretailers in multiple countries have significantly improved operational efficiency, establishing strong brandrecognition in local loss prevention markets. In education, focusing on classroom innovation, Hikvision refinesinteractive displays and lesson-sharing platforms to drive digital transformation of education. The Company isworking with K-12 schools and higher education institutions in over 100 countries to explore new ecosystempartnerships that elevate teaching quality and efficiency. In the sports venue sector, the Company implementsAIoT technologies to integrate lighting, HVAC, and security systems for centralized intelligent management,significantly reducing operational costs. Simultaneously, the deployment of smart navigation systems and
interactive displays greatly enhances spectator experiences while improving venue operational efficiency and usersatisfaction. In data centers, the Company employs multi-dimensional monitoring sensors to achieve precisemonitoring and regulation of environmental parameters, ensuring stable equipment operation and reduced energyconsumption. Meanwhile, leveraging intelligent security systems, it conducts real-time monitoring of personnelaccess and equipment operational status, effectively safeguarding data security. Across manufacturing and energyindustries, customized comprehensive campus solutions spanning perimeter security to personnel/vehiclemanagement serve over 300 enterprises. Multi-dimensional perception technologies deeply integrate withproduction workflows and equipment monitoring, ensuring operational safety and efficiency gains.2） Accelerating the development of an international digital marketing-sales-service system to further
enhance operational capabilitiesGuided by the Company's overarching digital transformation strategy, Hikvision's international business adoptsa customer-centric approach. Focusing on the entire value chain of core operations, it continuously develops andoptimizes digital platforms to improve end-to-end operational efficiency from the Company to clients and end-users.
The Company persists in decentralizing channel networks to empower partners and build a collaborativeecosystem, shifting its marketing-sales-service focus toward secondary clients and installers. Leveraging the HPP(Hik-Partner-Pro) initiative, it simplifies operational interfaces across installers' business workflows, refines toolkitsfor pre-sales, in-process, and post-sales stages, and strengthens promotional operations to continuously enhancedigital marketing, sales, and service capabilities. A global content management platform has been established to
create an omnichannel content marketing matrix, enabling efficient content creation, management, collaboration,distribution, and analytics. Additionally, the Company will advance standardized and systematic client managementframeworks, improve data governance, and increase marketing precision through higher-quality client data.Internationally, the Company prioritizes operational service quality by enhancing digital tools to optimizeoverseas warehouse and logistics management. It actively mobilizes resources to address volatile internationallogistics conditions, ensuring order fulfillment satisfaction.With 18 call centers and over 500 authorized service points deployed globally, the Company strengthenslocalized repair capabilities and accelerates technical response efficiency. Through its eLearning platform, itempowers clients with hybrid training programs combining online and offline modules. The Company will furtherupgrade AI-powered customer service solutions and expand self-service capabilities using large models tostreamline support processes.3） Building an international ecosystem collaboration framework through open product technologies andcooperative resourcesAs a global leader in AIoT products and solutions, Hikvision has been leveraging its localized global sales andservice networks and comprehensive product portfolio to deeply engage with overseas vertical industry clientsincluding system integrators, independent software vendors, and algorithm providers. While delivering proprietaryend-to-end solutions, the Company enhances partners' comprehensive competitiveness by offering tiered access toits technological capabilities and resources, enabling precise adaptation to diverse application scenarios.
In 2024, the Company continues to strengthen its capabilities in device, platform, and application openness.For device openness, it has expanded from video surveillance devices to AIoT devices, establishing a comprehensiveIoT device openness framework. Regarding platform openness, addressing intelligent transformation trends in theindustry and fragmented algorithm demands, Hikvision actively promotes its HEOP (Hardware Enabled OpenPlatform) and AI Open Platform to global clients, with over 100 registered HEOP partners by the end of 2024. Inapplication openness, Hikvision supports overseas partners including alarm monitoring service providers, fleetmanagement operators, and smart building maintenance specialists through localized and cloud platform integrationcapabilities.
In recent years, Hikvision has enhanced its digital capabilities to serve broader client segments. Through theTechnology Partner Program (TPP), it offers overseas partners product protocol resources, development support,and technical knowledge bases, while facilitating business expansion via co-listing and joint solution promotion.The platform added over 5,000 new users in 2024, with particularly rapid growth in access control and attendancepartners. By improving data connectivity from products to end-users and leveraging localized teams, the Companydrives online-to-offline synergies for partners, advancing the AIoT ecosystem.
Amid accelerating global digital and intelligent transformation, Hikvision will sustain resource investments todeepen overseas sales networks and expand open capabilities, with a focus on actionable vertical industries. TheCompany empowers cross-sector clients with scenario-based AIoT solutions to optimize management effectivenessand operational efficiency.
3.6 Innovative business services: Cultivating new growth drivers by exploring AIoT technologies, products,and business formats
Hikvision's continuous efforts in technical reserves and expanding business reach provide a robust foundationfor innovative business development. While both its core operations and innovative ventures align with the strategicfocus on AIoT, they differ in technical architectures, product development, and business strategies, forming amutually reinforcing ecosystem that empowers the digital transformation of economies and societies.
The innovative business portfolio, currently comprising HikRobot, EZVIZ Network, HikMicro, HikAuto,HikSemi, HikFire, HikRayin, and HikImaging, has consistently injected new momentum into the Company's long-term sustainable development through its robust growth.
Combining multi-dimensional perception, AI, navigation control, and decision-making technologies,HikRobot focuses on industrial IoT, smart logistics and intelligent manufacturing with solid algorithm expertise,
robust software and hardware development capabilities, and a complete marketing service system. HikRobotcontinues to invest in machine vision and robotics to improve quality, reduce costs, and increase efficiency andpromote the digital and intelligent transformation of manufacturing and logistics.
In 2024, the Company strengthened its machine vision capabilities by focusing on AI-powered industrialquality inspection and 3D technologies, launching products such as 2.5D imaging systems, industry-specific largemodels, and point-line-surface laser sensor series to enhance the VM-centric visual ecosystem. In the mobilerobotics domain, it introduced the 5th-generation AMR intelligent base with significantly improved autonomy,alongside the STU solution for e-commerce logistics to boost storage density and order-picking efficiency.Additionally, the Company unveiled serialized articulated robots, completing its strategic "hand-eye-foot"coordination framework and establishing an embodied intelligent architecture with perception, decision-making,mobility, and execution capabilities, comprehensively addressing smart manufacturing demands across industrialscenarios while improving production flexibility.
Committed to becoming a trusted provider of smart home and IoT cloud platform services, EZVIZ Networkstands out as one of the few AIoT companies in the industry with complete vertical service capabilities includinghardware design, R&D, manufacturing, and IoT cloud platform services. Leveraging proprietary technologies insmart hardware, cloud platforms, AI, and intelligent robots, it delivers AI-driven smart living solutions forresidential users and offers an open AIoT cloud platform for enterprise developers.
In 2024, the EZVIZ ecosystem has been comprehensively upgraded to a "2+5+N" architecture, centering onsmart video and visual technologies. Driven by the two core drivers—AI and the EZVIZ IoT Cloud—it integratesfive flagship self-developed AI-enabled product lines: smart home cameras, intelligent access control, smart controlsystems, service robots, and wearables. Simultaneously, through open ecosystem controllers, it connects N-typeperipheral product lines across subsystems including environmental control and smart entertainment, deliveringdifferentiated smart home products addressing security, access control, cleaning, health monitoring, andcompanionship scenarios, thereby enabling intelligent transformation for residential and adjacent spaces.
HikMicro, rooted in infrared thermal imaging technologies, advances high-value MEMS, optoelectroniccomponents, and sensor technologies to build multi-dimensional perception capabilities covering temperature,pressure, flow, and level. Targeting AIoT, industrial, outdoor, and embedded solutions markets, it delivers corecomponents, detectors, modules, thermal imagers, and process instrumentation products and overall solutions to theworld. By focusing on temperatures, HikMicro is developing multi-dimensional technology and product solutions,expanding the boundaries of human perception.
In 2024, Hikmicro launched its 8μm high-sensitivity infrared core components, detectors, and systems in thethermal imaging field, alongside shutter-free imaging algorithms and large-model AI-powered image algorithms,driving broader adoption of thermal imaging. In smart digital manufacturing, the Company introduced a series ofsmart instrumentation products—including pyrometers, ultrasonic/electromagnetic/mass flow meters, radar levelgauges, and pressure transmitters—by integrating MEMS sensing and high-precision algorithms. Synergizing withits thermal imaging portfolio, these solutions enable end-to-end industrial intelligence spanning process control,efficiency optimization, and safety assurance, creating a holistic perception network for enterprises.
HikAuto, centered on vision and millimeter-wave radar technologies, has become a leading intelligent drivingsensor supplier in the passenger vehicle OEM market in China, advancing intelligent driving adoption while servingcommercial vehicle and aftermarket sectors to enhance road safety and freight efficiency. The Company extendsAI-enhanced radar perception into AIoT applications across industrial, transportation, and perimeter security sectors.
Following its 2024 integration of Sensortech, HikAuto strengthened its R&D scale and capabilities,maintaining domestic market leadership in vehicle-mounted cameras and millimeter-wave radars. Leveraging itsaccumulated full-stack in-house R&D capabilities, the Company has achieved sustained breakthroughs in newproduct development and customer-designated mass production, securing projects for products including 4Dimaging millimeter-wave radars, L2+ integrated driving-parking systems, and cabin-parking solutions, aligningwith the industry-wide acceleration of intelligent driving adoption. For commercial vehicles, HikAuto deliversscenario-based smart systems addressing safety and efficiency amid industry trends of electrification and smarttransformation. Globally, it develops compliant ADAS products aligned with regional safety regulations and workswith partners to expand market reach. Concurrently, the Company advances in-vehicle video applications forconsumer markets with lightweight smart features and miniaturized functionalities to safeguard journey safety forvehicle owners.HikSemi specializes in providing professional storage products and solutions for enterprise clients and end-users. It focuses on data centers, in-vehicle applications, industrial controls, smart security, consumer electronics,and PC assembly, continuously enhancing competitiveness in vertical markets. HikSemi possesses full-stackcapabilities spanning product design, firmware algorithm development, packaging and testing, to intelligentmanufacturing mass production and delivery. By continuously expanding its product portfolio, advancingtechnological upgrades, and enhancing operational efficiency, the Company aims to become China's leadingintegrated storage solution provider, empowering enterprises and organizations in their digital transformation.
HikFire operates across general and industrial fire protection sectors as an intelligent fire IoT and smartmanagement solution provider centered on fire detection, multi-dimensional perception, wireless IoT, and AI videoanalytics. It supports urban fire IoT deployment and enterprise digital transformation, delivering one-stop fire safetysystems and management services for public facilities, industrial parks, SMBs, and households, while building acomprehensive fire safety ecosystem with its four-dimensional smart system integrating perception, prevention,management, and emergency response.
HikRayin is focusing on X-ray imaging technologies, dedicated to becoming a leading technology R&D,manufacturing, sales, and leasing services provider of invisible light detection equipment. The Company maintainsin-house production capabilities for security inspection machines, security doors, industrial X-ray equipment, anda full range of supporting products. With long-standing expertise in X-ray technology, AI, equipment IoT, etc.,HikRayin continuously empowers industries through technological innovation and value creation in smart securityinspection and intelligent manufacturing sectors.
HikImaging, deeply rooted in the medical technology sector, delivers OEM/ODM solutions for medicalendoscopy systems globally. Focused on multi-dimensional sensing, intelligent analytics, and audiovisual
transmission technologies in healthcare, it partners with medical device manufacturers to deliver rigid/flexibleendoscope solutions and surgical video management systems, advancing digital and intelligent transformation inoperating rooms and clinical settings. HikImaging focuses on advancing multi-dimensional perception, intelligentanalytics, and audio-visual transmission/computing/display/control technologies for medical scenarios. TheCompany provides medical device manufacturers with comprehensive solutions including rigid/flexible endoscopesand surgical audiovisual management systems, collaborating with partners to drive digital and intelligenttransformation in operating rooms and clinical diagnostic environments.
II. Analysis of Core CompetitivenessIn the context of the deepening societal digital transformation, the breakthrough advancements in artificialintelligence (AI) technology have imparted a strong impetus to the digitalization process. Hikvision continuouslydrives the implementation of cutting-edge technologies in the AIoT domain, striving to balance the fulfillment ofcustomer personalized needs, the development of scenario-based solutions, and the realization of its own scaleadvantages. Hikvision maintains industry-leading positions in technology accumulation, marketing strategies,manufacturing capabilities, operational efficiency, and talent reserves. The Company is dedicated to refining itsbusiness processes and organizational structures to better address fragmented demand, adheres to innovation intechnology, and advances the digital transformation of its marketing and service operations. Hikvision promotesprofound operational upgrades internally, consistently reinforcing its competitive edge in the industry. Byempowering diverse industries, Hikvision contributes to improving quality, reducing costs, and enhancingefficiency across society..
1. Maintain High-Level R&D Investment and Deepening Empowerment with AI Large Model TechnologySince its inception, Hikvision has consistently been dedicated to technological innovation, continuallyintegrating general technologies (hardware technology, materials and processes, embedded software, system-levelsoftware development, big data technology, and cybersecurity) with application-specific technologies to fosterproduct innovation and build a comprehensive product portfolio ranging from detectors, modules, devices tosystems. As an AIoT company, sensing technology has been a strategic focus of long-term investment for Hikvision.The Company has expanded sensing technology beyond visible light into domains such as millimeter waves,infrared, X-rays, lasers, and ultraviolet rays, while integrating acoustic waves, vibrations, temperature and humidity,pressure, and magnetic field sensing methods. This approach enables the Company to develop multi-dimensionalsensing fusion applications. Hikvision is advancing the innovative applications of AI across society and theeconomy, developing the Hikvision Guanlan Large AI Model to enhance the accurate understanding of dynamicscenarios and the effective handling of complex tasks. This innovation empowers software and hardware solutionswith more precise sensing capabilities and more robust cognitive abilities, driving continuous upgrade in securitybusiness and scalable implementation of scene-specific digital transformation.Hikvision has maintained a high-level R&D investment, with cumulative R&D expenses reaching RMB47.702billion over the past five years. Beyond its Hangzhou headquarters, which houses research institutes, hardwareproduct R&D centers, and software product R&D centers, the Company has established numerous local R&D
centers both domestically and internationally, forming a multi-tiered R&D system centered at the headquarters andradiating to regional offices. Hikvision will continue to invest strongly in R&D, reinforcing and consolidating itsAIoT technology foundation, deepening research and application of large AI models, and expanding the variety ofsmart IoT devices. By seizing opportunities in digital transformation, Hikvision aims to solidify its marketleadership in the AIoT industry.During this reporting period, Hikvision leveraged its deep technical capabilities and industry insights to deeplyintegrate cutting-edge large AI model technology. The Company has driven the iterative optimization of new digitalproducts, enriched its digital product portfolio, and accelerated the expansion of scenario-bases digitaltransformation business.
2. Continuous Improvement of Domestic and International Marketing, Sales and Service Networks andEnhancement of Digital Capabilities
Hikvision is committed to establishing a comprehensive global marketing, sales and service network to ensurerapid responses to customer needs. Within China, the Company has developed a marketing and service networkcentered on cities. Through 32 provincial business centers and over 300 city branches and offices, the network spansthe entire country, forming a hierarchical marketing structure organized at the city level. Internationally, Hikvisionhas advanced its "localization" strategy, decentralizing operational decision-making across four major regions: Pan-Asia Pacific, Middle East and Africa, Pan-Europe, and the Americas. The Company adheres to the strategy of "onecountry, one policy" and "one product, one strategy" achieving business presence in over 180 major countries andregions worldwide, providing localized services to local customers and end-users.In terms of service capabilities, Hikvision has a three-tiered vertical service system comprising the HangzhouGlobal Technical Support and Service Center, regional service centers, and authorized customer service stations.This structure enables global, locally embedded, and in-depth service delivery. Within China, the Company hasestablished 32 provincial technical service departments, over 300 regional service centers, and has partnered withover 3,000 key partners and authorized service providers. Internationally, Hikvision has set up 30 direct after-salesservice centers and over 400 authorized customer service stations. Additionally, the Company offers a "replacementinstead of repair" service for certain products and has optimized local delivery chains by expanding the coverage ofoverseas localized warehouses, improving their inventory turnover and delivery efficiency, thereby enabling fasterresponse to customer needs.Hikvision is also fully advancing its digital marketing and service strategy, encompassing the entire marketing
and service process. This is achieved through initiatives such as the development of a digital marketing and serviceplatform, application of AI technologies, and digital operations. These efforts enhance promotional activities andfacilitate customer and user engagement. The Company continues to enhance its digital capabilities and share themexternally with partners, empowering them to better serve users. This, in turn, improves the Company's overalloperational efficiency, from end to end—from the Company to its customers and end-users—while strengtheningits core competitiveness in marketing and services..
3. Continuous Development of a Flexible Manufacturing System to Strengthen Supply Chain Resilience
The AIoT industry is characterized by diverse and personalized customer demands, with Hikvision offeringover 30,000 distinct hardware products. Production must thus cater to the requirements of small-volume, multi-batch, and large-scale customized orders. To tackle these challenges, Hikvision has consistently focused on buildinga flexible and efficient manufacturing system. This effort involves enhancing lean production, automationcapabilities, and leveraging AI technology to improve production scheduling efficiency and the consistency ofoutput quality. The company operates manufacturing bases in locations such as Hangzhou Tonglu, Chongqing, andWuhan, while steadily advancing plans to establish and expand new bases. Additionally, through its overseasfacilities in India, Brazil, and the UK, Hikvision implements localized manufacturing to ensure continuous globalproduct supply.
Hikvision has always prioritized the establishment of long-term, stable partnerships with suppliers. TheCompany collaborates closely with suppliers to iteratively upgrade raw materials and components, transferring itsaccumulated expertise in digitalizing the supply chain to industry partners. This collaboration fosters a healthysupplier ecosystem, thereby strengthening the overall industry supply chain stability.
The Company promotes the deep application of scenario-based digital products within its production campuses,utilizing its own operations as a model for continuous iteration. By driving innovative applications of automation,digitization, and intelligent technologies, Hikvision improves supply quality, enhances operational efficiency, andreduces production costs.
4. Continuous Advancement of Management System Reform and Comprehensive Promotion of InternalDigital Transformation
In the ever-evolving market competition, a company's ability to efficiently allocate internal resources, reduceinternal communication costs, and achieve high-efficiency collaboration is a crucial aspect of its competitiveness.As the Company's business continues to grow and evolve, its resource organization methods and management
approaches are also being continuously optimized.In terms of business direction and target setting, the Company employs the BLM strategic planningmethodology to refresh its strategic planning and annual business plan on a rolling basis each year. This ensuresthat all business teams and departments are well-aligned, targets are clearly defined, and responsibilities are assignedeffectively. In terms of internal management, the Company is strengthening its governance and organizationalcapabilities in change management, focusing on the continuous improvement of business profitability andmanagement capabilities, and steadily advancing its internal digital transformation efforts. In terms of the directionof the Company's transformation, efforts are being made to align and integrate resources across the Company, witha focus on five key areas: enterprise-level marketing digitization, enterprise-level R&D and quality digitization,enterprise-level operational analysis and refinement, enterprise-level data governance capability-building, andenterprise-level AI capability-building. Additionally, the Company is developing digital capabilities across variousdomains to drive high-quality transformation execution through high-quality planning. Relying on IT systemdevelopment, the Company is continuously optimizing and improving business processes and enhancing systemefficiency to build refined operational capabilities. In terms of risk management, the Company has established arobust risk management system, with its global compliance governance and risk management capabilities steadilyimproving.
5. Continuous Development of Talent Ecosystem and Igniting Organizational Innovation Vitality
The Company firmly believes that talent is a key driver of sustainable enterprise development and a coreelement of its competitiveness. Guided by the people-oriented philosophy of "empowering individuals and growingtogether," the Company actively attracts and cultivates talent from around the globe. By continuously refining itstalent identification and performance evaluation mechanisms, the Company adopts scientific methods to identify,evaluate, and utilize talent, fully motivating employees' enthusiasm and creativity while enhancing organizationalcapabilities. With its business strategy as the driving force, the Company is committed to building agile and efficientorganizations. It ensures a steady supply of talent for critical positions, achieving effective alignment betweenpeople and roles to support profitable business growth.The Company integrates compensation and benefits with equity follow-investment for innovative business,creating a comprehensive employee return system. A mature mechanism for employee participation in and sharingof the Company's growth has been established. Employees who participate in equity follow-investments contributeto the Company's performance and, in turn, receive long-term personal rewards. This creates a mutually reinforcingrelationship between the Company's long-term development and the continuous growth of its talent.
III. Core Business Analysis
1. Overview
The continuous evolution of societal demands has consistently created opportunities for industrialtransformation. Over the past two decades, the development of social safety systems has driven the rapid growth ofthe security industry. Currently, enhancing industrial efficiency is a key factor for China, as a manufacturingpowerhouse, to further strengthen its competitiveness. Since its founding over twenty years ago, Hikvision hasseized the opportunities presented by the rapid development of the security industry, emerging as a global leader inthe field. Throughout this journey, the Company has built a robust ecosystem of AIoT technologies and products.By leveraging scenario-based digital solutions, Hikvision has played a significant role in driving industrial upgradesand improving various aspects of social governance and people's daily lives, enhancing quality, reducing costs, andboosting efficiency.In 2024, amid a complex domestic and international environment, Hikvision remained steadfast in its approach,responding to uncertainties with a proactive yet prudent mindset. During the reporting period, the Companyachieved an operating income of RMB92.50 billion, reflecting a year-on-year increase of 3.53%. The net profitattributable to shareholders of the listed Company amounted to RMB11.98 billion, representing a year-on-yeardecline of 15.10%. The proportion of innovative businesses in the overall business mix continued to rise, with keydivisions such as HikRobot, Ezviz, and HikMicro achieving leading positions in their respective fields, providingstrong support for the Company's business growth. Overlooking the lucrative growth of its overseas main business,Hikvision adopted region-specific strategies in its four major global regions, leading to a steady increase in marketshare for its channel business, as well as the accumulation of project capabilities and experience. In the face ofsignificant domestic business environment pressures, the development of scenario-based digital business helpedopen up new avenues for the domestic main business, establishing a second growth curve for the Company.Guided by its strategic positioning in AIoT, Hikvision made positive progress across various domains,including its technological and product ecosystems, domestic and international marketing systems, production andmanufacturing capabilities, and innovative business units. The Company is steadily advancing in the AIoT sector.
1. Maintain R&D Investment and Strengthen AIoT Technology and Product Ecosystem. Over the pastdecade, Hikvision has accumulated significant advancements in multi-dimensional sensing and perception fusiontechnologies. The Company's research and development in artificial intelligence has also reached a certain scale.
The iterative evolution of various technology sets has brought a positive cluster effect to Hikvision's productdevelopment. Furthermore, the advancement of large model technology has expanded the boundaries of perceptualintelligence and cognitive intelligence, delivering substantial improvements to both the hardware and softwareproducts and solutions of Hikvision. Building on these achievements, the Company has rapidly advanced itsinnovation in digital products and large model applications. In 2024, Hikvision continued to launch a wide range ofnew products tailored to new scenarios and demands, featuring significantly enhanced functionalities. These effortshave comprehensively elevated the intelligence level of its products and continuously expanded the boundaries ofits AIoT business.
2. Continuous Evolution of Marketing Organizations to Adapt Resource Allocation to BusinessDevelopment Needs. Hikvision has continuously refined its regional market penetration strategy, optimizing itsbusiness layout. Domestically, the Company operates 32 provincial business centers and over 300 city-levelsubsidiaries. Internationally, it adopts a localized approach with the strategy of "one country, one policy" and "oneproduct, one strategy", embedding business operations at the grassroots level to ensure marketing activities closelyalign with user needs and deeply understand their requirements. Building on this regional strategy, Hikvisionintegrates industry and regional resources for vertical industries such as the financial sector and other sectorsrequiring similar vertical management. This allows the Company to adapt its marketing organization structures toongoing business changes. Additionally, based on business differences, Hikvision has adopted independentoperations and performance evaluations for certain product lines, industry lines, and innovative businesses. Thisapproach enables the Company to strengthen smaller product categories and industries, ensuring organizationaldevelopment adapts to business evolution. Furthermore, Hikvision is comprehensively advancing the digitaltransformation of its marketing systems to enhance the end-to-end operational efficiency of its customer-facingservices.
3. Continuously Polishing Supply Chain Flexibility to Drive Cost Reduction and EfficiencyImprovement. The AIoT industry is characterized by multi-category, small-batch, and multi-batch production,requiring a manufacturing system that ensures product quality while also allowing flexible switching of productioncapacity. Hikvision has long been dedicated to building a flexible and efficient manufacturing system, widelyadopting the Company's self-developed automation and intelligent production solutions to continuously enhancemanufacturing capabilities. In 2024, Hikvision vigorously promoted the practical verification of digital productswithin its own factories. By innovatively applying automated, digitalized, and intelligent technologies and products,
the Company improved supply quality, strengthened operational efficiency, and reduced production costs.
4. Diversified Innovation Business Layout, Supporting the Implementation of the Intelligent IoTStrategy. In 2024, the total revenue from innovative businesses reached RMB22.48 billion, accounting for 24.31%of the Company's overall income. HikRobot focuses on industrial IoT, smart logistics, and intelligent manufacturing,continuously deepening its investment in machine vision and mobile robots, and newly adding a full series of jointrobots, gradually completing the strategic layout of "hand, eye, and foot" collaboration, establishing itself as aleading company in the domestic industry. Ezviz possesses comprehensive capabilities from hardware design, R&D,and manufacturing to IoT cloud platforms, becoming one of the few AIoT companies in the industry with completevertical integrated service capabilities. HikMicro specializes in high-value-added MEMS, optoelectroniccomponents, and sensor technologies, building multi-dimensional sensing capabilities in temperature, pressure, flow,and material level, becoming a leading domestic enterprise in thermal imaging. Other innovative businesses are ina high-growth phase, with market competitiveness continuously improving. The innovative businesses and the mainbusiness collectively revolve around the AIoT business direction, with a unified and divided business layout, jointlysupporting the Company's sustained and stable growth, driving the Company to steadily advance towards its goals.
2. Revenue / cost of sales and services
(1) Revenue structure
Unit: RMB
| 2024 | 2023 (Restated) | YoY Change (%) | |||
| Amount | Proportion to revenue | Amount | Proportion to revenue | ||
| Revenue | 92,495,525,118.30 | 100.00% | 89,341,177,610.40 | 100.00% | 3.53% |
| Classified by industry | |||||
| AIoT products and services | 92,495,525,118.30 | 100.00% | 89,341,177,610.40 | 100.00% | 3.53% |
| Classified by product | |||||
| Products and services for main business (Note 1) | 67,963,258,099.83 | 73.48% | 68,781,078,704.92 | 76.99% | -1.19% |
| Constructions for main business | 2,048,116,006.90 | 2.21% | 2,007,188,913.81 | 2.25% | 2.04% |
| Subtotal | 70,011,374,106.73 | 75.69% | 70,788,267,618.73 | 79.23% | -1.10% |
| Robotic business | 5,928,825,303.14 | 6.41% | 4,940,495,688.57 | 5.53% | 20.00% |
| Smart home business | 5,190,222,359.58 | 5.61% | 4,686,023,001.37 | 5.25% | 10.76% |
| Thermal imaging business | 4,191,132,575.45 | 4.53% | 3,284,778,727.13 | 3.68% | 27.59% |
| Auto electronics business | 3,919,493,044.46 | 4.24% | 2,706,680,020.16 | 3.03% | 44.81% |
| Storage business | 2,314,389,221.29 | 2.50% | 1,931,387,706.41 | 2.16% | 19.83% |
| Other innovative businesses (Note 2) | 940,088,507.65 | 1.02% | 1,003,544,848.03 | 1.12% | -6.32% |
| Subtotal (Note 3) | 22,484,151,011.57 | 24.31% | 18,552,909,991.67 | 20.77% | 21.19% |
| Classified by region | |||||
| Domestic | 60,601,005,007.24 | 65.52% | 60,373,572,006.00 | 67.58% | 0.38% |
| Overseas | 31,894,520,111.06 | 34.48% | 28,967,605,604.40 | 32.42% | 10.10% |
Note 1: Main business refers to the business parts other than the innovative businesses.Note 2: Other innovative businesses include the products and services of the innovative business subsidiaries, such as HikFire, Rayinand HikImaging. Same below.Note 3: The data listed in the subtotals may differ slightly from the aggregated results of the relevant individual data due to rounding.
Revenue structure (note 4)
Unit: RMB 100mn
| 2024 | 2023 (Restated) | YoY Change (%) | 2022 (Restated) | ||
| Domestic main business | PBG | 134.67 | 153.54 | -12.29% | 161.35 |
| EBG | 176.51 | 178.45 | -1.09% | 165.05 | |
| SMBG | 119.71 | 126.79 | -5.58% | 124.97 | |
| Other products and services for main business | 9.33 | 9.33 | 0.00% | 9.28 | |
| Overseas main business | Products and services for main business | 259.89 | 239.77 | 8.39% | 220.32 |
| Innovative businesses (note5) | 224.84 | 185.53 | 21.19% | 150.70 | |
| Total | 924.96 | 893.41 | 3.53% | 831.67 | |
Note 4: The operating income from domestic main business (including three major business groups in domestic and other productsand services for main business) and overseas main business only include Hikvision's main business's products and services,excluding revenue from innovative businesses.Note 5: Innovative businesses' revenue includes its domestic and overseas revenueNote 6: The data listed in the subtotals may differ slightly from the aggregated results of the relevant individual data due to rounding.
(2) Industries, products or regions accounting for more than 10% of the Company's revenue or operatingprofit
√ Applicable □ Inapplicable
Unit: RMB
| Revenue | Cost of sales and services | Gross margin | YoY Change (%) of revenue | YoY Change (%) of operating cost | YoY Change (%) of gross margin | |
| Classified by industry | ||||||
| AIoT products and services | 92,495,525,118.30 | 51,953,857,912.21 | 43.83% | 3.53% | 4.47% | -0.50% |
| Classified by product | ||||||
| Products and services for main business | 67,963,258,099.83 | 36,860,856,267.41 | 45.76% | -1.19% | -0.31% | -0.48% |
| Constructions for main business | 2,048,116,006.90 | 1,624,213,884.66 | 20.70% | 2.04% | 6.17% | -3.08% |
| Innovative businesses | 22,484,151,011.57 | 13,468,787,760.14 | 40.10% | 21.19% | 19.95% | 0.62% |
| Subtotal | 92,495,525,118.30 | 51,953,857,912.21 | 43.83% | 3.53% | 4.47% | -0.50% |
| Classified by region | ||||||
| Domestic | 60,601,005,007.24 | 34,769,215,813.85 | 42.63% | 0.38% | 2.34% | -1.10% |
| Revenue | Cost of sales and services | Gross margin | YoY Change (%) of revenue | YoY Change (%) of operating cost | YoY Change (%) of gross margin | |
| Overseas | 31,894,520,111.06 | 17,184,642,098.36 | 46.12% | 10.10% | 9.05% | 0.52% |
When the statistical caliber of the Company's main business data is adjusted during the reporting period, theCompany's main business data would be adjusted according to the end of the reporting period in the most recentperiod.
□ Applicable √ Inapplicable
(3) If revenue from physical products sales greater than revenue from providing services
√ Yes □ No
| Industry | Item | Unit | 2024 | 2023 | YoY Change (%) |
| AIoT products and services | Sales volume | Per unit | 245,393,303 | 227,487,010 | 7.87% |
| Output volume | Per unit | 256,348,512 | 240,073,553 | 6.78% |
Explanation on why the related data varied by more than 30% on a YoY basis
□Applicable √Inapplicable
(4) Fulfillment of signed significant sales contracts and procurement contracts by the reporting period
□ Applicable √Inapplicable
(5) Cost of sales and services structure
Classified by industry
Unit: RMB
| Industry | Item | 2024 | 2023 (Restated) | YoY Change (%) | ||
| Amount | Proportion to cost of sales and services | Amount | Proportion to cost of sales and services | |||
| AIoT products and services | Cost of sales and services | 51,953,857,912.21 | 100.00% | 49,732,768,547.57 | 100.00% | 4.47% |
Classified by product
Unit: RMB
| Product | Item | 2024 | 2023 (Restated) | YoY Change (%) | ||
| Amount | Proportion to cost of sales and services | Amount | Proportion to cost of sales and services | |||
| Products and services for main business | Cost of sales and services | 36,860,856,267.41 | 70.95% | 36,974,434,806.35 | 74.35% | -0.31% |
| Constructions for main business | Cost of sales and services | 1,624,213,884.66 | 3.13% | 1,529,858,191.39 | 3.08% | 6.17% |
| Innovative businesses | Cost of sales and services | 13,468,787,760.14 | 25.92% | 11,228,475,549.83 | 22.58% | 19.95% |
| Product | Item | 2024 | 2023 (Restated) | YoY Change (%) | ||
| Amount | Proportion to cost of sales and services | Amount | Proportion to cost of sales and services | |||
| Subtotal | Cost of sales and services | 51,953,857,912.21 | 100.00% | 49,732,768,547.57 | 100.00% | 4.47% |
Note: The data listed in the subtotals may differ slightly from the aggregated results of the relevant individual data due to rounding.
(6) Any change in consolidation scope during the reporting period
√Yes □ No
During the reporting period, the Group established 4 domestic subsidiaries, 3 overseas subsidiaries, and gainedactual control of 1 subsidiary through entrusted management agreements. All of this result in changes in the scopeof its consolidation scope. For details, please refer to changes in the consolidation scope in Note (VI) to the financialstatements.
(7) Significant change or adjustment of the Company's business, products or services during the reportingperiod:
□ Applicable √ Inapplicable
(8) Major customers and suppliers:
Sales to major customers of the Company
| Sales to top five customers (RMB) | 2,343,413,902.30 |
| Total sales to top five customers as a percentage of the total sales for the year (%) | 2.53% |
| Total sales to the related parties in top five customers as a percentage of the total sales for the year (%) | 0.00% |
Information on top five customers
| No. | Name of customer | Sales amount (RMB) | Percentage of total sales for the year |
| 1 | First | 575,507,193.15 | 0.62% |
| 2 | Second | 513,745,986.05 | 0.56% |
| 3 | Third | 479,382,722.27 | 0.52% |
| 4 | Fourth | 411,281,576.78 | 0.44% |
| 5 | Fifth | 363,496,424.05 | 0.39% |
| Total | -- | 2,343,413,902.30 | 2.53% |
Other information of major customers
□Applicable √Inapplicable
Major suppliers of the Company
| Total purchases from top five suppliers (RMB) | 6,247,846,592.09 |
| Total purchases from top five suppliers as a percentage of the total purchases for the year (%) | 12.79% |
| Total purchases from the related parties in the top five suppliers as a percentage of the total purchases for the year (%) | 6.32% |
Information on top five suppliers of the Company
| No. | Supplier name | Purchase amount (RMB) | Percentage of total purchase for the year |
| 1 | First | 1,897,826,757.19 | 3.89% |
| 2 | Second | 1,189,548,670.24 | 2.43% |
| 3 | Third | 1,088,587,794.52 | 2.23% |
| 4 | Fourth | 1,086,560,559.94 | 2.22% |
| 5 | Fifth | 985,322,810.20 | 2.02% |
| Total | -- | 6,247,846,592.09 | 12.79% |
Other information of major suppliers
√ Applicable □ Inapplicable
Some of the top five suppliers are related parties of the Company, and the Company strictly operates within the pre-approved estimated limits for routine related-party transactions. In addition, directors, supervisors, seniormanagement, key technical personnel, shareholders with more than 5% equity, actual controllers, and other relatedparties of the Company do not have any direct or indirect interests in major suppliers. For further details, pleaserefer to "Section X (11) - Related Party Relationships and Transactions."
3. Expenses
Unit: RMB
| 2024 | 2023 (Restated) | YoY Change (%) | Note of significant change | |
| Selling expenses | 12,051,218,102.62 | 10,746,788,076.01 | 12.14% | No significant change |
| Administrative expenses | 3,095,939,643.92 | 2,770,781,203.45 | 11.74% | No significant change |
| R&D expenses | 11,864,013,392.27 | 11,392,948,404.47 | 4.13% | No significant change |
| Financial expenses | -114,817,493.16 | -749,800,283.79 | 84.69% | Affected by foreign exchange rate fluctuations, foreign exchange loss increased |
4. R&D Investment
√Applicable □Inapplicable
R&D personnel of the Company
| 2024 | 2023 | Change Percentage | |
| Number of R&D staff (ppl) | 28,272 | 28,479 | -0.73% |
| 2024 | 2023 | Change Percentage | |
| R&D staff as percentage of Total headcount | 47.37% | 48.65% | -1.28% |
| Education structure of R&D staff | —— | —— | —— |
| Bachelor degree | 16,954 | 17,502 | -3.13% |
| Master's degree | 8,903 | 8,602 | 3.50% |
| Master's degree or above | 179 | 161 | 11.18% |
| others | 2,236 | 2,214 | 0.99% |
| Age composition of R&D staff | —— | —— | —— |
| Under 30 years old | 13,484 | 14,967 | -9.91% |
| 30-40 years old | 13,747 | 12,655 | 8.63% |
| Over 40 years old | 1,041 | 857 | 21.47% |
R&D investment of the Company
| 2024 | 2023 | Change Percentage | |
| Amount of R&D expenses (RMB) | 11,864,013,392.27 | 11,392,948,404.47 | 4.13% |
| R&D expenses as a percentage of revenue | 12.83% | 12.75% | 0.08% |
| Capitalized R&D expenses (RMB) | 0.00 | 0.00 | 0.00% |
| Capitalized R&D expenses as a percentage of R&D expenses | 0.00% | 0.00% | 0.00% |
Reason and effect of significant change in the composition of the Company's R&D personnel
□ Applicable √ Inapplicable
Reason of significant change of total R&D expenses as a percentage of revenue as compared to last year
□ Applicable √ Inapplicable
Reason and explanation of its reasonableness of significant change of the capitalized R&D expenses
□ Applicable √ Inapplicable
5. Cash Flow
Unit: RMB
| Item | 2024 | 2023 (Restated) | YoY Change (%) |
| Subtotal of cash inflows from operating activities | 104,471,470,619.92 | 99,392,083,915.65 | 5.11% |
| Subtotal of cash outflows from operating activities | 91,207,378,597.19 | 82,769,874,194.60 | 10.19% |
| Net cash flows from operating activities | 13,264,092,022.73 | 16,622,209,721.05 | -20.20% |
| Item | 2024 | 2023 (Restated) | YoY Change (%) |
| Subtotal of cash inflows from investing activities | 3,173,062,938.17 | 4,907,512,153.30 | -35.34% |
| Subtotal of cash outflows from investing activities | 7,720,603,935.27 | 8,894,812,143.31 | -13.20% |
| Net cash flows from investing activities | -4,547,540,997.10 | -3,987,299,990.01 | -14.05% |
| Subtotal of cash inflows from financing activities | 7,365,413,894.21 | 11,109,937,859.61 | -33.70% |
| Subtotal of cash outflows from financing activities | 29,444,402,679.84 | 14,255,369,357.73 | 106.55% |
| Net cash flows from financing activities | -22,078,988,785.63 | -3,145,431,498.12 | -601.94% |
| Net increase in cash and cash equivalents | -13,374,924,975.49 | 9,602,843,248.26 | -239.28% |
Explanation of why the related data varied significantly on a YoY basis
√ Applicable □ Inapplicable
The main reason for the change in net cash flow from financing activities was the increase in expenditures forrepaying loans and repurchasing shares this year.
Explanation of reasons leading to the material difference between cash flow from operating activities during thereporting period and net profit for the year
□ Applicable √ Inapplicable
IV. Non-core Business Analysis
□Applicable √Inapplicable
V. Analysis of Assets and Liabilities
1. Material changes of asset items
Unit: RMB
| December 31, 2024 | December 31, 2023 (Restated) | YoY Change (%) | Note of significant change | |||
| Amount | Percentage of total assets | Amount | Percentage of total assets | |||
| Cash and bank balances | 36,271,488,337.03 | 27.48% | 49,638,158,662.54 | 35.75% | -8.27% | The reduction in cash and cash equivalents is due to share repurchases and loan repayments |
| Accounts receivable | 37,910,128,735.42 | 28.72% | 35,816,573,511.44 | 25.79% | 2.93% | No significant change |
| Contract assets | 985,822,785.69 | 0.75% | 1,173,312,415.20 | 0.84% | -0.09% | No significant change |
| Inventories | 19,110,711,958.11 | 14.48% | 19,211,444,296.82 | 13.84% | 0.64% | No significant change |
| December 31, 2024 | December 31, 2023 (Restated) | YoY Change (%) | Note of significant change | |||
| Amount | Percentage of total assets | Amount | Percentage of total assets | |||
| Long-term equity investment | 1,527,223,390.79 | 1.16% | 1,151,104,887.85 | 0.83% | 0.33% | The increase in investment income from associates and joint ventures, as well as other changes in equity |
| Fixed assets | 15,063,752,296.49 | 11.41% | 11,508,312,342.17 | 8.29% | 3.12% | Projects such as Xi'an Science and Technology Park Project were transferred to fixed assets |
| Construction in process | 4,699,473,381.21 | 3.56% | 4,307,651,074.46 | 3.10% | 0.46% | No significant change |
| Right-of-use assets | 530,138,023.79 | 0.40% | 521,061,396.66 | 0.38% | 0.02% | No significant change |
| Lease liabilities | 375,432,749.68 | 0.28% | 344,005,866.13 | 0.25% | 0.03% | No significant change |
| Contract liabilities | 3,353,943,054.24 | 2.54% | 2,977,990,775.40 | 2.14% | 0.40% | No significant change |
| Short-term borrowings | 1,031,895,812.62 | 0.78% | 2,118,952,026.06 | 1.53% | -0.75% | The need for working capital has decreased, and part of the long-term and short-term loans has been repaid. |
| Non-current liabilities due within one year | 767,030,688.91 | 0.58% | 5,814,660,214.96 | 4.19% | -3.61% | |
| Long-term borrowings | 5,119,185,000.00 | 3.88% | 8,940,122,961.01 | 6.44% | -2.56% | |
High proportion of overseas assets
□ Applicable √ Inapplicable
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
| Item | Opening balance | Profit or loss from change in fair value during the period | Cumulative fair value changes included in equity | Provision for decline in value during the current period | Purchased amount during the period | Sales during the period | Other changes | Closing balance |
| Financial assets | ||||||||
| 1. Derivative financial assets | 37,380.00 | 26,738,543.93 | 26,775,923.93 | |||||
| 2. Other non-current financial assets | 472,184,937.66 | -15,184,854.90 | 15,000,000.00 | 472,000,082.76 | ||||
| 3. Receivables for financing | 1,594,219,832.62 | 697,428,411.43 | 2,291,648,244.05 | |||||
| Subtotal of financial assets | 2,066,442,150.28 | 11,553,689.03 | 15,000,000.00 | 697,428,411.43 | 2,790,424,250.74 | |||
| Derivative financial liabilities | 38,079,755.04 | 36,205,413.40 | 1,874,341.64 | |||||
Whether there were any material changes on the measurement attributes of major assets of the Company during the reporting period:
□ Yes √ No
3. Assets right restrictions as of the end of the reporting period
Unit: RMB
VI. Investments
1. Overview
√Applicable □ Inapplicable
2. Significant equity investment during the current reporting period
□Applicable √Inapplicable
| Item | Closing book value (RMB) | Reasons for being restricted |
| Cash and bank balances | 218,445,956.74 | Various cash deposits and other restricted funds |
Notes receivable
| Notes receivable | 1,274,931,981.36 | Endorsed to suppliers, discounted to banks, and pledged for the issuance of the banker's acceptance |
| Accounts receivable | 352,621,694.25 | Pledge for long-term debts |
Contract assets
| Contract assets | 128,422,846.09 | Pledge for long-term debts |
| Fixed assets | 54,026,704.89 | Fixed assets leased out under operating leases |
| Intangible assets | 12,166,524.79 | Pledge for long-term debts |
Other non-current assets
| Other non-current assets | 1,276,495,354.49 | Pledge for long-term debts |
| Total | 3,317,111,062.61 |
Investment in 2024 (RMB)
| Investment in 2024 (RMB) | Investment in 2023 (RMB) | YoY (%) |
| 5,704,894,189.40 | 4,935,643,770.15 | 15.59% |
3. Significant non-equity investment during the current reporting period
√ Applicable □ Inapplicable
Unit: RMB
| Project name | Invest method | Fixed assets investment or not | Project industry | Investment during the current reporting period | Cumulative amount of investment by the end of the current reporting period | Source of funds | Project schedule | Reasons for not reaching planned progress and expected benefits | Disclosure Date (if applicable) | Disclosure Index (if applicable) |
| Wuhan Science and Technology Park Project | Purchase | Yes | AIoT products and services | 1,657,233,983.77 | 1,657,649,090.38 | Self-financing | 87.31% | None | October 23, 2021 | Announcement on Investment and Construction Progress of Wuhan Science and Technology Park Project (No. 2021-065) |
| Xi'an Science and Technology Park Project | Self-built | Yes | AIoT products and services | 271,269,582.66 | 1,460,580,233.39 | Self-financing | 100.00% | None | September 23, 2017 | Announcement on Investment and Construction of Xi'an Science and Technology Park in Xi'an (No. 2017-031) |
| EZVIZ Intelligent Manufacturing Chongqing Base Project(Infrastructure Part) | Self-built | Yes | AIoT products and services | 516,118,684.43 | 1,144,333,377.23 | Self-financing/ Raise funds | 97.80% | None | August 11, 2021 | Announcement on the Investment and Construction of EZVIZ Intelligent Manufacturing (Chongqing) Base Project by Holding Subsidiaries (No. 2021-052) |
| Project name | Invest method | Fixed assets investment or not | Project industry | Investment during the current reporting period | Cumulative amount of investment by the end of the current reporting period | Source of funds | Project schedule | Reasons for not reaching planned progress and expected benefits | Disclosure Date (if applicable) | Disclosure Index (if applicable) |
| HikRobot Intelligent Manufacturing (Tonglu) Base Project | Self-built | Yes | AIoT products and services | 478,500,853.12 | 498,800,343.68 | Self-financing | 46.57% | None | January 19, 2022 | Announcement on the Investment and Construction of HikRobot Intelligent Manufacturing (Tonglu) Base Project by a Holding Subsidiary (No. 2022-009) |
| Shijiazhuang Science and Technology Park Project (Phase II) | Self-built | Yes | AIoT products and services | 80,666,336.75 | 356,913,939.48 | Self-financing | 100.00% | None | March 22, 2018 | Announcement on Investment and Construction of Shijiazhuang Science and Technology Park in Shijiazhuang (No. 2018-016) |
| HikRobot Product Industrialization Base Construction Project | Self-built | Yes | AIoT products and services | 138,335,361.50 | 199,752,968.31 | Self-financing | 19.71% | None | January 19, 2022 | Announcement on the Investment and Construction of HikRobot Product Industrialization Base Construction Project by Holding Subsidiary (No. 2022-007) |
| Industrialization Base of Infrared Thermal Imaging Products | Self-built | Yes | AIoT products and services | 95,736,171.04 | 166,668,535.02 | Self-financing | 18.47% | None | January 19, 2022 | Announcement on the Investment and Construction of the Industrialization Base of Infrared Thermal Imaging Products by the Holding Subsidiary (No. 2022-008) |
| Project name | Invest method | Fixed assets investment or not | Project industry | Investment during the current reporting period | Cumulative amount of investment by the end of the current reporting period | Source of funds | Project schedule | Reasons for not reaching planned progress and expected benefits | Disclosure Date (if applicable) | Disclosure Index (if applicable) |
| Wuhan Intelligence Industry Park Project (Phase II) | Self-built | Yes | AIoT products and services | 8,183,414.95 | 13,854,531.11 | Self-financing | 0.99% | None | September 23, 2017 | Announcement on Investment and Construction of Wuhan Intelligence Industry Park in Wuhan (No. 2017-036) |
| Total | -- | -- | -- | 3,246,044,388.22 | 5,498,553,018.60 | -- | -- | -- | -- | -- |
Note: In accordance with the Company's Authorization Management System, new investments on fixed assets of 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
(1) Securities Investments
□ Applicable √ Inapplicable
There no such case in the reporting period.
(2) Derivatives Investments
√ Applicable □ Inapplicable
1) Derivative investments for hedging purposes during the reporting period
√ Applicable □ Inapplicable
Unit: 0,000 RMB
| Type of derivatives investment | Initial investment amount | Opening amount | Gain or loss on changes in fair value during the reporting period | Changes in cumulative fair value included in equity | Purchased amount during the reporting period | Sold amount during the reporting period | Closing amount | Proportion of closing investment amount to the Company's net assets at the end of the reporting period |
| Forward foreign exchange contract | 176,133.92 | 176,133.92 | 6,294.40 | - | 382,710.45 | - | 143,549.68 | 1.78% |
| Total | 176,133.92 | 176,133.92 | 6,294.40 | - | 382,710.45 | - | 143,549.68 | 1.78% |
| Accounting policies and specific accounting principles for hedging business during the reporting period and explanations on whether there have been significant changes from the previous reporting period | In accordance with the provisions of Accounting Standards for Business Enterprises (hereinafter referred to as "ASBE") No. 22 - Recognition and Measurement of Financial Instruments, ASBE No. 37 - Presentation of Financial Instruments and other relevant regulations and guides, the Company accounted for and disclosed its forward foreign exchange contracts. There was no significant changes from the previous reporting period. | |||||||
| Explanations on actual gain or loss during the reporting period | There was a total of RMB6.00 million actual losses during the reporting period. | |||||||
| Explanations on the effect of hedging business | The Company's purpose was to avoid and prevent risks of exchange rate or interest rate fluctuations and prohibited any speculative actions, further improving the Company's ability to cope with risks of foreign exchange fluctuations, better avoiding and preventing risks of foreign exchange rate and interest rate fluctuations, and enhancing its financial stability. | |||||||
| Capital source of derivatives investment | The Company's own fund. | |||||||
| Risk analysis and control measures (including but not limited to, market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) of holding derivatives during the reporting period | For details of the risk analysis and control measures, please refer to the Announcement on Carrying out Foreign Exchange Hedging Business in 2024 (Announcement No. 2024-015) disclosed by the Company on April 20, 2024. | |||||||
| Change of market price or fair value of invested | The Company recognized and measured the fair value of derivatives in accordance with the Accounting Standards for Business | |||||||
| Type of derivatives investment | Initial investment amount | Opening amount | Gain or loss on changes in fair value during the reporting period | Changes in cumulative fair value included in equity | Purchased amount during the reporting period | Sold amount during the reporting period | Closing amount | Proportion of closing investment amount to the Company's net assets at the end of the reporting period |
| derivatives during the reporting period; specific methods, related assumptions and parameter setting of the derivatives' fair value analysis should be disclosed | Enterprises Article 22 - Recognition and Measurement of Financial Instruments. During the reporting period, a total of RMB62.94 million of gains from changes in fair value of forward foreign exchange contract were recognized, and the fair value is determined according to the exchange rate and interest rate provided by banks and other pricing service institutions, measured and recognized on a monthly basis. | |||||||
| Prosecution (if applicable) | None | |||||||
| Announcement date for approvals of derivatives investment from the Board of Directors (if any) | April 20, 2024 | |||||||
| Announcement date for approvals of derivatives investment from the general meeting of shareholders (if any) | Inapplicable | |||||||
2) Derivative investments for speculative purposes during the reporting period
□Applicable √ Inapplicable
There is no derivative investments for speculative purposes during the reporting period.
5. Use of raised funds
□ Applicable √ Inapplicable
During the reporting period, there was no use of raised fund.The details of the use of funds raised by EZVIZ Network, the Company's holding subsidiary, was disclosed on April 12, 2025 in Annual Report of Hangzhou EZVIZNetwork Co., Ltd Section VI (14) - Progress of the Use of Funds Raised 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 asset for the Company during the current reporting period.
2. Sale of significant equity
□ Applicable √ Inapplicable
VIII. Analysis of Major Subsidiaries and Holding Companies
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Inapplicable
| Company name | Equity acquisition and disposal method during the reporting period | Impact on overall production results |
| Hangzhou Furui Technology Ltd. | Management Entrustment Agreement | Business development |
| Hangzhou Hikimaging Electronics Ltd. | Cash contribution | Business development |
| Hangzhou Rayin Detection Tecnology Ltd. | Cash contribution | Business development |
| EZVIZ Vietnam LLC Co., Ltd | Cash contribution | Expand overseas sales channels |
| Hangzhou Micro Sensing Electronics Ltd. | Cash contribution | Business development |
| Guoneng Haikang Yaoshi Technology (Hangzhou) Ltd. | Cash contribution | Business development |
| EZVIZ Trading FZE. | Cash contribution | Expand overseas sales channels |
| Hikrobot Japan KK | Cash contribution | Expand overseas sales channels |
IX. Structural Entities Controlled by the Company
□ Applicable √ Inapplicable
X. Outlook for the Future Development of the Company
1. Development Trends for the Industry
IoT perception, AI, and big data are the core technologies of the AIoT industry and key drivers for digitaltransformation. The development of the AIoT industry will drive various industries, and bring unprecedentedchanges to the entire society.
The Company has long-standing technical expertise and first-mover advantage in the field of AIoT, and isconfident to seize the industrial opportunities brought by innovations in large models. It will collaborate withpartners to advance the digital transformation of various industry scenarios, contributing to the broader societaldigital transformation.
2. Development Strategy of the Company
Hikvision is committed to serving various industries with IoT perception, AI, and big data technologies, leadingthe future of AIoT. Through comprehensive perception technologies, we aim to help people better connect with the
world around them. With a wealth of intelligent products, we strive to identify and satisfy diverse demands bydelivering intelligence at your fingertips. Through innovative AIoT applications, we are dedicated to empoweringevery individual to enjoy a better future by building an intelligent world that is more convenient, efficient and secure.
3. Key Priorities in 2025
(1) Seize the opportunity of the whole society's digital transformation, accelerate the implementation of large-scalemodel technologies, focus on product and technological development, and promote the growth of scenario-baseddigital business.
(2) Drive organizational transformation and refined management to achieve long-term profitable growth.
(3) Accelerate the Company's internal digital transformation to improve operational efficiency.
(4) Continue to deepen marketing strategies and fully advance the digitalization of marketing, sales and service.
(5) Enhance manufacturing capabilities to ensure supply security and continuously improve a flexible and efficientsupply chain.
(6) Expand the scale of innovative businesses, strengthen competitiveness, and strive for superior market positionsin respective sectors.XI. Reception of Activities including Research, Communication and Interviews during theReport Period
√ Applicable □ Inapplicable
| Time of reception | Location of reception | Method of reception | Type of reception object | Reception object | The main content of the discussion and the information provided | Index of basic situation of the research |
| April 20, 2024 | Headquarters meeting room of the Company | Performance result conference call | Institutional investors; individuals | Investors including Guotai Junan Securities-Liu Xiao | The Company's operations in 2023 and the first quarter of 2024 | CNINF, Investor Relations Activity Record on April 20, 2024 |
| May 7, 2024 – May 31, 2024 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | Investors including Caitong Securities Management-Wu Jiaochen | The Company's operating conditions and future prospects | CNINF, Investor Relations Activity Record: From May 7, 2024 – May 31, 2024 |
| August 17, 2024 | Headquarters meeting room of the | Performance result conference call | Institutional investors; individuals | Investors including Chang'an Fund- | The Company's operating conditions in the first half of | CNINF, Investor Relations Activity Record on August 17, 2024 |
| Time of reception | Location of reception | Method of reception | Type of reception object | Reception object | The main content of the discussion and the information provided | Index of basic situation of the research |
| Company | Xu Xiaoyong | 2024 | ||||
| October 26, 2024 | Headquarters meeting room of the Company | Performance result conference call | Institutional investors; individuals | Investors including Northeast Securities Co., Ltd.-Huang Jing | The Company's operations in the third quarter of 2024 | CNINF, Investor Relations Activity Record on October 26, 2024 |
| Octorber 29, 2024 – December 6, 2024 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors; individuals | Investors including Fuhua Investment Trust-Gong Xiaowei | The Company's operating conditions and future prospects | CNINF, Investor Relations Activity Record: From Octorber 29, 2024 –December 6, 2024 |
XII. The Formulation and Implementation of Market Value Management Systems andValuation Enhancement Plans
Whether or not the Company has established the market value management system
√ Applicable □ Inapplicable
On April 17, 2025, the Company's 6
th
Board of Directors convened its 5
th
meeting and reviewed and approved theMarket Value Management System. The system aims to legally and compliantly utilize various methods to enhanceits investment value, thereby ensuring that the Company's investment value reasonably reflects its quality on thebasis of continuous improvement of the Company's operational standards and quality.
Whether or not the Company has disclosed valuation enhancement plans
□ Applicable √ Inapplicable
Section IV Corporate GovernanceI. Basic Situation of Corporate Governance
Since the inception of the Company, we have been strictly following relevant laws and regulations such as theCompany Law, Securities Law, Code of Corporate Governance of Listed Companies, Rules Governing the Listingof Shares on Shenzhen Stock Exchange, and Shenzhen Stock Exchange Listed Companies Self-RegulatorySupervision Guidelines No. 1 - Standardized Operation of Main Board Listed Companies as well as the requirementsof the regulations and regulatory documents of the regulatory authorities and continuously improving the "3+1"corporate governance structure comprising shareholders' meeting, the Board of Directors, the Board of Supervisors,and the management taking into consideration the actual situation of the Company, and strictly follow the principleof disclosing information in a true, accurate, complete, timely and impartial manner; we have also established andimproved internal management and control system, promoted the standardized operation of the Company andensured the legitimate rights and interests of the Company and investors. During the reporting period, the basicdetails of corporate governance is as follows:
1. Shareholders and shareholders' meeting
All shareholders of the Company have the equal status and full rights, especially small and mediumshareholders. During the reporting period, the Company held a total of 3 general meetings of shareholders, whichwas convened by the Company's Board of Directors, and witnessed by lawyers on-site with legal opinions issued.Proposals of general meetings of shareholders were reviewed in compliance with legal procedures to ensure that allshareholders have the right to know, participate, and vote on major issues of the Company and to fully exercise theirlegal rights.
2. The controlling shareholders and listed company
The Company's controlling shareholders had no improper conduct and have never directly or indirectlyinterfered with the Company's decision-making and operating activities overriding shareholders' meeting. There areno such cases that controlling shareholders illegally occupy the Company's funds or the Company illegally providesguarantees for controlling shareholders. The Company, with its own complete business system and managementcapabilities, has been independent of controlling shareholders in terms of business, personnel, assets, organizations,and finances. The Company's Board of Directors, Board of Supervisors and internal institutions has been operatingseparately and major company decisions are made and implemented by the Company.
3. Directors and the Board of Directors
The Company's Board of Directors, operating in a normalized way, has exercised its authority invested by theArticles of Association and relevant laws and regulations, and implemented the relevant decisions of theshareholders' meeting. The number and composition of the Company's Board of Directors comply with therequirements of laws and regulations. There are four committees for strategy, audit, nomination, remuneration andappraisal, and risk and compliance under it. Each committee has a clear division of labor, clear powers andresponsibilities, and effective operation, ensuring the Board's professionalization and efficiency of deliberation anddecision-making. All directors of the Company have performed their duties with integrity, loyalty, diligence,professionalism and due diligence, and earnestly safeguard the legitimate rights and interests of the Company andshareholders with a view to the interests of the Company and shareholders. Complying with the relevant provisionsof the Measures for the Administration of Independent Directors of Listed Companies regarding independence, theindependent directors of the Company fulfilled their duties independently and objectively, provided guidance andadvice, and played their due role in improving the company's supervisory mechanisms. They ensured the interestsof the Company and its shareholders, especially the shareholders of public shares, were safeguarded, promoted theimprovement of the Board's decision-making level, and ensured the standardized operation of the Company.
4. Supervisors and Board of Supervisors
The Company's Board of Supervisors, operating in a normalized way, has exercised its authority invested bythe Articles of Association and relevant laws and regulations The number and composition of the Company's Boardof Supervisors meet the requirements of laws and regulations; the Company's supervisors have diligently performedtheir duties and obligations, and carried out supervision and inspection functions being responsible to shareholders,and supervised the Company's financial status, operating conditions and related transactions, and the performanceof duties by directors and senior managers to fully protect the legal rights and interests of the Company and allshareholders.
5. Performance appraisal and incentive and restraint mechanism
The Company has established a complete performance appraisal system and remuneration system. Theappointment procedures for senior management personnel are open and transparent, and comply with relevant lawsand regulations. The remuneration and appraisal committee under the Company's Board of Directors is responsiblefor performance appraisal of the Company's senior management at the end of the year to determine theirremuneration. To further set up and improve the Company's incentive mechanism and strengthen the concept ofsustainable development of both the Company and employees, the Company has adopted the plan of core staff's co-
investment into innovation business to achieve its development strategy and business objectives, and realizesustainable health development.
6. Information disclosure and transparency
The Company has strictly followed the relevant laws and regulations and the Information DisclosureManagement System to disclose relevant information truthfully, accurately, completely, timely and impartially, andthoroughly implemented the Information Insider Management System to register insiders and file to furtherstandardize inside information management and to ensure that all shareholders and other stakeholders of theCompany have equal access to company information. The Company's information disclosure has been recognizedby the regulatory authorities: the Company has been rated as Level A by the Shenzhen Stock Exchange for 14consecutive years in the main board listed company information disclosure assessment.
7. Continue to improve the internal management system
In accordance with relevant laws and regulations such as the Company Law and Securities Law, as well as therules and normative documents from regulatory authorities, and in accordance with the requirements of theCompany's Articles of Association, the Company has established a set of internal management systems includingDeliberation Regulation for the shareholders' meeting, board of directors, and board of supervisors, as well asWorking Rules of specific committees of the board of directors. These systems also include the Code of Conductfor Independent Directors, Rules for the General Manager's Work, Authorization Management System, RelatedParty Transaction Management System, External Guarantee Management System, and Investor RelationsManagement System. The Company continually strengthens internal management, refines the governance structure,enhances the level of standard operations, and safeguards the legitimate rights and interests of the Company and itsshareholders.
8. Investor relations activities
The Company has proactively organized result briefing conferences and investor research activities after thedisclosure of regular reports to actively listen to investors' opinions and suggestions, and released the InvestorRelations Activity Record after the event to ensure fair access to company information by all investors. In dailywork, the Company has kept in touch with investors through multiple channels such as telephone, e-mail, andirm.cninfo.com.cn to effectively interact and communicate with investors. The Company has been honored with the"China Listed Company Investor Relations Management Shareholder Returning Tianma Award" by the SecuritiesTimes, the "Best Board of Directors of Listed Companies in 2024" by the Economic Observer, and the "Best IRTeam with the Best Institutional Coverage in 2023" by Finenter, among other accolades.
Any significant incompliance for the laws, administrative regulations and the relevant regulatory documentsissued by China Securities Regulatory Commission in respect of the Company's corporate governance:
□ Yes √ No
There is no significant incompliance for the laws, administrative regulations and the relevant regulatorydocuments issued by China Securities Regulatory Commission in respect of the Company's corporate governance.
II. Company's Independence in Assets, Personnel, Finances, Organizations and Businessesfrom Controlling Shareholders and Actual Controller
The Company is completely independent in business, personnel, assets, organizations, and finances from itsshareholders. The Company has established a sound internal control system, being capable of operatingindependently with its complete and independent business.
1. Business independence: The Company has own production, purchases and sales systems, which arecompletely independent from controlling shareholders. Therefore, there is no competition among the Company,controlling shareholders, and related parties.
2. Personnel independence: The Company has independent personnel. The management has set up variousindependent departments, including R&D, production, administration, finance and operation managementdivisions, etc., and established complete management methods for labor, personnel, and salary management.Personnel of the Company is independent from controlling shareholders, e.g. the chairman is elected through thegeneral meetings of the Board. In addition, the general manager, senior deputy general managers, CFO, thesecretary of the Board, and other senior management personnel of the Company are work full-time in the Companyand receive remuneration, and do not receive remuneration in the controlling shareholders, nor do they hold anyadministrative positions other than directors and supervisors in the controlling shareholders. Directors, supervisors,and senior management personnel are appointed through legal procedures strictly in accordance with relevantregulations stipulated in Company Law and Articles of Association. There is no controlling shareholder illegalintervention in the Company's personnel decisions in general meetings of the Board or shareholders.
3. Asset Completeness: The property rights of assets are explicitly between the Company and the controllingshareholders, and no assets, funds, or other resources owned by the Company are illegally and irregularly occupiedor controlled by the controlling shareholders. Assets of the Company are integrated, including complete property
rights of fixed assets for production, supporting assets for production, and intangible assets of patents, etc. TheCompany has the full control and ownership of all assets.
4. Independence in organizations: The Company's Board of Directors, Board of Supervisor, managementand other internal organizations operate independently, and each functional department is independent fromcontrolling shareholders in duty and personnel. There is no superior-subordinate relation between functionaldepartments of controlling shareholders and those of the Company, which would have an impact on the Company'sindependent operations.
5. Financial Independence: The Company has established an independent financial department, as well as asound and independent financial and accounting system. The Company makes financial decisions independently.There is a standardized financial accounting system and a financial management system for the Company'sbranches and subsidiaries, and there is no controlling shareholder intervention in the Company's financial andaccounting activities. The Company has maintained accounts with banks independently of and do not share anybank account with our Controlling Shareholders. The Company has undertaken independent tax registration inaccordance with applicable laws, and paid tax independently.III. Horizontal Competition
□ Applicable √ Inapplicable
IV. Annual General Meeting and Extraordinary General Meetings Convened during theReporting Period
1. General Meetings Convened during the Reporting Period
| Meeting | Nature | Proportion of participating investors | Convened Date | Disclosure Date | Resolution of the Meeting |
| 2023 Annual General Meeting | Annual General Meeting | 65.7518% | May 10, 2024 | May 11, 2024 | 21 proposals including the 2023 Annual Report and Its Summary were reviewed,voted and approved. For details, please refer to the Company's announcement: No. 2024-002. |
| 2024 First Extraordinary General Meeting | Extraordinary General Meeting | 62.3135% | August 2, 2024 | August 3, 2024 | 6 proposals including the Resolution on the Election of Non-Independent Directors for the 6th Board of Directors were reviewed,voted and approved. For details, please refer to the Company's announcement: No. 2024-041. |
| 2024 Second Extraordinary General Meeting | Extraordinary General Meeting | 68.4275 % | December 25, 2024 | December 26, 2024 | The proposal on The Company's Share Repurchase Plan" was reviewed,voted and approved item by item. For details, please refer to the Company's announcement: No. 2024-068. |
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with ResumedVoting Rights:
□ Applicable √ Inapplicable
V. Information about Directors, Supervisors, Senior Management
1. Basic Situation
| Name | Gender | Age | Title | Tenure status | Commencement of term of office | Termination of term of office | Shares held at the beginning of the Period (Shares) | Shares increased during the Period (shares) | Shares decreased during the Period (Shares) | Other increase or decrease of shares (Share) | Shares held at the end of the Period (Shares) | Reasons for increase or decrease of shares |
| Hu Yangzhong | Male | 60 | Chairman of the Board of Directors | Incumbent | August 2, 2024 | -- | 155,636,477 | 360,000 | 0 | 0 | 155,996,477 | Increase of shares during the Period |
| Director, General Manager (CEO) | Term Expired | December 28, 2001 | August 2, 2024 | |||||||||
| Fu Baijun | Male | 53 | Director | Incumbent | August 2, 2024 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Xu Lixing | Male | 54 | Director | Incumbent | August 2, 2024 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Xu Peng | Male | 49 | Director, General Manager (CEO) | Incumbent | August 2, 2024 | -- | 108,622 | 0 | 0 | -70,000 | 38,622 | The repurchase and cancellation of the Company's 2021 restricted shares |
| Senior Deputy General Manager | Term Expired | March 12, 2021 | August 2, 2024 |
| Name | Gender | Age | Title | Tenure status | Commencement of term of office | Termination of term of office | Shares held at the beginning of the Period (Shares) | Shares increased during the Period (shares) | Shares decreased during the Period (Shares) | Other increase or decrease of shares (Share) | Shares held at the end of the Period (Shares) | Reasons for increase or decrease of shares |
| Wang Qiuchao | Male | 74 | Director | Incumbent | March 5, 2021 | -- | 35,000 | 0 | 0 | 0 | 35,000 | -- |
| Wu Xiaobo | Male | 65 | Independent Director | Incumbent | March 5, 2021 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Hu Ruimin | Male | 61 | Independent Director | Incumbent | March 5, 2021 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Lv Changjiang | Male | 60 | Independent Director | Incumbent | August 2, 2024 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Tan Xiaofen | Male | 47 | Independent Director | Incumbent | August 2, 2024 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Lu Jianzhong | Male | 71 | Chairman of the Board of Supervisors | Incumbent | March 5, 2021 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Huang Xing | Female | 41 | Supervisor | Incumbent | August 2, 2024 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Pan Jia | Male | 45 | Employee Supervisor | Incumbent | August 2, 2024 | -- | 54,625 | 0 | 0 | 0 | 54,625 | -- |
| He Hongli | Female | 52 | Senior Deputy General Manager | Incumbent | December 18, 2005 | -- | 331,500 | 0 | 0 | 0 | 331,500 | -- |
| Name | Gender | Age | Title | Tenure status | Commencement of term of office | Termination of term of office | Shares held at the beginning of the Period (Shares) | Shares increased during the Period (shares) | Shares decreased during the Period (Shares) | Other increase or decrease of shares (Share) | Shares held at the end of the Period (Shares) | Reasons for increase or decrease of shares |
| Pu Shiliang | Male | 48 | Senior Deputy General Manager | Incumbent | March 21, 2018 | -- | 355,900 | 0 | 0 | -90,000 | 265,900 | The repurchase and cancellation of the Company's 2021 restricted shares |
| Guo Xudong | Male | 53 | Senior Deputy General Manager | Incumbent | March 12, 2021 | -- | 21,140 | 30,000 | 0 | 0 | 51,140 | Increase of shares during the Period |
| Xu Ximing | Male | 52 | Senior Deputy General Manager | Incumbent | October 11, 2016 | -- | 227,900 | 10,000 | 0 | -90,000 | 147,900 | Increase of shares during the Period and the repurchase and cancellation of the Company's 2021 restricted shares |
| Chen Junke | Male | 54 | Senior Deputy General Manager | Incumbent | March 21, 2018 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Huang Fanghong | Female | 43 | Senior Deputy General | Incumbent | April 8, 2016 | -- | 449,500 | 30,000 | 0 | -80,000 | 399,500 | Increase of shares during the Period and the |
| Name | Gender | Age | Title | Tenure status | Commencement of term of office | Termination of term of office | Shares held at the beginning of the Period (Shares) | Shares increased during the Period (shares) | Shares decreased during the Period (Shares) | Other increase or decrease of shares (Share) | Shares held at the end of the Period (Shares) | Reasons for increase or decrease of shares |
| Manager | repurchase and cancellation of the Company's 2021 restricted shares | |||||||||||
| Jin Yan | Female | 46 | Senior Deputy General Manager, Person in Charge of Finance | Incumbent | July 22, 2015 | -- | 331,000 | 0 | 0 | -80,000 | 251,000 | The repurchase and cancellation of the Company's 2021 restricted shares |
| Cai Changyang | Male | 54 | Senior Deputy General Manager | Incumbent | April 8, 2016 | -- | 109,500 | 0 | 0 | 0 | 109,500 | -- |
| Feng Wei | Male | 46 | Senior Deputy General Manager, Board Secretary | Incumbent | October 25, 2024 | -- | 0 | 0 | 0 | 0 | 0 | -- |
| Chen Zongnian | Male | 60 | Chairman of the Board of Directors | Term Expired and Resigned | June 19, 2008 | August 2, 2024 | 0 | 0 | 0 | 0 | 0 | -- |
| Name | Gender | Age | Title | Tenure status | Commencement of term of office | Termination of term of office | Shares held at the beginning of the Period (Shares) | Shares increased during the Period (shares) | Shares decreased during the Period (Shares) | Other increase or decrease of shares (Share) | Shares held at the end of the Period (Shares) | Reasons for increase or decrease of shares |
| Qu Liyang | Male | 61 | Director | Term Expired and Resigned | March 7, 2018 | August 2, 2024 | 15,750 | 0 | 0 | 0 | 15,750 | -- |
| Wu Weiqi | Male | 61 | Director, Standing Deputy General Manager | Term Expired and Resigned | March 1, 2003 | August 2, 2024 | 8,685,789 | 0 | 0 | 0 | 8,685,789 | -- |
| Li Shuhua | Male | 54 | Independent Director | Term Expired and Resigned | March 5, 2021 | August 2, 2024 | 0 | 0 | 0 | 0 | 0 | -- |
| Guan Qingyou | Male | 48 | Independent Director | Term Expired and Resigned | March 5, 2021 | August 2, 2024 | 0 | 0 | 0 | 0 | 0 | -- |
| Hong Tianfeng | Male | 59 | Chairman of the Board of Supervisors | Term Expired and Resigned | March 5, 2021 | August 2, 2024 | 0 | 0 | 0 | 0 | 0 | -- |
| Xu Lirong | Male | 62 | Supervisor | Term Expired and Resigned | March 21, 2018 | August 2, 2024 | 303,000 | 0 | 0 | 0 | 303,000 | -- |
| Jin Duo | Male | 60 | Senior Deputy General Manager | Term Expired and Resigned | March 10, 2015 | August 2, 2024 | 109,500 | 0 | 0 | 0 | 109,500 | -- |
| Bi Huijuan | Female | 54 | Senior Deputy General Manager | Resigned | October 11, 2016 | August 2, 2024 | 236,100 | 0 | 0 | 236,100 | -- |
| Name | Gender | Age | Title | Tenure status | Commencement of term of office | Termination of term of office | Shares held at the beginning of the Period (Shares) | Shares increased during the Period (shares) | Shares decreased during the Period (Shares) | Other increase or decrease of shares (Share) | Shares held at the end of the Period (Shares) | Reasons for increase or decrease of shares |
| Total | -- | -- | -- | -- | -- | -- | 167,011,303 | 430,000 | 0 | -410,000 | 167,031,303 | -- |
Note: 1. The number of shares held at the beginning of the period, shares increased during the period, shares decreased during the period, other increase or decreaseof shares, and shares held at the end of the period for directors, supervisors, and senior management personnel above are all shares directly held by them accordingly,including restricted shares.
2. On August 2, 2024, Hu Yangzhong was elected as the Company's chairman; Fu Bojun, Xu Lixing, and Xu Peng were elected as directors; Lv Changjiang and TanXiaofen were elected as independent directors; and Huang Xing and Pan Jia were elected as supervisors. On October 25, 2024, Feng Wei was appointed as a seniorexecutive of the Company.On August 2, 2024, Chen Zongnian, Qu Liyang, and Wu Weiqi completed their terms and left from their positions as directors of the Company. Li Shuhua and GuanQingyou completed their terms and left from their positions as independent directors of the Company. Hong Tianfeng and Xu Lirong completed their terms and leftfrom their positions as supervisors of the Company. Wu Weiqi and Jin Duo completed their terms and left from their positions as senior management of the Company.On October 25, 2024, Bi Huijuan left from her position as senior management of the Company.
3. During the reporting period, the initial number of shares held by newly appointed Directors, Supervisors, and Senior Management is the number of shares held asof their appointment date.
Any resignation of directors or supervisors and dismissals of senior management personnel during their term of office during the reporting period.
√Yes □No
On October 25, 2024, Ms. Bi Huijuan, a senior management member of the Company, applied to resign from her position as senior deputy general manager of theCompany for personal reasons. For further details, please refer to the Company's announcement Announcement on the Resignation of a Senior Management Member,published on October 26, 2024, on the cninfo website (www.cninfo.com.cn).
Change of directors, supervisors and senior management personnel
√Applicable □Inapplicable
| Name | Title | Type | Date | Reason |
| Hu Yangzhong | Chairman | Appointment and Removal | August 2, 2024 | Rotation |
| Fu Baijun | Director | Election | August 2, 2024 | Rotation |
| Xu Lixing | Director | Election | August 2, 2024 | Rotation |
| Xu Peng | Director, CEO | Appointment and Removal | August 2, 2024 | Rotation |
| Lv Changjiang | Independent Director | Election | August 2, 2024 | Rotation |
| Tan Xiaofen | Independent Director | Election | August 2, 2024 | Rotation |
| Lu Jianzhong | Supervisor Chairman | Election | August 2, 2024 | Rotation |
| Huang Xing | Supervisor | Election | August 2, 2024 | Rotation |
| Pan Jia | Employee Supervisor | Election | August 2, 2024 | Rotation |
| Feng Wei | Senior Deputy General Manager | Appointment | October 25, 2024 | Appointment |
| Chen Zongnian | Chairman | Expiration of term | August 2, 2024 | Rotation |
| Qu Liyang | Director | Expiration of term | August 2, 2024 | Rotation |
| Wu Weiqi | Director, Standing Deputy General Manager | Expiration of term | August 2, 2024 | Rotation |
| Li Shuhua | Independent Director | Expiration of term | August 2, 2024 | Rotation |
| Guan Qingyou | Independent Director | Expiration of term | August 2, 2024 | Rotation |
| Hong Tianfeng | Supervisor Chairman | Expiration of term | August 2, 2024 | Rotation |
| Xu Lirong | Employee Supervisor | Expiration of term | August 2, 2024 | Rotation |
| Jin Duo | Senior Deputy General Manager | Expiration of term | August 2, 2024 | Rotation |
| Bi Huijuan | Senior Deputy General Manager | Resignation | October 25, 2024 | Personal Reason |
2. Positions and Incumbency
1) Directors
Mr. Hu Yangzhong (胡扬忠): Born in 1965, master of engineering, a senior research engineer. He served as anengineer of 52
nd
Research Institute at China Electronics Technology Group Corporation (hereinafter referred to as"52nd
Research Institute") from June 1989 to December 2001. From December 2013 to April 2022, he served as adirector of China Electronics Technology HIK Group Ltd. (hereinafter referred to as "CETHIK"). From December2001 to August 2024, he served as a director and the general manager of the Company. Hu currently serves as the
Chairman of the Board of Directors of the Company.Mr. Fu Bajun (傅柏军): Born in 1972, bachelor of economics, a senior accountant. He successively held positionssuch as senior deputy general manager of Hikvision and assistant general manager of China Electronics TechnologyHIK Group Co., Ltd. He is currently a director of Hikvision.Mr. Xu Lixing (徐立兴): Born in 1971, bachelor of economics, a senior accountant. He has successively served asthe chief accountant of the 55
th
Research Institute of China Electronics Technology Group Ltd., China ElectronicsNational Basic Southern Group Co., Ltd., the 14
thResearch Institute of China Electronics Technology Group Ltd.,and China Electronics Guo Rui Group Co., Ltd. He is currently the chief accountant of China ElectronicsTechnology HIK Group Co., Ltd. and a director of Hikvision.Mr. Xu Peng (徐鹏): Born in 1976, bachelor of engineering, a senior engineer. From 1998 to 2004, he successivelyheld positions such as assistant engineer and engineer at the 52
ndResearch Institute of China Electronics TechnologyGroup Ltd. He joined Hikvision in 2004 and successively served as a camera R&D manager, R&D director, productdirector, general manager of the front-end product business department, deputy general manager, and senior deputygeneral manager of Hikvision. He is currently a director and general manager of Hikvision.Mr. Wang Qiuchao (王秋潮): Born in 1951, master of Law. He successively served as the general director ofZhejiang Tiance Law Firm, president of Lawyers Association of Zhejiang, and vice president of the Zhejiang LawSociety. He is currently an Honorary Partner of Zhejiang Tiance Law Firm, an arbitrator of the China InternationalEconomic and Trade Arbitration Commission, an arbitrator of the Shanghai International Arbitration Center, anarbitrator of the Shenzhen International Arbitration Center, and a director of Hikvision.Mr. Wu Xiaobo (吴晓波): Born in 1960, a PhD of business administration, Professor, Ph.D. Tutor. In February1982, he joined the Energy Saving Office of the Ministry of Forestry, Zhejiang Energy Conservation TechnologyService Center, and joined the School of Management of Zhejiang University in July 1992, successively served asan executive vice dean and dean. He is currently the Director of the Department of Social Sciences of ZhejiangUniversity, the director of the National Philosophy and Social Science Innovation Base - Research on InnovationManagement and Sustainable Competitiveness of Zhejiang University, the Chinese director of the Joint ResearchCenter for Global Manufacturing and Innovation Management of Zhejiang University-Cambridge University, theco-director of the Ruihua Institute of Innovation Management, an independent director of UCloud Technology Co.,Ltd., and an independent director of the Company.Mr. Hu Ruimin (胡瑞敏): Born in 1964, a PhD in engineering, second-level professor, doctoral tutor, Luojia
distinguished scholar, recipient of Special Government Grants from the State Council, Senior Member of IEEE(Institute of Electrical and Electronics Engineers), fellow of China Institute of Communications, distinguishedmember of China Computer Federation. He has successively served as vice chairman of the Academic Committeeof Wuhan University, director of the National Multimedia Software Engineering Technology Research Center,director of Hubei Provincial Key Laboratory of Multimedia Network Communication Engineering, First ExecutiveDean of National Cyber Security College and Dean of School of Computer Science of Wuhan University. FromDecember 2007 to December 2013, he served as an independent director of Wuhan Tienyu Information IndustryCo., Ltd. From January 2010 to January 2016, he served as the first dean of Hikvision Research Institute. He iscurrently a professor of Wuhan University and an independent director of the Company.Mr. Lv Changjiang (吕长江): Born in 1965, a PhD in Economics, a national high-level talent, and a recipient ofthe special government allowance of the State Council. He has successively served as an independent director ofEast Money Information Co., Ltd., China Tianying Inc., and Montage Technology Co., Ltd. He is currently thedeputy dean of the School of Management, a professor and doctoral supervisor of accounting at Fudan University,the co-editor-in-chief of "China Accounting Review" and "China Management Accounting", an independentdirector of Youngor Group Co., Ltd., and an independent director of Hikvision.Mr. Tan Xiaofen (谭小芬): Born in 1978, holding Bachelor and Master degree from the School of Economics andBusiness Administration at Beijing Normal University, and a Doctorate from the Chinese Academy of SocialSciences. His research areas include finance, macroeconomics, and international economics. He is a doctoralsupervisor, a visiting scholar at Columbia University in the United States, the chief expert of major projects of theNational Social Science Fund, the chief expert of key projects of the National Natural Science Fund, and the chiefexpert of major projects of the Ministry of Education's Philosophy and Social Science Late-stage Funding. Hesuccessively served as a professor and deputy dean of the School of Finance, director of the Personnel Department,director of the Talent Work Office, minister of the Teacher Work Department, director of the Development PlanningDepartment, and director of the Discipline Construction Office at Central University of Finance and Economics. Heis currently a professor of finance at the School of Economics and Management at Beihang University, anoutstanding young scholar of Bluesky Plan, a Changjiang Young Scholar of the Ministry of Education, anindependent director of Minsheng Royal Fund Management Co.,Ltd., and Sunshine Life Insurance Co., Ltd., andan independent director of Hikvision.
2) Supervisors
Mr. Lu Jianzhong (陆建忠): Born in 1954, holds bachelor degree in economics and CPA certificate. Lu served asa lecturer and an associate professor of finance and accounting department at Shanghai Maritime University fromSeptember 1986 to September 1997; he was a CPA and a partner of the auditing department ofPricewaterhouseCoopers, from October 1997 to June 2012; he was a chartered accountant of Shanghai De'anCertified Public Accountants LLP from July 2012 to July 2013; he was a chartered accountant of the Shanghaibranch of PKF Daxin Certified Public Accountants LLP, from August 2013 to July 2014;he was a partner and achartered accountant and a partner of Zhongxinghua Certificated Public Accountants LLP from August 2014 toJanuary 2016; he was a chartered accountant of Dahua Certificated Public Accountants LLP from January 2016 toDecember 2021. Lu currently serves as a chartered accountant of Zhongxinghua Certificated Public AccountantsLLP Shanghai Branch, and the chairman of the Board of Supervisors of the Company.Ms. Huang Xing (黄星): Born in 1984, bachelor of management, an accountant. She has served as the deputydirector (in charge of work) and director of the Audit Department, and deputy minister of the supervision and auditdepartment at China Electronics Technology HIK Group Co., Ltd. She is currently the deputy minister (in chargeof work) of the supervision and audit department, director of the Supervision Department, and director of the auditdepartment of China Electronics Technology HIK Group Co., Ltd., and a supervisor of Hikvision.Mr. Pan Jia (潘佳): Born in 1980, master of engineering. From July 2006 to March 2013, he served as a customermanager in the Semiconductor Division of Texas Instruments Semiconductor Technology (Shanghai) Co., Ltd. Hejoined Hikvision in April 2013 and held positions such as manager of the Procurement Management Department,director of the Procurement Management Department, and director of the Planning Department of the Supply ChainCenter. He currently serves as a staff representative supervisor of the Company and General Manager of theHangzhou Production Base of the Supply Chain Center.
3) Senior Management Personnel
Mr. Xu Peng (徐鹏): Please refer to his profile in preceding part of the report.Ms. He Hongli (何虹丽): Born in 1973, master of business administration. She joined Hikvision in December 2001and served as an assistant to the general manager and a deputy general manager of the Company. Ms. He currentlyserves as a senior deputy general manager of the Company.Mr. Pu Shiliang (浦世亮): Born in 1977, doctor of engineering, a senior engineer. He joined Hikvision in April2006 and held various positions in the Company, including R&D engineer, R&D manager, R&D director, , chiefexpert, and dean of the R&D institute. He currently serves as a senior deputy general manager of the Company.
Mr. Guo Xudong (郭旭东): Born in 1972, bachelor of engineering. In July 2002, he joined Hikvision, andsuccessively served as general manager of Shenzhen Branch, marketing director of domestic marketing center anddeputy general manager of domestic marketing center. He is currently the senior deputy general manager of theCompany.Mr. Xu Ximing (徐习明): Born in 1973, bachelor of engineering. From July 1996 to September 2016, he heldvarious positions in IBM, including engineer, department manager, director, partner of consulting service, seniorpartner of consulting service, and a vice president. He joined Hikvision in September 2016, and served as a deputygeneral manager of the Company. Mr. Xu currently serves as a senior deputy general manager of the Company.Mr. Chen Junke (陈军科): Born in 1971, bachelor of engineering, a senior engineer. Chen held various positionsin the 52
nd
Research Institute from 1994 to 2001, including assistant engineer, engineer and senior engineer. Hejoined the Company in 2001 and served as the technology director of the Digital Video Recorder (DVR) Divisionof the Technology Management Center, general manager of supply chain management center, employeerepresentative supervisor. Chen currently serves as senior deputy general manager of the Company.Ms. Huang Fanghong (黄方红): Born in 1982, bachelor of law. She joined Hikvision in June 2009 and held variouspositions at the Company including legal department manager, internal audit manager, internal control director, anda deputy general manager and the board secretary. Ms. Huang currently serves as a senior deputy general manager.Ms. Jin Yan (金艳): Born in 1979, master of management, an accountant. She joined Hikvision in 2004 and heldvarious positions at the Company, including financial manager, the general manager of the Financial ManagementCenter, and a deputy general manager and the person in charge of finance and accounting. Ms. Jin currently servesas a senior deputy general manager and the person in charge of finance and accounting of the Company.Mr. Cai Changyang (蔡昶阳): Born in 1971, bachelor of engineering. He joined Hikvision in 2004, and heldvarious positions of the Company, including general manager of Beijing branch, director for government andenterprise corporation department, director of investment department, director of strategy and marketing department,and a deputy general manager of the Company. Mr. Cai currently serves as senior deputy general manager of theCompany.Mr. Feng Wei (奉玮): Born in 1979, master of engineering. From January 2005 to June 2010, he served as aninternational management trainee, supply chain quality engineer, and market information manager at the GermanZF Group. From July 2010 to November 2013, he was an industry analyst at China Everbright Securities Co., Ltd.From November 2013 to October 2019, he served as the managing director of the research division, and the chiefanalyst for the automotive and auto parts industry at China International Capital Corporation Limited (CICC). From
November 2019 to July 2024, he was the Chief Financial Officer of NIO Group. In October 2024, he joinedHikvision and is currently the Company's senior deputy general manager and Board secretary.
Position held in shareholders' entities
√Applicable □ Inapplicable
| Name | Shareholder's entity | Position in shareholders' entities | Commencement of the term | Termination of the term | Compensation and allowance from the shareholders' entity |
| Chen Zongnian | China Electronics Technology HIK Group Ltd. | Chairman of the Board of Directors | November 2013 | Y | |
| Fu Baijun | China Electronics Technology HIK Group Ltd. | Deputy Secretary of the Committee | February 2023 | Y | |
| Xu Lixing | China Electronics Technology HIK Group Ltd. | Chief Accountant | February 2023 | Y | |
| Huang Xing | China Electronics Technology HIK Group Ltd. | Deputy Minister (in charge of work) of the Supervision and Audit Department | December 2023 | Y | |
| Xu Lirong | China Electronics Technology HIK Group Ltd. | Supervisor | December 2013 | N |
Positions held in other entities
√Applicable □ Inapplicable
| Name | Name of other Entity | Position in other entity | Commencement of the term | Termination of the term | Compensation and allowance from the other entities |
| Xu Lixing | China Electronics Technology Financial Co., Ltd. | Supervisor | April 2022 | N | |
| Xu Lixing | Phoenix Optics Ltd. | Director | December 2023 | N | |
| Xu Lixing | Zhejiang Chituo Technology Co., Ltd. | Director | January 2021 | N | |
| Xu Peng | Maxiot Technology (Hangzhou) Co., Ltd. | Director | December 2021 | N | |
| Wang Qiuchao | Zhejiang T&C Law Firm | Partner | June 1986 | Y | |
| Wang Qiuchao | Shanghai Kehui Value Investment Management Ltd. | Director | July 2009 | N | |
| Wang Qiuchao | Yalongxing Investment Development Ltd. | Director | February 2012 | January 2024 | N |
| Wu Xiaobo | Shanghai Yirui Management Consultants Ltd. | Director | April 2004 | April 2024 | N |
| Wu Xiaobo | Hangzhou Co-Rui Enterprise Management Consulting Ltd. | Director | April 2011 | N |
| Name | Name of other Entity | Position in other entity | Commencement of the term | Termination of the term | Compensation and allowance from the other entities |
| Wu Xiaobo | Ningbo Industrial Internet Research Institute Ltd. | Director | May 2018 | Y | |
| Wu Xiaobo | Eddy Co., Ltd. | Independent Director | August 2018 | November 2024 | Y |
| Wu Xiaobo | Zhongliang Holdings Group Ltd. | Independent Director | June 2019 | Y | |
| Wu Xiaobo | Ruihua Innovation Management Research Institute (Hangzhou) Ltd. | Director | November 2019 | N | |
| Wu Xiaobo | UCloud Technology Co., Ltd. | Independent Director | June 2020 | Y | |
| Wu Xiaobo | Zhongtian Holding Group Ltd. | Independent Director | July 2021 | Y | |
| Lv Changjiang | Montage Technology Group Co., Ltd. | Independent Director | October 2018 | June 2024 | Y |
| Lv Changjiang | Youngor Fashion Co., Ltd. | Independent Director | May 2020 | Y | |
| Tan Xiaofen | China Minsheng Bank Fund Management Co., Ltd. | Independent Director | January 2023 | Y | |
| Tan Xiaofen | Yangguang Life Insurance Co., Ltd. | Independent Director | March 2024 | Y | |
| Lu Jianzhong | Huatai Baoxing Fund Management Co., Ltd. | Director | July 2016 | Y | |
| Lu Jianzhong | COSCO SHIPPING Development Co., Ltd. | Independent Director | January 2018 | July 2024 | Y |
| Lu Jianzhong | Shanghai Xinnanyang Only Education & Technology Co., Ltd. | Independent Director | January 2019 | January 2025 | Y |
| Lu Jianzhong | Shanghai Instrumentation & Electrical (Group) Co., Ltd. | Director | December 2019 | N | |
| Lu Jianzhong | Shanghai Vico Precision Mold & Plastics Co., Ltd. | Independent Director | May 2021 | June 2024 | Y |
| Lu Jianzhong | BOMESC Offshore Engineering Company Limited | Independent Director | December 2021 | Y | |
| Lu Jianzhong | Zhongxinghua Certified | Certified Public | January 2022 | N |
| Name | Name of other Entity | Position in other entity | Commencement of the term | Termination of the term | Compensation and allowance from the other entities |
| Public Accountants (Special General Partnership) Shanghai Branch | Accountant | ||||
| Lu Jianzhong | Bank of Tianjin Co., Ltd. | Independent Director | August 2022 | Y | |
| Huang Xing | Zhejiang Haikang Science & Technology Co., Ltd. | Supervisor | December 2019 | N | |
| Huang Xing | Beijing Hehai Technology Co., Ltd. | Supervisor | April 2020 | N | |
| Huang Xing | Zhejiang Yibo High-Tech Technology Co., Ltd. | Supervisor | January 2023 | N | |
| Huang Xing | Zhejiang Chituo Technology Co., Ltd. | Supervisor | January 2024 | N | |
| Huang Xing | Hangzhou Hongyan Electric Co., Ltd. | Chairman of the Board of Supervisors | June 2024 | N | |
| Chen Zongnian | Zhejiang AIoT Technology Magazine | Legal Representative | May 2009 | N | |
| Chen Zongnian | Phoenix Optics Ltd. | Chairman of the Board of Directors | December 2019 | N | |
| Wu Weiqi | Hangzhou Pukang Equity Investment Partnership (Limited Partnership) | Executive Partner | April 2011 | N | |
| Li Shuhua | Xi'an ShaanGu Power Co., Ltd. | Independent Director | May 2018 | July 2024 | Y |
| Li Shuhua | Luoyang Yuchuan Yuye Group Co., Ltd. | Independent Director | August 2018 | June 2024 | Y |
| Li Shuhua | Changzhou Guangyang Holdings Ltd. | Chairman of the Board of Directors and CEO | December 2022 | N | |
| Li Shuhua | Changzhou NRB Co., Ltd. | Chairman of the Board of Directors | October 2019 | Y | |
| Li Shuhua | Weihai Shiyi Electronics Ltd. | Chairman of the Board of Directors | December 2020 | N | |
| Li Shuhua | Juzhengyuan Co., Ltd. | Independent Director | December 2020 | Y |
| Name | Name of other Entity | Position in other entity | Commencement of the term | Termination of the term | Compensation and allowance from the other entities |
| Li Shuhua | CIMC-TianDa Holdings Company Ltd. | Independent Director | May 2021 | Y | |
| Li Shuhua | Guangdong Shengyi Technology Co., Ltd. | Independent Director | October 2021 | June 2024 | Y |
| Li Shuhua | TianJin TianHai Precision Forging Co., Ltd. | Chairman of the Board of Directors | December 2022 | N | |
| Li Shuhua | Yingda Securities Co.,Ltd. | Independent director | July 2023 | Y | |
| Li Shuhua | Yangzhou Goyoan Seiichi Intelligent Technology Co., Ltd. | Chairman of the Board of Directors | April 2024 | N | |
| Guan Qingyou | Beijing Rushi Chengjin Information Consulting Services Ltd. | CEO | October 2016 | N | |
| Guan Qingyou | Beijing Rushiwo Research Information Consulting Service Ltd. | Executive Director and CEO | December 2017 | Y | |
| Guan Qingyou | Midea Group Co., Ltd. | Independent Director | August 2018 | July 2024 | Y |
| Guan Qingyou | Beijing Xincai Zhibei Information Technology Ltd. | Supervisor | October 2018 | N | |
| Guan Qingyou | South China Futures Co., Ltd. | Independent Director | March 2019 | July 2024 | Y |
| Guan Qingyou | Beijing Moviebook Technology Co., Ltd. | Independent Director | March 2019 | January 2024 | N |
| Guan Qingyou | Shanxi International Trust Co., Ltd. | Independent Director | July 2019 | July 2024 | Y |
| Guan Qingyou | Beijing Rushiwo Research Institute of Science and Technology Ltd. | Executive Director and CEO | May 2020 | N | |
| Guan Qingyou | Beijing Rushi Wancheng Technology Development Ltd. | Executive Director and CEO | June 2020 | N | |
| Guan Qingyou | Hainan Wuyongtang Information Technology Ltd. | Executive Director and CEO | July 2020 | N | |
| Guan Qingyou | Beijing Yaocen Yuanmu | Executive director | July 2020 | N |
| Name | Name of other Entity | Position in other entity | Commencement of the term | Termination of the term | Compensation and allowance from the other entities |
| Information Technology Ltd. | & CEO | ||||
| Guan Qingyou | Beijing Ruoan Jiatai Technology Ltd. | Executive Director and CEO | December 2020 | N | |
| Guan Qingyou | Zhongchancheng Investment (Shenzhen) Ltd. | Supervisor | March 2021 | N | |
| Guan Qingyou | Qingdao Rushiwo Research Investment Management Ltd. | Supervisor | November 2021 | N | |
| Guan Qingyou | Shenzhen Jiuzhoutongyu Technology Ltd. | Supervisor | January 2022 | N | |
| Guan Qingyou | Ucap Cloud Information Technology Co.,Ltd. | Independent Director | September 2022 | Y | |
| Hong Tianfeng | Shanghai Fangguang Investment Management Ltd. | Executive Director and CEO | February 2012 | Y | |
| Hong Tianfeng | Shenzhen Yunzhixun Network Technology Ltd. | Director | May 2014 | N | |
| Hong Tianfeng | Shenzhen Fangguang Enterprise Management Consulting Ltd. | Executive Director and CEO | May 2016 | N | |
| Hong Tianfeng | CETC Huayun Information Technology Ltd. | Director | March 2017 | N | |
| Hong Tianfeng | Shanghai Daxian Intelligent Science and Technology Ltd. | Director | June 2018 | January 2024 | N |
| Hong Tianfeng | Quanzhi Technology (Hangzhou) Ltd. | Director | June 2020 | N | |
| Hong Tianfeng | Shanghai Fanglan Enterprise Management Center | Executive Director and CEO | March 2021 | January 2024 | N |
| Hong Tianfeng | Shanghai Fangguang Enterprise Management Consulting Ltd. | Executive director | November 2022 | N | |
| Hong Tianfeng | Nantong Fangjun Enterprise Management Co., Ltd. | Supervisor | March 2023 | N | |
| Hong Tianfeng | Nantong Fangyuan Enterprise Management Co., Ltd. | Executive Director | March 2023 | N | |
| Hong Tianfeng | Hunan Zerafber New Materials Co., Ltd. | Director | August 2022 | N | |
| Hong Tianfeng | Shanghai Fangkeng | Supervisor | March 2024 | June 2024 | N |
| Name | Name of other Entity | Position in other entity | Commencement of the term | Termination of the term | Compensation and allowance from the other entities |
| Enterprise Management Co., Ltd. | |||||
| Xu Ximing | Shenzhen Wangyu Security Service Science and Technology Ltd. | Director | November 2019 | N | |
| Xu Ximing | Chengdu Guoshengtianfeng Network Technology Ltd. | Director | August 2020 | N | |
| Xu Ximing | Hangzhou Confirmware Technology Co., Ltd. | Director | August 2021 | N | |
| Guo Xudong | Zhejiang Fast Line data fusion Information Technology Co., Ltd. | Director | January 2021 | N | |
| Jin Duo | Zhejiang Haishi Huayue Digital Technology Ltd | Legal representative and Chairman of the Board of Directors | January 2020 | Febuary 2025 | N |
Incumbent and off-office directors, supervisors and senior management personnel during the reporting period thathave been imposed administrative penalties by the CSRC during the last three years.
□ Applicable √ Inapplicable
3. Remuneration of Directors, Supervisors and Senior Management PersonnelThe decision-making program, determination basis and actual remuneration payment of directors, supervisors andsenior management personnel:
The remuneration of directors, supervisors and senior management personnel will be received preliminarily bythe Remuneration and Appraisal Committee of the Board, among them, remuneration of independent directorsand external supervisors would be further reviewed and approved by general meeting of shareholders. As for thosedirectors (exclude independent directors), supervisors (exclude external supervisors) and senior managementpersonnel who receive remuneration from the Company directly, they will receive remuneration according to theCompany's current Salary System and Performance Appraisal Schemes.Explanations on other situations.
□ Applicable √ Inapplicable
Remuneration of directors, supervisors and senior management personnel
Unit: RMB 0,000
| Name | Gender | Age | Title | Tenure status | Total remuneration from the Company (RMB'0,000) | Remuneration from related parties (Y/N) |
| Hu Yangzhong | M | 60 | Chairman of the Board of Directors | Incumbent | 215.53 | N |
| Fu Baijun | M | 53 | Director | Incumbent | 0 | Y |
| Xu Lixing | M | 54 | Director | Incumbent | 0 | Y |
| Xu Peng | M | 49 | Director and CEO | Incumbent | 247.99 | N |
| Wang Qiuchao | M | 74 | Director | Incumbent | 30.00 | N |
| Wu Xiaobo | M | 65 | Independent Director | Incumbent | 30.00 | N |
| Hu Ruimin | M | 61 | Independent Director | Incumbent | 30.00 | N |
| Lv Changjiang | M | 60 | Independent Director | Incumbent | 12.50 | N |
| Tan Xiaofen | M | 47 | Independent Director | Incumbent | 12.50 | N |
| Lu Jianzhong | M | 71 | Chairman of the Board of Supervisors | Incumbent | 20.00 | N |
| Huang Xing | F | 41 | Supervisor | Incumbent | 0 | Y |
| Pan Jia | M | 45 | Employee Supervisor | Incumbent | 51.82 | N |
| He Hongli | F | 52 | Senior Deputy General Manager | Incumbent | 255.50 | N |
| Pu Shiliang | M | 48 | Senior Deputy General Manager | Incumbent | 257.18 | N |
| Guo Xudong | M | 53 | Senior Deputy General Manager | Incumbent | 222.84 | N |
| Xu Ximing | M | 52 | Senior Deputy General Manager | Incumbent | 282.66 | N |
| Chen Junke | M | 54 | Senior Deputy General Manager | Incumbent | 229.72 | N |
| Huang Fanghong | F | 43 | Senior Deputy General Manager | Incumbent | 229.75 | N |
| Jin Yan | F | 46 | Senior Deputy General Manager, Person in Charge of Finance and Acounting | Incumbent | 229.75 | N |
| Cai Changyang | M | 54 | Senior Deputy General Manager | Incumbent | 231.32 | N |
| Feng Wei | M | 46 | Senior Deputy General Manager Board Secretary | Incumbent | 54.42 | N |
| Chen Zongnian | M | 60 | Chairman of the Board of Directors | Term Expired and Resigned | 0 | Y |
| Qu Liyang | M | 61 | Director | Term Expired and Resigned | 0 | Y |
| Wu Weiqi | M | 61 | Director, Standing Deputy General | Term Expired and | 117.32 | N |
| Name | Gender | Age | Title | Tenure status | Total remuneration from the Company (RMB'0,000) | Remuneration from related parties (Y/N) |
| Manager | Resigned | |||||
| Li Shuhua | M | 54 | Independent Director | Term Expired and Resigned | 17.50 | N |
| Guan Qingyou | M | 48 | Independent Director | Term Expired and Resigned | 17.50 | N |
| Hong Tianfeng | M | 59 | Chairman of the Board of Supervisors | Term Expired and Resigned | 11.67 | N |
| Xu Lirong | M | 62 | Supervisor | Term Expired and Resigned | 71.40 | N |
| Jin Duo | M | 60 | Senior Deputy General Manager | Term Expired and Resigned | 117.40 | N |
| Bi Huijuan | F | 54 | Senior Deputy General Manager | Resigned | 194.04 | N |
| Total | -- | -- | -- | -- | 3190.31 | -- |
Note 1: Directors (excluding independent directors), supervisors (excluding non-employee representativesupervisors) and senior managers who serve in the Company and receive remuneration with the numeration structurecomposed of 50% of basic salary, 50% of bonuses linked to the Company's performance, and social insurance andprovident fund paid in accordance with the statutory proportion.Note 2: The compensation for current directors, supervisors, and senior management during the reporting periodreflects the total remuneration accrued during their tenure. For former directors, supervisors, and senior managementwho have left their positions, the disclosed compensation represents the total remuneration received during theirtenure within the reporting period.Note 3: On August 2, 2024, Fu Baijun and Xu Lixing were elected as company directors; Lv Changjiang and TanXiaofen were elected as independent directors; Huang Xing and Pan Jia were elected as supervisors. On October25, 2024, Feng Wei was appointed as a senior management of the Company.On August 2, 2024, Chen Zongnian, Qu Liyang, and Wu Weiqi resigned as directors of the Company at the end oftheir terms; Li Shuhua and Guan Qingyou resigned as independent directors of the Company at the end of theirterms; Hong Tianfeng and Xu Lirong resigned as supervisors of the Company at the end of their terms; Wu Weiqiand Jin Duo resigned as senior management of the Company at the end of their terms. On October 25, 2024, BiHuijuan resigned as senior management of the Company
VI. Performance of Duties by Directors during the Reporting Period
1. The Board of Directors during the Reporting Period
| Meeting Session | Convening Date | Disclosure Date | Meeting Resolutions |
| The 20th meeting of the 5th session of the Board | April 18, 2024 | April 20, 2024 | 39 proposals were deliberated and approved at the meeting, including 2023 Annual Report and Its Summary. For details, please refer to the Company's announcement: No. 2024-009. |
| The 21st meeting of the 5th session of the Board | July 17, 2024 | July 18, 2024 | 6 proposals were deliberated and approved at the meeting, including the Proposal on the Nomination of Non-Independent Director Candidates for the Sixth Session of the Board. For details, please refer to the Company's announcement: No. 2024-028. |
| The 1st meeting of the 6th session of the Board | August 2, 2024 | August 3, 2024 | 6 proposals were deliberated and approved at the meeting, including the Proposal on the Election of the Chairman of the Sixth Session of Board of Directors. For details, please refer to the Company's announcement: No. 2024-043. |
| The 2nd meeting of the 6th session of the Board | August 16, 2024 | August 17, 2024 | 2 proposals were deliberated and approved at the meeting, including the 2024 Half Year Report and Its Summary. For details, please refer to the Company's announcement: No. 2024-046. |
| The 3rd meeting of the 6th session of the Board | October 25, 2024 | October 26, 2024 | 2 proposal were deliberated and approved at the meeting, including the 2024Q3 Report and Its Summary. For details, please refer to the Company's announcement: No. 2024-053. |
| The 4th meeting of the 6th session of the Board | December 9, 2024 | December 10, 2024 | 2 proposal were deliberated and approved at the meeting, including the Proposal on the Repurchase Plan of the Company's Shares. For details, please refer to the Company's announcement: No. 2024-060. |
2. Attendance of Directors in Board Meetings and General Meetings
| Attendance of directors in board meetings and general meetings | |||||||
| Name of Director | Board meeting presence required in the reporting | Board meeting presence on site | Board meeting presence by telecom- communication | Board meeting presence through a proxy (times) | Board meeting absence (times) | Board meeting not attend in person for two consecutive | Presence of independent directors in general meetings |
| period (times) | (times) | (times) | times | (times) | |||
| Hu Yangzhong | 6 | 3 | 3 | 0 | 0 | N | 3 |
| Fu Baijun | 4 | 2 | 2 | 0 | 0 | N | 2 |
| Xu Lixing | 4 | 2 | 2 | 0 | 0 | N | 2 |
| Xu Peng | 4 | 2 | 2 | 0 | 0 | N | 2 |
| Wang Qiuchao | 6 | 2 | 4 | 0 | 0 | N | 3 |
| Wu Xiaobo | 6 | 2 | 4 | 0 | 0 | N | 3 |
| Hu Ruimin | 6 | 3 | 3 | 0 | 0 | N | 3 |
| Lv Changjiang | 4 | 2 | 2 | 0 | 0 | N | 2 |
| Tan Xiaofen | 4 | 2 | 2 | 0 | 0 | N | 2 |
| Chen Zongnian | 2 | 1 | 1 | 0 | 0 | N | 2 |
| Qu Liyang | 2 | 1 | 1 | 0 | 0 | N | 2 |
| Wu Weiqi | 2 | 1 | 1 | 0 | 0 | N | 2 |
| Li Shuhua | 2 | 1 | 1 | 0 | 0 | N | 2 |
| Guan Qingyou | 2 | 1 | 1 | 0 | 0 | N | 2 |
| Explanation of the Situation | 1. On August 2, 2024, the Company convened its 2024 First Extraordinary General Meeting, completing the election process. Fu Baijun, Xu Lixing, and Xu Peng were elected as directors of the 6th Session of the Board of Directors, while Lv Changjiang and Tan Xiaofen were elected as independent directors of the 6th Session of the Board of Directors. 2. During the reporting period, the 5th Session of the Board of Directors of the Company held 2 board meetings, while the 6th Session of the Board of Directors of the Company held 4 board meetings. | ||||||
3. Objections from Directors on Related Issues of the Company
Were there any objections on related issues of the Company from directors?
□ Yes √ No
During the reporting period, there is no objections on related issues of the Company from directors.
4. Other Details about the Performance of Duties by Directors
Were there any suggestions from directors accepted by the Company?
√ Yes □ No
During the Reporting Period, directors strictly followed related rules, regulations, including Company Law,Rules Governing the Listing of Shares on Shenzhen Stock Exchange, Shenzhen Stock Exchange Listed CompaniesSelf-Regulatory Supervision Guidelines No. 1 - Standardized Operation of Main Board Listed Companies andArticles of Association. They focused on the Company operation, carefully review the Company's relevant meeting
materials, reviewed and approved a number of board resolutions, and have no objection to all the proposals; At thesame time, the directors of the Company put forward relevant constructive suggestions based on their professionalabilities and the actual situation of the Company, which had a positive impact on the standardized operation of theCompany and fulfilled their duties as directors.
The Company's independent directors strictly followed Measures for the Administration of IndependentDirectors of Listed Companies and related rules/ regulations, carried out their duties, and attended the shareholders'general meetings, the board meeting, and meetings of the board's special committees. The special committee of independent directors studied and deliberated matters such as financial statement, related-party transactions, the hiringaccounting firms, and foreign exchange hedging. To improve the Company supervisory systems and to protect thelegal rights of the Company and shareholders, especially public shareholders as a whole, independent directorsprovided professional and subjective advices, enhancing the board's management capability, ensuring theCompany's standardized operations. For details, please refer to Independent Directors' 2024 Debriefings disclosedon www.cninfo.com.cn.
VII. The Special Committees under the Board during the Reporting Period
| Committee Name | Members | Number of meetings held | Convening Date | Meeting Content | Important comments and suggestions |
| Strategy Committee of the 5th session of the Board of Directors | Chen Zongnian (convener), Wu Xiaobo, Hu Ruimin | 2 | April 18, 2024 to June 11, 2024 | Reviewed and approved 3 proposals including the 2023 Annual Work Report of the Strategy Committee of the Board of Directors | All expressed concurring opinions |
| Audit Committee of the 5th session of the Board of Directors | Li Shuhua (convener), Wang Qiuchao, Guan Qingyou | 3 | January 19, 2024 to April 18, 2024 | Reviewed and approved 11 proposals including Proposal on 2024 Reappointment of Certificated Public Accountants LLP | All expressed concurring opinions |
| Remuneration and Appraisal Committee of the 5th session of the Board of Directors | Guan Qingyou (convener), Wu Xiaobo, Wu Weiqi | 3 | March 22, 2024 to July 17, 2024 | Reviewed and approved 8 proposals including the 2023 Annual Report of the Remuneration and Appraisal Committee | All expressed concurring opinions |
| Nomination Committee of the 5th | Hu Ruimin (convener), Qu | 2 | April 18, 2024 to July 17, 2024 | Reviewed and approved 3 proposals including the the | All expressed concurring |
| Committee Name | Members | Number of meetings held | Convening Date | Meeting Content | Important comments and suggestions |
| session of the Board of Directors | Liyang, Li shuhua | 2023 Annual Report of the Nomination Committee | opinions | ||
| Strategy Committee of the 6th session of the Board of Directors | Hu Yangzhong (convener), Hu Ruimin, Wu Xiaobo | 1 | September 9, 2024 | Reviewed and approved the Proposal on the Investment by the Controlled Subsidiary to Establish Hangzhou Micro Sensing Technology Ltd. (Provisional Name) | All expressed concurring opinions |
| Audit Committee of the 6th session of the Board of Directors | Lv Changjiang (convener), Tan Xiaofen, Xu Lixing | 3 | August 2, 2024 to October 25, 2024 | Reviewed and approved 4 proposals including the Proposal on the Appointment of the Chief Financial Officer | All expressed concurring opinions |
| Nomination Committee of the 6th session of the Board of Directors | Wu Xiaobo (convener), Tan Xiaofen, Xu Lixing | 2 | August 2, 2024 to October 14, 2024 | Reviewed and approved 4 proposals including the Proposal on the Appointment of the CEO | All expressed concurring opinions |
| Risk and Compliance Committee of the 6th session of the Board of Directors | Wang Qiuchao (convener), Xupeng, Fu Baijun | 1 | August 2,2024 | Reviewed and approved the Work Plan of the Risk and Compliance Committee of the Board of Directors | All expressed concurring opinions |
VIII. Performance of Duties by the Supervisory CommitteeWere there any risks to the Company identified by Board of Supervisors when performing its duties during thereporting period?
□ Yes √ No
The Board of Supervisors has no objection to the supervision matters during the reporting period.
IX. Staff in the Company
1. Statistics of Employees, Professional Structure of the Staff, and Educational Background
| Number of incumbent employees in the parent Company at the end of the reporting period | 17,861 |
| Number of incumbent employees in major subsidiaries at the end of the reporting period | 41,828 |
| Number of incumbent employees at the end of the reporting period | 59,689 |
| Number of employees receiving salaries in current period | 59,689 | |
| Number of retired employees requiring the parent Company and its subsidiaries to bear costs | 0 | |
| Professional structure | ||
| Tier | Number of employees | |
| Managerial personnel | 993 | |
| Production staff | 18,302 | |
| Sales staff | 10,151 | |
| Technical staff | 28,272 | |
| Financial staff | 415 | |
| Administrative Staff | 1,556 | |
| Total | 59,689 | |
| Educational background | ||
| Education background | Number of employees | |
| Master and/or doctor/or above | 11,448 | |
| Bachelor | 28,740 | |
| Junior College (professional training) | 7,177 | |
| Other | 12,324 | |
| Total | 59,689 | |
2. Staff Remuneration Policy
Hikvision applies scientific talent cultivation methods, effective talent incentive mechanisms and faircompetition platforms to recruit talents, and continuously optimizes the talent structure. The Company providesemployees with remuneration packages which are competitive in the industry. In addition to endowment insurance,medical insurance, unemployment insurance, employment injury insurance, maternity insurance and housingprovident funds, the Company also provides employees with the supplementary commercial insurance, specialallowances, and other benefits, and creates a fairer and more humanized working environment for each employee;so that each employee is able to demonstrate his/her value, and create value to satisfy increasing demands for a goodlife.
3. Staff Training Plans
The Company is driven by its long-term development strategy and aims to support business growth and talent
development by planning and implementing a series of training programs and courses. Adhering to the dualstrategies of "system building" and "resource development," we leverage a digital training platform tocomprehensively address training needs across all levels, enhancing efficiency and effectiveness. Simultaneously,the Company actively explores agile and diversified talent development models, focusing on key positions and coretalents to tailor customized learning solutions that facilitate business strategy execution.
In 2025, the Company will further strengthen its talent development system. By designing and delivering talentdevelopment initiatives and core business talent cultivation programs, it aims to elevate workforce capabilities andensure a robust pipeline of critical talents for key roles and pivotal business campaigns.
4. Labor Outsourcing
□ Applicable √ Inapplicable
X. Profit Distribution and Capitalization of Capital ReservesProfit distribution policy in the reporting period, especially the formulation, implementation and adjustment ofcash dividend policy
√Applicable □Inapplicable
| Special explanation of cash dividend policy | |
| Whether it complies with the provisions of the Company's articles of association or the requirements of the resolution of the shareholders' meeting: | Yes |
| Whether the dividend standard and dividend ratio are clear: | Yes |
| Whether the relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether independent directors performed their duties and played their due roles: | Yes |
| For companies with no cash dividend, disclose detailed reasons and further measures to improve investment return for shareholders: | Inapplicable |
| Whether minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests are fully protected: | Yes |
| If the cash dividend policy is adjusted or changed, whether the conditions and procedures are compliant and transparent: | Inapplicable |
The 20
th meeting of the 5
thsession of the Board of Directors of the Company reviewed and approved the 2023Annual Profit Distribution Proposal, and was reviewed and approved by the Company's 2023 annual generalmeeting: based on the Company's current total share capital of 9, 330,600,931 shares, the Company proposed to
distribute cash dividend of RMB 9 (tax inclusive) per each 10 shares to all shareholders, bonus share and sharedistribution from capital reserve is nil. The date of record for this profit distribution is May 20, 2024, the ex-rights/ex-dividend date is May 21, 2024, and the total cash dividends (tax inclusive) is RMB8,397,540,837.90.The above-mentioned profit distribution policy conforms to the provisions of the Company's articles ofassociation and the review procedures, and fully protects the legitimate rights and interests of small and mediuminvestors, and the independent directors have expressed their agreement.
During the reporting period, the Company was profitable and the distributable profits to shareholders of theparent company was positive, but the Company did not propose a cash dividend distribution plan.
□ Applicable √ Inapplicable
Profit distribution and capitalizing of capital reserves for the current reporting period
√ Applicable □ Inapplicable
| Bonus issue per 10 shares (share) | 0 |
| Cash dividend per 10 shares (RMB) (tax inclusive) | 7.00 |
| Additional shares converted from capital reserves for 10 shares (share) | 0 |
| Total capital shares as the basis for the distribution proposal (share) | Based on the total number of shares outstanding as of the record date for the implementation of the 2024 annual profit distribution plan, minus the number of shares held in the company's repurchase account. |
| Total cash dividend (RMB) (tax inclusive) | The Company plans to distribute cash dividend of RMB7.00 (tax inclusive) per 10 shares to all shareholders, based on the total number of shares outstanding as of the record date for the future implementation of the 2024 annual profit distribution plan, minus the number of shares held in the company's repurchase account. |
| Amount of cash dividends in other methods (such as share repurchase) (RMB) | 310,017,794.90 |
| Total cash dividends (including other methods) (RMB) | The sum of the company's share repurchases in 2024, RMB 310,017,794.90, and the cash dividend of RMB7.00 per 10 shares (tax inclusive) distributed to all shareholders, based on the total number of shares outstanding as of the record date for the implementation of the 2024 annual profit distribution plan (after deducting shares held in the company's repurchase account), |
| Distributable profits (RMB) | 44,480,765,952.49 |
| Percentage of cash dividends in the total distributed profit (%) | 100.00% |
| Cash dividend policy: | |
| The Company is in the development stage and has a substantial plan of cash expenditure. In the current profit distribution, cash | |
| dividends shall account for at least 20%. |
| Details about the plan for profit distribution and capitalizing capital reserves into share capital |
| As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, in 2024, the parent company of the Company realized net profit of RMB9,484,641,144.09, with no withdrawal of statutory surplus reserve, adding the undistributed profit of the parent company at the beginning of the year of RMB43,150,159,133.80, deducting the cash dividends of RMB8,309,878,493.40, adding back RMB155,844,168.00 of the unpaid dividends in past years for the repurchased restricted shares, as of December 31, 2024, the profits distributable to shareholders of the parent company amounted to RMB44,480,765,952.49, and the profits distributable to shareholders in the consolidated statement were RMB60,959,912,942.15. To sum up, according to the principle of "whichever is lower", the profits distributable to shareholders this year was RMB44,480,765,952.49. 2024 annual profit distribution plan: The Company plans to distribute cash dividend of RMB7.00 (tax inclusive) per 10 shares to all shareholders, based on the total number of shares outstanding as of the record date for the future implementation of the 2024 annual profit distribution plan, minus the number of shares held in the Company's repurchase account, and bonus share and share distribution from capital reserve is nil. The remaining undistributed profits will be transferred to the next year. |
XI. The Implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or otherIncentive Plans
√Applicable □Inapplicable
1. Share Incentive
During the reporting period, the Company terminated the implementation of the 2021 Restricted Stock Planand repurchased and canceled the relevant restricted shares.On April 18, 2024 and May 10, 2024, the 20
th
meeting of the 5
th
session of the Board of Directors, the 18
th
meeting of the 5
thsession of the Board of Supervisors and 2023 Annual General Meeting reviewed and approvedProposal on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasing and CancelingRelevant Restricted Shares, and agreed the company terminate the implementation of the 2021 Restricted StockPlan and repurchase and cancel all restricted stocks granted but not yet unlocked. The number of restricted stocksproposed to be repurchased and cancelled this time totals 97,402,605 shares, accounting for 1.0439% of thecompany'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 ShenzhenBranch of China Securities Depository and Clearing Corporation Limited. As of the reporting day, the Companydoes not have any outstanding restricted shares.
For details, please refer to the Announcement on Terminating the Implementation of the 2021 Restricted StockPlan and Repurchasing and Canceling Relevant Restricted Shares and the Announcement on the Completion ofRepurchase 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 therequirements 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).
Equity incentives obtained by the directors and senior management of the Company
√Applicable □Inapplicable
Unit: Share
| Name | Title | Restricted Shares held at the beginning of the period | Shares vested in the current period | Shares newly granted in the current period | Price for restricted shares granted (RMB per share) | Restricted Shares held at period-end |
| Xu Peng | Board Director, CEO | 70,000 | 70,000 | - | - | 0 |
| Pu Shiliang | Senior Deputy General Manager | 90,000 | 90,000 | - | - | 0 |
| Xu Ximing | Senior Deputy General Manager, | 90,000 | 90,000 | - | - | 0 |
| Huang Fanghong | Senior Deputy General Manager | 80,000 | 80,000 | - | - | 0 |
| Jin Yan | Senior Deputy General Manager, Person in Charge of Finance | 80,000 | 80,000 | - | - | 0 |
| Total | -- | 410,000 | 410,000 | -- | -- | 0 |
Note: During the reporting period, the 2021 Restricted Stock Plan were completely repurchased and canceled, among which senior
managers collectively repurchased and canceled to 410,000 shares. As of the reporting day, the Company does not have anyoutstanding restricted shares.
Assessment and incentive mechanism for the senior managementThe Company has established a fairly sophisticated mechanism on employees' evaluation and incentiverestraint, and has established a fair and transparent appraisal and incentive mechanism on senior managementpersonnel and other various level management personnel and employees. The Company's Board of Directors hascarried out annual appraisals of senior management members mainly based on annual target achievement index.The Board is responsible for appraisals of the general manager on the general manager's duty, capacity andperformance of operation; and the general manager carried out appraisals of other senior management members ontheir operational management and implementation of relevant assignments. In 2024, senior management personnel
carried out their duties diligently with good performance. In the face of complex and changing business environment,better of internal management, improve operating efficiency and continue to promote the steady development of theCompany.
2. The Implementation of Employee Stock Incentive Plan
□Applicable √Inapplicable
3. Other Incentive Plans
□Applicable √Inapplicable
XII. Construction and Implementation of Internal Control System during the Reporting Period
1. Construction and Implementation of Internal Control
The Company has established a scientifically designed and effectively implemented internal control system,and continuously strengthen internal audit supervision, in accordance with the Basic Standard for EnterpriseInternal Control and its associated Guidelines and other internal control supervision requirements. The AuditCommittee under the Board of Directors and the Board of Supervisors supervise and comment the Company'simplementation of internal control, and the management is responsible for organizing and leading the daily internalcontrols of the Company.
The Audit Committee under the Board of Directors inspects and supervises the scientificity, rationality,effectiveness and implementation of the Company's internal control system. At the same time, the Audit Committeehas organized special work meetings to follow up on the implementation of major matters by the financial centerand internal audit department, and puts forward relevant requirements on the normativeness of internal control ofthe Company. The Company has set up an internal audit department under the Audit Committee of the Board ofDirectors, which is equipped with full-time personnel to independently carry out internal audits, supervise andinspect the effectiveness and rationality of internal control. The internal audit department is accountable and reportsto the Audit Committee and reports on their work regularly. The internal audit department audits the risk profilesof the Company's business areas according to an annual audit plan. It highlights internal control defects and givesrational suggestions, and standardizes and supervises the operation and management of the Company. Through theoperation, analysis, and evaluation of its internal control system, the Company has effectively mitigated operational
and management risks and facilitated the achievement of internal control objectives.
During the reporting period, the Company continuously strengthened its self-evaluation and self-improvementon internal control. It continued to improve and thoroughly implement internal control in its departments andstrengthened the awareness of compliance management, to ensure the effective implementation of the internalcontrol system, improve the standard of the Company's operations, and promote the healthy and sustainabledevelopment of the Company. For more details, please refer to the 2024 Internal Control Self-Evaluation Reportdisclosed by the Company on CNINFO website (www.cninfo.com.cn).
2. Any Significant Internal Control Deficiencies during the Reporting Period
□ Yes √ No
XIII. The Company's Management and Control of Subsidiaries during the Reporting Period
In strict adherence to the relevant laws and regulations such as the Authorization Management System and theregulations and normative documents of regulatory authorities, the Company considers and approves proposals onthe acquisition and cancellation the registration of new subsidiaries, and exercises management powers over majormatters of the subsidiaries in accordance with the requirements regarding assets control over the subsidiaries andthe standard operations of the Company. At the same time, subsidiaries shall provide timely, complete and accurateinformation to the Company such as operating results, financial position and operating prospects, so that theCompany can conduct scientific decision-making, supervision and coordination.
During the reporting period, the Company established four domestic subsidiaries and three overseassubsidiaries, and gained actual control of 1 subsidiary through entrusted management agreements. All of this resultin changes in the scope of its consolidation scope. For details, please refer to changes in the consolidation scope inNote (VI) to the financial statements.XIV. Self-evaluation Report on Internal Control or Internal Control Audit Report
1. Self-evaluation Report on Internal Control
| Disclosure date of full text of self-evaluation report on internal control | April 19, 2025 |
| Disclosure index of full text of self-evaluation report on internal control | www.cninfo.com.cn |
| Proportion of assets evaluated in total assets | 100.00% |
| Proportion of revenue evaluated in total revenue per consolidated financial statement | 100.00% | |
| Recognition standard of deficiencies | ||
| Nature | Financial report level | Non-financial report level |
| Qualitative criteria | Significant deficiency: A deficiency or a combination of deficiencies in internal control may prevent significant errors in financial reports from being identified or prevented, e.g.: A. Invalid internal control environment; B. Fraud of directors, supervisors and senior management personnel on the financial report ; C. Significant errors identified by external auditors but not identified during the Company is operating; D. Invalid supervision of audit committee and internal audit system; E. Other deficiencies that may lead to the wrong judgement of financial statement reporter. Important deficiency: A deficiency or a combination of deficiencies in internal control may prevent errors in financial report from being identified or prevented, although such deficiency is not significant, but require attention of the Board and Management, e.g.: A. Application of accounting policies does not follow the enterprise accounting standard; B. No internal control systems for fraud; C. No control systems or system not effective for unusual or special transactions or no compensatory relevant control; D. One or more deficiencies which prevent the preparation of true and fair financial statements. Normal deficiency: Not significant and not important deficiency. | Internal control deficiencies at non-financial report level are mainly identified by the likelihood of occurrence and the extent of impacts on operating effective in business. Significant deficiency: the high likelihood leading to significant reduction of working efficiency, or significant increase of uncertainty, or significant deviation from the expected target; Important deficiency: a higher likelihood leading to remarkable reduction of working efficiency, or remarkable increase of uncertainty, or remarkable deviation from the expected target; Normal deficiency: a low likelihood leading to reduction of working efficiency, or increase of uncertainty, or deviation from the expected target; |
| Quantitative criteria | Significant deficiency: potential errors 5% or more of total profits Important deficiency: potential errors 2% or more but below 5% of total profits Normal deficiency: potential errors is 2% or less of total profits | Significant deficiency: direct losses of assets is 5% or more of total profits Important deficiency: direct losses of assets is2% or more but below 5% of total profits Normal deficiency: direct losses of assets is below 2% of total profits |
| Number of significant deficiencies in financial report level | 0 | |
| Number of significant deficiencies in non-financial report level | 0 | |
| Number of important deficiencies in financial report level | 0 | |
| Number of important deficiencies in non-financial report level | 0 | |
2. Internal Control Audit Report
√Applicable □Inapplicable
| Deliberation Opinion Paragraph in Internal Control Audit Report | |
| We believe that Hangzhou Hikvision Digital Technology Co., Ltd. maintained effective internal control over financial reporting in all material aspects as of December 31st 2024 in accordance with the Basic Standard for Enterprise Internal Control and other related regulations. | |
| Disclosure of internal control audit report | Disclose |
| Disclosure date of the full text of the internal control audit report | April 19, 2025 |
| Disclosure index of full text of internal control audit report | www.cninfo.com.cn 2024 Internal Control Audit Report |
| Internal control audit opinion | Standard unqualified audit opinion |
| Whether there are material weakness of non-financial report | No |
Whether the accounting firm issued an internal control audit report with a non-standard opinion
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the self-evaluation report fromthe Board of Directors
√ Yes □No
Section V Environmental and Social ResponsibilityI. Significant Environmental Issues
Whether the Company or any of its subsidiaries should be categorized as a critical pollutant enterprises publishedby environmental protection department
□Yes √No
II. Social ResponsibilitiesFor details, please refer to the Company's 2024 Environment, Social and Governance Report disclosed on CNINFO(www.cninfo.com.cn).III. The Achievements of Poverty Alleviation and Rural RevitalizationFor details, please refer to the Company's 2024 Environment, Social and Governance Report disclosed on CNINFO(www.cninfo.com.cn).
Section VI Significant Events
I. Performance of Commitments
1. Complete and Incomplete Commitments of the Company and Its Actual Controller, Shareholders, Related parties, Acquirers, and Other Related
Parties for the Commitments by the End of the Reporting Period.
√ Applicable □ Inapplicable
| Commitments | Giver of commitments | Commitment type | Details of commitments | Date of commitments | Term of commitments | Performance |
| Commitments in offering documents or shareholding alterations | CETHIK | Commitments regarding horizontal competition and related party transactions | 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. (2) Haikang Group will not make use of the controlling power to obtain the prior right to complete the transaction with Hikvision. (3) Haikang Group will not deal with Hikvision in not fair terms comparing to the market prices to prejudice the Company's interests. For unavoidable related transactions, the Company will observe the principles of justice and fairness to determine prices according to the market on the basis of equality, voluntarily. The Company will obey the Articles of Association and other regulatory documents related to the avoiding of issues | October 29, 2013 | Long-term | Strict performance |
| Commitments | Giver of commitments | Commitment type | Details of commitments | Date of commitments | Term of commitments | Performance |
| about related transactions. The related transactions will go through approval procedures in accordance with related rules and complete legal procedures, fulfilling the information disclosure obligations in respect to the related transactions 3. Commitment to the maintenance of the independence of the listed Company 3.1 Commitment to Personnel Independence of the listed Company (1) Commitment that our general manager, deputy general manager, chief financial officer, secretary of the board and other members of senior management shall not assume any positions other than directors and supervisors or get any remuneration in CETHIK and/or any of its controlled entities; (2) Commitment in keeping the management of labor, human resources and issues related to remuneration of the listed Company independent from that of CETHIK; 3.2 Commitment to the independence of the asset of the listed Company (1) Commitment to independent and complete asset of the listed Company (2) Commitment free of unlawful use of cash and asset of the listed Company by the controlling shareholders 3.3 Commitment to financial independence of the listed Company (1) Commitment to an independent finance department with a team and accounting system; (2) Commitment to a regulated, independent accounting system and financial management system of the branches and subsidiaries (3) Commitment to maintaining accounts with banks independently of and not sharing any bank account with our controlling shareholders (4) Commitment that the financial staff shall not assume any positions in CETHIK (5) Commitment to paying taxes independently according to the law; (6) Commitment to implementing financial decisions independently 3.4 The Company has set up an independent organizational structure which maintains its independent operations which is independent from that of CETHIK. 3.5 Commitment to business Independence of the listed Company (1) The Company has the asset, personnel, aptitude and management capability |
| Commitments | Giver of commitments | Commitment type | Details of commitments | Date of commitments | Term of commitments | Performance |
| for independent and complete business operation. The Company has the ability to operate independently in the market. (2) Commitment in independence in both business and operations 4. Regarding plans for the development and relevant commitment for the listed Company, Haikang Group has committed as below for the subsequent development of Hikvision according to the Securities Acts and relevant laws and rules, 4.1 Currently the Company has no plan to change or make significant adjustments for principal business in the next 12 months; 4.2 Currently the Company has no plan to sell, merge or operate with another Company for the assets and business of the listed Company or its subsidiaries in the next 12 months. 4.3 Currently the Company has no plan to alter the Board of the Directors and senior management and no agreement with other shareholders about the appointment and removal of the directors or senior management. The team of Board of Directors and senior management will remain unchanged for the foreseeable future. 4.4 Currently the Company has no plan to make significant changes to the Articles of Association for the listed Company. 4.5 Currently the Company has no plan to make significant changes to the existing employee recruitment for the listed Company. 4.6 Currently the Company has no plan to make significant changes for the dividend distribution plan for the listed Company. 4.7 Currently the Company has no plan to make significant changes for business and organizational structure for the listed Company. | ||||||
| Commitments in Initial Public | Hangzhou Weixun Equity Investment Partnership | Share restriction commitment | During Hu Yangzhong, Wu Weiqi, Jiang Haiqing, Zhou Zhiping, Xu Lirong, Cai Dingguo, He Hongli, Zheng Yibo, Hu Dan, Jiang Yufeng, Liu Xiang, | May 17, 2010 | Long term | Strict performance |
| Commitments | Giver of commitments | Commitment type | Details of commitments | Date of commitments | Term of commitments | Performance |
| Offering or re-financing | (Limited Partnership) | Wang Ruihong, Chen Junke's tenure of the Company's Board of Directors, supervisors and senior management personnel, the annual transfer of Hikvision's total shares should not exceed 25% of total number of shares held under Weixun; within 6 months after abovementioned personnel's demission, should not transfer Hikvision's shares held under Weixun. | ||||
| Hangzhou Pukang Equity Investment Partnership (Limited Partnership) | Share restriction commitment | During Hu Yangzhong, Wu Weiqi, Gong Hongjia's tenure of the Company's Board of Directors, supervisors and senior management personnel, the annual transfer of Hikvision's total shares should not exceed 25% of total number of shares held under Pukang; within 6 months after abovementioned personnel's demission, should not transfer Hikvision's shares held under Pukang. | May 17, 2010 | Long term | Strict performance | |
| The Company's directors, supervisors and executive: HuYangzhong, Wu Weiqi, Jiang Haiqing, Zhou Zhiping, Xu Lirong, Cai Dingguo, He Hongli, Zheng Yibo, Hu Dan, Jiang Yufeng, Liu Xiang, Wang Ruihong, Chen Junke | Share restriction commitment | During their tenure of the Company's Board of Directors, supervisors and senior management personnel, the annual shares transfer should not exceed 25% of total number of shares held under Weixun; within 6 months after their demission, they should not transfer their shares held under Weixun. | May 17, 2010 | Long term | Strict performance | |
| Directors, executive officers of the Company: Hu Yangzhong, Wu Weiqi | Share restriction commitment | During their tenure of the Company's Board of Directors, supervisors and senior management personnel, the annual shares transfer should not exceed 25% of total number of shares held under Pukang; within 6 months after their demission, they should not transfer their shares held under Pukang. | May 17, 2010 | Long term | Strict performance | |
| The Company's director Gong Hongjia's spouse, Chen Chunmei | Share restriction commitment | During Gong Hongjia's tenure of the Company's Board of Directors, supervisors and senior management personnel, Chen's annual shares transfer should not exceed 25% of total number of shares held under Pukang; within 6 | May 17, 2010 | Long-term | Strict performance |
| Commitments | Giver of commitments | Commitment type | Details of commitments | Date of commitments | Term of commitments | Performance |
| months after the demission of Gong Hongjia, Chen should not transfer her shares held under Pukang. | ||||||
| China Electronics Technology Group Corporation | Commitment to avoid horizontal competition | To avoid any loss of the Company and other shareholders arising from any competing business, China Electronics Technology Group Corporation, the actual controller of the Company, issued Letters of non-competition on 18 September, 2008. | September 18, 2008 | Long term | Strict performance | |
| Gong Hongjia; Hangzhou Weixun Equity Investment Partnership (Limited Partnership); Hangzhou Pukang Equity Investment Partnership (Limited Partnership); ZheJiang Orient Holdings Co., Ltd. | Commitment to avoid horizontal competition | To avoid any loss of the Company and other shareholders arising from any competing business, Gong Hongjia, Hangzhou WeiXun I Equity Investment Partnership (Limited Partnership), ZheJiang Orient Holdings Co., Ltd. and Hangzhou Pukang Equity Investment Partnership (Limited Partnership), the promoters of the Company, issued Commitment Letters of non-competition in the same industry on July 10, 2008. | July 10, 2008 | Long term | Strict performance | |
| Other commitments (commitments relating to the spin-off of EZVIZ Network to be listed on the Science and Technology Innovation Board) | Hangzhou Hikvision Digital Technology Co., Ltd. | Commitment relating to the spin-off of EZVIZ Network to be listed on the Science and Technology Innovation Board | Arrangement on trading restriction and commitement to voluntarily restrict shares relating to the spin-off of EZVIZ Network to be listed on the Science and Technology Innovation Board, for details, please refer to the appendix Ⅵ of the Prospectus on the Initial Public Share Offering and Listing on the STAR Market of the Shanghai Stock Exchange of Hangzhou EZVIZ Network Co., Ltd. published by EZVIZ Network on the website of Shanghai Stock Exchange (www.sse.com.cn): commitments relating to investor protection. | December 28, 2022 | Within 36 months from the date of issuing and listing of EZVIZ Network | Strict performance |
| Commitment relating to the intention to hold shares and the intention to reduce holdings of shares of EZVIZ Network of the spin-off of EZVIZ Network to be listed on the Science and Technology Innovation Board, for details, please refer to the appendix Ⅵ of the Prospectus on the Initial Public Share Offering and Listing on the STAR Market of the Shanghai Stock Exchange of Hangzhou EZVIZ Network Co., Ltd. published by EZVIZ Network on the website of Shanghai Stock Exchange (www.sse.com.cn): commitments relating to investor | December 28, 2022 | Within 2 years from the end date of shares restriction period of | Strict performance |
| Commitments | Giver of commitments | Commitment type | Details of commitments | Date of commitments | Term of commitments | Performance |
| protection. | EZVIZ Network | |||||
| Commitments and initiatives to stabilize the stock price of EZVIZ Network, to repurchase shares of EZVIZ Network, to guarantee no fraud in listing of EZVIZ Network, to make compensation for diluted spot return, to undertake compensation or liability in accordance with the law, to have constraints for failing to fulfill commitments, to avoid intra-industry competition, to regulate and reduce related party transactions, to avoid capital occupation, and to keep system independent after the spin-of of EZVIZ Network to be listed on the Science and Technology Innovation Board. For details, please refer the Prospectus on the Initial Public Share Offering and Listing on the STAR Market of the Shanghai Stock Exchange of Hangzhou EZVIZ Network Co., Ltd. published by EZVIZ Network on the website of Shanghai Stock Exchange (www.sse.com.cn): commitments relating to investor protection. | December 28, 2022 | Long term | Strict performance | |||
| Whether the commitments is fulfilled in time | Yes | |||||
2. Where Any Profit Forecast Was Made for Any of the Company's Assets or Projects and the CurrentReporting Period Is Still Within the Forecast Period, the Company Shall Explain Whether thePerformance of the Asset or Project Reaches the Profit Forecast and Why:
□ Applicable √ Inapplicable
II. The Company's Funds Used by the Controlling Shareholder or Other Related Parties forNon-operating Purposes
□ Applicable √ Inapplicable
No such case during the current reporting period.
III. Illegal Provision of Guarantees for External Parties
□ Applicable √ Inapplicable
No such case in the current reporting period.
IV. Explanation Given by the Board of Directors regarding the Latest "Non-standard Auditor'sReport"
□ Applicable √ Inapplicable
V. Explanation Given by the Board of Directors, Supervisory Committee and IndependentDirectors (if applicable) regarding the "Non-standard Auditor's Report" Issued by the CPAFirm for the Current Reporting Period
□ Applicable √ Inapplicable
VI. For Changes in Accounting Policies, Accounting Estimates or Correction of SignificantAccounting Errors Compared with the Financial Report for the Prior Year
√ Applicable □Inapplicable
For details, please refer to the Note (III) 35.VII. Explanation for Changes in Scope of the Consolidated Financial Statements as Comparedto the Financial Report for the Prior Year
√ Applicable □ Inapplicable
During the reporting period, the Company established four domestic subsidiaries and three overseas
subsidiaries, and gained actual control of 1 subsidiary through entrusted management agreements. All of this resultin changes in the scope of its consolidation scope. For details, please refer to changes in the consolidation scope inNote (VI) to the financial statements.
VIII. Engagement and Disengagement of the CPA firm
CPA firm engaged at present
| Name of the domestic CPA firm | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
| Remuneration for the domestic CPA firm (RMB'0000) | 440 |
| Consecutive years of the audit service provided by the domestic CPA firm | 9 |
| Name of the certified public accountants from the domestic CPA firm | Chen Yan, Liu Ying |
| Consecutive years of the audit service provided by the certified public accountants from the domestic CPA firm | Chen Yan has provided audit service for 2 year; Liu Ying has provided audit service for 2 year. |
Whether the CPA firm was changed in the current period
□ Yes √ No
Whether to reappoint a CPA firm during the audit
□ Yes √ No
Engagement of internal control audit CPA firm, financial advisor or sponsor
√Applicable □ Inapplicable
During the reporting period, the Company hired Deloitte Touche Tohmatsu Certified Public Accountants LLPas the internal control audit accounting firm, and paid a total of RMB 630,000 of internal control audit fees duringthe period.
IX. Delisting after Disclosure of this Annual Report
□ Applicable √ Inapplicable
X. Bankruptcy and Restructuring
□ Applicable √ Inapplicable
No such case during the reporting period.
XI. Material Litigations and Arbitration
□ Applicable √ Inapplicable
The Company had no material litigation or arbitration during the current reporting period.
XII. Punishments and Rectifications
□ Applicable √ Inapplicable
No such case during the reporting period.
XIII. Integrity of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Inapplicable
XIV. Significant Related-party Transaction
1. Related-party Transactions Arising from Routine Daily Operations
√ Applicable □Inapplicable
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principles for related party transactions | Related party transaction amount(0'000 RMB) | Proportion to the amount of similar transactions. | Approved trading quota (0'000 RMB) | Whether exceed the approved quota | Settlement method | Disclosure date | Disclosure reference |
| Subsidiaries or research institutes of CETC | Under the common control of the Company's actual controller | Procurement | Purchasing of raw materials, receiving services, and others | Reference market price agreed by both parties | 189,782.68 | 3.89% | 350,000.00 | No | Payment on delivery | April 20, 2024 | Announcement on the forecast of daily related-party transactions in 2024 (No. 2024-014) |
| Joint ventures | Joint ventures held by the Company | 765.20 | 0.02% | 2,200.00 | No | Payment on delivery | |||||
| Associated companies | Associated companies held by the Company | 28,161.30 | 0.58% | 61,900.00 | No | Payment on delivery | |||||
| Other related parties | See Note 1 for details | 118,964.55 | 2.44% | 200,200.00 | No | Payment on delivery | |||||
| Subsidiaries or research institutes of CETC | Under the common control of the Company's actual controller. | Sales | Providing services, selling products commercial goods, and others | Reference market price agreed by both parties | 21,928.03 | 0.24% | 50,000.00 | No | Payment on delivery | April 20, 2024 | |
| Joint ventures | Joint ventures held by the Company | 3,487.95 | 0.04% | 18,600.00 | No | Payment on delivery | |||||
| Associated companies | Associated companies held by the Company | 3,447.41 | 0.04% | 15,700.00 | No | Payment on delivery | |||||
| Other related parties | See Note 1 for details | 2,200.44 | 0.02% | 10,300.00 | No | Payment on delivery |
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principles for related party transactions | Related party transaction amount(0'000 RMB) | Proportion to the amount of similar transactions. | Approved trading quota (0'000 RMB) | Whether exceed the approved quota | Settlement method | Disclosure date | Disclosure reference |
| Subsidiaries or research institutes of CETC | Under the common control of the Company's actual controller. | Lease | Renting house from related parties | Reference market price agreed by both parties | 167.06 | 0.37% | 500.00 | No | Based on contract | April 20, 2024 | |
| Total | 368,904.61 | - | 709,400 | - | - | - | - | ||||
| Details on significant sales return | None | ||||||||||
| Total amount of related transactions projected based on different categories, and the actual performance during the current reporting period (if any) | The aforementioned estimated amount includes the additional amount that was added during the actual execution. According to the relevant rules and the Company's Management System of Related Transaction, this additional amount has been approved by the Company's chairman. | ||||||||||
| Reasons on significant difference between trading price and market referencing price (if applicable) | Not applicable | ||||||||||
Note 1: Enterprises controlled, jointly controlled or serving as directors or senior management personnel by affiliated natural persons of the Company (includingdirectors, 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.
2. Related-party Transactions regarding Purchase and Disposal of Assets or Equity
□Applicable √Inapplicable
No such case in the reporting period.
3. Significant Related-party Transactions Arising from Joint Investments on External Parties
□Applicable √Inapplicable
No such case in the reporting period.
4. Related Credit and Debt Transactions
□ Applicable √Inapplicable
No related-parties' creditor's rights or debts during the reporting period.
5. Transactions with Related Financial Companies
√Applicable □Inapplicable
Deposit business
| Related Party | Relationship | Maximum daily deposit limit (0,000 RMB) | Deposit interest rate range | Opening balance (restated) (0,000 RMB) | Amount incurred (0,000 RMB) | Closing Balance (0,000 RMB) | |
| Total deposit amount for the current period (0,000 RMB) | Total withdrawal amount for the current period (0,000 RMB) | ||||||
| CETC Finance Co., Ltd. | Under the common control of the Company's actual controller | 1,643,272.24 | 0.1%-1.75% | 401,364.74 | 538,540.57 | 539,886.94 | 400,018.37 |
Loan business
| Related Party | Relationship | Loan Quota (0,000 RMB) | Loan Interest Rate Range | Opening Balance (0,000 RMB) | Amount incurred (0,000 RMB) | Closing Balance (0,000 RMB) | |
| Total Loan Amount for the Current Period (0,000 | Total Repayment Amount for the Current | ||||||
| RMB) | Period (0,000 RMB) | ||||||
| CETC Finance Co., Ltd. | Under the common control of the Company's actual controller | 500,000.00 | 2.8% | - | 15,000.00 | - | 15,000.00 |
Credit or other financial services
| Related Party | Relationship | Business Type | Total Amount (0,000 RMB) | Actual amount incurred (0,000 RMB) |
| CETC Finance Co., Ltd. | Under the common control of the Company's actual controller | Other financial services | 600,000.00 | 415,600.00 |
Note: 1. The above amount is the amount of entrusted loans issued by the Company to its subsidiaries through China ElectronicsTechnology Finance Co., Ltd. during the year.
2. The Company's renewable credit line with CETC Finance Co., Ltd. in the current year shall not exceed RMB 5 billion (inclusive),with actual utilized amount reaching RMB 150 million, all of which are loan businesses (see the table above).
6. Transactions between the Financial Company Controlled by the Company and Related Parties
□ Applicable √Inapplicable
7. Other Significant Related Party Transactions
□Applicable √Inapplicable
There is no other significant related party transactions during the reporting period.
XV. Significant Contracts and Their Execution
1. Trusteeship, Contracting and Leasing
(1) Trusteeship
□ Applicable √ Inapplicable
No such case in the reporting period.
(2) Contracting
□ Applicable √ Inapplicable
No such case in the reporting period.
(3) Leasing
□Applicable √Inapplicable
No such case in the reporting period.
2. Significant Guarantees
√Applicable □ Inapplicable
Unit: RMB'0000
| Guarantees provided by the Company to its subsidiaries | |||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Guarantee expiration date | Fulfilled or not | Guarantee for a related party or not | |
| Hangzhou Hikvision Technology Ltd. | April 20, 2024 | 1,088,400.00 | July 26, 2021 | 294,596.32 | Joint guarantee | May 9, 2029 | No | No | |
| LuoPu HaiShi DingXin Electronic Technology Ltd. | April 20, 2024 | 29,000.00 | March 26, 2019 | 19,520.00 | Joint guarantee | March 3, 2025 | Yes | No | |
| PiShan HaiShi YongAn Electronic Technology Ltd. | April 20, 2024 | 28,000.00 | March 26, 2019 | 18,678.00 | Joint guarantee | March 27, 2025 | Yes | No | |
| Moyu HaiShi Electronic Technology Ltd. | April 20, 2024 | 24,000.00 | March 26, 2019 | 15,440.00 | Joint guarantee | March 27, 2025 | Yes | No | |
| Hangzhou Hikvision System Technology Ltd. | April 20, 2024 | 80,000.00 | March 23, 2021 | 13,351.44 | Joint guarantee | March 31, 2026 | No | No | |
| Urumqi HaiShi Xin'An Electronic Technology Ltd. | April 20, 2024 | 37,000.00 | March 26, 2019 | 9,542.00 | Joint guarantee | January 13, 2025 | Yes | No | |
| Hangzhou Hikvision Electronic Ltd. | April 20, 2024 | 21,500.00 | October 23, 2023 | 4,200.00 | Joint guarantee | March 31, 2026 | No | No | |
| Nanjing Hikvision Digital Technology Ltd. | April 20, 2024 | 11,000.00 | June 30, 2022 | 3,853.70 | Joint guarantee | July 31, 2025 | No | No | |
| Chongqing Hikvision Technology Ltd. | April 20, 2024 | 25,000.00 | May 10, 2024 | 2,400.00 | Joint guarantee | March 31, 2026 | No | No | |
| Guarantees provided by the Company to its subsidiaries | |||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Guarantee expiration date | Fulfilled or not | Guarantee for a related party or not | |
| Chongqing Hikvision System Technology Ltd. | April 20, 2024 | 2,000.00 | March 30, 2023 | 173.95 | Joint guarantee | July 24, 2025 | No | No | |
| Yutian HaiShi Meitian Electronic Technology Ltd. | April 20, 2024 | 30,000.00 | March 26, 2019 | - | Joint guarantee | December 23, 2024 | Yes | No | |
| Xi'an Hikvision Digital Technology Ltd. | April 20, 2024 | 18,000.00 | September 29, 2022 | - | Joint guarantee | July 31, 2025 | Yes | No | |
| Wuhan Haorong Technology Ltd. | April 20, 2024 | 33,000.00 | December 4, 2023 | - | Joint guarantee | July 31, 2025 | Yes | No | |
| Shijiazhuang Hikvision Technology Ltd. | April 20, 2024 | 12,000.00 | October 18, 2023 | - | Joint guarantee | July 31, 2025 | Yes | No | |
| Hikvision International Co.,Limited | April 20, 2024 | 85,000.00 | Not happened during the reporting period | ||||||
| HIKVISION TECHNOLOGY PTE. LTD | April 20, 2024 | 10,000.00 | Not happened during the reporting period | ||||||
| Zhengzhou Hikvision Digital Technology Ltd. | April 20, 2024 | 6,100.00 | Not happened during the reporting period | ||||||
| Chengdu Hikvision Digital Technology Ltd. | April 20, 2024 | 6,000.00 | Not happened during the reporting period | ||||||
| Nanchang Hikvision Digital Technology Ltd. | April 20, 2024 | 4,500.00 | Not happened during the reporting period | ||||||
| Hefei Hikvision Digital Technology Ltd. | April 20, 2024 | 3,500.00 | Not happened during the reporting period | ||||||
| Hikvision Digital Technology (Shanghai) Ltd. | April 20, 2024 | 3,000.00 | Not happened during the reporting period | ||||||
| Fuzhou Hikvision Digital Technology Ltd. | April 20, 2024 | 2,500.00 | Not happened during the reporting period | ||||||
| Guarantees provided by the Company to its subsidiaries | |||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Guarantee expiration date | Fulfilled or not | Guarantee for a related party or not | |
| Wuhan Hikvision Technology Ltd. | April 20, 2024 | 1,000.00 | Not happened during the reporting period | ||||||
| Total guarantee cap for subsidiaries approved during the reporting period (B1) | 1,560,500.00 | Total actual guarantee amount for subsidiaries during the reporting period (B2) | 1,195,187.89 | ||||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period (B3) | 1,560,500.00 | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | 381,755.41 | ||||||
| Guarantees provided by the Company's subsidiary to another subsidiary | |||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Guarantee expiration date | Fulfilled or not | Guarantee for a related | |
| Hangzhou Haikang Machine Intelligence Ltd. | April 20, 2024 | 23,000.00 | June 13, 2023 | 2,373.92 | Joint guarantee | 2025.04.12 | No | No | |
| Hangzhou Hikmicro Intelligent Technology Ltd. | April 20, 2024 | 11,000.00 | November 2, 2023 | 1,935.15 | Joint guarantee | 2025.04.12 | No | No | |
| Hangzhou Haikang Intelligent Technology Ltd. | April 20, 2024 | 32,000.00 | March 14, 2022 | 1,297.51 | Joint guarantee | 2026.02.27 | No | No | |
| Hikrobot Europe B.V. | April 20, 2024 | 5,000.00 | August 29, 2024 | 515.82 | Joint guarantee | 2026.07.19 | No | No | |
| Chongqing EZVIZ Electronic Ltd. | April 20, 2024 | 17,000.00 | September 11, 2023 | - | Joint guarantee | 2024.09.11 | Yes | No | |
| Zhangjiang Hikfire Technology Ltd. | April 20, 2024 | 10,000.00 | Not happened during the reporting period | ||||||
| Guarantees provided by the Company to its subsidiaries | ||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Guarantee expiration date | Fulfilled or not | Guarantee for a related party or not |
| Hikrobot Korea Limited | 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 reporting period (C1) | 107,000.00 | Total actual guarantee amount for subsidiaries during the reporting period (C2) | 32,322.40 | |||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period(C3) | 107,000.00 | Total actual guarantee balance for subsidiaries at the end of the reporting period(C4) | 6,122.40 | |||||
| The total amount of Company's guarantees (that is, the total of the first three items) | ||||||||
| Total guarantee cap approved during the reporting period(A1+B1+C1) | 1,667,500.00 | Total actual guarantee amount during the reporting period(A2+B2+C2) | 1,227,510.29 | |||||
| Total approved guarantee cap at the end of the reporting period(A3+B3+C3) | 1,667,500.00 | Total actual guarantee balance at the end of the reporting period(A4+B4+C4) | 387,877.81 | |||||
| Portion of the total actual guarantee (A4+B4+C4) amount in net assets of the Company | 4.81% | |||||||
| Of which: | ||||||||
| The balance of guarantee for shareholders, actual controllers and their affiliates. (D) | 0 | |||||||
| Guarantees provided by the Company to its subsidiaries | ||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Guarantee expiration date | Fulfilled or not | Guarantee for a related party or not |
| Amount of debt guarantees provided directly or indirectly for entities with a liability-to-asset ratio over 70% (E) | 367,752.42 | |||||||
| Total amount of guarantee exceeding 50% of net assets (F) | 0 | |||||||
| Total guarantee amount of the above-mentioned 3 kinds of guarantees (D+E+F) | 367,752.42 | |||||||
| Disclosure regarding outstanding guarantee contracts during the reporting period where guarantee obligations have been triggered or there is evidence indicating potential joint and several liability (if applicable). | None | |||||||
| Disclosure regarding external guarantees provided in violation of established procedures (if applicable). | None | |||||||
3. Entrusted Others to Manage Cash Assets
(1) Entrusted financial management
□ Applicable √ Inapplicable
No such case during the reporting period
(2) Entrusted loan management
□ Applicable √ Inapplicable
No such case during the reporting period
4. Other Significant Contracts
□ Applicable √ Inapplicable
No such case during the reporting period
XVI. Other Significant Events
√ Applicable □ Inapplicable
1. During the reporting period, the Company re-elected the board of directors, supervisors and seniormanagement personnel.On August 2, 2024, the company convened the 1
stFirst Extraordinary General Meeting of Shareholders in2024, electing the 6
th Board of Directors and 6
thBoard of Supervisors.The 6
thBoard of Directors consists of 9 members: 5 Non-independent Directors, Mr. Hu Yangzhong, Mr. FuBaijun, Mr. Xu Lixing, Mr. Xu Peng, Mr. Wang Qiuchao), and 4 Independent Directors,Mr. Wu Xiaobo, Mr. HuRuimin, Mr. Lv Changjiang (Accounting Professional), Mr. Tan Xiaofen.The 6thBoard of Supervisors comprises 3 members: Mr. Lu Jianzhong, Ms. Huang Xing, and Mr. Pan Jia(Employee Representative Supervisor, elected through the Employee Representative Assembly).
On August 2, 2024, the Company held the 1
st Meeting of the 6
thBoard of Directors, electing Mr. Hu Yangzhongas Chairman of the Bboard of Directors and appointing Mr. Xu Peng as General Manager, along with other seniormanagement personnel.On August 2, 2024, the company convened the 1
st Meeting of the 6
thBoard of Supervisors, electing Mr. LuJianzhong as Chairman of the Board of Supervisors.On October 25, 2024, the company held the 3
rd Meeting of the 6
thBoard of Directors, appointing Mr. Feng Weias Senior Deputy General Manager and concurrently Board Secretary.
For details, please refer to 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, Announcement on theElection of Employee Representative Supervisors for the 6
thSupervisory Board, Announcement on Resolutions ofthe 1st Meeting of the 6th session of the Board of Supervisors, and Announcement on Resolutions of the 3st Meetingof the 6th session of the Board of Directors, which were published by the Company on www.cninfo.com.cn onAugust 3, 2024 and October 25, 2024.
2. The Company's controlling shareholder and persons acting in concert have completed the plan to
increase their shareholdings.The Company received a notice from China Electronics Technology HIK Group Ltd. (hereinafter referred to as"CETHIK"), the Company's controlling shareholder, and its concerted actor CETC Investment Holdings Co., Ltd.(hereinafter referred to as "CETC Investment") on October 18, 2024 that CETHIK and CETC Investment intendedto increase its shareholdings of the Company's shares through the trading system of the Shenzhen Stock Exchangethrough centralized bidding within 6 months from October 19, 2024. The total amount of the increasedshareholdings by CETHIK would not be less than RMB200 million and not more than RMB300 million, while thetotal amount of the increased shareholdings by CETC Investment would not be less than RMB100 million and notmore than RMB200 million. The funding sources for CETHIK include its own funds and special loans for stockacquisition, whereas CETC Investment's funding comes from its own capital.
By the close of 8 April, 2025, CETHIK cumulatively acquired 6,845,600 shares through centralized biddingtransactions on the Shenzhen Stock Exchange, representing 0.0741% of the company's total share capital at the time,with a total investment of RMB 200,182,737.28 (excluding transaction fees). By the close of 8 April, 2025, CETCInvestment cumulatively acquired 12,853,665 shares through centralized bidding transactions on the ShenzhenStock Exchange, representing 0.0347% of the company's total share capital at the time, with a total investment ofRMB 100,016,373.80 (excluding transaction fees).
The Company has duly fulfilled its disclosure obligations in accordance with relevant regulations uponreaching the halfway point and completion of the aforementioned share increase plan and its completion. For details,please refer to the announcements published on the CNINFO website: the Announcement on the Share IncreasePlan by the Company's Controlling Shareholder and Its Concerted Parties (October 19, 2024), the Announcementon the Controlling Shareholder Obtaining a Special Loan Commitment Letter for Share Increase (December 14,2024), the Progress Announcement at the Midpoint of the Share Increase Plan by the Controlling Shareholder andIts Concerted Parties (January 18, 2025), and the Announcement on Implementation Completion (April 9, 2025).
In addition to the above plan, CETHIK disclosed a share increase plan on October 17, 2023, which wascompleted on January 9, 2024, while CETC Investment disclosed a plan on January 17, 2024, completed onFebruary 6, 2024. For details, refer to the announcements published on the CNINFO website: the Announcement onCompletion of Share Increase Plan by the Controlling Shareholder (January 10, 2024) and the Announcement onCompletion of Share Increase Plan by Concerted Parties of the Controlling Shareholder (February 7, 2024).
3. The Company's share repurchase plan and its implementation progress.
Based on the firm confidence in the Company's future development prospects and the high recognition of itslong-term value, the Chairman of the board proposed a share repurchase on October 18, 2024. The proposal wasreviewed and approved at the 4
th
Meeting of the 6
th Board of Directors on December 9, 2024, and the 2024 2
nd
Extraordinary General Meeting on December 25, 2024, through the Share Repurchase Plan Proposal. The companyis authorized to repurchase a portion of its domestically issued RMB ordinary shares (A-shares) via centralizedbidding on the Shenzhen Stock Exchange. The total repurchase amount shall not exceed RMB 2.5 billion (inclusive)and shall be no less than RMB 2.0 billion (inclusive), with a maximum repurchase price of RMB 40 per share(inclusive). Funding sources include the company's own capital and a dedicated share repurchase loan. Therepurchase period shall not exceed 12 months from the date of shareholder approval. The repurchased shares willbe canceled to reduce registered capital. For details, refer to the announcements published on October 19, December10, and December 26, 2024: Announcement on the Chairman of the board's Share Repurchase Proposal, Resolutionof the Fourth Meeting of the Sixth Board of Directors, Announcement on the Share Repurchase Plan, Resolution ofthe 2024 Second Extraordinary General Meeting, and Share Repurchase Report.
On December 26, 2024, the Company completed its first repurchase of 4,003,019 shares via a dedicatedsecurities account through centralized bidding, representing 0.0434% of the total shares outstanding. The highestand lowest transaction prices were RMB 31.50/share and RMB 31.06/share, respectively, with a total share valueof RMB 125,613,283.27 (excluding fees).
As of the market close on March 31, 2025, the Company has implemented the share repurchase through thededicated securities account for share repurchases via centralized bidding, cumulatively repurchasing 40,504,219shares, which represents 0.4387% of the Company's current total issued share capital. The highest transaction pricewas RMB32.70 per share, and the lowest transaction price was RMB27.53 per share. The total transaction amountwas RMB1,235,479,288.81 (excluding transaction fees).
The Company strictly complies with regulatory requirements, follows lawful procedures, and disclosesrepurchase progress announcements within the first three trading days of each month. For details, refer to theAnnouncement on the First Share Repurchase published on December 27, 2024, on the CNINFO website, and themonthly Announcement on Share Repurchase Progress.
XVII. 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 ChiNextMarket
On March 7, 2023, Hangzhou Hikrobot Co., Ltd. (hereinafter referred to as "HikRobot") received Notice onAccepting the Application Documents for the Initial Public Offering of Shares and Listing on the SZSE ChiNextMarket 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 tothe Announcement on the Application for the Initial Public Offering of Shares and Listing on the SZSE ChiNextMarket of Hangzhou Hikrobot Co., Ltd., a Subsidiary of the Company, is Accepted by the SZSE (AnnouncementNo.: 2023-008) published by the Company on CNINFO website (www.cninfo.com.cn) on March 8, 2023. ShenzhenStock Exchange issued the Inquiry Letter on the Review of Application Documents for the Initial Public ShareOffering 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 ofApplication Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market ofHangzhou Hikrobot Co., Ltd. on May 17, 2023. Shenzhen Stock Exchange issued the Second Inquiry Letter on theReview of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNextMarket of Hangzhou Hikrobot Co., Ltd. (Inquiry Letter (2023) No. 010218) on June 30, 2023, and HikRobot hassubmitted the Reply to the Second Inquiry Letter on the Review of Application Documents for the Initial PublicShare Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. on July 27,2023. Shenzhen Stock Exchange issued the Review Opinions Implementation Letter for the Application ofHangzhou Hikrobot Co., Ltd. for the Initial Public Offering of Shares and Listing on the ChiNext Board (ReviewLetter (2024) No. 010010) on January 15, 2024, and subsequently announced Hikrobot's submission of the Replyto the Review Opinions Letter from the Application Documents Review Center for the Initial Public OfferingofShares and Listing on the ChiNext Board of Hangzhou Hikrobot Co., Ltd. on January 2, 2025.
Section VII Changes in Shares and Information about ShareholdersI. Changes in Share Capital
1. Table of Changes in Share Capital
Unit: Share
| Before the change | Changes in the period (+, -) | After the change | |||||||
| Shares | Ratio | New Shares Issued | Bonus share | Share transferred from capital reserve | Others | Sub-total | Shares | Ratio | |
| 1. Shares subject to conditional restriction(s) | 222,167,673 | 2.38% | -94,639,161 | -94,639,161 | 127,528,512 | 1.38% | |||
| 1) State holdings | |||||||||
| 2) Shares held by state-owned corporates | |||||||||
| 3) Shares held by other domestic investors | 222,031,673 | 2.38% | -94,503,161 | -94,503,161 | 127,528,512 | 1.38% | |||
| Including: held by domestic corporations | |||||||||
| held by domestic individuals | 222,031,673 | 2.38% | -94,503,161 | -94,503,161 | 127,528,512 | 1.38% | |||
| 4) Shares held by overseas investors | 136,000 | 0.00% | -136,000 | -136,000 | 0 | 0.00% | |||
| Including: held by overseas corporations | |||||||||
| held by overseas individuals | 136,000 | 0.00% | -136,000 | -136,000 | 0 | 0.00% | |||
| 2. Shares without restriction | 9,108,433,258 | 97.62% | -2,763,444 | -2,763,444 | 9,105,669,814 | 98.62% | |||
| 1) RMB ordinary shares | 9,108,433,258 | 97.62% | -2,763,444 | -2,763,444 | 9,105,669,814 | 98.62% | |||
| 2) Domestically listed foreign shares | |||||||||
| Before the change | Changes in the period (+, -) | After the change | |||||||
| Shares | Ratio | New Shares Issued | Bonus share | Share transferred from capital reserve | Others | Sub-total | Shares | Ratio | |
| 3) Foreign shares listed overseas | |||||||||
| 4) Others | |||||||||
| 3. Total | 9,330,600,931 | 100.00% | -97,402,605 | -97,402,605 | 9,233,198,326 | 100.00% | |||
Reason for the changes in share capital
√Applicable □Inapplicable
(1) During the reporting period, the number of senior managers' locked-up shares changed due to senior managers' increase in shareholdings and leadership re-election of the Company. For details, please refer to the table from "V. Information about Directors, Supervisors, and Senior Management" in Section IV "CorporateGovernance" of this report.
(2) During the reporting period, the Company terminated the 2021 Restricted Stock Plan and repurchased and canceled all relevant restricted shares.
On April 18, 2024 and May 10, 2024, the 20
th meeting of the 5
th session of the Board of Directors, the 18
th meeting of the 5
thsession of the Board of Supervisorsand 2023 Annual General Meeting reviewed and approved Proposal on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasing andCanceling Relevant Restricted Shares, and agreed the company terminate the implementation of the 2021 Restricted Stock Plan and repurchase and cancel all restrictedstocks 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 havecompleted the repurchase and cancellation procedures at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited. As of the reportingday, the Company does not have any outstanding restricted shares.
For details, please refer to the Announcement on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasing and Canceling RelevantRestricted Shares and the Announcement on the Completion of Repurchase and Cancellation of Restricted Stocks Related to the 2021 Restricted Stock Plan publishedby the Company on www.cninfo.com.cn on April 20, 2024 and August 17, 2024.
Approval for changes in share capital
√Applicable □Inapplicable
On April 18, 2024 and May 10, 2024, the 20
th meeting of the 5
th session of the Board of Directors, the 18
th meeting of the 5
thsession of the Board of Supervisorsand 2023 Annual General Meeting reviewed and approved Proposal on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasing andCanceling Relevant Restricted Shares, and agreed the company terminate the implementation of the 2021 Restricted Stock Plan and repurchase and cancel all restrictedstocks granted but not yet unlocked.
Transfer for changes in share capital
√Applicable □Inapplicable
On August 15, 2024, the Company completed the repurchase and cancellation procedures for 97,402,605 restricted shares under its 2021 Restricted ShareIncentive Plan through China Securities Depository and Clearing Corporation Limited (Shenzhen Branch). Consequently, the total share capital was adjusted from9,330,600,931 shares to 9,233,198,326 shares. As of the reporting day, the Company does not have any outstanding restricted shares.
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per share attributable to common shareholders of theCompany, 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
| Name of shareholder | Opening restricted shares | Increased in current period | Vested in current period | Closing restricted shares | Note for restricted shares | Unlock date |
| Grantees of restricted share incentive plan (consolidated) | 97,402,605 | 0 | 97,402,605 | 0 | Equity Incentive Restricted Shares | August 15, 2024, 2021 Restricted Stock Plan repurchased and canceled |
| Hu Yangzhong | 116,727,358 | 270,000 | 0 | 116,997,358 | Restricted shares for senior executives | In accordance with relevant regulations on the management of shares held by senior executives. |
| Xu Peng | 11,466 | 0 | 0 | 11, 466 | Restricted shares for senior executives | |
| Wang Qiuchao | 26,250 | 0 | 0 | 26,250 | Restricted shares for senior executives | |
| Pan Jia | 40,969 | 0 | 0 | 40,969 | Restricted shares for senior executives | |
| He Hongli | 248,625 | 0 | 0 | 248,625 | Restricted shares for senior executives | |
| Pu Shiliang | 176,925 | 0 | 0 | 176,925 | Restricted shares for senior executives | |
| Guo Xudong | 15,855 | 22,500 | 0 | 38,355 | Restricted shares for senior executives | |
| Xu Ximing | 80,925 | 7,500 | 0 | 88,425 | Restricted shares for senior executive | |
| Huang Fanghong | 257,125 | 22,500 | 0 | 279,625 | Restricted shares for senior executives | |
| Jin Yan | 188,250 | 0 | 0 | 188,250 | Restricted shares for senior executives | |
| Cai Changyang | 82,125 | 0 | 0 | 82,125 | Restricted shares for senior executives | |
| Qu Liyang | 11,812 | 3,938 | 0 | 15,750 | Restricted shares for senior executives | |
| Wu Weiqi | 6,514,342 | 2,171,447 | 0 | 8,685,789 | Restricted shares for senior executives |
| Name of shareholder | Opening restricted shares | Increased in current period | Vested in current period | Closing restricted shares | Note for restricted shares | Unlock date |
| Xu Lirong | 227,250 | 75,750 | 0 | 303,000 | Restricted shares for senior executives | |
| Jin Duo | 82,125 | 27,375 | 0 | 109,500 | Restricted shares for senior executives | |
| Bi Huijuan | 177,075 | 59,025 | 0 | 236,100 | Restricted shares for senior executives | |
| Total | 222,271,082 | 2,660,035 | 97,402,605 | 127,528,512 | -- | -- |
Note:
1) Executives who are grantees under incentive restricted shares scheme, his/her holding incentive restricted shares are counted within the "Grantees of restrictedshare incentive plan (consolidated)" on the second row.
2) The total amount of vested shares of the "Grantees of restricted share incentive plan (consolidated)" in the current reporting period is 97,402,605 shares, whichresults from the repurchase and cancellation of restricted shares granted but not unlocked of the Company's 2021 Restricted Stock Plan in the current period (includingthe repurchase and cancellation of the corresponding restricted shares held by the above senior executives).
3) The chairman of the board, Hu Yangzhong and senior managers, Guo Xudong, Xu Ximing, Huang Fanghong increased their holdings of the Company. These sharesare classified as restricted shares for senior managers in accordance with the relevant rules. Qu Liyang, Wu Weiqi, Xu Lirong, and Jin Duo retired upon expiration oftheir terms, while Bi Huijuan resigned from her executive position during the reporting period. All shares held by them are fully classified into executive restrictedshares within 6 months of her resignation in accordance with relevant equity restriction rules.
4) For newly appointed directors, supervisors, and senior management during the reporting period, their initial restricted shares are the number of shares classified asrestricted shares at the time of appointment in accordance with relevant equity restriction rules.
II. Issuance and Listing of Securities
1. Securities (exclude Preferred Share) Issued during the Reporting Period
□Applicable √Inapplicable
2. Explanation on Changes in Total Share Capital, the Structure of Shareholders, and the Structure of Assets and Liabilities of the Company
√ Applicable □ Inapplicable
On August 15, 2024, the company completed the repurchase and cancellation procedures for 97,402,605 restricted shares under its 2021 Restricted Share Incentive
Plan through China Securities Depository and Clearing Corporation Limited (Shenzhen Branch). Consequently, the total share capital was adjusted from 9,330,600,931shares to 9,233,198,326 shares. As of the reporting day, the Company does not have any outstanding restricted shares.After the completion of the above matters, there has been no significant change in the shareholder structure, asset and liability structure of the Company.
3. Existent Shares Held by Internal Staff of the Company
□ Applicable √ Inapplicable
III. Particulars about the Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit: Share
| Total number of common shareholders at the end of the reporting period | 401,004 | The total number of ordinary shareholders at the end of the previous month before the disclosure date of the annual report | 340,254 | ||||||
| Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them (Excluding shares lent through refinancing) | |||||||||
| Name of shareholder | Nature of shareholder | Share-holding percentage (%) | Total ordinary shares held at the end of the reporting period | Increase/decrease during the reporting period | The number of shares held with trading restrictions | The number of shares held without trading restrictions | Pledged or marked or frozen | ||
| Status | Amount | ||||||||
| China Electronics Technology HIK Group Ltd. | Domestic state-owned corporation | 36.93% | 3,410,150,909 | 6,271,400 | 0 | 3,410,150,909 | Pledged | 50,000,000 | |
| Gong Hongjia | Overseas individual | 10.42% | 962,504,814 | 0 | 0 | 962,504,814 | Pledged | 231,058,200 | |
| Hangzhou Weixun Equity Investment Partnership (Limited Partnership) | Domestic non-state-owned corporation | 4.88% | 450,795,176 | 0 | 0 | 450,795,176 | Pledged | 22,200,000 | |
| Shanghai Perseverance Asset Management Partnership (Limited Partnership) - Perseverance Adjacent Mountain 1 Yuanwang Fund | Other | 4.18% | 385,950,050 | -41,049,950 | 0 | 385,950,050 | - | - |
| CETC Investment Holdings Co., Ltd. | Domestic state-owned corporation | 2.66% | 245,484,168 | 13,176,265 | 0 | 245,484,168 | - | - |
| Hangzhou Pukang Equity Investment Partnership (Limited Partnership) | Domestic non-state-owned corporation | 1.98% | 182,510,174 | 0 | 0 | 182,510,174 | Pledged | 51,980,000 |
| The 52nd Research Institute at China Electronics Technology Group Corporation | Domestic state-owned corporation | 1.96% | 180,775,044 | 0 | 0 | 180,775,044 | - | - |
| Hu Yangzhong | Domestic individual | 1.69% | 155,996,477 | 360,000 | 116,997,358 | 38,999,119 | - | - |
| Central Huijin Investment Co., Ltd. | Domestic state-owned corporation | 0.70% | 64,700,691 | 0 | 0 | 64,700,691 | - | - |
| Industrial and Commercial Bank of China Co., Ltd. - Huatai Pinebridge CSI 300 ETF Securities Investment Fund | other | 0.69% | 63,851,856 | 35,931,100 | 0 | 63,851,856 | - |
| Explanation on associated relationship or concerted actions among the above-mentioned shareholders: | Among the above shareholders, China Electronics Technology HIK Group Ltd., CETC Investment Holdings Co., Ltd., and the 52nd Research Institute at China Electronics Technology Group Corporation are acting-in-concert parties. Mr. Gong Hongjia and Hangzhou Pukang Equity Investment Partnership (Limited Partnership) are acting-in-concert parties. Mr. Hu Yangzhong and Hangzhou Weixun Equity Investment Partnership (Limited Partnership) are acting-in-concert parties. Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert parties in accordance with the Administrative Measures for Acquisitions of Listed Companies. | |||
| Shareholding details of the top 10 unrestricted shareholders (excluding shares lent out through securities lending arrangements and management locked-in shares). | ||||
| Name of shareholder | Number of shares without trading restrictions held at the period-end | Type of shares | ||
| Type | Number | |||
| China Electronics Technology HIK Group Co., Ltd. | 3,410,150,909 | RMB ordinary shares | 3,410,150,909 | |
| Gong Hongjia | 962,504,814 | RMB ordinary shares | 962,504,814 | |
| Hangzhou Weixun Equity Investment Partnership (Limited Partnership) | 450,795,176 | RMB ordinary shares | 450,795,176 | |
| Shanghai Perseverance Asset Management Partnership (Limited Partnership) - Perseverance Adjacent Mountain 1 Yuanwang Fund | 385,950,050 | RMB ordinary shares | 385,950,050 | |
| CETC Investment Holdings Co., Ltd. | 245,484,168 | RMB ordinary shares | 245,484,168 | |
| Hangzhou Pukang Equity Investment Partnership (Limited Partnership) | 182,510,174 | RMB ordinary shares | 182,510,174 | |
| The 52nd Research Institute at China Electronics Technology Group Corporation | 180,775,044 | RMB ordinary shares | 180,775,044 | |
| Central Huijin Investment Co., Ltd. | 64,700,691 | RMB ordinary shares | 64,700,691 | |
| Industrial and Commercial Bank of China Co., Ltd. - Huatai Pinebridge CSI 300 ETF Securities Investment Fund | 63,851,856 | RMB ordinary shares | 63,851,856 | |
| Hong Kong Securities Clearing Company Ltd.(HKSCC) | 49,563,620 | RMB ordinary shares | 49,563,620 | |
| Explanation on associated relationship and concerted actions among Top 10 shareholders holding shares without trading restrictions, and among Top 10 shareholders and Top 10 shareholders holding shares without trading restrictions | Among the above shareholders, China Electronics Technology HIK Group Co., Ltd., CETC Investment Holdings Co., Ltd., and the 52nd Research Institute at China Electronics Technology Group Corporation are acting-in-concert parties. Mr. Gong Hongjia and Hangzhou Pukang Equity Investment Partnership (Limited Partnership) are acting-in-concert parties. Hangzhou Weixun Equity Investment Partnership (Limited Partnership) and Mr. Hu Yangzhong, chairman of the board, are acting-in-concert parties. Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert parties in accordance with the Administrative Measures for Acquisitions of Listed Companies. | |||
Details of share lending activities through securities lending arrangements by shareholders holding more than 5% of shares, top 10 shareholders, and top 10 holdersof unrestricted circulating shares.
√ Applicable□ Inapplicable
Unit: shares
| Details of share lending activities through securities lending arrangements by shareholders holding more than 5% of shares, top 10 shareholders, and top 10 holders of unrestricted circulating shares. | ||||||||
| Name of shareholder | Period-beginning common account and credit account holdings | Period-beginning refinancing lending shares that have not yet been returned | Period-end common account and credit account holdings | Period-end refinancing lending shares that have not 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 Fund | 27,920,756 | 0.30% | 15,900 | 0.00% | 63,851,856 | 0.69% | 0 | 0.00% |
Any changes of the Company's top 10 common shareholders or top 10 non-restricted common shareholders were due to refinancing, lending/repayment issues comparedwith the previous period?
□ Applicable √ Inapplicable
Any of the Company's top 10 common shareholders or top 10 non-restricted common shareholders conducted any agreed buy-back in the reporting period?
□ Yes √ No
No such case during the current reporting period.
2. Particulars about Controlling Shareholder of the Company
Nature of the controlling shareholder: Central State-ownedType of the actual controller: Corporation
| Name of controlling shareholder | Legal Representative /People in charge | Date of establishment | Organization code | Business scope |
| China Electronics Technology HIK Group Ltd. | Chen Zongnian | November 29, 2002 | 9133000014306073XD | Industrial investment; R&D of environmental protection products, network products, intelligent products and electronic products; technology transfer, technical services, manufacturing and sales; business consulting services, rental services of self-owned real estate; import and export businesses. |
| Shares held by the controlling shareholder in other listed companies through controlling or holding during the reporting period | Directly holds 47.16% shares of domestic listed company Phoenix Optical Co. Ltd., and directly holds 13.50% shares of domestic listed company Anbang Save-guard Group Co., Ltd. and indirectly holds 17. 73% shares of domestic listed company Hangzhou EZVIZ Network Co., Ltd. (China Electronics Technology HIK Group Ltd. holds 36.93% shares of the Company and the Company holds 48.00% shares of Hangzhou EZVIZ Network Co., Ltd). | |||
Change of the controlling shareholder during the reporting period
□ Applicable √ Inapplicable
The Company's controlling shareholder has not changed during the reporting period.
3. Particulars about the Company's Actual Controller & Concerted Parties
Nature of the actual controller: Central state-owned assets management agencyType of the actual controller: CorporationEngaged in the construction of national major electronic information system projects, as well as the research, development, production, andsales of equipment, civil electronic information software, materials, components, complete machines, system integration, and relatedcommon technologies.
| Name of the actual controller | Legal Representative /People in charge | Date of establishment | Organization code | Business scope |
| China Electronics Technology Group Corporation | Wang Haibo | February 25, 2002 | 91110000710929498G | Engaged in the construction of national major electronic information system projects, as well as the research, development, production, and sales of equipment, civil electronic information software, materials, components, complete machines, system integration, and related common technologies. |
| Shares held by the actual controlling shareholder in other listed companies through controlling or holding during the reporting period | China Electronics Technology Group Corporation is the actual controller of 18 domestic listed companies including Sun Create Electronic Co., Ltd, CETC Digital Technology Co., Ltd, CETC Cyberspace Security Technology Co., Ltd., CETC Putian Technology Co., Ltd., Tai'ji Computer Corporation Limited, GLARUN Technology Co., Ltd. , Phoenix Optics Co., Ltd., Chengdu Spaceon Electronics Co.,Ltd., CETC Chip Technology Inc., Hebei Sinopack Electronic Technology Co., Ltd., Eastern Communications Co.,Ltd., Eastcompeace Technology Co.,Ltd., Nanjing Potevio Telecommunications Co., Ltd., Chengdu Siwi Science and Technology Co., Ltd., Nanjing Guobo Electronics Co., Ltd., Hangzhou EZVIZ Network Co., Ltd., Nanjing Les Information Technology Co., Ltd., Beijing E-hualu Information Technology Co., Ltd. and etc. | |||
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
No such change during the reporting period.
The ownership and controlling relationship between the actual controller of the Company and the Company is detailedas follows:
The actual controller controls the Company through trust or other asset management methods
□ Applicable √Inapplicable
4. The Company's Controlling Shareholder or the Largest Shareholder and its Concerted Action Person'sCumulative Pledged Shares Account for 80% of the Company's Shares Held by Them
□ Applicable √ Inapplicable
5. Particulars about Other Corporate Shareholders with Shareholding Proportion over 10%
□ Applicable √ Inapplicable
6. Particulars on Shareholding Decrease Restrictions for the Controlling Shareholders, Actual Controller,Restructurer or Other Committing Parties
□ Applicable √ Inapplicable
IV. The Specific Implementation of Share Repurchase during the Reporting PeriodImplementation progress of share repurchase
√ Applicable □Inapplicable
| Disclosure Date | Planned repurchase amount of shares | Proportion to total share capital | Planned amount of repurchase fund | Repurchase period | Use of repurchase | Amount of repurchased shares (share) | The number of repurchased shares as a proportion of the underlying stock covered by the share incentive scheme |
| December 10, 2024 | Calculated based on that the repurchase price shall not exceed RMB40 per share. The amount shall not exceed 62,500,000 shares and not less than 50,000,000 share, and the final result is subject to the actual repurchase. | Calculated based on that the repurchase price shall not exceed RMB40 per share. The repurchased portion of shares shall not exceed 0.68% and not less than 0.54%, and final result is subject to the actual repurchase. | Shall not exceed RMB2.5 billion (inclusive) and not less than RMB 2 billion (inclusive) | December 25, 2024 – December 24, 2025 | Cancel and reduce registered capital in accordance with law | 10,000,219 | Inapplicable |
Note: The number of shares repurchased presented in the table reflects the actual repurchased shares as of the close oftrading on December 31, 2024.
Based on the firm confidence in the Company's future development prospects and the high recognition of its long-term value, the Chairman of the board proposed a share repurchase on October 18, 2024. The proposal was reviewed andapproved at the 4
th Meeting of the 6
th Board of Directors on December 9, 2024, and the 2024 2
ndExtraordinary GeneralMeeting on December 25, 2024, through the Share Repurchase Plan Proposal. The Company is authorized to repurchasea portion of its domestically issued RMB ordinary shares (A-shares) via centralized bidding on the Shenzhen StockExchange. The total repurchase amount shall not exceed RMB 2.5 billion (inclusive) and shall be no less than RMB 2.0
billion (inclusive), with a maximum repurchase price of RMB 40 per share (inclusive). Funding sources include theCompany's own capital and a dedicated share repurchase loan. The repurchase period shall not exceed 12 months from thedate of shareholder approval. The repurchased shares will be canceled to reduce registered capital. For details, refer to theannouncements published on October 19, December 10, and December 26, 2024: Announcement on the Chairman of theboard's Share Repurchase Proposal, Resolution of the Fourth Meeting of the Sixth Board of Directors, Announcement onthe Share Repurchase Plan, Resolution of the 2024 Second Extraordinary General Meeting, and Share Repurchase Report.On December 26, 2024, the Company completed its first repurchase of 4,003,019 shares via a dedicated securitiesaccount through centralized bidding, representing 0.0434% of the total shares outstanding. The highest and lowesttransaction prices were RMB 31.50/share and RMB 31.06/share, respectively, with a total share value of RMB125,613,283.27 (excluding fees).
As of the close of March 31, 2025, the Company had cumulatively repurchased 40,504,219 shares through thededicated securities account, accounting for 0.4387% of the total shares outstanding. The highest and lowest transactionprices were RMB 32.70/share and RMB 27.53/share, respectively, with a total share value of RMB 1,235,479,288.81(excluding fees).The Company strictly complies with regulatory requirements, follows lawful procedures, and discloses repurchaseprogress announcements within the first three trading days of each month. For details, refer to the Announcement on theFirst Share Repurchase published on December 27, 2024, on the CNINFO website, and the monthly Announcement onShare Repurchase Progress.
Implementation progress of reduce holdings of repurchased shares by means of centralized bidding
□Applicable√ Inapplicable
Section VIII Information of Preferred Shares
□ Applicable √ Inapplicable
There is no preferred share existed for the Company during the current reporting period.
Section IX Bonds
□ Applicable √ Inapplicable
Section X Financial Report
Audit Report
| Audit Opinion | Standard unqualified audit opinion |
| Audit Report sign-off Date | April 17, 2025 |
| Audit Institution Name | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
| Audit Report Number | Deloitte Auditors' Report (Audit) No. 25- P04523 |
| Certified Public Accounts Name | Chen yan, Liu ying |
To all shareholders of Hangzhou Hikvision Digital Technology Co., Ltd.:
1. Audit Opinion
We have audited the accompanying financial statements of Hangzhou Hikvision Digital Technology Co., Ltd.(hereinafter referred to as "Hikvision" or "The Group"), including consolidated and parent company's balance sheet as ofDecember 31, 2024, consolidated and parent company's income statement, cash flow statement and statement of changesin owners' equity of 2024 as well as relevant financial notes to financial statements.In our opinion, the financial statements annexed have been prepared in accordance with Accounting Standards forBusiness Enterprises in all material respects and they present fairly the consolidated and parent company's financialposition of Hikvision as of December 31, 2024 and consolidated and parent company's financial performance and cashflows of 2024.
2. Basis of Opinion
We have conducted our audit in accordance with the Auditing Standards for Chinese Certified Public Accountants."Responsibilities of Certified Public Accountants for Financial Statements Audit" in the audit report further states ourresponsibilities under the standards. As per the code of ethics of Chinese certified public accountants, we are independentfrom Hikvision and have implemented other responsibilities as required by the code of ethics. We believe that the auditevidence we have acquired is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Matters
Key matters are matters we deem the most significant to the financial statements audit for this year based on ourprofessional judgment. These matters are handled based on the financial statements audit as a whole and the audit opinionformed accordingly. We don't present opinions separately on these matters. We confirm that the following matters are keymatters to be communicated through in the audit report.
(1) Recognition of Sales Revenues
Description:
As shown in Note (V) 45, the operating revenue in the consolidated financial statements of the Group for the yearended December 31, 2024 is RMB92,495,525,118.30. The product sales revenue, a key performance indicator, reachesRMB87,408,184,677.06, accounting for 94.50% of the operating revenue, which is a significant indicator of the Groupand has a significant influence on results of business operations. The product sales revenue include different sales modelssuch as product domestic sales and product export sales by domestic companies and the overseas sales of overseassubsidiaries, and the revenue recognition is complicated. Therefore, we regard the occurrence of product sales revenue asa key audit matter.
Audit Measures:
Main audit procedures that we perform for the aforesaid key audit matters include:
(1) Understanding and evaluating design and implementation of key internal control in relation to revenue recognition,and testing the effectiveness of its operation;
(2) For revenues under different sales models, selecting a sample to check the sales contract, reviewing its main
transaction terms, evaluating whether revenue recognition complies with requirements of accounting policies of theGroup and the Accounting Standards for Business Enterprises;
(3) Analyzing revenues and gross profits based on product types, to understand whether there are abnormal fluctuationsin the revenues and gross profits for the year, and conducting a test of details for identified specific transactions,through systematic analysis of revenue data, and reviewing relevant supporting documents;
(4) Selecting sample(s) from product sales revenues recorded for the year, checking invoices, sales contracts or orders,shipping orders, signature forms, and other supporting documents; for the sample(s) of income under the export modelof the selected domestic companies, additional inspections will be made to the customs declaration record andshipment record.
(2) Provision for Credit Loss of Accounts Receivable
Description:
As disclosed in Note (V) 4 to the consolidated financial statements of the Group, as of December 31, 2024, the balanceof accounts receivable amounted to RMB41,824,083,460.37, and the balance of provision for credit losses of accountsreceivable amounted to RMB3, 913,954,724.95. The book value of the Group's accounts receivable is relatively high, andthe provision for credit loss of accounts receivable has a significant impact on the financial statements. As shown in Note(III) 11.2, Note (III) 13 and Note (III) 35 of the financial statements, the Group makes provisions for credit losses foraccounts receivable at an amount equivalent to expected credit losses during the entire duration. For accounts receivablewith significant individual amount and when the debtor has major financial difficulties, etc., the Group recognizes its creditlosses based on individual assets, and classifies other accounts receivable into different combinations based on commoncredit risk characteristics and calculates expected credit losses on a portfolio basis.
For accounts receivable classified into portfolios, the Group uses impairment matrix to determine the expected creditloss provision for accounts receivable. The expected credit loss provision ratio for each portfolio is determined based onthe Group's historical overdue ratio and default and with reference to the forward-looking information of the industry. Theaccounting estimates above are subject to a high level of uncertainties. Therefore, we identify the recognition of credit lossprovision for accounts receivable on a portfolio basis as a key audit matter.
Audit Measures:
Main audit procedures that we perform for the aforesaid key audit matters include:
(1) Understanding and evaluating design and implementation of key internal control in relation to expected credit lossprovision for accounts receivable by the Group, and testing the effectiveness of its operation;
(2) Understanding the Group's accounting policies for expected credit loss on accounts receivable; for the model credit
loss provision for accounts receivable on a portfolio basis, the following main procedures were performed-Assessing the rationality of measurement method by using impairment matrix model, and the rationality of the keyparameters and assumptions used in the impairment matrix model, including classification of different portfolios,classification of stage, forward-looking adjustment, etc.;- Obtaining the historical default data used by the Group's management in determining the historical loss rate ofaccounts receivable, and evaluating the accuracy thereof;- Selecting samples to test the accuracy of the classification of portfolio and stage by the Group's management;- Recalculating the expected credit loss provision based on default loss percentage.
4. Other Information
Management of Hikvision shall be responsible for other information. Other information includes the informationcovered in the annual report, excluding the financial statements and our audit report.Our audit opinion on the financial statements does not cover other information and we do not express any form ofauthentication conclusion on other information.In connection with our audit of the financial statements, our responsibility is to read other information and to considerwhether other information is significantly misstated or materially inconsistent with the financial statements or theinformation we learned during the audit.Based on the works we have performed, if we determine that there is a material misstatement in other information,we should report the fact. In this respect, we have nothing to report.
5. Responsibility of the Management and Governance for the Financial Statements
The management of Hikvision is responsible for the preparation of financial statements in accordance withAccounting Standards for Business Enterprises to achieve fair presentation, and design, implementation and maintenanceof necessary internal control to enable the financial statements are free from material misstatement, whether due to fraudor error.
When preparing the financial statements, the management is responsible for assessing the going-concern ability ofHikvision, disclosing issues related to going-concern as applicable, and applying going-concern assumptions, unless themanagement plans to liquidate Hikvision, terminate operation or has no other realistic choice.
The governance is responsible for supervising financial reporting processes of Hikvision.
6. Responsibility of Certified Public Accountants on Audit of the Financial Statements
Our objective is to obtain reasonable assurance as to whether the overall financial statements are free from materialmisstatement, whether due to fraud or error, and to issue audit report that contain audit opinions. Reasonable assurance isa high level of assurance, but could not guarantee that an audit performed in accordance with the Auditing Standards canalways figure out any existing material misstatements. Misstatements may be caused by fraud or error. Misstatement is
generally considered to be material if it is reasonably expected that the misstatement, alone or aggregated, may affect theusers' financial decisions based on the financial statements.In performing the audit in accordance with the Auditing Standards, we applied professional judgment and maintainedprofessional skepticism. Meanwhile, we also perform the following duties:
(1) Identify and evaluate the risk of material misstatement of financial statements due to fraud or error; design and
implement audit procedures to cope with these risks, and obtain adequate and appropriate audit evidence as the basisfor expressing audit opinions. As fraud may involve collusion, forgery, willful omission, misrepresentation oroverride of internal control, the risk of not discovering a material misstatement due to fraud is higher than the risk ofnot discovering a material misstatement due to error.
(2) Understand the internal control related to auditing as a way to design appropriate audit procedures.
(3) Evaluate the properness of accounting policy selected by the management and the rationality of accounting estimate
and related disclosure.
(4) Reach a conclusion on whether the going concern assumption adopted by the management is appropriate. Meanwhile,
based on the audit evidence obtained, reach a conclusion on whether there are material uncertainties in the events orconditions that may cast significant doubts on Hikvision's ability to continue as a going concern. If we reach aconclusion that there is a material uncertainty, the Auditing Standards require us to call the attention of the users ofthe report to the relevant disclosures in the financial statements in the audit report. If the disclosure is insufficient, weshould issue modified audit opinions. Our conclusion is based on the information available up to the date of the auditreport. However, future events or conditions may result in the failure of Hikvision to continue as a going concern.
(5) Evaluate the overall presentation (including the disclosure), structure and content of the financial statements and
evaluate whether the financial statements fairly reflect the related transactions and events.
(6) Obtain adequate and appropriate audit evidence on the financial information of entity or business activities of
Hikvision so as to express audit opinions on the financial statements. We are responsible for directing, supervisingand executing the audit on the Group, and assume full responsibility for the audit opinions.We communicated with the governance about the scope of the audit, the schedule and major audit findings, includingthe notable shortcomings of internal control identified during the auditing.
We also provide statement to the governance on the independence-related work ethics we follow, and communicatewith the governance on all relations and other matters that might be reasonably deemed to influence our independence aswell as relevant precautionary measures (as applicable).
We determine which of the matters we communicated with the governance are of the greatest importance to the auditof financial statements of the current period so as to make them key matters. We describe the matters in the audit report.We decide not to communicate on such matters in the audit report unless the laws and regulations forbid the publicdisclosure of such matters, or, in rare circumstances, if the negative consequence of communication of matters in the auditreport is reasonably expected to exceed the benefit of the public interest.
On December 31, 2024
Consolidated Balance Sheet
Unit: RMB
| Item | Notes | On December 31, 2024 | On December 31, 2023(Restated) |
| Current Assets: | |||
| Cash and bank balances | (V)1 | 36,271,488,337.03 | 49,638,158,662.54 |
| Derivative financial assets | (V)2 | 26,775,923.93 | 37,380.00 |
| Notes receivable | (V)3 | 2,722,596,142.46 | 2,606,071,375.74 |
| Accounts receivable | (V)4 | 37,910,128,735.42 | 35,816,573,511.44 |
| Receivables for financing | (V)6 | 2,291,648,244.05 | 1,594,219,832.62 |
| Prepayments | (V)7 | 664,602,593.01 | 508,151,405.92 |
| Other receivables | (V)8 | 531,344,606.50 | 571,912,035.93 |
| Inventories | (V)9 | 19,110,711,958.11 | 19,211,444,296.82 |
| Contract assets | (V)5 | 985,822,785.69 | 1,173,312,415.20 |
| Non-current assets due within one year | (V)10 | 894,327,647.82 | 1,079,721,006.23 |
| Other current assets | (V)11 | 1,071,066,653.10 | 961,593,616.75 |
| Total Current Assets | 102,480,513,627.12 | 113,161,195,539.19 | |
| Non-current Assets: | |||
| Long-term receivables | (V)12 | 380,453,188.09 | 538,698,618.76 |
| Long-term equity investment | (V)13 | 1,527,223,390.79 | 1,151,104,887.85 |
| Other non-current financial assets | (V)14 | 472,000,082.76 | 472,184,937.66 |
| Fixed assets | (V)15 | 15,063,752,296.49 | 11,508,312,342.17 |
| Construction in progress | (V)16 | 4,699,473,381.21 | 4,307,651,074.46 |
| Right-of-use assets | (V)17 | 530,138,023.79 | 521,061,396.66 |
| Intangible assets | (V)18 | 1,828,287,135.99 | 1,810,476,551.45 |
| Goodwill | (V)19 | 312,165,129.29 | 311,353,640.88 |
| Long-term deferred expenses | (V)20 | 162,841,758.91 | 177,361,533.93 |
| Deferred tax assets | (V)21 | 2,206,191,157.06 | 1,978,373,012.15 |
| Other non-current assets | (V)22 | 2,353,160,984.64 | 2,920,349,344.39 |
| Total Non-current Assets | 29,535,686,529.02 | 25,696,927,340.36 | |
| Total Assets | 132,016,200,156.14 | 138,858,122,879.55 |
On December 31, 2024
Consolidated Balance Sheet-continued
Unit: RMB
| Item | Notes | On December 31, 2024 | On December 31, 2023 (Restated) |
| Current Liabilities: | |||
| Short-term borrowings | (V)24 | 1,031,895,812.62 | 2,118,952,026.06 |
| Derivative financial liabilities | (V)25 | 1,874,341.64 | 38,079,755.04 |
| Notes payable | (V)26 | 1,197,128,746.56 | 1,163,687,279.58 |
| Accounts payable | (V)27 | 20,185,303,107.69 | 19,163,485,888.09 |
| Contract liabilities | (V)28 | 3,353,943,054.24 | 2,977,990,775.40 |
| Payroll payable | (V)29 | 5,666,415,834.10 | 6,120,471,280.78 |
| Taxes payable | (V)30 | 1,535,936,096.02 | 1,622,550,187.86 |
| Other payables | (V)31 | 3,528,359,044.48 | 3,911,612,841.06 |
| Including: dividend payables | (V)31.2 | 186,793.11 | 253,957,413.29 |
| Non-current liabilities due within one year | (V)32 | 767,030,688.91 | 5,814,660,214.96 |
| Other current liabilities | (V)33 | 377,117,275.65 | 1,481,222,044.19 |
| Total Current Liabilities | 37,645,004,001.91 | 44,412,712,293.02 | |
| Non-current Liabilities: | |||
| Long-term borrowings | (V)34 | 5,119,185,000.00 | 8,940,122,961.01 |
| Lease liabilities | (V)35 | 375,432,749.68 | 344,005,866.13 |
| Long-term payables | 9,780,220.80 | 15,526,169.45 | |
| Provisions | (V)36 | 305,250,049.71 | 213,084,038.31 |
| Deferred income | (V)37 | 874,512,073.53 | 966,259,592.34 |
| Deferred tax liabilities | (V)21 | 112,711,363.52 | 129,866,978.18 |
| Other non-current liabilities | (V)38 | 74,029,948.84 | 1,672,933,103.20 |
| Total Non-current Liabilities | 6,870,901,406.08 | 12,281,798,708.62 | |
| Total Liabilities | 44,515,905,407.99 | 56,694,511,001.64 | |
| Owners' Equity | |||
| Share capital | (V)39 | 9,233,198,326.00 | 9,330,600,931.00 |
| Capital reserves | (V)40 | 6,181,644,265.06 | 7,864,903,763.52 |
| Less: Treasury shares | (V)41 | 310,044,296.12 | 2,737,987,226.55 |
| Other comprehensive income | (V)42 | (111,510,486.21) | 44,667,516.16 |
| Surplus reserves | (V)43 | 4,715,460,312.00 | 4,715,460,312.00 |
| Retained earnings | (V)44 | 60,959,912,942.15 | 57,136,620,244.01 |
| Total Owners' Equity Attributable to Owner of the Company | 80,668,661,062.88 | 76,354,265,540.14 | |
| Minority equity | 6,831,633,685.27 | 5,809,346,337.77 | |
| Total Owners' Equity | 87,500,294,748.15 | 82,163,611,877.91 | |
| Total Liabilities and Owners' Equity | 132,016,200,156.14 | 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
On December 31, 2024
Balance Sheet of the Parent Company
Unit: RMB
| Item | Notes | On December 31, 2024 | On December 31, 2023 |
| Current Assets: | |||
| Cash and bank balances | 22,813,537,991.27 | 36,366,610,163.17 | |
| Notes receivable | 226,470,150.02 | 214,433,654.20 | |
| Accounts receivable | (XVI)1 | 25,733,620,869.95 | 19,016,777,665.77 |
| Receivables for financing | 50,535,530.46 | 44,650,466.33 | |
| Prepayments | 234,363,667.93 | 53,649,708.62 | |
| Other receivables | (XVI)2 | 4,405,567,174.71 | 3,061,246,174.74 |
| Including: dividend receivables | (XVI)2.2 | - | 41,423,446.39 |
| Inventories | 143,812,782.98 | 199,049,157.84 | |
| Contract assets | 18,901,004.71 | 10,490,078.61 | |
| Non-current assets due within one year | 106,879,332.17 | 157,086,525.60 | |
| Other current assets | 1,720,538,797.37 | 1,676,541,190.03 | |
| Total Current Assets | 55,454,227,301.57 | 60,800,534,784.91 | |
| Non-current Assets: | |||
| Long-term accounts receivable | 1,204,913,267.41 | 3,633,588,076.55 | |
| Long-term equity investment | (XVI)3 | 9,486,970,485.01 | 8,681,387,048.75 |
| Other non-current financial assets | 307,130,117.76 | 338,767,764.24 | |
| Fixed assets | 3,415,196,347.85 | 3,392,288,906.32 | |
| Construction in progress | 79,844,913.85 | 17,377,463.50 | |
| Right-of-use assets | 84,298,386.18 | 124,744,108.19 | |
| Intangible assets | 173,965,691.99 | 96,021,508.25 | |
| Long-term deferred expenses | 37,381,601.80 | 39,437,083.99 | |
| Deferred tax assets | 298,084,602.58 | 322,869,398.52 | |
| Other non-current assets | 62,355,873.60 | 146,216,939.94 | |
| Total Non-current Assets | 15,150,141,288.03 | 16,792,698,298.25 | |
| Total Assets | 70,604,368,589.60 | 77,593,233,083.16 |
On December 31, 2024
Balance Sheet of the Parent Company - continued
Unit: RMB
| Item | Notes | On December 31, 2024 | On December 31, 2023 |
| Current Liabilities: | |||
| Short-term borrowings | 200,075,833.33 | - | |
| Accounts payable | 1,184,469,965.39 | 1,050,518,329.53 | |
| Contract liabilities | 191,877,808.28 | 218,875,534.52 | |
| Payroll payable | 3,247,226,282.17 | 3,644,152,847.04 | |
| Taxes payable | 574,239,387.19 | 944,807,901.59 | |
| Other payables | 635,628,127.73 | 738,553,487.03 | |
| Non-current liabilities due within one year | 210,197,535.44 | 1,523,328,743.28 | |
| Other current liabilities | 44,720,937.37 | 1,134,059,460.70 | |
| Total Current Liabilities | 6,288,435,876.90 | 9,254,296,303.69 | |
| Non-current Liabilities: | |||
| Long-term borrowings | 1,827,000,000.00 | 5,887,380,000.00 | |
| Lease liabilities | 46,955,785.74 | 66,330,125.99 | |
| Provisions | 107,030,168.03 | 97,586,882.51 | |
| Deferred Income | 365,813,574.47 | 410,243,110.75 | |
| Other non-current liabilities | - | 1,642,792,335.93 | |
| Total Non-current Liabilities | 2,346,799,528.24 | 8,104,332,455.18 | |
| Total Liabilities | 8,635,235,405.14 | 17,358,628,758.87 | |
| Owners' Equity | |||
| Share capital | 9,233,198,326.00 | 9,330,600,931.00 | |
| Capital reserves | 3,849,752,890.09 | 5,776,371,174.04 | |
| Less: Treasury shares | 310,044,296.12 | 2,737,987,226.55 | |
| Surplus reserves | 4,715,460,312.00 | 4,715,460,312.00 | |
| Retained earnings | 44,480,765,952.49 | 43,150,159,133.80 | |
| Total Owners' Equity | 61,969,133,184.46 | 60,234,604,324.29 | |
| Total Liabilities and Owners' Equity | 70,604,368,589.60 | 77,593,233,083.16 |
For the reporting period from January 1, 2024 to December 31, 2024
Consolidated Income Statement
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period (Restated) |
| I. Total Revenue | (V)45 | 92,495,525,118.30 | 89,341,177,610.40 |
| Less: Total operating costs | (V)45 | 51,953,857,912.21 | 49,732,768,547.57 |
| Business taxes and surcharges | (V)46 | 692,285,927.36 | 704,641,378.69 |
| Selling expenses | (V)47 | 12,051,218,102.62 | 10,746,788,076.01 |
| Administrative expenses | (V)48 | 3,095,939,643.92 | 2,770,781,203.45 |
| Research and Development (R&D) expenses | (V)49 | 11,864,013,392.27 | 11,392,948,404.47 |
| Financial expenses | (V)50 | (114,817,493.16) | (749,800,283.79) |
| Including: Interest expenses | 391,404,187.13 | 457,605,119.59 | |
| Interest income | 878,035,430.32 | 1,067,169,946.60 | |
| Add: Other Income | (V)51 | 2,653,682,810.87 | 2,559,523,242.99 |
| Investment income | (V)52 | 187,021,018.77 | 63,302,304.25 |
| Including: Investment gains (Losses) in associated enterprise and joint-venture enterprise | 30,668,990.87 | (29,966,477.85) | |
| Gains (losses) from changes in fair values | (V)53 | 47,759,102.43 | 22,679,257.89 |
| Credit impairment gains (losses) | (V)54 | (1,068,789,505.74) | (879,922,773.25) |
| Impairment gains (losses) of assets | (V)55 | (445,914,387.59) | (463,382,275.12) |
| Asset disposal income (losses) | (14,539,975.31) | (5,674,511.78) | |
| II. Operating Profit | 14,312,246,696.51 | 16,039,575,528.98 | |
| Add: Non-operating income | (V)56 | 63,737,582.35 | 87,573,120.04 |
| Less: Non-operating expenses | (V)57 | 32,490,638.86 | 27,933,016.91 |
| III. Total Profit | 14,343,493,640.00 | 16,099,215,632.11 | |
| Less: Income tax expenses | (V)58 | 1,202,471,579.49 | 943,313,868.90 |
| IV. Net Profit | 13,141,022,060.51 | 15,155,901,763.21 | |
| (I) Classification by continuous operation | |||
| (a) Net profit on continuous operation | 13,141,022,060.51 | 15,155,901,763.21 | |
| (b) Net loss on terminated operation | - | - | |
| (II) Classification by attribution of ownership | |||
| (a) Net profit attributable to owners of parent company | 11,977,327,023.54 | 14,107,726,276.26 | |
| (b) Profit or loss attributable to minority shareholders | 1,163,695,036.97 | 1,048,175,486.95 | |
| V. Other Comprehensive Income, Net of Income Tax | (V)42 | (285,156,327.33) | 183,798,707.05 |
| Other comprehensive income attributable to owners of the Company, net of tax | (156,178,002.37) | 87,254,674.97 | |
| (I) Items that will not be reclassified subsequently to profit or loss | - | - | |
| (II) Other comprehensive income to be reclassified to profit or loss in subsequent periods | (156,178,002.37) | 87,254,674.97 | |
| 1. Exchange differences arising on conversion of financial statements denominated in foreign currencies | (156,178,002.37) | 87,254,674.97 | |
| Other comprehensive income attributable to minority interests, net of tax | (128,978,324.96) | 96,544,032.08 | |
| VI. Total Comprehensive Income | 12,855,865,733.18 | 15,339,700,470.26 |
| Item | Notes | Amount for the current period | Amount for the prior period (Restated) |
| Total comprehensive income attributable to owners of the parent company | 11,821,149,021.17 | 14,194,980,951.23 | |
| Total comprehensive income attributable to minority shareholders | 1,034,716,712.01 | 1,144,719,519.03 | |
| VII. Earnings per Share | |||
| (I) Basic earnings per share (RMB/share) | (XVII)2 | 1.297 | 1.520 |
| (II) Diluted earnings per share (RMB/share) | (XVII)2 | 1.297 | 1.520 |
In the current year, for business combinations under common control, the net loss realized by the combined party priorto the combination was: RMB 295,677.15, while the net profit realized by the combined party in the previous year was:
RMB 218,576.25.
For the reporting period from January 1, 2024 to December 31, 2024
Income Statement of the Parent Company
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period (Restated) |
| I. Total Revenue | (XVI)4 | 24,148,421,603.36 | 25,547,794,166.85 |
| Less: Total operating Cost | (XVI)4 | 4,483,355,526.93 | 4,557,434,594.05 |
| Business taxes and surcharges | 288,929,873.36 | 315,430,824.67 | |
| Selling expenses | 3,729,196,616.91 | 3,866,288,945.36 | |
| Administrative expenses | 885,742,669.64 | 911,095,185.51 | |
| Research and Development (R&D) expenses | 7,164,260,715.25 | 7,500,668,818.36 | |
| Financial expenses | (460,591,487.54) | (642,865,974.82) | |
| Including : Interest expenses | 134,657,024.82 | 161,668,592.71 | |
| Interest income | 578,070,079.98 | 865,373,583.65 | |
| Add: Other income | 1,671,483,871.95 | 1,634,201,874.22 | |
| Investment income | (XVI)5 | 428,959,177.60 | 499,611,155.15 |
| Including: Investment gains(Losses) in associated enterprise and joint-venture enterprise | 26,003,020.74 | (36,401,170.84) | |
| Gains (losses) from changes in fair values | (31,637,646.48) | 2,475,310.72 | |
| Credit impairment gains (losses) | (114,296,061.01) | (98,343,814.70) | |
| Impairment gains (losses) of assets | (98,433.91) | 2,652,989.00 | |
| Asset disposal income (losses) | (7,215,529.29) | 1,072,329.19 | |
| II. Operating profit | 10,004,723,067.67 | 11,081,411,617.30 | |
| Add: Non-operating income | 8,474,270.33 | 15,820,653.67 | |
| Less: Non-operating expenses | 1,565,470.96 | 1,821,528.02 | |
| III. Total profit | 10,011,631,867.04 | 11,095,410,742.95 | |
| Less: Income tax expenses | 526,990,722.95 | 543,355,227.07 | |
| IV. Net profit | 9,484,641,144.09 | 10,552,055,515.88 | |
| V. Other comprehensive income, net of income tax | - | - | |
| VI. Total comprehensive income | 9,484,641,144.09 | 10,552,055,515.88 |
For the reporting period from January 1, 2024 to December 31, 2024
Consolidated Cash Flow Statement
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period (Restated) |
| I. Cash Flows from Operating Activities: | |||
| Cash receipts from sale of goods or rendering of services | 98,512,386,004.95 | 93,594,226,079.25 | |
| Receipts of tax refunds | 4,198,239,416.84 | 3,991,363,648.68 | |
| Other cash receipts relating to operating activities | (V)59(1) | 1,760,845,198.13 | 1,806,494,187.72 |
| Sub-total of ash inflows from operating activities | 104,471,470,619.92 | 99,392,083,915.65 | |
| Cash payments for goods purchased and services received | 56,858,146,890.75 | 52,008,690,617.35 | |
| Cash paid to and on behalf of employees | 20,140,688,302.14 | 17,978,448,952.57 | |
| Payments of various types of taxes | 6,679,316,991.20 | 6,494,801,736.38 | |
| Other cash payments relating to operating activities | (V)59(1) | 7,529,226,413.10 | 6,287,932,888.30 |
| Sub-total of cash outflows from operating activities | 91,207,378,597.19 | 82,769,874,194.60 | |
| Net Cash Flows from Operating Activities | (V)60(1) | 13,264,092,022.73 | 16,622,209,721.05 |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from recovery of investments | (V)59(2) | 3,002,416,092.15 | 4,688,412,447.25 |
| Cash receipts from investment income | 67,333,430.58 | 67,123,840.33 | |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 18,893,652.30 | 30,738,410.30 | |
| Other cash receipts relating to investing activities | (V)59(2) | 84,419,763.14 | 121,237,455.42 |
| Sub-total of cash inflows from investing activities | 3,173,062,938.17 | 4,907,512,153.30 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | (V)59(2) | 4,665,742,203.72 | 4,047,816,024.05 |
| Cash payments to acquire investments | (V)59(2) | 3,046,421,031.55 | 4,803,003,467.44 |
| Net cash paid for obtaining subsidiaries and other business units | (V)60(2) | 8,440,700.00 | 43,992,651.82 |
| Sub-total of cash outflows from investing activities | 7,720,603,935.27 | 8,894,812,143.31 | |
| Net Cash Flows from Investing Activities | (4,547,540,997.10) | (3,987,299,990.01) | |
| III. Cash Flows from Financing Activities: | |||
| Cash receipts from capital contributions | 149,000,000.00 | 72,570,000.00 | |
| Including: cash receipts from capital contributions from minority owners of subsidiaries | 149,000,000.00 | 72,570,000.00 | |
| Cash receipts from borrowings | 7,214,406,837.74 | 11,032,367,859.61 | |
| Other cash receipts from financing activities | (V)59(3) | 2,007,056.47 | 5,000,000.00 |
| Sub-total of cash inflows from financing activities | 7,365,413,894.21 | 11,109,937,859.61 | |
| Cash repayments of borrowings | 17,073,833,780.12 | 6,174,788,332.85 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 8,993,845,346.34 | 7,083,299,395.46 | |
| Including : Dividends and profits paid by subsidiaries to minority shareholders | 327,176,023.62 | 194,009,629.27 | |
| Other cash payments relating to financing activities | (V)59(3) | 3,376,723,553.38 | 997,281,629.42 |
| Sub-total of cash outflows from financing activities | 29,444,402,679.84 | 14,255,369,357.73 | |
| Net Cash Flows from Financing Activities | (22,078,988,785.63) | (3,145,431,498.12) | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | (12,487,215.49) | 113,365,015.34 | |
| V. Net Increase (Decrease) in Cash and Cash Equivalents | (V)60(1) | (13,374,924,975.49) | 9,602,843,248.26 |
| Add: Opening balance of Cash and Cash Equivalents | (V)60(3) | 49,427,967,355.78 | 39,825,124,107.52 |
| VI. Closing Balance of Cash and Cash Equivalents | (V)60(3) | 36,053,042,380.29 | 49,427,967,355.78 |
For the reporting period from January 1, 2024 to December 31, 2024
Cash Flow Statements of the Parent Company
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period |
| I. Cash Flows from Operating Activities:: | |||
| Cash receipts from the sale of goods and the rendering of services | 20,183,364,498.46 | 33,798,989,613.55 | |
| Receipts of tax refunds | 1,437,778,163.22 | 1,484,786,334.10 | |
| Other cash receipts relating to operating activities | 904,245,500.67 | 1,003,715,734.81 | |
| Sub-total of cash inflows from operating activities | 22,525,388,162.35 | 36,287,491,682.46 | |
| Cash payments for goods acquired and services received | 5,072,134,963.21 | 5,141,659,409.02 | |
| Cash paid to and on behalf of employees | 7,948,378,555.58 | 7,743,837,239.02 | |
| Payments of various types of taxes | 3,393,746,907.86 | 2,810,558,011.92 | |
| Other cash payments relating to operating activities | 4,427,556,481.06 | 4,018,574,345.87 | |
| Sub-total of cash outflows from operating activities | 20,841,816,907.71 | 19,714,629,005.83 | |
| Net Cash Flows from Operating Activities | (XVI)8(1) | 1,683,571,254.64 | 16,572,862,676.63 |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from recovery of investments | 4,114,000,000.00 | 876,506,386.63 | |
| Cash receipts from investment income | 449,576,192.54 | 559,285,378.22 | |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 20,287,904.27 | 59,072,378.14 | |
| Other cash receipts relating to investing activities | 74,971,218,190.24 | 66,769,850,832.31 | |
| Sub-total of cash inflows from investing activities | 79,555,082,287.05 | 68,264,714,975.30 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 521,185,569.34 | 319,040,089.07 | |
| Cash payments to acquire investments | 4,529,752,620.00 | 3,569,972,354.33 | |
| Other cash payments relating to investing activities | 73,178,198,874.61 | 70,028,455,422.77 | |
| Sub-total of cash outflows from investing activities | 78,229,137,063.95 | 73,917,467,866.17 | |
| Net Cash Flows from Investing Activities | 1,325,945,223.10 | (5,652,752,890.87) | |
| III. Cash Flows from Financing Activities | |||
| Cash receipts from borrowings | 1,650,000,000.00 | 5,481,410,000.00 | |
| Other cash receipts relating to financing activities | 13,326,445,447.45 | 11,356,826,127.58 | |
| Sub-total of cash inflows from financing activities | 14,976,445,447.45 | 16,838,236,127.58 | |
| Cash repayments of borrowings | 6,785,400,600.00 | 473,648,200.00 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 8,424,721,408.99 | 6,590,228,195.38 | |
| Other cash payments relating to financing activities | 16,338,194,784.59 | 12,107,588,596.15 | |
| Sub-total of cash outflows from financing activities | 31,548,316,793.58 | 19,171,464,991.53 | |
| Net Cash Flows from Financing Activities | (16,571,871,346.13) | (2,333,228,863.95) | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | (2,076,162.95) | (3,379,613.83) | |
| V. Net Increase (Decrease) in Cash and Cash Equivalents | (XVI)8(1) | (13,564,431,031.34) | 8,583,501,307.98 |
| Add: Opening balance of cash and cash equivalents | (XVI)8(2) | 36,354,702,554.38 | 27,771,201,246.40 |
| VI. Closing Balance of Cash and Cash Equivalents | (XVI)8(2) | 22,790,271,523.04 | 36,354,702,554.38 |
For the reporting period from January 1, 2024 to December 31, 2024
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
| Items | 2024 | |||||||
| Owner's equity attributable to the parent company | Minority interests | Total owners' equity | ||||||
| Share capital | Capital reserves | Less: Treasury share | Other comprehensive income | Surplus reserve | Retained profits | |||
| I. Closing balance of the prior year | 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 |
| Due to the changes in accounting policies | - | - | - | - | - | - | - | - |
| II. Opening balance of current year | 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 |
| III. Increase or decrease in the current period | (97,402,605.00) | (1,683,259,498.46) | (2,427,942,930.43) | (156,178,002.37) | - | 3,823,292,698.14 | 1,022,287,347.50 | 5,336,682,870.24 |
| (I) Total comprehensive income | - | - | - | (156,178,002.37) | - | 11,977,327,023.54 | 1,034,716,712.01 | 12,855,865,733.18 |
| (II) Owners' contributions and reduction in capital | (97,402,605.00) | (1,683,259,498.46) | (2,583,787,098.43) | - | - | - | 222,426,339.63 | 1,025,551,334.60 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - | 149,000,000.00 | 149,000,000.00 |
| 2. Share-based payment recognized in owners' equity | - | 782,354,064.37 | - | - | - | - | 83,074,508.22 | 865,428,572.59 |
| 3. Others | (97,402,605.00) | (2,465,613,562.83) | (2,583,787,098.43) | - | - | - | (9,648,168.59) | 11,122,762.01 |
| (III) Profit distribution | - | - | 155,844,168.00 | - | - | (8,154,034,325.40) | (234,855,704.14) | (8,544,734,197.54) |
| 1. Transfer to surplus reserves | - | - | - | - | - | - | - | - |
| 2. Distributions to shareholders | - | - | - | - | - | (8,309,878,493.40) | (234,855,704.14) | (8,544,734,197.54) |
| 3. Others | - | - | 155,844,168.00 | - | - | 155,844,168.00 | - | - |
| IV. Closing balance of the current period | 9,233,198,326.00 | 6,181,644,265.06 | 310,044,296.12 | (111,510,486.21) | 4,715,460,312.00 | 60,959,912,942.15 | 6,831,633,685.27 | 87,500,294,748.15 |
For the reporting period from January 1, 2024 to December 31, 2024
Consolidated Statement of Changes in Owners' Equity-continued
Unit: RMB
| Items | 2023 (Restated) | |||||||
| Owner's equity attributable to the parent company | Minority interests | Total owners' equity | ||||||
| Share capital | Capital reserves | Less: Treasury share | Other comprehensive income | Surplus reserve | Retained profits | |||
| I. Closing balance of the prior year | 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 |
| Due to the changes in accounting policies | - | - | - | - | - | 182,975.56 | 1,391,408.52 | 1,574,384.08 |
| II. Opening balance of current year | 9,430,920,624.00 | 10,141,153,435.32 | 5,316,033,650.24 | (42,587,158.81) | 4,715,460,312.00 | 49,460,423,962.05 | 4,582,390,827.34 | 72,971,728,351.66 |
| III. Increase or decrease in the current period | (100,319,693.00) | (2,276,249,671.80) | (2,578,046,423.69) | 87,254,674.97 | - | 7,676,196,281.96 | 1,226,955,510.43 | 9,191,883,526.25 |
| (I) Total comprehensive income | - | - | - | 87,254,674.97 | - | 14,107,726,276.26 | 1,144,719,519.03 | 15,339,700,470.26 |
| (II) Owners' contributions and reduction in capital | (100,319,693.00) | (2,276,249,671.80) | (2,609,860,174.19) | - | - | - | 243,095,948.04 | 476,386,757.43 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - | 72,570,000.00 | 72,570,000.00 |
| 2. Share-based payment recognized in owners' equity | - | 169,682,759.53 | - | - | - | - | 37,934,118.40 | 207,616,877.93 |
| 3. Others | (100,319,693.00) | (2,445,932,431.33) | (2,609,860,174.19) | - | - | - | 132,591,829.64 | 196,199,879.50 |
| (III) Profit distribution | - | - | 31,813,750.50 | - | - | (6,431,529,994.30) | (160,859,956.64) | (6,624,203,701.44) |
| 1. Transfer to surplus reserves | - | - | - | - | - | - | - | - |
| 2. Distributions to shareholders | - | - | (91,514,124.10) | - | - | (6,554,752,952.30) | (160,746,296.99) | (6,623,985,125.19) |
| 3. Others | - | - | 123,327,874.60 | - | - | 123,222,958.00 | (113,659.65) | (218,576.25) |
| IV. Closing balance of the current period | 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 |
For the reporting period from January 1, 2024 to December 31, 2024
Statement of Changes in Owners' Equity of the Parent Company
Unit: RMB
| Item | 2024 | |||||
| Share capital | Capital reserves | Less: Treasury share | Surplus reserve | Retained profits | Total owners' equity | |
| I. Closing balance of the prior year | 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 |
| Due to the changes in accounting policies | - | - | - | - | - | - |
| II. Opening balance of current year | 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 |
| III. Increase or decrease in the current period | (97,402,605.00) | (1,926,618,283.95) | (2,427,942,930.43) | - | 1,330,606,818.69 | 1,734,528,860.17 |
| (I) Total comprehensive income | - | - | - | - | 9,484,641,144.09 | 9,484,641,144.09 |
| (II) Owners' contributions and reduction in capital | (97,402,605.00) | (1,926,618,283.95) | (2,583,787,098.43) | - | - | 559,766,209.48 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - |
| 2. Share-based payment recognized in owners' equity | - | 652,558,986.86 | - | - | - | 652,558,986.86 |
| 3. Others | (97,402,605.00) | (2,579,177,270.81) | (2,583,787,098.43) | - | - | (92,792,777.38) |
| (III) Profit distribution | - | - | 155,844,168.00 | - | (8,154,034,325.40) | (8,309,878,493.40) |
| 1. Transfer to surplus reserves | - | - | - | - | - | - |
| 2. Distributions to shareholders | - | - | - | - | (8,309,878,493.40) | (8,309,878,493.40) |
| 3. Others | - | - | 155,844,168.00 | - | 155,844,168.00 | - |
| IV. Closing balance of the current period | 9,233,198,326.00 | 3,849,752,890.09 | 310,044,296.12 | 4,715,460,312.00 | 44,480,765,952.49 | 61,969,133,184.46 |
| Item | 2023 | |||||
| Share capital | Capital reserves | Less: Treasury share | Surplus reserve | Retained profits | Total owners' equity | |
| I. Closing balance of the prior year | 9,430,920,624.00 | 8,264,384,780.30 | 5,316,033,650.24 | 4,715,460,312.00 | 39,030,437,901.96 | 56,125,169,968.02 |
| Due to the changes in accounting policies | - | - | - | - | (909,206.34) | (909,206.34) |
| II. Opening balance of current year | 9,430,920,624.00 | 8,264,384,780.30 | 5,316,033,650.24 | 4,715,460,312.00 | 39,029,528,695.62 | 56,124,260,761.68 |
| III. Increase or decrease in the current period | (100,319,693.00) | (2,488,013,606.26) | (2,578,046,423.69) | - | 4,120,630,438.18 | 4,110,343,562.61 |
| (I) Total comprehensive income | - | - | - | - | 10,552,055,515.88 | 10,552,055,515.88 |
| (II) Owners' contributions and reduction in capital | (100,319,693.00) | (2,488,013,606.26) | (2,609,860,174.19) | - | - | 21,526,874.93 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - |
| 2. Share-based payment recognized in owners' equity | - | 73,548,755.72 | - | - | - | 73,548,755.72 |
| 3. Others | (100,319,693.00) | (2,561,562,361.98) | (2,609,860,174.19) | - | - | (52,021,880.79) |
| (III) Profit distribution | - | - | 31,813,750.50 | - | (6,431,425,077.70) | (6,463,238,828.20) |
| 1. Transfer to surplus reserves | - | - | - | - | - | - |
| 2. Distributions to shareholders | - | - | (91,514,124.10) | - | (6,554,752,952.30) | (6,463,238,828.20) |
| 3. Others | - | - | 123,327,874.60 | - | 123,327,874.60 | - |
| IV. Closing balance of the current period | 9,330,600,931.00 | 5,776,371,174.04 | 2,737,987,226.55 | 4,715,460,312.00 | 43,150,159,133.80 | 60,234,604,324.29 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
I. Basic Information about the Company
1. Overview of 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 TechnologyLtd", 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 approvalof document No. 598 [2008] issued by the MOFCOM (The Ministry of Commerce of the People's Republic of China), theCompany was renamed as "Hangzhou Hikvision Digital Technology Co., Ltd.", headquartered in Hangzhou. On May 28,2010, the Company was listed on the Shenzhen Stock Exchange.
The main business activities of the Company and its subsidiaries (hereinafter referred to as "the Group") include themanufacture and sale of security equipment, network equipment and intelligent equipment, the manufacture and wholesaleof auto parts and accessories, the sale of electronic products, the provision of construction projects, technical services,technology development, technical consulting, software development, information system integration services, dataprocessing and storage support services, etc.
2. Date of Approval for Issuance of Financial Statements
The Company's consolidated financial reports were approved for issuance by the 5
th meeting of the 6
thsession of theBoard of Directors of the Company on April 17, 2025.
II. Basis of Preparation of Financial Statements
Basis of preparation of financial statementsThe Group have adopted the Accounting Standards for Business Enterprises ("ASBE") and relevant provisions issued bythe Ministry of Finance ("MoF"). In addition, the Group has disclosed relevant financial information in accordance withInformation Disclosure and Presentation Rules for Companies Offering Securities to the Public No. 15－GeneralProvisions on Financial Reporting (revised in 2023).
Going concernThe Group has evaluated its going concern for 12 months going forward starting from December 31, 2024, and there is nofactor that may cast significant doubt on the entity's ability to continue as a going concern. Therefore, the financialstatements have been prepared on a going concern basis.
Bookkeeping base and valuation principles
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The Group measures the accounting elements in accordance with the accrual accounting basis. Except certain financialinstruments are measured by fair value, these financial statements are prepared in accordance with the measurements basisof historical costs. If the asset decreases in value, the provision for impairment of assets should be made according torelevant regulations.
According to the historical cost measurement, the assets shall be measured as per the amount of cash or cash equivalentpaid at the time of purchase, or the fair value of consideration paid for the purchase of such assets. The liabilities shall bemeasured in accordance with the amount of funds or assets actually received when undertaking current obligations, or thecontract amount when undertaking the current obligations, or the amount of cash or cash equivalents required for payingback the debts in daily activities.
The fair value is a price received by the market participants from selling asset or transferring liability during orderlytransaction at the measurement date. No matter the fair value is observable or estimated by using valuation technique, themeasured 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 marketparticipants to use the assets for optimal use to generate economic benefits, or to sell the assets to other market participantsto 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 techniquesinvolving unobservable inputs in the subsequent fair value measurement, the valuation technique is corrected in thevaluation process in order to make the initial recognition results confirmed by valuation techniques equal to the transactionprice.
Based on the observable extent of the input value of the fair value, and the importance of such input value to the fair valuemeasurement, 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 measurementdate;? Level 2: The input value is the input value of relevant assets or liabilities observable directly or indirectly in addition tolevel 1 input value;? Level 3: The input value is the non-observable input value of relevant assets or liabilities.
III. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates suggests:
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The Group has formulated specific accounting policies and accounting estimates for the method of determining materialitystandards and the basis of selection, provision for credit losses on accounts receivable, provision for inventory depreciation,depreciation of fixed assets, and revenue recognition according to the actual production and operation characteristics. Thesignificant judgements and accounting estimates and their key assumptions applied by the Group in identifying significantaccounting policies are detailed in Notes (III), 35.
1. Statement for Compliance with Accounting Standards for Business Enterprises (ASBE)The financial statements of the Company have been prepared in accordance with ASBE, and present truly and completely,the Company's and consolidated financial position as of December 31, 2024; and the Company's and consolidated resultsof operations, and the Company's and consolidated changes in owners' equity, and the Company's and consolidated cashflows for 2024.
2. Accounting Period
The Group has adopted the calendar year as its accounting year from January 1
st to December 31
steach year.
3. Business Cycle
The business cycle refers to the period from purchase of assets used for processing to realization of cash or cash equivalents.The Group business cycle is usually 12 months.
4. Functional Currency
Renminbi ("RMB") is the currency in the primary economic environments in which the Company and its domesticsubsidiaries are operated. The Company and its domestic subsidiaries take RMB as their functional currency. Overseassubsidiaries of the Company determine their functional currency on the basis of the primary economic environment inwhich 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 |
| Significant construction in progress | Single amount of investment of construction in progress accounts for 2% of net assets balance |
| Significant accounts payable, other payables, and contract liabilities aged over 1 year | Accounts payable, other payables, and contract liabilities aged more than one year account for 5% of the balance of liabilities |
| Significant non-wholly owned subsidiaries | Minority interests representing 10% of consolidated shareholders' equity |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Significant joint ventures or associates | Investment income of individual joint ventures/associates accounts for 10% of consolidated net profit or the year-end balance of long-term equity investment in the enterprise accounts for 10% of the total consolidated assets |
| Cash received or paid in connection with significant investment activities | The amount of cash inflow or outflow from a single investing activity accounts for 10% of cash inflow or outflow from investing activities |
6. The Accounting Treatment of Business Combinations Involving Enterprises under Common Control andBusiness Combinations Not Involving Enterprises under Common ControlBusiness combinations are classified into business combinations involving enterprises under common control and businesscombinations not involving enterprises under common control.
6.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of thecombining enterprises are actual controlled by the same party or parties both before and after the combination, and thatcontrol is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded by the combining entitiesat the date of the combination. The difference between the carrying amount of the net assets obtained and the carryingamount of the consideration paid for the combination is adjusted to the share premium in capital reserve. If the sharepremium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.
6.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business combination in which all of thecombining enterprises are not actual 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 incurredor assumed, and equity securities issued by the acquirer in exchange for control of the acquiree. If a business combinationnot under the common control is realized step by step through multiple transactions, the cost of the combination is the sumof the consideration paid on the purchase date and the fair value of the equity of the purchase already held before thepurchase date on the purchase date. The intermediary expenses incurred by the acquirer in respect of auditing, legal
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
services, valuation and consultancy services, etc. and other associated administrative expenses attributable to the businesscombination 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, thedifference is treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. Where thecost of combination is less than the acquirer's interest in the fair value of the acquiree's identifiable net assets, the acquirerfirstly reassesses the measurement of the fair values of the acquiree's identifiable assets, liabilities and contingent liabilitiesand measurement of the cost of combination. If after that reassessment, the cost of combination is still less than theacquirer's interest in the fair value of the acquiree's identifiable net assets, the acquirer recognizes the remaining differenceimmediately into profit or loss for the current period.
Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presentedseparately in the consolidated financial statements.
7. Criteria for determining control right and Preparation Method of Consolidated Financial Statements
7.1 Criteria for determining control right
Control right means that an investor may control an investee; the investor may participate in relevant activities of theinvestee to obtain variable rewards and also be able to use the control rights for the investee to influence its amount ofreturns. The Group will re-evaluate, if the change of the relevant facts and circumstances leading to the change of therelevant 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 theGroup loses the control power of the subsidiary.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
As for subsidiaries disposed by the Group, operating results and cash flows prior to the disposal date (the date of losingcontrol 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 operatingresults and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated incomestatement and consolidated statement of cash flows.
No matter when the business combination occurs in the reporting period, subsidiaries acquired through a businesscombination involving enterprises under common control are included in the Group's scope of consolidation as if they hadbeen included in the scope of consolidation from the date when they first came under the common control of the actualcontrolling party. Their operating results and cash flows from the beginning of the earliest reporting period are includedin the consolidated income statement and consolidated statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on theuniform 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 periodattributable to minority interests is presented as "minority interests" in the consolidated income statement below the "netprofit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders' portion of the opening balance of owners' equity of the subsidiary, the excess amount are still allocatedagainst minority interests.
Acquisition of minority interests or disposal of interest in a subsidiary that does not result in the loss of control over thesubsidiary is accounted for as equity transactions. The carrying amounts of the total owners' equity attributable to ownerof the Company and minority equity are adjusted to reflect the changes in their relative interests in the subsidiary. Thedifference between the amount by which the minority interests are adjusted and the fair value of the consideration paid orreceived 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.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
In the case that the equity of the acquiree is obtained through multiple deals in stages to finally form the businesscombination 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 nota "package deal", a deal where the control is obtained on the acquisition date will be subject to accounting. The acquiree'sequity held before the acquisition date will be re-measured based on the fair value of the equity on the acquisition dateand the difference between the fair value and book value will be included in the profit or loss in the current period. If theacquiree's equity held before the acquisition date involves any changes in the other comprehensive income or in any otherowner's equity accounted by the equity method, then it is transferred to income for the period in which it belongs at thedate 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 andobligations of the joint parties in the joint arrangement, taking into account the structure and legal form of sucharrangement and also the contractual provisions.
The Groups investment in any joint venture is accounted by the equity method. See the details in Note (III) "18.3.2 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'sshort-term (Generally refers to due within three months from the purchase date), highly liquid investments that are readilyconvertible 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 theactual spot exchange rate on the date of transaction; The exchange rate that approximates the actual spot exchange rate onthe date of transaction is calculated according to the middle price of market exchange rate at the beginning of the monthin which the transaction happened.
At the balance sheet date, foreign currency monetary items are translated into [RMB] using the spot exchange rates at thebalance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
balance sheet date and those on initial recognition or at the previous balance sheet date are recognized in profit or loss forthe period, except for exchange differences related to a specific-purpose borrowing denominated in foreign currency thatqualify 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 itemconstituting a net investment in a foreign operation, exchange difference arising from changes in exchange rates arerecognized as "exchange differences arising on conversion of financial statements denominated in foreign currencies " inother 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 atthe 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 areconverted from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet aretranslated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items are converted at thespot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflectingthe distribution of profits are translated at exchange rates that approximate the actual spot exchange rates on the dates ofthe transactions; The difference between the converted assets and the aggregate of liabilities and shareholders' equity itemsis 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 atthe date of cash flows for conversion. The affected amount of cash and cash equivalents due to the change of exchangerate, as an adjustment item, shall be separately listed as "the impact of cash and cash equivalents due to the change ofexchange 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 ofthe 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 todisposal of certain interest in it or other reasons, the Group transfers the accumulated exchange differences arising onconversion of financial statements of this foreign operation attributable to the owners' equity of the Company and presentedunder shareholders' equity, to profit or loss in the period in which the disposal occurs.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
In case of a disposal or other reason that does not result in the Group losing control over a foreign operation, but only adecrease in proportion of overseas business interests, the proportionate share of accumulated exchange differences arisingon conversion of financial statements are re-attributed to minority interests and are not recognized in profit and loss undercurrent period. For partial disposals of equity interests in foreign operations, which are associates or joint ventures, theproportionate shares of the accumulated exchange differences arising on conversion of financial statements of foreignoperations is 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 assumedwill 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 determiningthe fair value of financial assets and financial liabilities is described in the related disclosure of the basis of accountingand valuation principles in note (ii). For financial assets and financial liabilities at fair value through profit and loss, therelevant trading costs will be directly charged to profit and loss of the current period. For other types of financial assetsand financial liabilities, the relevant trading costs will be booked into the initial recognition amount. Upon initialrecognition of accounts receivable which have no material financing components or have not taken into consideration thefinancing components in contracts with a term not exceeding one year according to Accounting Standards for BusinessEnterprise No. 14 – Revenue ("Revenue Standard"), such initial amount is measured by the transaction price as definedunder the Revenue Standard.
Effective interest rate method refers to the method of calculating the amortized cost of financial asset or financial liabilityand 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 ora financial liability for an expected subsisting period into the balance of book value of the financial asset or the amortizedcost of the financial liability. When determining the effective interest rate, the expected cash flows are estimated on thebasis of considering all contractual terms of the financial asset or financial liability (such as early repayment, extendedterm, call option or other similar option) but without considering the expected credit loss.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The amortized cost of a financial asset or a financial liability refers to the initial recognition amount of such financial assetor financial liability, less the repaid amount of principal, plus or minus the accrued amortized amount calculated byamortization of the difference between the initial recognition amount and the amount on maturity by using the effectiveinterest 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 valuethrough 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 thefinancial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding and the financial asset is held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows. Financial assets classified by the Group as financial asset measured by amortizedcost include cash and cash equivalents, notes receivables and accounts receivable, other receivables, long-term receivablesand other non-current assets.
The Group will classify a financial asset into a financial asset measured by fair value through other comprehensive incomeif the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principaland interest on the principal amount outstanding, and the financial asset is held within a business model whose objectiveis achieved by both collecting contractual cash flows and selling the financial assets. This category of financial assetsmainly includes financial assets with a maturity of more than one year from the date of acquisition and which are presentedunder other debt investments, financial assets maturing within one year (inclusive) from the balance sheet date and whichare presented under non-current assets maturing within one year, as well as the notes receivable classified as fair value atthe time of acquisition and their changes are included in other comprehensive income are listed in the receivables forfinancing, 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 aninvestment in an equity instrument held for non-trading purpose recognized or without consideration in a businesscombination of enterprises not under the same control as a financial asset at fair value through other comprehensive income.This type of financial assets is presented as investment in other equity instruments.
Financial assets which have satisfied one of the following conditions indicate that such financial assets are held for tradingpurpose 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
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 fairvalue 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 costor as financial assets at fair value through other comprehensive income, they will be classified as financial assets at fairvalue through profit and loss.? At the time of initial recognition, in order to eliminate or substantially reduce mismatch in accounting, the Groupmay irrevocably designate a financial asset as a financial asset measured at fair value with changes through profit and loss.
Financial assets measured at fair value with changes recognized in profit or loss, other than derivative financial assets, arepresented as trading financial assets. If such financial assets have a maturity of more than one year from the balance sheetdate (or without a fixed maturity) and which are expected to be held for more than one year, they will be presented underother non-current financial assets.
11.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost adopt the effective interest rate method for subsequent measurement accordingto amortized cost, the profit or loss when impairment occurs or upon derecognition will be accounted in profit and loss ofthe current period.
The Group recognizes interest income by using effective interest rate method for financial assets measured at amortizedcost. The Group determines interest income by multiplying the balance of book value of financial assets with the effectiveinterest rate except under the following circumstances:
? For acquired or generated financial assets which incurred credit impairment already, their interest income will bedetermined 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 inthe subsequent period, the Group will determine their interest income by using the amortized cost of such financial assetsmultiplied with the effective interest rate in the subsequent period. If such financial asset ceases to have credit impairmentdue to improvement in credit risk in the subsequent period, then the Group should change to multiply the effective interestrate 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
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 amountcharged by such financial asset to the profit and loss of each period is deemed to be equal to the amount which has beenmeasured 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 othercomprehensive 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 changesin fair value will be recognized in other comprehensive income. Upon derecognition of such financial asset, theaccumulated profit or loss charged to other comprehensive income will be reversed from other comprehensive income andcharged to retained earnings. During the period when such investment in equity instruments for non-trading purpose areheld by the Group, the right to receive dividends by the Group has been established, and economic benefits related todividends are likely to flow into the Group, and if the amount of dividends may be measured reliably, the dividend incomeis 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 profitor loss arising from changes in fair value and the dividend and interest income relating to such financial asset will beaccounted in the profit and loss of the current period.
11.2 Impairment of Financial Assets
For financial assets measured at amortized cost, financial assets that are classified as financial asset at fair value throughother comprehensive income, lease receivables and contract assets, the Group will handle impairment on the basis ofexpected credit loss and recognize loss provision.
The Group's consideration of contract assets, notes receivable and accounts receivable that are generated by transactionsregulated by revenue standards and do not contain significant financing components or that do not consider financingcomponents in contracts that are not more than one year old, as well as those lease receivables formed from transactionsthat are defined by the Accounting Standards for Business Enterprises No. 21-Leasing, the loss reserve shall be measuredbased 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 impairmentalready, the Group will assess on each balance sheet date the changes in credit risk of the relevant financial instrumentssince initial recognition. If the credit risk of such financial asset has significantly increased after initial recognition, theGroup will calculate its loss provision based on the amount equivalent to the expected credit loss for the entire subsisting
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
period. If the credit risk of such financial asset since initial recognition has not increased significantly, the Group willcalculate 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 assetat fair value through other comprehensive income, is accounted in the profit and loss of the current period. For financialasset classified as measured at fair value through other comprehensive income, the Group will recognize its credit lossprovision in other comprehensive income and charged the impairment loss or gain to the profit and loss of the currentperiod, 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 periodof the financial instrument in the preceding accounting period, but at the balance sheet date of the current period, suchfinancial instrument is no longer under the condition of significant increase in credit risk since initial recognition, theGroup calculates the loss provision for such financial instrument on the balance sheet date of the current period accordingto an amount equivalent to the expected credit loss for the next 12 months, and the resulting loss provision reversal amountwill 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 ofthe financial instrument at the balance sheet date with the default risk on the initial recognition date, to confirm whetherthe credit risk of the financial instrument has significantly increased after initial recognition.
The Group considers the following factors when assessing whether the credit risk has significantly increased:
(1) Whether a significant change has been caused to the internal price indicator due to changes in credit risk.
(2) Whether the external credit rating of financial instrument has actual or expected significant changes.
(3) Whether the actual or expected internal credit rating of the debtor has been downgraded.
(4) Whether adverse changes have occurred in the business, finance or economic conditions which are expected to causesignificant 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 whichthe debtor operates.
(7) Whether significant changes have occurred in the value of security pledged for the debt or the quality of guaranteeor credit enhancement provided by third parties. Such changes are expected to reduce the debtor's economicmotivation 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.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Whether or not the credit risks increase significantly after the foregoing assessments, if any contractual payment for anyfinancial instrument that overdue for over (including) 30 days, it indicates the credit risks of that financial instrument haveincreased significantly.
On the balance sheet date, if the Group determines that the financial instrument only carries low credit risks, then it assumesthat the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk ofdefault on financial instruments is low, the borrower is highly able to perform its contractual cash flow obligations in theshort term, and even if the economic situation and operating environment are adversely changed over a long period of timebut not necessarily reducing the borrower's performance of its contractual cash obligations, the financial instrument isconsidered 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 theGroup 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 grantedconcession 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 financialasset;
(6) The purchase or generation of a financial asset at a large discount, such discount reflects the fact of occurrence of creditloss.
11.2.3 Confirmation of expected credit loss
The Group confirms the expected credit loss of the relevant financial instrument according to the following method:
? In respect of financial asset and lease receivables, the credit loss is the present value of the difference between the
contractual cash flow that the group should receive and the cash flow that it expects to receive.? In respect of financial assets with credit impairment on the balance sheet date but they are not acquired or generated
financial assets with credit impairment, the credit loss represents the difference between the balance of the book value
of such financial asset and the present value of the estimated future cash flows discounted by the original effective
interest rate.
The factors reflected by the method used for calculating expected credit loss of financial instruments by the Group include:
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 economicconditions 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 cashflows 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 rightsto receive cash flows from the financial asset; (2) upon transfer of such financial asset and transfer of substantially all therisks and rewards in respect of the ownership of such financial asset to the transferee; (3) upon transfer of such financialasset, though the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownershipof 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 suchfinancial asset, and has retained the control over such financial asset, then such transferred financial asset will continue tobe recognized, and the relevant liabilities will continue to be recognized, according to the level of the Group's continuousinvolvement in such transferred financial asset. The relevant liabilities will be measured by the Group according to thefollowing method:
? If the transferred financial asset is measured by amortized cost, the book value of the relevant liabilities is equivalentto the book value of the transferred asset of continuous involvement less the amortized cost of the rights retained by theGroup (if the Group has retained the relevant rights due to transfer of the financial asset) and plus the amortized cost ofthe obligations undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of thefinancial asset), and the relevant liabilities are not designated as financial liabilities at fair value through profit and loss ofthe current period.? If the transferred financial asset is measured by fair value, the book value of the relevant liabilities is equivalent tothe book value of the transferred asset of continuous involvement less the fair value of the rights retained by the Group (ifthe Group has retained the relevant rights due to transfer of the financial asset) and plus the fair value of the obligationsundertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the financial asset), andthe 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 ofthe book value of the transferred financial assets as at the date of derecognition and the consideration received from such
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
transfer and the accumulated amount of change in fair value originally included in other comprehensive income, whichcorresponds to the amount in respect of derecognition, shall be recognized in the profit and loss for the current period. Ifthe transfer of the financial assets by the Group is designated as investment in equity instrument held for non-tradingpurpose measured at fair value through other comprehensive income, the accumulated gains or losses previously includedin other comprehensive income shall be transferred out from other comprehensive income and be included in retainedearnings.
For transfer in part, which satisfies the conditions of derecognition, of the financial assets, the book value of the entirefinancial assets before the transfer shall be shared between the derecognized portion and the continuous recognition portionat their respective relative fair value on the date of transfer, and the difference between the sum of the considerationreceived from derecognition and the accumulated amount of change in fair value originally included in othercomprehensive income, which corresponds to the amount in respect of derecognition, and the book value of thederecognized portion as at the date of derecognition shall be included in the profit and loss of the current period. If thetransfer of the financial assets by the Group is designated as investment in equity instrument for non-trading purposemeasured at fair value through other comprehensive income, the accumulated gains or losses previously included in othercomprehensive 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 torecognize the entire financial assets transferred and the consideration received as a result of the asset transfer is recognizedas a liability when received.
11.4 Classification, confirmation and measurement of financial liabilities and equity instruments
Pursuant to the contractual terms of the issued financial instruments and the substantive economic condition as reflected,but not in legal terms only, combined with the definitions of financial liabilities and equity instruments, the Group hasclassified such financial instruments or the components thereof as financial liabilities or equity instruments upon initialrecognition.
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 andother 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 fortrading purpose (including derivatives of financial liabilities) and financial liabilities designated as measured at fair value
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 fortrading.
Financial liabilities that fulfill one of the following conditions suggest that the Group assumes such financial liabilities fortrading 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 throughprofit and loss of the current period, provided that they have satisfied one of the following conditions: (1) such designationcan eliminate or substantially reduce accounting mismatches; (2) managing and evaluating the performance of portfoliosof financial liabilities, or portfolios of financial assets and financial liabilities, on fair value basis and reporting internallyto key personnel of the Group on this basis in accordance with the risk management or investment strategies specified informal 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 changesin fair value and the dividends or interest expenses relating to such financial liabilities are accounted in the profit and lossof the current period.
11.4.1.2 Other financial liabilities
Excluding transfer of financial assets not complying with derecognition conditions, or financial liabilities as a result ofcontinuous involvement in transferred financial assets, as well as the financial guarantee contracts, the other financialliabilities will be classified as financial liabilities measured at amortized cost, subsequent measurement will be based onamortized cost, gains or losses on derecognition or amortization will be accounted in the profit and loss of the currentperiod.
If the Group and the counterparty have revised or renegotiated the contract, this has not resulted in the derecognition offinancial liabilities measured at amortized cost for subsequent measurement, but has caused changes in the contractualcash flows, then the Group should recalculate the book value of such financial liabilities, and the relevant gains or lossesshall be accounted in the profit and loss of the current period. The recalculated book value of such financial liabilities willbe determined by the Group by discounting the cash flows from the renegotiated or revised contract with the original effectinterest rate of the financial liabilities. All costs or expenses incurred in the revision or renegotiation of the contract will
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
be reflected in the adjusted book value of financial liabilities after such revision, and will be amortized during theremaining 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 orsuch part of it will be derecognized. When the Group (as borrower) and the lender enter into an agreement to undertakenew financial liabilities for replacing the original financial liabilities, if substantive difference exists in the contractualterms between the new financial liabilities and the original financial liabilities, the Group should derecognize the originalfinancial 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 derecognizedportion and the consideration paid (including non-cash asset transferred out or new financial liabilities undertaken) willbe 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 allliabilities of the Group. The Group issues (including refinances), repurchases, sells or cancels equity instruments fortreatment of changes in equity. The Group will not recognize changes in the fair value of equity instruments. Tradingexpenses 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 willnot affect the total equity of shareholders.
11.5 Derivatives
Derivatives include foreign exchange forward contract, among others. Derivatives are measured at fair value initially onthe 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 isenforceable currently, while at the same time the Group plans to perform netting settlement, or to liquidate the financialasset and repay the financial liability at the same time, the amount after offsetting between the financial asset and financial
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
liability will be presented in the balance sheet. Save as said above, the financial asset and financial liability are presentedseparately 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 bereclassified. All financial liabilities are not reclassified.
The Group reclassifies financial assets and applies the prospective application method for relevant accounting treatmentfrom the date of reclassification (i.e., the first day of the first reporting period after the change in the business model thatled 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 othercomprehensive income, it is measured at the fair value of the financial asset at the date of reclassification. The differencebetween the original carrying amount and the fair value is recognized in other comprehensive income.
12. Notes receivable
12.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for the notes receivable for which individual credit risk assessments are conducted, the Group classifies notesreceivable 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 |
12.2 The criteria for determining individual provisioning for bad debts
The Group separately assesses the credit risk of the notes receivable with a single significant amount and the debtor withsevere financial difficulties
13. Accounts receivable, financial lease receivables and installment receivables in long-term receivables
13.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for the accounts receivable for which individual credit risk assessments are conducted, the Group categorizesaccounts receivable into Portfolio A, Portfolio B and Portfolio C based on shared risk characteristics. Common credit riskcharacteristics adopted by the Group include the geographical location and business object.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
For long-term receivables, the common credit risk profile adopted by the Group includes business objects.
13.2 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 itsaccounts receivable and long-term receivables related to the financial lease and installment collection business. The ageingis calculated from the end of the credit period. The ageing is calculated on a continuous basis when the terms and conditionsof accounts receivables and long-term receivables are modified but do not result in derecognition of them.
13.3 The criteria for determining individual provisioning for bad debts
The Group assesses the credit risk of accounts receivable with significant individual amounts and significant financialdifficulties of debtors and financial lease receivables and installment receivables in long-term receivables individually
14. Receivables for Financing
14.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for the receivables for financing for which individual credit risk assessments are conducted, the rest of receivablesfor financing includes bank acceptance bills and certificates of accounts receivable claims. Given the low likelihood ofincurring significant losses due to default, the Group considers that the bank acceptance bills and certificates of accountsreceivable claims it holds do not pose significant credit risk.
14.2 The criteria for determining individual provisioning for bad debts
This Group individually assesses the credit risk of financing of accounts receivable where the amount is material and thedebtor has encountered severe financial difficulties.
15. Other receivables
15.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for other receivables for which individual credit risk assessments have been conducted, the Group categorizes otherreceivables into different groups according to the nature of the amounts, and determines credit losses on a portfolio basis.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
15.2 The criteria for determining individual provisioning for bad debts
The Group individually assesses the credit risk of other receivables that are material in amount and where the debtor hasencountered severe financial difficulties.
16. Inventories
16.1 Categories of inventories, valuation method, count system, amortization method for low cost and short-livedconsumable 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 performancecosts. Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversionand other expenditures incurred in bringing the inventories to their present location and condition.
16.1.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
16.1.3 Inventory count system
The perpetual inventory system is maintained for stock system.
16.1.4 Amortization method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortized using the immediate write-off method.
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 realizablevalue is lower than the cost, the inventory falling price reserves is withdrawn.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Net realizable value is the amount of the estimated selling price of inventory in day-to-day activities less the estimatedcosts to be incurred at completion, estimated selling expenses and related taxes. The determination of net realizablevalue of inventories is based on firm evidence obtained, taking into account the purpose for which the inventories areheld 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 havedisappeared, resulting in the net realizable value of the inventory being higher than its carrying value, the amount of theoriginal provision for inventory depreciation shall be reversed, and the amount of the reversal shall be included in thecurrent profit or loss.
16.3 The combination category and the basis for determining the inventory falling price reserves, and the basis fordetermining 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 largequantity and low unit price. For inventories manufactured and sold in the same region, having the same or similar use orpurpose, and difficult to measure separately from other items, provision for inventory depreciation shall be made on aconsolidated basis. The Group makes provision for inventory falling price reserves according to the nature and status ofinventories.
17. Contract Assets
17.1 Method and standard for determination of contract assets
Contract assets refer to the Group's right to consideration in exchange for goods or services that the Group has transferredto 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 asreceivables.
17.2 Combination category and determination basis of bad debt provision according to credit risk characteristicsConsistent with accounts receivable, based on common risk characteristics, the Group provides for credit losses on aportfolio basis and the common credit risk characteristics adopted include the geographical location and business object.
17.3 The criteria for determining individual provisioning for bad debts
The Group individually assesses the credit risk of contract assets that are material in amount and where the debtor hasencountered significant financial difficulties.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 toobtain variable benefits from its activities, and at same time, to use the control rights on the investee to influence theamount 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 controlright. Significant influence is the power to participate in the financial and operating policy decisions of the investee but isnot control or joint control over those policies. When determining whether an investing enterprise is able to exercisecontrol or significant influence over an investee, the effect of potential voting rights of the investee, such as currentconvertible 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 statementsobtained on the merger date shall be considered as the initial investment cost of long-term equity investment. Thedifferences between the initial investment cost of long-term equity investment and the paid cash, the transferred non-cashassets and the book value of the assumed debts are adjusted against the capital surplus; if the capital surplus is not sufficientto be offset, the remaining balance is adjusted against retained earnings. In the case of issued equity securities treated asconsolidation consideration, share of book value of owner's equity of merged party in the final controlling partyconsolidated financial statements is regarded as initial investment cost of long-term equity investments on the date ofconsolidation; capital reserve shall be adjusted in accordance with taking total nominal value of issued share as capitalshare, the difference between the initial investment cost of long-term equity investments and total book value of issuedshares; 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 equityof the acquiree is obtained through multiple deals in stages to finally form the business combination not under the commoncontrol, the business combination shall be handled differently based on whether it is "package deal": where it is packagedeal, the Company accounts each deal as a deal to obtain the control. If the deal is not a "package deal", the sum of thecarrying amount of the equity investment of the acquiree plus the cost of the new investment shall be used as the initialinvestment cost of the long-term equity investment calculated according to the cost method. The equity originally held is
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 othermanagement 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 businesscombination 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 financialstatements. 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 areadditional investments or disinvestments, the long-term equity investment cost shall be adjusted. Income from theinvestment in the current period shall be recognized in accordance with the cash dividends or profits declared and issuedby the investee.
18.3.2 Long-term equity investment accounted for using the equity method
Except for investments in associates and joint ventures that are wholly or partly classified as holding assets for sale, theGroup accounts for investment in associates and joint ventures using the equity method. An associate is an entity overwhich the Group has significant influence and a joint venture is an entity over which the Group can only exercise jointcontrol 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 ofthe fair value of the investee's identifiable net assets at the time of acquisition, no adjustment is made to the initialinvestment cost. Where the initial investment cost is less than the Group's share of the fair value of the investee'sidentifiable net assets at the time of acquisition, the difference is recognized in profit or loss for the period, and the cost ofthe long-term equity investment is adjusted accordingly.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Under the equity method, the Group recognizes its share of the net profit or loss and other comprehensive income of theinvestee for the period as investment income or loss and comprehensive income for the period, meanwhile, the book valueof the long-term equity investment shall be adjusted; The Group shall accordingly reduce the book value of the long-termequity investment in terms of the part that shall be enjoyed according to the profit or cash dividends declared by theinvested 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 adjustedand be included into the capital reserves. The Group shall, on the ground of the fair value of all identifiable assets of theinvested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the investedentity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by theinvested unit are different from those adopted by the Group, the adjustment shall be made for the financial statements ofthe invested unit in accordance with the accounting policies and accounting periods of the Group to recognize theinvestment income and other comprehensive incomes. For the transaction incurred between the group and associatedenterprises and joint ventures, invested or sold assets don't constitute a business, the part that doesn't achieve internaltransaction profit or loss or belongs to the Group calculated according to the enjoyed ratio will be offset, and the profit orloss on investment will be confirmed on this basis. But for the unrealized loss arising from the internal transaction betweenthe Group and the invested unit, if such transaction loss is defined as the impairment loss of the transferred asset, theycannot be offset.
When the Group determines the net loss of the invested unit that shall be shared, it is necessary to write-down the bookvalue of the long-term equity investment and other long-term equities substantially constituting the net investment of theinvested unit to zero as a limit. Besides, if the Group is obliged to bear extra loss for the invested unit, it shall be necessaryto 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 offsetsits attributable share of the un-confirmed losses, resume recognizing its attributable share of profits.
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 carryingamount is recognized in profit or loss for the period.
19. Fixed Assets
19.1 Recognition criteria for fixed assets
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 onlywhen it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can bemeasured 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 thateconomic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measuredreliably. Meanwhile the carrying amount of the replaced part is derecognized. Other subsequent expenditures arerecognized 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 inwhich it is ready for intended use. The depreciation method, depreciation period, estimated residual value rate and annualdepreciation rate of each category of fixed assets are as follows:
| Item | Depreciation method | Depreciation period | Residual value rate (%) | Annual depreciation rate (%) |
| 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 |
| Transportation vehicles | 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 disposalof the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the conditionexpected 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, thefixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
disposal of the asset net of the carrying amount and related taxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied atleast 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 duringthe 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 forintended use. The standards and time points for carrying forward various types of projects under construction to fixedassets are as follows:
| Item | Standards and timing of carry-over as fixed assets |
| Buildings and Constructions | The main construction project and supporting projects have been substantially completed and reached a state of practical usability. |
| Equipments to be installed and commissioned | Relevant equipment and other supporting facilities have been installed; after debugging, the equipment can maintain normal and stable operation for a period of time. |
21. Borrowing Costs
Borrowing costs directly attributable to the acquisition & construction or production of assets eligible for capitalizationshall be capitalized when assets expenditure, borrowing costs and necessary construction or production for bringing assetsto expected conditions for use or marketing have taken place; when construction or production of assets ready forcapitalization reach to expected conditions for use or marketing, capitalization shall be ceased. Other borrowing expensesare recognized as expenses in the current period.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interestexpense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds beforebeing used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowedunder general-purpose borrowings, the Group determines the amount of interest to be capitalized on such borrowings byapplying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over theamounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable tothe general-purpose borrowings. During the capitalization period, exchange differences related to a specific-purpose
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
borrowing denominated in foreign currency are all capitalized. Exchange differences in connection with general-purposeborrowings are recognized in profit or loss in the period in which they are incurred.
22. Intangible Assets
22.1 Service life and its basis for determination, estimate, amortization method or review procedure
Intangible assets include land use right, intellectual property (IP), application software, and franchise, etc.
An intangible asset is measured initially at cost. When an intangible asset with a finite useful life is available for use, itsoriginal cost is amortized over its estimated useful life using the straight-line method. The amortization method, servicelife and net residual value of various intangible assets are shown as follows:
| Class | Amortization method | Service life (year) | Determination basis | Salvage value 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 | - |
| Franchise | Straight-line method | Franchised operating period | Franchise contract duration | - |
The fees charged by the Group to those who acquire public products and services during the project operation period donot constitute an unconditional right to receive cash. When the PPP project assets are ready for their intended use, thedifference between the consideration amount of the relevant PPP project assets or the amount of confirmed constructionincome and the amount of cash (or other financial assets) that is entitled to receive a determinable amount will berecognized 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 theyear, 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.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Expenditure during the development phase that meets all of the following conditions at the same time is recognized asintangible asset. Expenditure during development phase that does not meet the following conditions is recognized in profitor 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 theevidence of the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be usedinternally, the usefulness of the intangible asset;
(4) The availability of adequate technical, financial and other resources to complete the development and the ability to useor sell the intangible asset; and
(5) The expenditure attributable to the intangible asset during its development phase can be reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase, the Group recognizes allof them in profit or loss for the period. The costs of the intangible assets generated by internal development activities onlyinclude the total expenditure incurred from the time point when the capitalization conditions are available to the pointwhen the intangible assets are used for their intended purposes; for the expenditure that already becomes an expenditurein the profit and loss statement before the capitalization conditions are available during development of the same intangibleasset, no adjustment will be made.
The aggregate scope of the Group's R&D expenses includes employee compensation for personnel directly engaged inR&D activities, materials and service fees directly consumed by R&D activities, depreciation expenses and amortizationexpenses of intangible assets for equipment and equipment used in R&D activities, intermediate testing expenses for R&Dactivities, new product design expenses, and travel, transportation and communication expenses required for research andtest development. The Group uses the passing of feasibility studies and the completion of R&D project projects afterevaluation 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, fixedassets, construction in process, and intangible assets with a finite useful life may be impaired. If there is any indicationthat such assets may be impaired, recoverable amounts are estimated for such assets. Intangible assets with indefiniteuseful life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether thereis 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 anindividual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
amount is determined by the higher of 1) net amount of fair value of the asset or asset group deducted by the disposalexpenses; or 2) the present value of the expected future cash flows of the asset or asset group.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted as animpairment 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 conductedin accordance with the concerned asset group or asset portfolio. That is to allocate the book value of goodwill to the assetgroup or asset portfolio that is expected to benefit from the synergies of the combination in a reasonable way from the dateof purchasing. When recoverable amount of apportion-included asset group or asset portfolio of goodwill is less than bookvalue of goodwill, impairment loss shall be recognized. Firstly, amount of impairment loss shall be apportioned to thebook 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 periodand later periods with amortization term of more than one year, mainly for the expenses on betterment of leased fixedassets and employee housing loan deferred interest. Long-term deferred expenses are evenly amortized in installments inthree 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 receivedor 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 berecognized as the liabilities and current profit and loss or relevant asset cost. The Group's employee benefits and welfare
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
are included into current profit and loss or relevant asset cost according to actual amount occurred during the period. Ifthe 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 asmedical insurance premium, industrial injury insurance premium, maternity insurance premium and housing accumulationfund for its employees, as well as labor union expenditure and employee education expenses calculated and withdrawnaccording to the regulations, corresponding employee remuneration amount shall be calculated and determined inaccordance with specified calculation and withdrawal basis and proportion to recognize corresponding liabilities andincluded into the current profit and loss or relevant asset cost.
26.2 Accountant Arrangement Method of Post-employment Benefits
All post-employment benefits shall be considered as the defined contribution plan.
In the accounting period when the employee serves for the Group, the deposited amount calculated based on definedcontribution 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 benefitswill be determined as the following date, whichever is earlier, and will be included in the current profit and loss: 1) Whenthe Group cannot unilaterally withdraw the termination benefits provided due to labor relation cancellation plan oremployee lay-off suggestion; or 2)when the Group determines costs or expenses in relation with the restructuring of thepaid termination benefits.
27. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency such as products qualityassurance, etc. And it is probable that an outflow of economic benefits will be required to settle the obligation, and theamount 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 atthe balance sheet date, taking into account factors pertaining to a contingency such as the risks, uncertainties and timevalue of money. Where the effect of the time value of money is material, the amount of the provision is determined by
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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-settledshare-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 theequity instruments granted to employees at the grant date. Such amount is recognized as related costs or expenses on astraight-line basis over the vesting period, with a corresponding increase in capital reserve.
At each balance sheet date during the vesting period, the Group makes the best estimate according to the subsequent latestinformation of change in the number of employees who are granted with options that may vest, etc. and revises the numberof equity instruments expected to vest. The effect of the above estimate is recognized as related costs or expenses, with acorresponding 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 equityinstruments granted, the Group will include the incremental fair value of the equity instruments granted in the measurementof 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 recognizedfor services received. The increase in the fair value of the equity instruments granted is the difference between fair valueof the equity instruments before and after the modification on the date of the modification. If the Group modifies the termsor conditions of the share-based payment arrangement in a manner that reduces the total fair value of the share-basedpayment arrangement, or is not otherwise beneficial to the employee, the Group will continue to account for the servicesreceived as if that modification had not occurred, other than a cancellation of some or all the equity instruments granted.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
If cancellation of the equity instruments granted occurs during the vesting period, the Group will account for thecancellation of the equity instruments granted as an acceleration of vesting, and recognize immediately the amount thatotherwise would have been recognized over the remainder of the vesting period in profit or loss for the period, with acorresponding 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 equityinstruments granted.
29. Revenue
The Group's revenue consists of product sales revenue, engineering construction revenue and cloud services and otherservice revenue.
When (or as) a performance obligation in a contract was satisfied, i.e., when (or as) the customer obtains control of relevantgoods or services, the Group recognizes as revenue the amount of the transaction price that is allocated to that performanceobligation. A performance obligation is the Group's commitment to transfer to a customer a good or service (or a bundleof 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 performanceobligations contained in the contract and determines whether each individual performance obligation is to be performedover a certain period of time or at a certain point in time. Revenue is recognized over time by reference to the progresstowards complete satisfaction of the relevant performance obligation if one of the following criteria is met: (1) the customersimultaneously receives and consumes the benefits provided by the Group's performance as the Group performs; (2) theGroup's performance creates or enhances an asset that the customer controls as the Group performs; or (3) the Group'sperformance does not create an asset with an alternative use to the Group and the Group has an enforceable right topayment for performance completed to date. Otherwise, revenue is recognized at a point in time when the customer obtainscontrol of the distinct good or service.
If the contract contains two or more performance obligations, the Group allocates the transaction price to each singleperformance obligation on the contract start date in accordance with the relative proportion of the individual selling priceof the goods or services promised by each single performance obligation. However, if there is strong evidence that thecontract discount or variable consideration is only related to one or more (but not all) performance obligations in thecontract, the Group allocates the contract discount or variable consideration to the relevant one or more performancesobligation. 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 relevantinformation that can be reasonably obtained, and uses the observable input value to the maximum to estimate the individualselling price.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The Group judges whether the Group's identity is the principal or agent when engaging in transactions based on whetherit has control over the goods or services before transferring the goods or services to customers. If the Group is able tocontrol the goods or services before transferring them to customers, the Group is the principal responsible person, andrevenue is recognized based on the total amount of consideration received or receivable. Otherwise, the Group acts as anagent 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 payableto 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 productsand other products of the Group.
According to the contract, the Group recognizes revenue when the control of the product is transferred, that is, when theproduct is handed over to the agreed carrier or delivered to the place designated by the other party for receipt. As thedelivery of the products to the customer represents the right to receive the contract consideration unconditionally, and thematurity of the payment is only subject to the passage of time, the Group recognises a receivable when the product isdelivered to the customer. When a customer prepays for a purchase, the Group recognises the transaction amount receivedas 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 determinesthe best estimate of the variable consideration based on the expected delivery time, quantity and price of the products. Thetransaction price, including variable consideration, does not exceed the amount by which the accrued recognized revenueis unlikely to be materially reversed at the time the relevant uncertainty is eliminated. At each balance sheet date, theGroup 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., theGroup's distributors can accumulate sales rebates when purchasing specific products from the Group and use them to offsetthe price of goods in future purchases. These sales rebates provide resellers with discounts on their future purchases thatare not available to similar customers. As a result, the commitment to provide the dealer with a credit for future purchasesis a separate performance obligation that is recognized as a contractual liability at the time of the sale transaction at thetransaction price apportioned to the fair value of the rebate, and revenue is recognized when the reseller uses the salesrebate offset.
The Group provides quality assurance for the products sold, and the quality assurance related to the products sold by theGroup cannot be purchased separately, but is to assure customers that the products sold meet the established standards, sothe Group carries out accounting treatment in accordance with the provisions of Accounting Standard for BusinessEnterprises No. 13 - Contingencies.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
For product sales of the Group with sales return terms attached, as the customer obtains ownership of related products, theGroup 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 expectedliabilities in accordance with expected refund amounts due to sales returns. The remaining amount, subsequent todeduction of expected costs from collecting the products (including the decrease in value of the returned products), isrecognized as an asset in accordance with the carrying amount during the expected transfer of returned products afterdeducting 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 financingcomponent in the contract, the Group determines the transaction price based on the amount payable in cash when thecustomer assumes control of the products. The difference between the transaction price and the contract consideration isamortized using the effective interest rate method during the contract period. On the contract commencement date, theGroup does not consider the significant financing components in the contract if the interval between the customer obtainingcontrol 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 PPPProjects provided by the Group.
For project construction, the customer is able to control the assets under construction in the course of the Group'sperformance, and the Group regards them as a performance obligation to be performed within a certain period of time, andthe revenue is recognized according to the performance progress, unless the performance progress cannot be reasonablydetermined.
The Group uses the output method to determine the progress of performance, which is to determine the progress ofperformance based on the value of engineering construction services transferred to customers. If the progress ofperformance 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 reasonablydetermined.
The Group's customers make milestone payments with the Group in respect of projects in accordance with the terms ofthe contract. The Group first recognizes the completed performance obligations as contract assets and reclassifies them asaccounts receivable when the payment milestone is reached; if the contract price received or receivable by the Groupexceeds the accumulated performance obligations completed, the excess part is recognized as a contract liability. TheGroup'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 elementsin the contracts. The Group determines the transaction price on the basis of the amount payable in cash on the assumption
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
that the customer will take control of the asset-building. The difference between the transaction price and the contractconsideration is amortized over the life of the contract using the effective interest method. At the commencement date ofthe contract, the Group expects that the interval between the customer obtaining control of the service and the customerpaying 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 maintenanceservices as individual performance obligations in the contract, and allocates the transaction price to each performanceobligation based on the relative proportion of the stand-alone selling price of each performance obligation. When providingconstruction 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, andtelephone 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 thetime of the Group's performance, and the Group regards them as a performance obligation to be performed within a certainperiod, and the revenue is recognized according to the performance progress during the period of providing services. TheGroup adopts the output approach to determine the performance progress, i.e. the performance progress is determinedbased on the value of the services transferred to the customer to the customer. The customer paid for the cloud services inadvance at the time of purchase, so the Group recognized the cloud service payment received at the time of the transactionas a contractual liability, and recognized the revenue according to the performance progress during the period of theprovision 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 bythe customers at the same time as the performance of the contract by the Group shall be regarded as the performanceobligation to be performed within a certain period of time, and the revenue shall be recognized according to theperformance progress. The Group's customers make milestone payments with the Group for O&M services in accordancewith the terms of the contract. The Group first recognizes completed performance obligations as contract assets andreclassifies them as accounts receivable when payment milestones are reached, and if the contract price received orreceivable by the Group exceeds the accumulated performance obligations completed, the excess part is recognized as acontract liability. The Group's contract assets and contractual liabilities under the same contract are presented on a netbasis.
For the provision of operation and maintenance services to customers, the economic benefits obtained and consumed bythe customers at the same time as the performance of the contract by the Group shall be regarded as the performance
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
obligation to be performed within a certain period of time, and the revenue shall be recognized according to theperformance progress. The Group's customers make milestone payments with the Group for O&M services in accordancewith the terms of the contract. The part of the Group that has obtained the unconditional right to receive payment isrecognized as accounts receivable, and the remainder is recognized as contract assets, and if the contract price received orreceivable by the Group exceeds the accumulated performance obligations completed, the excess part is recognized as acontract liability. The Group's contract assets and contractual liabilities under the same contract are presented on a netbasis.
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 forthe goods or services to which the asset relates, and included in current profit or loss. If the amortization period of theasset does not exceed one year, it is included in current profit or loss when it occurs. Other expenses incurred by the Groupin order to obtain the contract shall be included in current profit or loss when incurred, unless it is clearly borne by thecustomer.
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 thanthe revenue standard and meets the following conditions is recognized as an asset: (1) The cost is directly related to acurrent or anticipated contract; (2) The cost increases the Group's resources for fulfilling performance obligations in thefuture; (3) The cost is expected to be recovered. The aforesaid assets are amortized on the same basis as the recognitionof 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 inventoriesbased 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 assetsrecognized in accordance with other relevant ASBEs and related to the contract. Then, for assets related to contract costswhose carrying value is higher than the difference between the following two items, the Group makes provision forimpairment for the excess to be recognized as asset impairment losses: (1) the remaining amount of consideration expectedto be obtained by the Group for the transfer of goods or services related to the asset; (2) the estimated costs to be incurredin connection with the transfer of such relevant goods or services.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
After provision for impairment is made for the asset related to contract costs, if the difference between the above two itemsis higher than the carrying value of the asset due to changes in the factors of impairment in previous periods, the originalprovision for impairment of the asset is reversed and included in the current profit or loss, but the carrying value of theasset after the reversal shall not exceed the carrying value of the asset on the reversal date assuming no provision forimpairment 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 bereceived.
If a government subsidy is a monetary asset, it shall be measured at the amount received or receivable.
31.1 Judgment basis and Accountant treatment of government subsidy related to assets
The government subsidies for some special subsidies and etc. are used for constructions and forms long-term assets, andtherefore 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 orloss over the useful life of the related asset.
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. whichare used to compensate the group-related costs or losses, and therefore are categorized as government subsidy related toincome.
For a government grant related to income, if the subsidy is a compensation for related expenses or losses to be incurred insubsequent periods, it is recognized as deferred income, and recognized in profit or loss over the periods in which therelated costs or losses are recognized; If the subsidy, such as VAT refund, is a compensation for related expenses or lossesalready incurred, it is recognized immediately in profit or loss for the period.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
For government subsidies related to the Group's daily operations shall be booked into other income; for those not relatedto the Group's daily operations, shall be booked into non-operating income/expense.
The policy-based preferential loan interest subsidy obtained by our group is directly allocated by the government to ourgroup, and the corresponding interest subsidy offsets the relevant borrowing costs.
32. Deferred Tax Assets / Deferred Tax Liabilities
The income tax expenses include current income tax and deferred income tax.
32.1. Current Income Tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at theamount expected to be paid (or recovered) according to the requirements of tax laws.
32.2 Deferred Tax Assets and Deferred Tax Liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between thenil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determinedaccording 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 deductibletemporary differences, the Group recognizes the relevant deferred tax assets to the extent that it is likely to obtain thetaxable income to offset the deductible temporary differences. In addition, deferred tax assets or liabilities relating to theinitial recognition of goodwill, as well as those arising from transactions that are neither a business combination nor affectaccounting profits and taxable income (or deductible losses) and do not result in equal taxable and deductible temporarydifferences, are not recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the extent that it isprobable 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, exceptwhere the Group is able to control the timing of the reversal of the temporary difference and it is probable that the
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporarydifferences associated with such investments are only recognized to the extent that it is probable that there will be taxableprofits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeablefuture.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are measured at the applicabletax rates in the period in which the related assets are recovered or the related liabilities are recovered in accordance withthe tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except when they arise fromtransactions or events that are directly recognized in other comprehensive income or in shareholders' equity, in which casethey are recognized in other comprehensive income or in shareholders' equity; and when they arise from businesscombinations, in which case they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probablethat sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilized. Suchreduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
32.3 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 assetsand 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 anddeferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity ordifferent taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assetsand liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities areexpected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
33. Lease
Lease refers to a contract that conveys the right to use an asset for a period of time in exchange for consideration.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The Group assesses whether a contract is, or contains, a lease at the inception date. The Group does not re-assess whethera contract contains a lease unless the terms and conditions of the contract are changed.
33.1 The Group as the lessee
33.1.1 Separating components of lease
In case the contract contains one or more lease and non-lease components, the Group separates each lease component andnon-lease component, and allocates the consideration to the lease and non-lease components based on the proportion ofrelative stand-alone prices of the components.
33.1.2 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-termlease and lease of low-value assets. The commencement date of the lease term refers to the date from which the lessormakes 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.
The Group calculates depreciation of the right-of-use assets in accordance with the relevant depreciation provisions ofAccounting Standards for Business Enterprises No. 4 - Fixed Assets. The right-of-use asset is depreciated over the shorterof the lease term and the useful life of the right-of-use asset, unless there is a transfer of ownership or purchase optionwhich 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 inaccordance with the provisions of Accounting Standards for Business Enterprises No. 8 - Impairment of Assets.
33.1.3 Lease liabilities
The Group initially measures the lease liability on the commencement date at an amount equal to the present value of thelease 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 discountrate. The Group uses its incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the leased assetduring 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 oflease term at fixed periodic rate and recognizes in the current loss and profit or relevant asset costs.
After the commencement date of the lease term, the Group remeasures the lease liability and adjusts the correspondingright-of-use assets under the following circumstances. If the carrying value of the right-of-use assets has been reduced tozero while the lease liability needs to be further reduced, the Group will recognize the difference into the current loss andprofit:
? In case of any change of the lease term or any change in the valuation of the purchase option, the Group remeasuresthe 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
remeasures the lease liability at the present value calculated based on the changed lease payments and the originaldiscount rate.
33.1.4 Basis for judgment and accounting treatment of the lessee's simplified treatment of short-term leases and leasesof low-value assets
The Group has elected not to recognize the right-of-use assets and lease liabilities for short-term leases and leases of low-value assets. Short-term lease refers to lease with a term no more than 12 months from the commencement date of leaseterm and without purchase option. Lease of low-value assets refers to lease for single lease asset with low value when itis new. The Group recognizes lease payments under short-term leases and leases of low-value assets as the current lossand profit or the relevant asset costs on a straight-line basis over each period during the lease term.
33.1.5 Lease modification
In case of lease modification, the Group makes accounting treatment of such lease change as a separate lease if all of thefollowing 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.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Where accounting treatment is not made for lease modification as a separate lease, at the effective date of leasemodification, the Group reallocates the contract consideration after the modification, redetermines the lease term, andremeasures the lease liability based on the present value calculated according to the modified lease payments and therevised 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 Groupreduces the carrying amount of the right-of-use assets, and recognizes the relevant gains or losses relating to the partial orfull termination of the lease in the income statement; for the lease liabilities remeasured due to other lease modifications,the Group adjusts the carrying amount of the right-of-use assets accordingly.
33.2 The Group as the lessor
33.2.1 Separating components of lease
In case the contract contains both lease and non-lease components, the Group allocates the contract consideration inaccordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue on portion oftransaction prices, based on the respective stand-alone prices of the lease component and the non-lease component.
33.2.2 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 underlyingasset. Operating lease refers to the leases other than finance lease.
33.2.2.1 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 periodsover 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.
33.2.2.2 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 financelease receivables and derecognizes the finance lease assets. Net lease investment is the sum of present value ofunguaranteed residual value and lease payments receivable discounted at the interest rate implicit in lease on thecommencement date of the lease term.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Lease payments receivable, which refer to amounts receivable by the Group from the lessee for conveying the right to usethe 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 periodicinterest rate.
In financial leases in which the Group acts as a manufacturer or distributor as the lessor, on the commencement date ofthe lease term, the Group recognizes revenue based on the lower of the fair value of the leased assets and the present valueof the lease receipts discounted at the market rate, and carries forward the cost of sales based on the balance of the carryingamount 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 recognizedin profit or loss for the current period on the commencement date of the lease term.
33.2.3 Lease modification
In case of modification of the operating lease, the Group accounts for it as a new lease as of the effective date of themodification, any prepaid or accrued lease payments relating to the original lease are considered as payments for the newlease .
In case of modification of the finance lease, the Group accounts for the modification of a finance lease as a separate leaseif all of the following conditions are met:
? The modification increases the scope of the lease by adding the right to use one or more lease assets;? The consideration for the lease increases by an amount that is commensurate with the stand-alone price for the
increase in scope, and any appropriate adjustments to that price to reflect the circumstances of the particular contract.
If a modification of finance lease is not accounted for as a separate lease, the Group accounts for the changed lease underthe 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.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
? If the modification becomes effective on the commencement date of the lease and the lease is classified as a financelease, the Group accounts for it in accordance with the provisions of Accounting Standards for Business EnterprisesNo. 22 - Recognition and Measurement of Financial Instruments regarding the modification or renegotiation ofcontracts.
34. Debt Restructuring
34.1 Recognize debt restructuring obligation as a creditor
For debt restructuring carried out by modifying other terms, the Group recognizes and measures the restructured claims inaccordance with the provisions of ASBE No. 22 - Recognition and Measurement of Financial Instruments.
35. Important Judgments while Applying Accounting Policy, and Key Assumptions and Uncertainty FactorsApplied for Accounting EstimateDuring the process of using accounting policy described in note (III), due to the uncertainty in operation activities, thegroup should judge, estimate and assume the book value of the report items which may not be metered reliably. Thesejudgments, estimates and assumptions are based on the historical experience of the Group's management and other relatedfactors. Differences may exist between the actual results and the Group's estimate.
The Group regularly reviews the above judgments, assumptions and estimations on the basis of continuous operation. Ifthe changes of accounting estimate only influence current period, the influence amount will be affirmed during thechanging period; if it influences the current period and subsequent periods, the influence amount will be recognized in thecurrent period and future period.
- Key assumptions and uncertainties used in accounting estimateOn balance sheet date, key assumptions and uncertainties for performing accounting estimates on book value of assets andliabilities in subsequent future periods are:
Impairment provision for inventoriesExcept for contract performance costs, inventories are measured at the lower of cost or net realizable value. For rawmaterials, the latest or future actual purchase price is used as the basis for determining the net realizable value; For productsin progress, the net realizable value is determined by the actual selling price of the most recent or post-period finishedproduct, less the estimated costs of the current similar type at the time of completion of the product, the estimated salesexpenses and related taxes; For finished products, the actual selling price of the latest or future finished product minus theestimated selling expenses and related taxes will be incurred, is used as the basis for determining the net realizable value.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 impairmentcircumstance of inventory with long storage time according to the inventory aging.. Based on the above procedure, theGroup's management deems that the full provision amounts have been withdrawn for inventory. For details, please referto 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 animpairment matrix on a portfolio basis to determine its expected credit loss of the relevant accounts receivable. The Groupdivides the risk characteristics according to the region and object of its business, and divides the relevant accountsreceivable 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 differentportfolios of various types of accounts receivable. As of December 31, 2024, based on the historically loss rate and considerreasonable and well-founded forward-looking information in the industry, the Group determines the correspondingproportion of loss provision for accounts receivable. The amount of the provision for expected credit losses will changeas the estimation of the Group. The details on the provision for expected credit losses of the accounts receivable of theGroup are given in Note (V) 4.
Useful life and predicted net residual value of fixed asset
The Group's estimation of fixed assets useful life is based on the historical experience of actual usable term of fixed assetswith similar properties and functions, the estimation of predicted net residual value is the amount obtained currently bythe Group from the assets after deducting the anticipated disposal expense based on the anticipated status assuming theconditions that fixed assets' predicted useful life expires and fixed assets are at the end of useful life. The Group shallconduct the review on the predicted service life and predicted net residual value of fixed assets at least annually. For thecurrent reporting period, the Group's management did not see signs either indicating a shortened or extended useful life ofthe 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 ofproduct quality assurance obligations to customers in accordance with the product contract; the Group made such anestimation according to the predicted claim rate, repair and replacement cost of relevant products. The management deemsthat the current estimation on accrued liabilities of product quality warranty is reasonable, however, the Group will
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
continue to review the conditions of product repairs, and will conduct adjustment if any sign indicating the need to makeadjustments 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 theperiod when the relevant asset is expected to be recovered or the relevant debt is expected to be paid off. The expectedapplicable income tax rate is determined according to the relevant current tax regulations and the actual situation of theGroup. 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 temporarydifferences, and the effective tax rate of temporary difference in the future applicable years. If the actual taxable incomeand 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 thecorresponding period. If the actual taxable income and taxable temporary differences in the future is more than theestimation, or actual tax rate is higher than the estimation, then the deferred tax assets that are partially unrecognizeddeductible losses and deductible temporary differences will be recognized and confirmed in the income statement duringthe corresponding period.
Goodwill impairment
When testing goodwill for impairment, a pre-tax interest discount rate that appropriately reflects the current market timevalue of money and asset-specific risk is determined and the present value of the projected future cash flows of the relevantasset group or combination of asset groups containing goodwill is calculated. When the future actual result is differentfrom the original estimation, the result of the goodwill impairment test will alter.
36. Significant Alternation in Accounting Policy and Accounting EstimationsThe Ministry of Finance issued the Interpretation No. 17 of Accounting Standards for Business Enterprises (the"Interpretation No. 17") and No. 18 of Accounting Standards for Business Enterprises (the "Interpretation No. 18") onOctorber 25, 2023 and December 6, 2024
Interpretation No. 17 of Accounting Standards for Business Enterprises
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Interpretation No. 17 standardizes the classification of current liabilities and non-current liabilities and the accountingtreatment of sale and leaseback transactions, which is effective from January 1, 2024.
Regarding the classification of current liabilities and non-current liabilities
Interpretation No. 17 has revised and improved the principles for classifying current and non-current liabilities inAccounting Standard for Business Enterprises No. 30 - Presentation of Financial Statements: It clarifies that if an enterprisedoes not have the substantive right to defer the settlement of a liability beyond one year from the balance sheet date, theliability shall be classified as a current liability. The subjective possibility of whether the enterprise will exercise the aboveright does not affect the classification of the liability's liquidity; It clarifies that for liabilities arising from loanarrangements of an enterprise, if the enterprise's right to defer the settlement of the liability beyond one year from thebalance sheet date depends on contractual terms, the contractual terms to be followed by the enterprise before and on thebalance sheet date and those to be followed after the balance sheet date should be distinguished, and whether there is theright to defer the settlement of the liability on the balance sheet date should be considered; It clarifies that if thecounterparty to the enterprise's liability has the option to settle the liability with the enterprise's own equity instrumentsand this option is classified as an equity instrument and recognized separately, the relevant settlement terms are irrelevantto the classification of the liability's liquidity; and it clarifies the information disclosure requirements for loan arrangementssubject to contractual terms and classified as non-current liabilities. Enterprises are also required to adjust comparativeperiod information when first applying this provision.
After assessment, the Group believes that the adoption of the above provisions will not have a material impact on theGroup's financial statements.
Regarding the accounting treatment of sale and leaseback transactions
Interpretation No. 17 stipulates that where the transfer of assets in a sale and leaseback transaction is deemed a sale, afterthe commencement of the lease term, the lessee shall not recognize gains or losses related to the right to use obtained fromthe leaseback when determining the lease payments or the changed lease payments in the subsequent measurement of thelease liability arising from the sale and leaseback. Where a lease modification results in a reduction of the scope of thelease or a shortening of the lease term, the lessee shall recognize any gains or losses related to the partial or full terminationof the lease in the current period profit or loss, which is not subject to the above restriction. When an enterprise first appliesthis provision, it shall retrospectively adjust the sale and leaseback transactions conducted after the first application ofAccounting Standard for Business Enterprises No. 21 - Leases.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
After assessment, the Group believes that the adoption of the above provisions will not have a material impact on theGroup's financial statements.
Interpretation No. 18 of Accounting Standards for Business Enterprises
Interpretation No. 18 standardizes the accounting treatment of warranty-type quality guarantees that do not constitute aseparate performance obligation, which will be effective from December 6, 2024, and allows enterprises to apply it inadvance from the year of issuance.
Regarding the accounting treatment of warranty-type quality guarantees that do not constitute a separate performanceobligation
Interpretation No. 18 stipulates that, in accordance with Accounting Standard for Business Enterprises No. 14 - Revenue,when accounting for the provision recognized due to warranty-type quality guarantees that do not constitute a separateperformance obligation, enterprises shall follow the relevant provisions of Accounting Standard for Business EnterprisesNo. 13 - Contingencies. The determined amount of the provision shall be debited to accounts such as "Cost of MainBusiness" or "Other Business Costs" and credited to the "Provision" account. Correspondingly, it shall be presented in theitems of "Total Operating Costs" in the income statement and "Other Current Liabilities," "Non-current Liabilities Duewithin One Year," and "Provisions" in the balance sheet. When an enterprise first applies this interpretation, if the originalrecognition of warranty-type quality guarantees was recorded in "Selling Expenses," the changes in the accountingaccounts and financial statement items involved in the accounting treatment of such warranty-type quality guarantees shallbe retrospectively adjusted as a change in accounting policy. The Group originally recorded the warranty-type qualityguarantees in "Selling Expenses" and has applied this provision in advance this year. The impact on the relevant items ofthe Group's consolidated income statement for the year 2023 is presented as follows:
Unit: RMB
| Item | Before restatement | Adjustment | After restatement |
| Total operating costs | 49,637,055,845.33 | 95,712,702.24 | 49,732,768,547.57 |
| Selling expenses | 10,842,500,778.25 | (95,712,702.24) | 10,746,788,076.01 |
In accordance with the Compilation of Application Guidelines for Accounting Standards for Business Enterprises 2024,the Group has changed the presentation of derivative financial instruments that were previously classified as "FinancialAssets at Fair Value through Profit or Loss" or "Financial Liabilities at Fair Value through Profit or Loss" to separate lineitems, and has retrospectively adjusted the comparative data in the financial statements accordingly. The specific impactsare presented as follows:
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The impact on the relevant items of the Group's consolidated balance sheet as of January 1, 2024, is presented as follows:
Unit: RMB
| Item | January 1, 2024 | Adjustment | January 1, 2024 |
| Held for trading financial assets | 37,380.00 | (37,380.00) | - |
| Derivative financial assets | - | 37,380.00 | 37,380.00 |
| Held for trading financial liabilities | 38,079,755.04 | (38,079,755.04) | - |
| Derivative financial liabilities | - | 38,079,755.04 | 38,079,755.04 |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
IV. TaxesMajor Categories of Taxes and Tax Rates
| Category of tax | Basis of tax computation | Tax rate |
| Enterprise income tax | Taxable income | 25% (Note 1) |
| VAT | For the taxable product sales revenue or taxable labor revenue, the Company and its domestic subsidiaries are ordinary Value-added Tax payers; the VAT payable is the balance of input tax after deducting the deductible output tax. | 6%, 9%, 13% and simple collection rate of 5%, 3% (Note 2-4) |
| City maintenance and construction tax | Actual payable turnover tax | 7%, 5% |
| Education surcharges | Actual payable turnover tax | 3% |
| Local education surcharges | Actual payable turnover tax | 2% |
Note 1: Except that this Company and subsidiaries in China are applicable to the following tax preference, this Company's other subsidiaries in China are applicable to 25% of enterpriseincome 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, and valid term is 3 years, and the preferential taxperiod 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 (Ministryof 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 2024 to pay the 2023annual corporate income tax at the rate of 10%. As of the approval date of this report, the Company's preferential income tax in 2024 has not been verified and approved. Therefore,the Company's enterprise income tax in 2024 is calculated and paid at the rate of 15% (2023: 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, NationalDevelopment 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 enjoyedpreferential tax policies for the development of the western region. Therefore, the current enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in thecurrent reporting period (2023:15%).
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
(3) According to the Recording List of the First Batch of identified High-tech Enterprises of Zhejiang Province in 2021 and the list of High-tech Enterprises Identified and Reported bythe Zhejiang Provincial Accreditation Agency in 2024 issued by the Leading Group Office of National High-tech Enterprise Identification Management Work on January 24, 2022and December 26, 2024, Hangzhou Fuyang Haikang Baotai Surveillance Technology Service Ltd. (hereinafter referred to as "Fuyang Baotai") and Hangzhou Hikstorage TechnologyLtd. ("Hikstorage Technology") , subsidiaries of the Company, are identified as high-tech enterprises, and the valid terms of the identification for both are 3 years and the preferentialtax period is from 2021 to 2023 and from 2024 to 2026. Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reportingperiod (2023:15%).
(4) In accordance with the List of High-tech Enterprises Identified by the Zhejiang Provincial Accreditation Agency in 2022 issued by the leading group office of Zhejiang high-techenterprise identification management work on January 17, 2022, the Company's subsidiaries, Hangzhou Hikvision System Technology Ltd. (hereinafter referred to as "HangzhouSystem"), Hangzhou Rayin Technology Ltd. (hereinafter referred to as "Hangzhou Rayin Technology"), and Hangzhou Hikfire Technology Ltd. (hereinafter referred to as "HikFireTechnology") were recognized as high-tech enterprises with a valid term of 3 years and the preferential tax period is from 2022 to 2024. Therefore, the enterprise income tax iscalculated 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 EnterpriseIdentification Office on January 4, 2024, the Company's subsidiary, Shanghai Goldway Intelligent Transportation System Ltd. was identified as the high-tech enterprise, and validterm 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 currentreporting 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 NationalHigh-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 thepreferential 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%).
(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 NationalHigh-tech Enterprise Identification Management on December 28, 2023, the Company's subsidiary, Hangzhou Hikrobot Technology Co., Ltd. (hereinafter referred to as "HikRobot")was identified as the high-tech enterprises, and valid term is3 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 InformationTechnology 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 aqualified 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%
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 list of High-tech Enterprises Identified and Reported by the Zhejiang Provincial Accreditation Agency 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 Ltd. (hereinafter referred to as "HikmicroSensing") 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 fromenterprise 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 of2024 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 Officeof National High-tech Enterprise Identification Management on January 17, 2023, the Company's subsidiary, Hangzhou Hikmicro Software Ltd. (hereinafter referred to as "HangzhouHikmicro Software") was identified as the high-tech enterprise with a valid term of 3 years and the preferential tax period is from 2022 to 2024.
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 InformationTechnology of the People's Republic of China, the National Development and Reform Commission, the Ministry of Finance and the State Administration of Taxation, HangzhouHikmicro 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 taxat half of the 25% statutory tax rate in the third to fifth years. The year of 2024 is the fifth year of Hangzhou Hikmicro Software making profits and enjoyed enterprise income tax athalf of the 25% statutory tax rate.
According to the preferential tax policies for the integrated circuit industry and the software industry, Hangzhou Hikmicro Software obtained approval from the tax authorities in May2024 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 "Hebei Sensortech") 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 andpaid 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")
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 InformationTechnology of the People's Republic of China, the National Development and Reform Commission, the Ministry of Finance and the State Administration of Taxation, EZVIZ Softwareis 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 (2023: half of the 25% statutory tax rate).
(12) In accordance with the provisions of the Announcement on Further Supporting the Development of Small and Micro-sized Enterprises and Individual Businesses (Announcement No.12 of 2023 by the Ministry of Finance and the State Taxation Administration), Hangzhou Furui Technology Ltd. ("Furui Technology"), Henan Hua'an Security Services Co., Ltd.(hereinafter referred to as "Henan Hua'an Security Services"), Hangzhou Hikimaging Electronics Ltd., Zhengzhou Hikvision Technology Ltd., Anhui Hikvision Urban OperationService Co., Ltd., Shijiazhuang Haishi Digital Technology Ltd., Hangzhou Rayin Detection Technology Ltd. and Hangzhou Xingrong Information Technology Ltd. qualify as smalland micro-sized profitable enterprises and are eligible for the preferential corporate income tax policy for small and micro-sized enterprises. The taxable income up to CNY 3 millionis reduced to 25% of the taxable income and is subject to a corporate income tax rate of 20%. Therefore, the corporate income tax for this year is calculated and paid at a reduced rateof 5%.
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 StateAdministration of Taxation, as for self-developed software products sales of the Company, Hangzhou System, HikRobot, HikAuto Software, Hangzhou EZVIZ Software, HikstorageTechnology, 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 Technology Ltd., Fuyang Baotai, Zhejiang Hailai Yunzhi Technology Co., Ltd., and Hebei Sensortech,the VAT shall be calculated and paid with tax rate of 13% at first, then the portion with actual tax bearing excess 3% shall be refunded after State Administration of Taxation reviews.
Note 3: In accordance with the Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry Fa Gai Cai Jin [2022] No. 271, in 2022,taxpayers in the production and life service industries will be deducted by 10% and 15% respectively according to the deductible input tax deductible for the current period (hereinafterreferred to as the "Additional Deduction Policy"). In accordance with the Announcement on clarifying policies such as VAT reduction and exemption for small-scale taxpayers (Ministryof Finance, State Administration of Taxation Announcement [2023] No. 1), In 2023, the current deductible input tax for production and living services taxpayers will continue to bededucted by 5% and 10% of the tax payable respectively. The policy is valid until December 31, 2023.
The Company's part of branches, and the subsidiaries, Hangzhou Hikvision Technology Ltd.'s part of branches, Chongqing System, Hangzhou Hikvision Financial Leasing Ltd. ( formerlyknown as 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 HuaAn Bao Quan Intelligent Development Co.,Ltd.( hereinafter reffered to as "Hua'an Bao Quan Intelligent") and its Luoyang Branch, Hua'an Security Services, Urumqi HaiShi Xin'An Electronic Technology Ltd., Chengdu HikvisionDigital Technology Ltd., Hangzhou EZVIZ Software, Hangzhou branch of Zhejiang Hikfire Technology Ltd., Wuhan Hikvision Technology Ltd., some branches of Hangzhou HaikangIntelligent Technology Ltd., and Guizhou Haikang Transport Big Data Ltd. met the provisions of the VAT Additional Deduction Policy and were entitled to additional deduction preferentialtax policy of input tax in 2023 and ceased the related preferential treatment in 2024.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 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 materialsare 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 thepolicy and deducts an additional 15% of the current deductible input tax to deduct the tax payable.
V. Notes to Items in the Consolidated Financial Statements
1. Cash and Bank Balances
Unit: RMB
| Item | Closing balance | Opening balance (Restated) | ||||
| Foreign currency amount | Exchange rate for conversion | RMB amount | Foreign currency amount | Exchange rate for conversion | RMB amount | |
| Cash: | ||||||
| RMB | - | - | 2,759.07 | - | - | 1,678.63 |
| EUR | 32,977.56 | 7.5257 | 248,180.23 | 147,128.30 | 7.8592 | 1,156,310.77 |
| USD | 19,048.11 | 7.1884 | 136,926.36 | 30,104.54 | 7.0827 | 213,221.43 |
| Other currencies | 294,157.68 | - | - | 414,544.09 | ||
| Bank balance: | ||||||
| RMB | - | - | 30,906,055,381.57 | - | - | 45,212,743,399.98 |
| USD | 525,069,475.29 | 7.1884 | 3,774,409,416.15 | 348,625,559.51 | 7.0827 | 2,469,210,250.34 |
| EUR | 71,544,059.18 | 7.5257 | 538,419,126.19 | 113,802,623.62 | 7.8592 | 894,397,579.52 |
| Other currencies | 715,042,893.37 | - | - | 824,341,197.50 | ||
| Other currency funds: | ||||||
| RMB | - | - | 293,311,312.74 | - | - | 179,985,499.57 |
| USD | 1,925,634.95 | 7.1884 | 13,842,234.25 | 2,700,309.07 | 7.0827 | 19,125,479.05 |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Closing balance | Opening balance (Restated) | ||||
| Foreign currency amount | Exchange rate for conversion | RMB amount | Foreign currency amount | Exchange rate for conversion | RMB amount | |
| EUR | 159,997.07 | 7.5257 | 1,204,089.92 | 565,119.25 | 7.8592 | 4,441,385.18 |
| Other currencies | - | - | 28,521,859.50 | - | - | 32,128,116.48 |
| Total | 36,271,488,337.03 | 49,638,158,662.54 | ||||
| Including: deposited in overseas banks | 796,652,984.09 | 942,602,817.26 | ||||
Details of other currency funds:
Unit: RMB
| ItemItem | Closing balance | Opening balance | ||||
| Foreign currency amount | Exchange rate for conversion | RMB amount | Foreign currency amount | Exchange rate for conversion | RMB amount | |
| Capitals with limitations: | ||||||
| Deposits for letter of credit | - | - | - | - | - | 5,807,814.00 |
| Bank acceptance bill | - | - | 4,342,362.58 | - | - | 5,729,976.08 |
| Deposits for letter of guarantee | - | - | 187,030,125.71 | - | - | 150,406,759.09 |
| Other security deposits | - | - | 15,572,718.45 | - | - | 17,821,752.36 |
| Other capitals with limitations | - | - | 11,500,750.00 | - | - | 30,425,005.23 |
| Subtotal | 218,445,956.74 | 210,191,306.76 | ||||
| Capitals without limitations: | ||||||
| Deposit in payment instrument provided by third-party and in securities account | - | - | 118,364,276.15 | - | - | 25,453,125.41 |
| Other currency funds in USD | 1,309.50 | 7.1884 | 9,413.21 | - | - | - |
| Other currency funds in EUR | 7,952.79 | 7.5257 | 59,850.31 | 4,586.74 | 7.8592 | 36,048.11 |
| Subtotal | 118,433,539.67 | 25,489,173.52 | ||||
| Total | 336,879,496.41 | 235,680,480.28 | ||||
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
2. Derivative Financial Assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Forward foreign exchange contract | 26,775,923.93 | 37,380.00 |
| Total | 26,775,923.93 | 37,380.00 |
On December 31, 2024, derivative financial assets are forward foreign exchange contracts, and they are not designated as hedging instruments, and the gains or losses arising from changesin their fair values are directly included in the current profit and loss.
3. Notes Receivable
(1) Categories of notes receivable
Unit: RMB
| Category | Closing balance | Opening balance |
| Bank acceptance bill | 2,365,648,400.91 | 2,199,710,776.69 |
| Finance company acceptance bill | 150,839,104.68 | 123,274,741.72 |
| Commercial acceptance bill | 206,108,636.87 | 283,085,857.33 |
| Total | 2,722,596,142.46 | 2,606,071,375.74 |
(2) At the end of the current reporting period, the Group had no pledged notes receivable.
(3) At the end of the current reporting period, notes receivable endorsed or discounted by the Group but not yet due at the balance sheet day
Unit: RMB
| Item | Amount not derecognized as of December 31, 2024 |
| Bank acceptance bill | 1,227,896,081.96 |
| Finance company acceptance bill | 46,990,625.40 |
| Commercial acceptance bill | 45,274.00 |
| Total | 1,274,931,981.36 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
As of December 31, 2024, the Group gave RMB1,193,485,939.57 (2023: RMB1, 075,118,808.52) undue bank acceptance bills to suppliers for endorsement, RMB46,990,625.40 (2023:
RMB47,808,575.05) undue acceptance bill of the finance company to suppliers for endorsement, RMB45,274.00 (2023: RMB500,000.00) undue commercial acceptance bill to suppliersfor endorsement. Discounted RMB34,410,142.39 (2023: RMB34,566,243.97) undue bank acceptance to banks. Since the Group has not transferred almost all the risks and rewards ofownership of financial assets, the Group has not terminated its confirmation. For details, please refer to Note (V) 24 and Note (V) 31.3.
(4) Classified disclosure by method of provision for bad debts.
Unit: RMB
| Category | Closing balance | ||||
| Carrying amount | Credit loss provision | Book value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | |
| Provision for bad debts of notes receivables on a single basis | - | - | - | - | - |
| Provision for bad debts of notes receivables by portfolios | 2,725,650,950.56 | 100.00 | 3,054,808.10 | 0.11 | 2,722,596,142.46 |
| Total | 2,725,650,950.56 | 100.00 | 3,054,808.10 | 0.11 | 2,722,596,142.46 |
Unit: RMB
| Category | Opening balance | ||||
| Carrying amount | Credit loss provision | Book value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | |
| Provision for bad debts of notes receivables on a single basis | - | - | - | - | - |
| Provision for bad debts of notes receivables by portfolios | 2,608,563,766.39 | 100.00 | 2,492,390.65 | 0.10 | 2,606,071,375.74 |
| Total | 2,608,563,766.39 | 100.00 | 2,492,390.65 | 0.10 | 2,606,071,375.74 |
Provision for bad debts of notes receivables by portfolios
Unit: RMB
| Category | Closing balance | ||
| Carrying amount | Credit loss provision | Proportion (%) | |
| Bank acceptance bill | 2,365,648,400.91 | - | - |
| Non-bank acceptance bill | 360,002,549.65 | 3,054,808.10 | 0.85 |
| Total | 2,725,650,950.56 | 3,054,808.10 | 0.11 |
Explanation of provision for bad debts of notes receivables by portfolios:
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The Group classifies notes receivable into different portfolios based on the characteristics of the acceptors.The Group believes that there is no significant credit risk to the acceptors ofbank acceptance bills held by the Group, so no loss provision is made.
(5) Provision for bad debts of notes receivables.
Unit: RMB
| Provision for bad debts | Expected credit loss for the entire duration |
| Balance as of January 1, 2024 | 2,492,390.65 |
| Provision for/ Reverse of the current year | 562,417.45 |
| Balance as at December 31, 2024 | 3,054,808.10 |
(6) Situation of provision
Unit: RMB
| Category | Opening balance | Amount of changes changed in the current reporting period | Closing balance | |
| Provision or reverse | Transfer or write-off | |||
| Notes receivable | 2,492,390.65 | 562,417.45 | - | 3,054,808.10 |
| Total | 2,492,390.65 | 562,417.45 | - | 3,054,808.10 |
4. Accounts Receivable
(1) Disclosure by aging
Unit: RMB
| Aging | Closing balance | Opening balance (restated) |
| Within credit period | 21,885,251,680.47 | 21,238,508,394.91 |
| Within 1 year after exceeding credit period | 13,413,302,524.64 | 12,622,668,221.07 |
| 1-2 years after exceeding credit period | 3,351,710,793.78 | 2,520,053,396.18 |
| 2-3 years after exceeding credit period | 1,353,841,038.81 | 1,029,311,890.05 |
| 3-4 years after exceeding credit period | 664,972,595.95 | 579,297,343.23 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Aging | Closing balance | Opening balance (restated) |
| Over 4 years after exceeding credit period | 1,155,004,826.72 | 1,018,167,722.39 |
| Total | 41,824,083,460.37 | 39,008,006,967.83 |
| Less: Credit impairment provision | 3,913,954,724.95 | 3,191,433,456.39 |
| Book value | 37,910,128,735.42 | 35,816,573,511.44 |
(2) Classified disclosure of credit loss by provision methods
Unit: RMB
| Category | Closing balance | ||||
| Carrying amount | Credit loss provision | Book value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | |
| Provision for credit loss on a single basis | - | - | - | - | - |
| Provision for credit loss by portfolios | 41,824,083,460.37 | 100.00 | 3,913,954,724.95 | 9.36 | 37,910,128,735.42 |
| Total | 41,824,083,460.37 | 100.00 | 3,913,954,724.95 | 9.36 | 37,910,128,735.42 |
Unit: RMB
| Category | Opening balance (restated) | ||||
| Carrying amount | Credit loss provision | Book value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | |
| Provision for credit loss on a single basis | - | - | - | - | - |
| Provision for credit loss by portfolios | 39,008,006,967.83 | 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 for accounts receivable
Unit: RMB
| Customer | Closing balance | ||
| Carrying amount | Credit loss provision | Proportion (%) | |
| Portfolio A | 3,382,037,568.78 | 84,935,468.35 | 2.51 |
| Portfolio B | 28,763,549,515.79 | 3,562,845,181.45 | 12.39 |
| Portfolio C | 9,678,496,375.80 | 266,174,075.15 | 2.75 |
| Total | 41,824,083,460.37 | 3,913,954,724.95 | 9.36 |
Description of credit loss provision by portfolios for accounts receivable
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
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 creditperiod, 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 theCompany 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 portfoliosinvolve 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 receivableare due.
As of December 31, 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
| Aging | Closing balance | Opening balance (Restated) | ||||||
| Expected average loss rate (%) | Carrying value | Bad debt provision | Book value | Expected average loss rate (%) | Carrying value | Bad debt provision | Book value | |
| Within credit period | 0.07 | 2,705,323,605.53 | 1,944,444.46 | 2,703,379,161.07 | 0.02 | 3,907,968,313.68 | 852,571.17 | 3,907,115,742.51 |
| Within 1 year after exceeding credit period | 2.26 | 554,426,756.05 | 12,545,412.20 | 541,881,343.85 | 1.90 | 676,630,538.84 | 12,829,329.20 | 663,801,209.64 |
| 1-2 years after exceeding credit period | 32.98 | 71,438,423.74 | 23,559,515.25 | 47,878,908.49 | 30.36 | 50,103,162.12 | 15,213,054.67 | 34,890,107.45 |
| 2-3 years after exceeding credit period | 70.25 | 13,320,979.94 | 9,358,292.92 | 3,962,687.02 | 63.25 | 12,070,966.60 | 7,635,014.88 | 4,435,951.72 |
| 3-4 years after exceeding credit period | 100.00 | 11,703,561.65 | 11,703,561.65 | - | 100.00 | 20,084,869.22 | 20,084,869.22 | - |
| Over 4 years after exceeding credit period | 100.00 | 25,824,241.87 | 25,824,241.87 | - | 100.00 | 11,222,150.03 | 11,222,150.03 | - |
| Total | 2.51 | 3,382,037,568.78 | 84,935,468.35 | 3,297,102,100.43 | 1.45 | 4,678,080,000.49 | 67,836,989.17 | 4,610,243,011.32 |
As of December 31, 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
| Aging | Closing balance | Opening balance | ||||||
| Expected average loss rate (%) | Carrying value | Bad debt provision | Book value | Expected average loss rate (%) | Carrying value | Bad debt provision | Book value | |
| Within credit period | 0.88 | 10,826,359,201.03 | 94,976,583.91 | 10,731,382,617.12 | 0.80 | 10,001,831,444.99 | 80,372,286.33 | 9,921,459,158.66 |
| Within 1 year after exceeding credit period | 5.21 | 11,759,406,126.15 | 612,261,723.49 | 11,147,144,402.66 | 4.69 | 10,816,276,812.71 | 506,914,857.87 | 10,309,361,954.84 |
| 1-2 years after exceeding credit period | 21.84 | 3,187,571,282.52 | 696,103,763.26 | 2,491,467,519.26 | 23.34 | 2,416,434,272.21 | 564,052,271.46 | 1,852,382,000.75 |
| 2-3 years after exceeding credit period | 48.51 | 1,321,386,954.11 | 640,970,300.26 | 680,416,653.85 | 42.77 | 993,475,956.99 | 424,940,431.68 | 568,535,525.31 |
| 3-4 years after exceeding credit period | 76.24 | 632,604,288.10 | 482,311,146.65 | 150,293,141.45 | 69.63 | 522,837,171.09 | 364,030,874.76 | 158,806,296.33 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Over 4 years after exceeding credit period | 100.00 | 1,036,221,663.88 | 1,036,221,663.88 | - | 100.00 | 920,056,259.62 | 920,056,259.62 | - |
| Total | 12.39 | 28,763,549,515.79 | 3,562,845,181.45 | 25,200,704,334.34 | 11.14 | 25,670,911,917.61 | 2,860,366,981.72 | 22,810,544,935.89 |
As of December 31, 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
| Aging | Closing balance | Opening balance | ||||||
| Expected average loss rate (%) | Carrying value | Bad debt provision | Book value | Expected average loss rate (%) | Carrying value | Bad debt provision | Book value | |
| Within credit period | 0.25 | 8,353,568,873.91 | 21,130,742.84 | 8,332,438,131.07 | 0.28 | 7,328,708,636.24 | 20,812,836.46 | 7,307,895,799.78 |
| Within 1 year after exceeding credit period | 6.05 | 1,099,469,642.44 | 66,495,406.43 | 1,032,974,236.01 | 6.19 | 1,129,760,869.52 | 69,879,355.77 | 1,059,881,513.75 |
| 1-2 years after exceeding credit period | 51.18 | 92,701,087.52 | 47,448,581.31 | 45,252,506.21 | 50.85 | 53,515,961.85 | 27,212,412.79 | 26,303,549.06 |
| 2-3 years after exceeding credit period | 91.34 | 19,133,104.76 | 17,475,677.40 | 1,657,427.36 | 92.83 | 23,764,966.46 | 22,060,264.82 | 1,704,701.64 |
| 3-4 years after exceeding credit period | 100.00 | 20,664,746.20 | 20,664,746.20 | - | 100.00 | 36,375,302.92 | 36,375,302.92 | - |
| Over 4 years after exceeding credit period | 100.00 | 92,958,920.97 | 92,958,920.97 | - | 100.00 | 86,889,312.74 | 86,889,312.74 | - |
| Total | 2.75 | 9,678,496,375.80 | 266,174,075.15 | 9,412,322,300.65 | 3.04 | 8,659,015,049.73 | 263,229,485.50 | 8,395,785,564.23 |
(3) Bad debt provision
Unit: RMB
| Category | Opening balance | Amount of changes changed in the current reporting period | Difference due to foreign currency statement translation | Closing balance | ||
| Provision | Recollect or reverse | Transfer or write-off | ||||
| Accounts receivable | 3,191,433,456.39 | 976,548,145.21 | 47,789,545.95 | 203,689,533.26 | (2,547,797.44) | 3,913,954,724.95 |
| Total | 3,191,433,456.39 | 976,548,145.21 | 47,789,545.95 | 203,689,533.26 | (2,547,797.44) | 3,913,954,724.95 |
(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 companiesamounted to RMB2,630,005,597.63 (of which the total amount of accounts receivable is RMB1,252,553,158.90 and the amount of contract assets is RMB1,377,452,438.73), accountingfor 5.86% of the total year-end balance of accounts receivable and contract assets (including the part included in other non-current assets), and the amount of provision for bad debts wasRMB265,120,104.87.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
5. Contract Assets
(1) Details of contract assets
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provisions for impairment | Book value | Carrying amount | Provisions for impairment | Book value | |
| Constructions | 2,821,485,040.98 | 23,550,579.80 | 2,797,934,461.18 | 2,847,993,321.71 | 21,993,021.25 | 2,826,000,300.46 |
| Maintenance services | 253,714,700.92 | 2,071,050.36 | 251,643,650.56 | 227,366,849.25 | 1,945,550.21 | 225,421,299.04 |
| Less: Contract assets that are included in other non-current assets (Note (V) 22) | 2,081,248,707.05 | 17,493,381.00 | 2,063,755,326.05 | 1,893,506,565.03 | 15,397,380.73 | 1,878,109,184.30 |
| Total | 993,951,034.85 | 8,128,249.16 | 985,822,785.69 | 1,181,853,605.93 | 8,541,190.73 | 1,173,312,415.20 |
(2) The classification and disclosure of the method of provision for impairment of contract assets (including the partincluded in other non-current assets)
Unit: RMB
| Item | Closing balance | ||||
| Carrying amount | Provisions for impairment | Book value | |||
| Amount | Proportion (%) | Amount | Provision proportion (%) | Amount | |
| Provision for impairment on a single item | - | - | - | - | - |
| Provision for impairment by portfolio | 3,075,199,741.90 | 100.00 | 25,621,630.16 | 0.83 | 3,049,578,111.74 |
| Total | 3,075,199,741.90 | 100.00 | 25,621,630.16 | 0.83 | 3,049,578,111.74 |
| Item | Opening balance | ||||
| Carrying amount | Provisions for impairment | Book value | |||
| 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 |
(3) Provision for bad debts of contract assets (including the part included in other non-current assets) in the current period
Unit: RMB
| Category | Opening balance | Amount of changes changed in the current reporting period | Difference due to foreign currency statement translation | Closing balance | |
| Provision | Transfer or write-off | ||||
| Contract assets | 23,938,571.46 | 1,680,465.16 | - | 2,593.54 | 25,621,630.16 |
| Total | 23,938,571.46 | 1,680,465.16 | - | 2,593.54 | 25,621,630.16 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
6. Receivables for Financing
(1) Receivables for financing by categories
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 2,128,242,910.57 | 1,594,219,832.62 |
| Certificates of accounts receivable claims | 163,405,333.48 | |
| Total | 2,291,648,244.05 | 1,594,219,832.62 |
(2) At the end of the reporting period, the Group had no pledged receivables for financing.
(3) At the end of the reporting period, receivables for financing endorsed or discounted by the Group that have not yetexpired on the balance sheet date.
Unit: RMB
| Item | Derecognized amount as of December 31, 2024 |
| Bank acceptance bill | 2,344,850,710.82 |
| Certificates of accounts receivable claims | 10,546,904.23 |
| Total | 2,355,397,615.05 |
As of December 31, 2024, the Group endorsed to suppliers bank acceptance bills amounting to RMB2,098,075,845.62that had not yet matured, and certificates of accounts receivable claims amounting to RMB10,546,904.23 that had not yetmatured, and discounted to banks bank acceptance bills amounting to RMB246,774,865.20that had not yet matured.
(4) The Group believes that the likelihood of non-payment upon maturity of the bank acceptance bills and certificates ofaccounts receivable claims it holds to be very low, and there is no significant credit risk, so no loss provision is made.
7. Prepayment
(1) Prepayments by aging analysis
Unit: RMB
| Aging | Closing balance | Opening balance | ||
| Carrying amount | Proportion (%) | Carrying amount | Proportion (%) | |
| Within 1 year | 624,943,424.42 | 94.03 | 439,229,846.71 | 86.44 |
| 1-2 years | 24,319,470.26 | 3.66 | 54,598,580.98 | 10.74 |
| 2-3 years | 11,026,833.66 | 1.66 | 9,132,956.08 | 1.80 |
| Over 3 years | 4,312,864.67 | 0.65 | 5,190,022.15 | 1.02 |
| Total | 664,602,593.01 | 100.00 | 508,151,405.92 | 100.00 |
(2) Closing balances of top five prepayments parties
As of December 31, 2024, the Group's top five balances of prepayments amounted to RMB101,949,950.71, accountingfor 15.34% of total closing balance of prepayments.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
8. Other Receivables
(1) Other receivables by aging
Unit: RMB
| Aging | Closing balance | Opening balance (restated) |
| Within contract period | 438,536,805.11 | 497,353,510.04 |
| Within 1 year | 71,996,644.17 | 58,190,602.54 |
| 1-2 years | 19,987,742.95 | 20,606,423.68 |
| 2-3 years | 14,942,465.41 | 4,357,328.94 |
| 3-4 years | 3,327,986.69 | 3,216,083.19 |
| Over 4 years | 15,860,010.64 | 20,110,646.73 |
| Total | 564,651,654.97 | 603,834,595.12 |
| Less: Credit impairment provision | 33,307,048.47 | 31,922,559.19 |
| Book value | 531,344,606.50 | 571,912,035.93 |
(2) Other receivables by nature of the payment
Unit: RMB
| Item | Closing balance of carrying amount | Opening balance of carrying amount (restated) |
| Guarantee deposits | 240,519,111.89 | 217,477,539.62 |
| Tax rebates | 130,609,720.61 | 27,765,998.37 |
| Temporary payments for receivables | 116,667,509.52 | 109,941,412.72 |
| Repurchase payments for restricted share | - | 169,968,816.44 |
| Others | 76,855,312.95 | 78,680,827.97 |
| Total | 564,651,654.97 | 603,834,595.12 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
(3) Accrual for bad debts of other receivables
Unit: RMB
| Bad debts allowance | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (credit impairment has not incurred) | Expected credit loss for the entire duration (credit impairment has 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 | (312,940.96) | 312,940.96 | - | - |
| -- Transfer into stage 3 | - | (2,505,851.45) | 2,505,851.45 | - |
| --Accrual/( recollect or reverse) in the current reporting period | (43,350.56) | 3,759,139.41 | (1,899,179.64) | 1,816,609.21 |
| Derecognition of financial assets (including direct write-downs) and transfer out | - | - | (213,993.50) | (213,993.50) |
| Other changes | (218,126.43) | - | - | (218,126.43) |
| Balance on December 31, 2024 | 1,587,353.47 | 7,276,075.63 | 24,443,619.37 | 33,307,048.47 |
(4) Provision for bad debts of other receivables
Unit: RMB
Top five debtors based on corresponding closing balance of other receivablesAt the end of current period, the aggregate amount of other receivables of the top five debtors of the Group was RMB146,450,707.35, accounting for 25.94% of the total balance of otherreceivables at the end of the year, and the provision for bad debts amounted to RMB114,373.25.
| Category | Opening balance | Amount of changes in the current reporting period | Difference resulted from foreign currency statements conversion | Closing balance | ||
| Provision | Recollect or reverse | Transfer or write-off | ||||
| Other receivables | 31,922,559.19 | 7,212,313.69 | 5,395,704.48 | 213,993.50 | (218,126.43) | 33,307,048.47 |
| Total | 31,922,559.19 | 7,212,313.69 | 5,395,704.48 | 213,993.50 | (218,126.43) | 33,307,048.47 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
9. Inventories
(1) Categories of inventories
Unit: RMB
| Category | Closing balance | Opening balance(restated) | ||||
| Carrying amount | Provision for decline in value of inventories/ Impairment provision for contract performance cost | Book value | Carrying amount | Provision for decline in value of inventories/ Impairment provision for contract performance cost | Book value | |
| Raw materials | 6,112,813,706.01 | 321,520,672.33 | 5,791,293,033.68 | 7,912,250,689.30 | 368,431,917.68 | 7,543,818,771.62 |
| Work-in-progress | 722,550,293.30 | - | 722,550,293.30 | 561,630,556.81 | - | 561,630,556.81 |
| Finished goods | 13,151,518,051.53 | 990,672,547.73 | 12,160,845,503.80 | 11,653,219,740.75 | 950,498,742.24 | 10,702,720,998.51 |
| Contract performance cost | 444,030,393.50 | 8,007,266.17 | 436,023,127.33 | 409,869,715.64 | 6,595,745.76 | 403,273,969.88 |
| Total | 20,430,912,444.34 | 1,320,200,486.23 | 19,110,711,958.11 | 20,536,970,702.50 | 1,325,526,405.68 | 19,211,444,296.82 |
(2) Provision for decline in value of inventories
Unit: RMB
| Category | Opening balance | The amount accrued in the current reporting period | The amount reversed or resold in the current reporting period | Effect on conversion of financial statements denominated in foreign currencies | Closing balance |
| Raw materials | 368,431,917.68 | 77,907,559.96 | 124,805,923.85 | (12,881.46) | 321,520,672.33 |
| Finished goods | 950,498,742.24 | 373,644,906.42 | 289,327,664.23 | (44,143,436.70) | 990,672,547.73 |
| Contract performance cost | 6,595,745.76 | 5,185,172.85 | 3,773,652.44 | - | 8,007,266.17 |
| Subtotal | 1,325,526,405.68 | 456,737,639.23 | 417,907,240.52 | (44,156,318.16) | 1,320,200,486.23 |
The write-offs of provision for inventories in the current reporting period are due to use or sale of inventories.
(3) Descriptions of the amortization amount of the contract performance cost for the current reporting periodFor the contract performance cost recognized as an asset, the Group adopts the same basis as the recognition of revenue related to the asset, and includes it in the profit or loss for thecurrent period when commercial goods or service have been transferred in accordance with the contract requirements and the acceptance certificate of the other party has been obtained.The amount included in profit or loss for the current period in 2024 is RMB711,095,338.26.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 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) | 894,327,647.82 | 1,079,721,006.23 |
| Total | 894,327,647.82 | 1,079,721,006.23 |
11. Other Current Assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible VAT input | 901,841,078.74 | 733,273,484.32 |
| Prepaid corporate income tax | 90,832,918.17 | 132,978,082.06 |
| Prepaid tariff | 18,347,927.67 | 32,945,213.90 |
| Others | 60,044,728.52 | 62,396,836.47 |
| Total | 1,071,066,653.10 | 961,593,616.75 |
12. Long-term Receivables
(1) Details of long-term receivables
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Financial leases receivables | 286,093,285.46 | 77,540,673.10 | 208,552,612.36 | 265,985,187.99 | 53,601,885.63 | 212,383,302.36 |
| Including: Unrealized income from financing | 5,907,102.54 | - | 5,907,102.54 | 7,730,078.24 | - | 7,730,078.24 |
| Installments business | 1,051,389,224.08 | 349,486,719.21 | 701,902,504.87 | 1,191,642,272.96 | 235,773,626.86 | 955,868,646.10 |
| Including: Unrealized income from financing | 13,619,170.58 | - | 13,619,170.58 | 26,937,454.05 | - | 26,937,454.05 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Employee housing loan | 364,325,718.68 | - | 364,325,718.68 | 450,167,676.53 | - | 450,167,676.53 |
| Including: Unrealized income from financing | 31,285,136.32 | - | 31,285,136.32 | 42,598,988.47 | - | 42,598,988.47 |
| Subtotal | 1,701,808,228.22 | 427,027,392.31 | 1,274,780,835.91 | 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) | 1,320,172,837.77 | 425,845,189.95 | 894,327,647.82 | 1,367,395,229.26 | 287,674,223.03 | 1,079,721,006.23 |
| Total | 381,635,390.45 | 1,182,202.36 | 380,453,188.09 | 540,399,908.22 | 1,701,289.46 | 538,698,618.76 |
(2) Disclosure by method of provision for bad debts
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Provision for bad debts by portfolio (including the portion due within one year) | 1,701,808,228.22 | 427,027,392.31 | 1,274,780,835.91 | 1,907,795,137.48 | 289,375,512.49 | 1,618,419,624.99 |
| Including: portfolio of employees | 364,325,718.68 | - | 364,325,718.68 | 450,167,676.53 | - | 450,167,676.53 |
| Portfolio of financial leasing and installment collection customers | 1,337,482,509.54 | 427,027,392.31 | 910,455,117.23 | 1,457,627,460.95 | 289,375,512.49 | 1,168,251,948.46 |
| Total | 1,701,808,228.22 | 427,027,392.31 | 1,274,780,835.91 | 1,907,795,137.48 | 289,375,512.49 | 1,618,419,624.99 |
Portfolio of employeesThe Group believes that the employees corresponding to the long-term receivable employee housing loans held by the Group all have labor relations with the Group and the Groupassesses 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 customersAs of December 31, 2024, the credit risk and expected credit losses of long-term receivables relevant to financial leasing and installment collection customers are as follows:
Unit: RMB
| Aging | Closing balance | ||
| Amounts | Credit loss provision | Estimated average loss rate (%) | |
| Within credit period | 379,383,102.82 | 2,656,826.86 | 0.70 |
| Within 1 year after exceeding credit period | 208,713,298.89 | 9,609,275.09 | 4.60 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Aging | Closing balance | ||
| Amounts | Credit loss provision | Estimated average loss rate (%) | |
| 1-2 years after exceeding credit period | 198,492,819.37 | 39,460,372.49 | 19.88 |
| 2-3 years after exceeding credit period | 227,883,932.22 | 94,708,562.23 | 41.56 |
| 3-4 years after exceeding credit period | 147,897,491.66 | 105,480,491.06 | 71.32 |
| Over 4 years after exceeding credit period | 175,111,864.58 | 175,111,864.58 | 100.00 |
| Total | 1,337,482,509.54 | 427,027,392.31 | 31.93 |
(3) Provision for bad debts
Unit: RMB
13. Long-term Equity Investment
Unit: RMB
| The invested entity | Opening balance | Increase/ Decrease in the current reporting period | Closing balance | Closing balance for impairment provision | |||||||
| Additional investments (note2) | Investment reduction | Investment profit (loss) recognized under the equity Method | Adjustment to other comprehensive income | Other changes in equity (note1) | Declaration of cash dividends or profit distribution | Impairment provision | others | ||||
| 1. Joint venture companies | |||||||||||
| Hangzhou Haikang Intelligent Industrial Equity Investment Fund Partnership | 791,356,253.14 | - | - | 19,685,451.64 | - | 57,022,183.13 | - | - | - | 868,063,887.91 | - |
Category
| Category | Opening balance | Amount of changes in the current reporting period | Difference resulted from foreign currency statements conversion | Closing balance | ||
| Provision | Recollect or reverse | Transfer or write-off | ||||
| Long term receivables | 289,375,512.49 | 138,280,648.52 | 628,768.70 | - | - | 427,027,392.31 |
| Total | 289,375,512.49 | 138,280,648.52 | 628,768.70 | - | - | 427,027,392.31 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| The invested entity | Opening balance | Increase/ Decrease in the current reporting period | Closing balance | Closing balance for impairment provision | |||||||
| Additional investments (note2) | Investment reduction | Investment profit (loss) recognized under the equity Method | Adjustment to other comprehensive income | Other changes in equity (note1) | Declaration of cash dividends or profit distribution | Impairment provision | others | ||||
| (L.P.) | |||||||||||
| Zhejiang City Digital Technology Ltd. | 29,635,485.61 | - | - | (3,765,849.98) | - | - | (5,792,258.59) | - | - | 20,077,377.04 | - |
| Zhejiang Haishi Huayue Digital Technology Ltd. | 14,067,281.65 | - | - | (362,700.73) | - | - | - | - | - | 13,704,580.92 | - |
| Guangxi Haishi Urban Operation Management Ltd. | 12,450,335.88 | - | - | (1,000,853.49) | - | - | - | - | - | 11,449,482.39 | - |
| Xuzhou Kangbo Urban Operation Management Service Ltd. | 11,052,348.36 | - | - | (206,602.05) | - | - | - | - | - | 10,845,746.31 | - |
| Others | 5,172,387.15 | 10,500,000.00 | - | (11,155,902.19) | - | - | - | - | - | 4,516,484.96 | - |
| Subtotal | 863,734,091.79 | 10,500,000.00 | - | 3,193,543.20 | - | 57,022,183.13 | (5,792,258.59) | - | - | 928,657,559.53 | - |
| 2. Associated companies | |||||||||||
| Beijing Taifang Technology Co. Ltd. (Note 1) | 36,942,210.69 | - | - | (3,332,699.09) | - | - | - | - | - | 33,609,511.60 | - |
| Jiaxin Haishi JiaAn Zhicheng Technology Ltd. | 27,941,495.40 | - | - | 1,120,872.94 | - | - | - | - | - | 29,062,368.34 | - |
| Zhiguang Hailian Big Data Technology Ltd. | 23,245,373.00 | - | - | 1,452,571.42 | - | - | (300,000.00) | - | - | 24,397,944.42 | - |
| Terapark (Nanjing) Ltd. | 18,257,785.52 | - | - | (1,806,705.74) | - | 1,090,599.45 | - | - | - | 17,541,679.23 | - |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| The invested entity | Opening balance | Increase/ Decrease in the current reporting period | Closing balance | Closing balance for impairment provision | |||||||
| Additional investments (note2) | Investment reduction | Investment profit (loss) recognized under the equity Method | Adjustment to other comprehensive income | Other changes in equity (note1) | Declaration of cash dividends or profit distribution | Impairment provision | others | ||||
| Others | 180,983,931.45 | 3,000,000.00 | - | 30,041,408.14 | - | 279,928,988.08 | - | - | - | 493,954,327.67 | - |
| Subtotal | 287,370,796.06 | 3,000,000.00 | - | 27,475,447.67 | - | 281,019,587.53 | (300,000.00) | - | - | 598,565,831.26 | - |
| Total | 1,151,104,887.85 | 13,500,000.00 | - | 30,668,990.87 | - | 338,041,770.66 | (6,092,258.59) | - | - | 1,527,223,390.79 | - |
Note 1: Changes in other equities during the reporting period was due to the changes in equity caused by increasing or decreasing capital of the investee by other shareholders.Note 2: During the reporting period, the Group made an additional investment of RMB 10,500,000.00 in a joint venture while maintaining its subscribed equity interest ratio unchanged.Additionally, the Group newly invested RMB 3,000,000.00 in an associate, acquiring a 30% equity stake.
14. Other Non-current Financial Assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Investments in equity instruments (Note) | 472,000,082.76 | 472,184,937.66 |
| Total | 472,000,082.76 | 472,184,937.66 |
Note: It refers to the Group's equity investments. The Group has no control, joint control or significant influence over these invested companies. During the current reporting period, theGroup received a cash dividend of RMB61,241,171.99 from the investees. (2023: RMB65,923,840.33) and recognized it as current profit and loss. Please refer to Note (V) 52 for details.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
15. Fixed Assets
(1) Details of fixed assets
Unit: RMB
| Item | Buildings and constructions | General-purpose equipment | Special-purpose equipment | Transportation vehicles | Total |
| I. Total original carrying amount | |||||
| 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 reporting period | 3,622,041,774.04 | 473,070,615.96 | 1,021,757,163.88 | 10,825,607.94 | 5,127,695,161.82 |
| 1) purchase | 116,585,618.70 | 469,875,616.21 | 566,266,251.04 | 10,825,607.94 | 1,163,553,093.89 |
| 2) transferred to construction in progress | 3,505,456,155.34 | 3,194,999.75 | 454,850,445.12 | - | 3,963,501,600.21 |
| 3) transferred from inventory | - | - | 640,467.72 | - | 640,467.72 |
| 3. Decrease in the current reporting period | 14,141,833.41 | 49,272,757.13 | 124,019,016.32 | 7,472,082.60 | 194,905,689.46 |
| 1) disposal or write-off | 14,141,833.41 | 49,272,757.13 | 87,374,960.15 | 7,472,082.60 | 158,261,633.29 |
| 2) transferred from construction in progress | - | - | 36,644,056.17 | - | 36,644,056.17 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (23,734,108.54) | (22,032,397.28) | (1,379,985.60) | (3,550,912.44) | (50,697,403.86) |
| 5. Closing Balance | 14,302,410,545.25 | 2,465,005,573.96 | 4,517,493,939.26 | 106,765,174.82 | 21,391,675,233.29 |
| 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 reporting period | 532,988,200.72 | 317,336,506.25 | 631,103,472.80 | 10,303,545.24 | 1,491,731,725.01 |
| 1) accrual | 532,988,200.72 | 317,336,506.25 | 631,103,472.80 | 10,303,545.24 | 1,491,731,725.01 |
| 3. Decrease in the current reporting period | 6,814,691.00 | 41,220,698.49 | 97,054,551.45 | 5,978,344.74 | 151,068,285.68 |
| 1) disposal or write- off | 6,814,691.00 | 41,220,698.49 | 69,587,837.31 | 5,978,344.74 | 123,601,571.54 |
| 2) transferred to construction in progress | - | - | 27,466,714.14 | - | 27,466,714.14 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (1,864,088.94) | (9,636,345.23) | (758,033.48) | (1,752,857.50) | (14,011,325.15) |
| 5. Closing balance | 2,424,520,975.54 | 1,333,180,015.45 | 2,494,483,298.03 | 75,738,647.78 | 6,327,922,936.80 |
| III. Total book value | |||||
| Closing balance on book value | 11,877,889,569.71 | 1,131,825,558.51 | 2,023,010,641.23 | 31,026,527.04 | 15,063,752,296.49 |
| Opening balance on book value (restated) | 8,818,033,158.40 | 996,539,559.49 | 1,659,943,367.14 | 33,796,257.14 | 11,508,312,342.17 |
(2) As of December 31, 2024, the book value of the special-purpose equipment rent out through operating leasing by theGroup is RMB54,026,704.89.
(3) Fixed assets of which certificates of title have not been granted as of December 31, 2024
Unit: RMB
| Item | Carrying amount | Reason for certificates of title not granted |
| Office space for branch offices | 128,504,791.84 | In the process of obtaining the real estate certificates |
| Wuhan Intelligence Industrial Park (Phase I) | 912,530,497.27 | In the process of obtaining the real estate certificates |
| Xi'an Science and Technology Park Project | 1,455,012,196.03 | In the process of obtaining the real estate certificates |
| Total | 2,496,047,485.14 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
16. Construction in Progress
(1) Details of construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision | Book value | Carrying amount | Provision | Book value | |
| Wuhan Science and Technology Park Project | 1,657,649,090.38 | - | 1,657,649,090.38 | 415,106.61 | - | 415,106.61 |
| EZVIZ Intelligent Manufacturing Chongqing Base Project(Infrastructure Part) | 1,144,333,377.23 | - | 1,144,333,377.23 | 628,214,692.80 | - | 628,214,692.80 |
| HikRobot Intelligent Manufacturing (Tonglu) Base Project | 498,800,343.68 | - | 498,800,343.68 | 20,299,490.56 | - | 20,299,490.56 |
| HikRobot Product Industrial Base Construction Project | 199,752,968.31 | - | 199,752,968.31 | 61,417,606.81 | - | 61,417,606.81 |
| Infrared Thermal Imaging Complete Machine Products Industrial Base | 166,668,535.02 | - | 166,668,535.02 | 70,932,363.98 | - | 70,932,363.98 |
| Wuhan Intelligence Industry Park Project (Phase II) | 13,854,531.11 | - | 13,854,531.11 | 5,671,116.16 | - | 5,671,116.16 |
| Xi'an Science and Technology Park Project | - | - | - | 1,189,310,650.73 | - | 1,189,310,650.73 |
| Shijiazhuang Science and Technology Park Project (Phase II) | - | - | - | 276,247,602.73 | - | 276,247,602.73 |
| Chongqing Science and Technology Park Project (Phase III) | - | - | - | 257,682,402.52 | - | 257,682,402.52 |
| Others | 1,018,414,535.48 | - | 1,018,414,535.48 | 1,797,460,041.56 | - | 1,797,460,041.56 |
| Total | 4,699,473,381.21 | - | 4,699,473,381.21 | 4,307,651,074.46 | - | 4,307,651,074.46 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
(2) Changes in significant construction in progress during the current reporting period
Unit: RMB
| Item | Budget (RMB 0,000) | Opening balance | Increase in the current reporting period | Transferred to fixed assets during the current reporting period | Closing balance | Amount invested as a proportion of budget amount (%) | Construction in Progress (%) | Source of funds |
| Wuhan Science and Technology Park Project | 189,850.00 | 415,106.61 | 1,657,233,983.77 | - | 1,657,649,090.38 | 87.31% | 87.31% | Self-financing |
| EZVIZ Intelligent Manufacturing Chongqing Base Project (Infrastructure Part) | 117,011.00 | 628,214,692.80 | 516,118,684.43 | - | 1,144,333,377.23 | 97.80% | 97.80% | Self-financing/ raised fund |
| HikRobot Intelligent Manufacturing (Tonglu) Base Project | 107,105.00 | 20,299,490.56 | 478,500,853.12 | - | 498,800,343.68 | 46.57% | 46.57% | Self-financing |
| HikRobot Product Industrial Base Construction Project | 101,346.00 | 61,417,606.81 | 138,335,361.50 | - | 199,752,968.31 | 19.71% | 19.71% | Self-financing |
| Infrared Thermal Imaging Complete Machine Products Industrial Base | 90,216.00 | 70,932,363.98 | 95,736,171.04 | - | 166,668,535.02 | 18.47% | 18.47% | Self-financing |
| Wuhan Intelligence Industry Park Project Hangzhou Innovation Industry Park (Phase II) | 140,460.00 | 5,671,116.16 | 8,183,414.95 | - | 13,854,531.11 | 0.99% | 0.99% | Self-financing |
| Xi'an Science and Technology Park Project | 152,557.00 | 1,189,310,650.73 | 271,269,582.66 | 1,460,580,233.39 | - | 95.74% | 100.00% | Self-financing |
| Shijiazhuang Science and Technology Park Project (Phase II) | 37,483.00 | 276,247,602.73 | 80,666,336.75 | 356,913,939.48 | - | 95.22% | 100.00% | Self-financing |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
17. Right-of-use Assets
Unit: RMB
| Items | Building and construction | General-purpose equipment | Special-purpose equipment | Transportation vehicles | Total |
| I. Total original carrying amount | |||||
| 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 | 390,546,590.79 | 110,068.19 | - | 10,935,529.58 | 401,592,188.56 |
| (1) New lease | 390,546,590.79 | 110,068.19 | - | 10,935,529.58 | 401,592,188.56 |
| 3. Decreased | 249,670,336.47 | 265,028.82 | 91,934,144.20 | 5,493,686.57 | 347,363,196.06 |
| (1) The lease contract expires or terminates early | 249,670,336.47 | 265,028.82 | 91,934,144.20 | 5,493,686.57 | 347,363,196.06 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (29,252,683.11) | (1,813,757.19) | - | (1,302,241.17) | (32,368,681.47) |
| 5. Closing balance | 1,034,862,846.02 | 9,462,700.30 | 25,866,583.99 | 27,957,734.14 | 1,098,149,864.45 |
| 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 | 272,174,025.72 | 10,228,679.30 | 4,524,164.49 | 8,155,978.82 | 295,082,848.33 |
| (1) Provisions | 272,174,025.72 | 10,228,679.30 | 4,524,164.49 | 8,155,978.82 | 295,082,848.33 |
| 3. Decreased | 167,186,335.82 | 265,028.82 | 91,934,144.20 | 5,493,686.57 | 264,879,195.41 |
| (1) The lease contract expires or terminates early | 167,186,335.82 | 265,028.82 | 91,934,144.20 | 5,493,686.57 | 264,879,195.41 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (15,924,975.16) | (907,058.96) | - | (587,934.90) | (17,419,969.02) |
| 5. Closing balance | 540,043,415.96 | 9,356,906.61 | 2,586,658.40 | 16,024,859.69 | 568,011,840.66 |
| III. Total book value | |||||
| 1. Closing balance on book value | 494,819,430.06 | 105,793.69 | 23,279,925.59 | 11,932,874.45 | 530,138,023.79 |
| 2. Opening balance on book value | 472,258,573.59 | 11,131,103.03 | 27,804,090.08 | 9,867,629.96 | 521,061,396.66 |
18. Intangible Assets
(1) Details of construction in progress
Unit: RMB
| Item | Land use right | Intellectual property right | Application software | Franchise | Total |
| I. Total original carrying amount | |||||
| 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 | 68,190,841.13 | 4,479,079.11 | 43,681,536.86 | 1,822,301.03 | 118,173,758.13 |
| (1) Purchase | 68,190,841.13 | 4,479,079.11 | 43,681,536.86 | 1,822,301.03 | 118,173,758.13 |
| 3. Decreased | - | - | 6,195,110.29 | - | 6,195,110.29 |
| (1)Disposal or write-off | - | - | 6,195,110.29 | - | 6,195,110.29 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | - | (83,282.97) | (1,388,667.85) | (25,608.79) | (1,497,559.61) |
| 5. Closing balance | 1,783,602,402.73 | 278,550,167.97 | 452,779,019.64 | 112,042,419.99 | 2,626,974,010.33 |
| II. Total 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 | 37,592,424.49 | 35,357,858.45 | 21,241,730.18 | 5,807,880.50 | 99,999,893.62 |
| (1)Accrual | 37,592,424.49 | 35,357,858.45 | 21,241,730.18 | 5,807,880.50 | 99,999,893.62 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Land use right | Intellectual property right | Application software | Franchise | Total |
| 3. Decreased | - | - | 5,983,159.56 | - | 5,983,159.56 |
| (1)Disposal or write-off | - | - | 5,983,159.56 | - | 5,983,159.56 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | - | (72,405.05) | (1,254,181.26) | (19,644.06) | (1,346,230.37) |
| 5. Closing balance | 207,962,228.63 | 133,776,630.29 | 384,418,987.10 | 30,494,964.83 | 756,652,810.85 |
| III. loss provision | |||||
| 1. Opening balance | - | - | - | 42,034,063.49 | 42,034,063.49 |
| 2. Closing balance | - | - | - | 42,034,063.49 | 42,034,063.49 |
| Ⅳ. Total book value | |||||
| 1. Closing balance on book value | 1,575,640,174.10 | 144,773,537.68 | 68,360,032.54 | 39,513,391.67 | 1,828,287,135.99 |
| 2. Opening balance on book value | 1,545,041,757.46 | 175,663,194.94 | 46,266,663.18 | 43,504,935.87 | 1,810,476,551.45 |
(2) At the end of the current reporting period, the land use right of the Group that has not completed the title certificate isnil.
19. Goodwill
(1) Goodwill book value
Unit: RMB
| The name of the investee or the matter that forming a goodwill | Opening balance | Increased | Decreased | Effect on conversion of financial statements denominated in foreign currencies | Closing balance |
| Wuhu Sensortech Intelligent Technology Ltd. (hereinafter referred to as the "Wuhu Sensortech") and Hebei Sensortech | 92,088,117.87 | - | - | - | 92,088,117.87 |
| SISTEMAS Y SERVICIOS DE COMUNICACI?N, S.A. DE C.V. | 81,236,394.36 | - | - | 1,212,346.54 | 82,448,740.90 |
| Henan HuaAn Baoquan Intelligence development Ltd. and its subsidiaries | 61,322,871.63 | - | - | - | 61,322,871.63 |
| Hangzhou Kuangxin Technology Ltd. | 59,060,454.06 | - | - | - | 59,060,454.06 |
| Zhejiang Zhiyuan Fire Safety Engineering Ltd. | 8,199,253.77 | - | - | - | 8,199,253.77 |
| BK EESTI AKTSIASELTS | 4,726,554.16 | - | - | (200,568.23) | 4,525,985.93 |
| SIA "BK Latvia" | 4,719,995.03 | - | - | (200,289.90) | 4,519,705.13 |
| Total | 311,353,640.88 | - | - | 811,488.41 | 312,165,129.29 |
(2) Information about the asset group or asset group combination to which the goodwill belongs
| Name | The composition and basis of the asset group or portfolio to which it belongs | Whether it is consistent with previous years |
| Wuhu Sensortech and Hebei Sensortech | The portfolio of the assets generates cash inflows independently. | Yes |
| SISTEMAS Y SERVICIOS DE COMUNICACI?N, S.A. DE C.V. | Yes | |
| Henan HuaAn Baoquan Intelligence development Ltd. and its subsidiaries | Yes | |
| Hangzhou Kuangxin Technology Ltd. | Yes | |
| Zhejiang Zhiyuan Fire Safety Engineering Ltd. | Yes | |
| BK EESTI AKTSIASELTS | Yes | |
| SIA "BK Latvia" | Yes |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
(3) Goodwill impairment provision
When the Group conducts impairment test on goodwill at the end of the reporting period, the key assumptions adoptedand their basis are as follows:
The recoverable amount of asset group portfolios containing apportioned goodwill is determined according to the presentvalue of the estimated future cash flow of the relevant asset group portfolios. The forecast period for future cash flows is5 years. The projection of future cash flows is based on management's estimate of sales revenue, cost of sales and operatingexpenses for the expected period based on past performance and expectations of market developments. The cash flowgrowth rate over 5 years is 0-2%.
During the reporting period, the Group did not find that the recoverable amount of the relevant asset group portfoliosincluding the apportioned goodwill was lower than its book value, so it is considered that there is no need to accrueimpairment loss for goodwill.
20. Long-term Deferred Expenses
Unit: RMB
| Invested unit | Opening Balance | Increased | Amortized | Other decreased amount | Difference of foreign currency translation | Closing balance |
| Improvement expenditure for leased fixed asset | 134,762,545.46 | 78,489,865.00 | 79,816,489.15 | - | (1,879,298.72) | 131,556,622.59 |
| Employee housing loan deferred interest | 42,598,988.47 | 6,476,901.90 | 17,299,277.22 | 491,476.83 | - | 31,285,136.32 |
| Total | 177,361,533.93 | 84,966,766.90 | 97,115,766.37 | 491,476.83 | (1,879,298.72) | 162,841,758.91 |
21. Deferred Tax Assets/ Deferred Tax Liabilities
(1) Deferred tax assets that are not presented on net off basis
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for impairment losses of assets | 1,069,364,511.58 | 262,572,804.77 | 1,127,769,340.63 | 278,268,231.18 |
| Provision for credit loss | 4,124,476,014.55 | 871,658,710.55 | 3,364,947,416.28 | 704,178,085.23 |
| Share-based payments | - | - | 93,168,926.31 | 16,404,683.77 |
| Provisions | 222,850,155.25 | 42,567,907.88 | 135,644,054.99 | 24,189,557.95 |
| Accrued but unsettled liabilities | 2,328,549,255.13 | 397,756,108.86 | 2,515,576,691.84 | 426,431,441.31 |
| Unrealized profit from inter-group transactions | 3,007,410,744.33 | 451,057,918.47 | 2,578,365,430.99 | 367,414,352.61 |
| Changes in the fair value of derivative financial instruments | 1,874,341.64 | 468,585.41 | 38,079,755.04 | 9,519,938.76 |
| Deferred income | 868,928,757.73 | 138,068,886.25 | 940,537,242.40 | 127,045,105.84 |
| Changes in fair value of other non-current financial assets | 64,034,397.24 | 9,605,159.59 | 32,396,750.76 | 4,859,512.61 |
| Difference in depreciation of fixed assets and difference in amortization of intangible assets | 186,042,413.56 | 30,689,292.90 | 199,086,488.75 | 32,012,352.33 |
| Tax deductible losses | 1,104,881,983.80 | 174,500,339.85 | 1,205,938,357.65 | 184,742,525.11 |
| Lease liabilities | 542,520,611.31 | 79,492,726.88 | 517,071,628.81 | 81,703,353.99 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Others | 151,226,802.47 | 47,687,727.75 | 79,735,281.12 | 23,121,972.50 |
| Total | 13,672,159,988.59 | 2,506,126,169.16 | 12,828,317,365.57 | 2,279,891,113.19 |
(2) Deferred tax liabilities that are not presented on net off basis
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Difference in depreciation of fixed assets and difference in amortization of intangible assets | 1,404,309,520.48 | 245,623,102.73 | 1,446,155,125.82 | 257,662,359.02 |
| Long term investment –partnership accounted by the equity method | 268,063,887.91 | 40,209,583.19 | 191,356,253.14 | 28,703,437.97 |
| Changes in the fair value of derivative financial instruments | 26,775,923.93 | 6,693,980.98 | 37,380.00 | 9,345.00 |
| Changes in the fair value of other non-current financial assets | 19,420,700.00 | 4,855,175.00 | 19,420,700.00 | 4,855,175.00 |
| Right-of-use assets | 530,138,023.79 | 77,298,681.61 | 521,061,396.66 | 80,828,988.24 |
| Valuation and appreciation of assets of business combinations not under common control | 139,474,285.68 | 34,868,571.42 | 174,342,857.16 | 43,585,714.29 |
| Others | 11,688,743.69 | 3,097,280.69 | 47,107,004.45 | 15,740,059.70 |
| Total | 2,399,871,085.48 | 412,646,375.62 | 2,399,480,717.23 | 431,385,079.22 |
(3) Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Offset amount at the end of the reporting period | Deferred tax assets or liabilities at the net amount after offset | Offset amount at the beginning of the reporting period | Deferred tax assets or liabilities at the net amount after offset | |
| Deferred tax assets | 299,935,012.10 | 2,206,191,157.06 | 301,518,101.04 | 1,978,373,012.15 |
| Deferred tax liabilities | 299,935,012.10 | 112,711,363.52 | 301,518,101.04 | 129,866,978.18 |
(4) Details of unrecognized deferred tax assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 348,425,118.87 | 342,665,221.23 |
| Deductible loss | 4,872,004,375.75 | 3,281,013,576.44 |
| Total | 5,220,429,494.62 | 3,623,678,797.67 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
(5) Deductible losses for unrecognized deferred tax assets will expire in the following years
Unit: RMB
| Year | Closing balance | Opening balance |
| 2024 | - | 15,999,871.35 |
| 2025 | 5,064,844.90 | 6,519,258.67 |
| 2026 | 21,423,245.81 | 24,119,133.46 |
| 2027 | 33,535,700.07 | 38,699,273.23 |
| 2028 | 305,106,077.53 | 382,611,825.49 |
| 2029 and beyond | 4,506,874,507.44 | 2,813,064,214.24 |
| Total | 4,872,004,375.75 | 3,281,013,576.44 |
22. Other Non-current Assets
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision | Book value | Carrying amount | Provision | Book value | |
| Contract assets | 2,081,248,707.05 | 17,493,381.00 | 2,063,755,326.05 | 1,893,506,565.03 | 15,397,380.73 | 1,878,109,184.30 |
| Prepayments for real estate | 135,783,923.33 | - | 135,783,923.33 | 962,718,172.95 | - | 962,718,172.95 |
| Prepayments for acquisition of land | 89,318,973.58 | - | 89,318,973.58 | 1,049,973.59 | - | 1,049,973.59 |
| Prepayments for equipment | 61,129,209.00 | - | 61,129,209.00 | 68,421,659.50 | - | 68,421,659.50 |
| Prepayments for infrastructure | 3,122,181.73 | - | 3,122,181.73 | 8,032,635.16 | - | 8,032,635.16 |
| Others | 51,370.95 | - | 51,370.95 | 2,017,718.89 | - | 2,017,718.89 |
| Total | 2,370,654,365.64 | 17,493,381.00 | 2,353,160,984.64 | 2,935,746,725.12 | 15,397,380.73 | 2,920,349,344.39 |
23. Assets with Restriction in Ownership or Use Rights
Unit: RMB
| Item | Book value at the end of the current reporting period | Cause of restriction |
| Cash and bank balances | 218,445,956.74 | Various guarantee deposits and other restricted funds |
| Notes receivable | 1,274,931,981.36 | Endorsed to the supplier, or discounted to the bank |
| Accounts receivable | 352,621,694.25 | Pledged for long-term borrowings |
| Contract assets | 128,422,846.09 | Pledged for long-term borrowings |
| Fixed assets | 54,026,704.89 | Fixed assets leased out under operating leases |
| Intangible assets | 12,166,524.79 | Pledged for long-term borrowings |
| Other non-current assets | 1,276,495,354.49 | Pledge for long-term borrowings |
| Total | 3,317,111,062.61 |
Unit: RMB
| Item | Book value at the beginning of the current reporting period | Cause of restriction |
| Cash and bank balances | 210,191,306.76 | Various guarantee deposits and other restricted funds |
| Notes receivable | 1,172,749,062.48 | Endorsed to the supplier, discounted to the bank, and 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 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Book value at the beginning of the current reporting period | Cause of restriction |
| 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 debts |
| Total | 3,493,095,296.20 |
24. Short-term Borrowings
(1) Categories of short-term borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Credit loan | 997,485,670.23 | 2,084,385,782.09 |
| Discounted but not expired notes (Note (V) 3) | 34,410,142.39 | 34,566,243.97 |
| Total | 1,031,895,812.62 | 2,118,952,026.06 |
(2) As of December 31, 2024, the Group did not have any overdue short-term loans that were failed to repay.
25. Derivative Financial Liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Forward foreign exchange contracts | 1,874,341.64 | 38,079,755.04 |
| total | 1,874,341.64 | 38,079,755.04 |
As of December 31, 2024, derivative financial liabilities are forward foreign exchange contracts, which are not designatedas hedging instruments, measured at fair value and their changes are recognized in profit and loss for the current period.
26. Notes Payable
List of accounts payable
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 1,197,128,746.56 | 1,163,687,279.58 |
| Total | 1,197,128,746.56 | 1,163,687,279.58 |
As of December 31, 2024, the Group did not have any unpaid matured notes payable.
27. Accounts Payable
(1) List of accounts payable
Unit: RMB
| Item | Closing balance | Opening balance |
| Payments for goods | 19,158,300,660.13 | 18,669,058,955.74 |
| Payables on project equipment | 1,027,002,447.56 | 494,426,932.35 |
| Total | 20,185,303,107.69 | 19,163,485,888.09 |
(2) As of December 31, 2024, the Group did not have any significant accounts payable with aging above one year.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
28. Contract Liabilities
(1) List of contract liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Advanced receipts from product sales | 2,541,743,559.81 | 2,411,948,613.09 |
| Advanced receipts from construction settlement payment | 342,197,373.57 | 267,231,078.24 |
| Advanced receipts from other services payment | 544,032,069.70 | 328,951,851.34 |
| Subtotal | 3,427,973,003.08 | 3,008,131,542.67 |
| Less: Contract liabilities included in other non-current liabilities (Note (V) 38) | 74,029,948.84 | 30,140,767.27 |
| Total | 3,353,943,054.24 | 2,977,990,775.40 |
(2) As of the end of the 2024, the Group has no significant contract liabilities with an aging period exceeding one year.
(3) 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 toresellers 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 thecustomer for the construction project according to the contract according to the contract provisions in excess of thecumulative completed performance obligations, and the revenue will be recognized according to the performance progressduring the contract period.
Advanced receipts from other services payment are the cloud service fees paid in advance by some customers and the partof the contract price received or receivable from customers for operation and maintenance according to the contractprovisions that exceeds the cumulative completed performance obligations, and the revenue will be recognized accordingto the performance progress during the service period.
(4) The amount of RMB 2,977,990,775.40 in the contract liabilities at the beginning of the year has been recognized asrevenue during this year. It is expected that RMB 30,140,767.27 will be recognized as revenue in 2025 and beyond. Theyear-end contract liabilities are expected to recognize RMB 3,353,943,054.24 as revenue within the next year and RMB74,029,948.84 in 2026 and beyond.
29. Payroll Payable
(1) Details of payroll payable
Unit: RMB
| Item | Opening balance (restated) | Increase in the current reporting period | Decrease in the current reporting period | Closing balance |
| 1. Short-term remuneration | 6,031,274,769.74 | 18,261,307,521.20 | 18,737,146,923.04 | 5,555,435,367.90 |
| 2. Termination benefits – defined contribution scheme | 89,196,511.04 | 1,470,873,139.52 | 1,449,089,184.36 | 110,980,466.20 |
| Total | 6,120,471,280.78 | 19,732,180,660.72 | 20,186,236,107.40 | 5,666,415,834.10 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
(2) List of Short-term remuneration
Unit: RMB
| Item | Opening balance (restated) | Increase in the current reporting period | Decrease in the current reporting period | Closing balance |
| 1. Wages or salaries, bonuses, allowances and subsidies | 5,563,702,232.42 | 15,194,989,269.67 | 15,805,423,620.56 | 4,953,267,881.53 |
| 2. Staff welfare | 612,991.96 | 624,569,199.47 | 594,563,244.14 | 30,618,947.29 |
| 3. Social insurance contributions | 38,766,515.01 | 756,566,713.74 | 748,481,673.20 | 46,851,555.55 |
| Including: Medical insurance | 36,814,275.30 | 717,254,802.38 | 710,325,452.18 | 43,743,625.50 |
| Injury insurance | 1,744,358.44 | 35,358,160.08 | 34,063,784.28 | 3,038,734.24 |
| Maternity insurance | 207,881.27 | 3,953,751.28 | 4,092,436.74 | 69,195.81 |
| 4. Housing funds | - | 1,408,489,560.73 | 1,404,655,026.62 | 3,834,534.11 |
| 5. Labor union and education fund | 428,193,030.35 | 276,692,777.59 | 184,023,358.52 | 520,862,449.42 |
| Subtotal | 6,031,274,769.74 | 18,261,307,521.20 | 18,737,146,923.04 | 5,555,435,367.90 |
(3) List of defined contribution plan
Unit: RMB
| Item | Opening balance (restated) | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Basic pension insurance | 87,283,204.70 | 1,416,767,806.77 | 1,397,068,691.06 | 106,982,320.41 |
| 2. Unemployment insurance | 1,913,306.34 | 54,105,332.75 | 52,020,493.30 | 3,998,145.79 |
| Subtotal | 89,196,511.04 | 1,470,873,139.52 | 1,449,089,184.36 | 110,980,466.20 |
Note: The Group participates in pension insurance and unemployment insurance plans established by government agenciesin accordance with regulations. According to these plans, the Group pays monthly fees to these plans in proportion to thepayment base. The Group has no other material obligation for the payment of pension benefits beyond the contributionsdescribed above, and corresponding expenses were booked into current profits and losses or corresponding assets.
In 2024, the Group shall pay RMB1,416,767,806.77 and RMB54,105,332.75 to the pension insurance plan andunemployment insurance plan respectively (2023: RMB1,148,680,658.64 and RMB43,814,265.77). As of December 31,2024, the Group had fees payables of RMB106,982,320.41 and RMB3,998,145.79 (December 31, 2023:
RMB87,283,204.70 and RMB1,913,306.34), which were due but not paid during the reporting period for pension andunemployment insurance plans.
30. Taxes Payable
Unit: RMB
| Item | Closing balance | Opening balance (restated) |
| Corporate income tax | 913,040,846.83 | 990,235,254.45 |
| Value-added tax | 404,940,647.59 | 476,152,883.91 |
| City construction and maintenance tax | 26,303,950.83 | 28,555,595.11 |
| Education surcharges | 11,664,982.93 | 11,969,432.94 |
| Local education surcharges | 8,323,731.96 | 8,314,407.76 |
| Others | 171,661,935.88 | 107,322,613.69 |
| Total | 1,535,936,096.02 | 1,622,550,187.86 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
31. Other Payables
31.1 Categories
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividend payables | 186,793.11 | 253,957,413.29 |
| Other payables | 3,528,172,251.37 | 3,657,655,427.77 |
| Total | 3,528,359,044.48 | 3,911,612,841.06 |
31.2 Dividend payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividends of incentive restricted shares | - | 155,844,168.00 |
| Dividends payable to minority shareholders | 186,793.11 | 98,113,245.29 |
| Total | 186,793.11 | 253,957,413.29 |
31.3 Other payables
(1) List of other payables according to the nature of the payment
Unit: RMB
| Item | Closing balance | Opening balance |
| Unexpired commercial acceptance bills that were endorsed (Note (V) 3) | 1,240,521,838.97 | 1,123,427,383.57 |
| Accrued expenses | 1,527,405,326.55 | 1,682,496,005.40 |
| Guarantee and deposit fees | 477,797,205.49 | 445,461,469.36 |
| Collection and payment on behalf | 209,269,289.66 | 294,323,679.79 |
| Other expense payable | 73,178,590.70 | 111,946,889.65 |
| Total | 3,528,172,251.37 | 3,657,655,427.77 |
(2) As of December 31, 2024, the Group did not have any significant other payables aging over one year.
32. Non-current Liabilities Due within One Year
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year (Note (V) 34) | 586,589,318.45 | 5,627,525,836.16 |
| Lease liabilities due within one year (Note (V) 35) | 180,403,223.06 | 184,722,447.43 |
| Long-term payables due within one year | 38,147.40 | 2,411,931.37 |
| Total | 767,030,688.91 | 5,814,660,214.96 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
33. Other Current Liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Subscription payment of restricted shares | - | 1,095,194,890.62 |
| Output VAT to be transferred | 377,117,275.65 | 386,027,153.57 |
| Total | 377,117,275.65 | 1,481,222,044.19 |
34. Long-term Borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Pledged loan (Note 1) | 1,033,059,164.49 | 1,259,495,605.29 |
| Mortgage loan | - | 320,694,296.02 |
| Credit loan (Note 2) | 4,672,715,153.96 | 12,959,458,895.86 |
| Other borrowing (Note 3) | - | 28,000,000.00 |
| Less: Long-term loans due within one year (Note (V) 32) | 586,589,318.45 | 5,627,525,836.16 |
| Total | 5,119,185,000.00 | 8,940,122,961.01 |
Note 1: As of December 31, 2024, the pledged loan was mainly obtained by the Group with all the rights and benefitspledged under relevant PPP Projects. The maturity period is from June 20, 2028 to March 26, 2040, the above annualinterest rate of the loan is variable interest rate, ranging from 3.61% to 4.25%.
Note 2: As of December 31, 2024, the maturity period of credit loan is from July 22, 2025 to Feburary 8, 2028, and theannual interest rate ranges from 1.75% to 3.40%
Note 3: During 2016, the Group and CDB Development Fund Ltd. (CDBDF) jointly injected capital into HangzhouHikvision Electronics Co., Ltd. ("Hangzhou Electronics"), a subsidiary of the Group. Pursuant to the capital injectionagreement, CDBDF would not participate in senior management personnel such as directors, and it would either take partin decision-making or make significant influence on Hangzhou Electronics. The Group shall pay a 1.2% annualized returnto CDBDF through dividends or interest payments, and the Group is required to redeem its equity holdings from CDBDFin installments each year from 2021 to 2024. Therefore, the capital injection by CDBDF is treated as a long-term loan. Asthe end of the reporting period, the Group has cumulatively redeemed the equity of Hangzhou Electronics held by CEBDFfor a total amount of RMB 190 million, and the balance of the loan is zero (December 31, 2023: RMB 28 million).
35. Lease Liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Lease liabilities | 555,835,972.74 | 528,728,313.56 |
| Less: Lease liabilities due within one year (Note (V) 32) | 180,403,223.06 | 184,722,447.43 |
| Total | 375,432,749.68 | 344,005,866.13 |
The Group's lease liabilities are analysed according to the maturity period of the remaining undiscounted contractualobligations as follows:
Unit: RMB
| Item | Closing balance | Opening balance |
| Within 1 year | 191,378,600.65 | 197,066,597.67 |
| 1- 5 years | 375,285,265.86 | 324,095,420.30 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Closing balance | Opening balance |
| Over 5 years | 29,402,566.24 | 41,329,449.20 |
| Total | 596,066,432.75 | 562,491,467.17 |
36. Provisions
Unit: RMB
| Item | Closing balance | Opening balance |
| Product quality warranty | 283,376,593.23 | 197,386,826.08 |
| Return payment payable | 21,873,456.48 | 15,697,212.23 |
| Total | 305,250,049.71 | 213,084,038.31 |
37. Deferred Income
Unit: RMB
| Item | Opening balance | Increase in current reporting period | Decrease in current reporting period | Closing balance |
| Government Subsidies (Note (VIII) 1) | 966,259,592.34 | 291,742,286.11 | 383,489,804.92 | 874,512,073.53 |
| Total | 966,259,592.34 | 291,742,286.11 | 383,489,804.92 | 874,512,073.53 |
38. Other Non-current Liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Subscription for restricted stocks | - | 1,642,792,335.93 |
| Contract liabilities (Note (V), 28) | 74,029,948.84 | 30,140,767.27 |
| Total | 74,029,948.84 | 1,672,933,103.20 |
39. Share Capital
Unit: RMB
| Opening balance | Changes for the current reporting period | Closing balance | |||||
| New issue of shares | Bonus issue | Restricted repurchased shares | Others | Subtotal | |||
| Total shares | 9,330,600,931.00 | - | - | (97,402,605.00)) | - | (97,402,605.00) | 9,233,198,326.00 |
Note: According to the Proposal on Terminating the Implementation of the 2021 Restricted Stock Plan and Repurchasingand Canceling Relevant Restricted Shares, that is reviewed and approved by the 20
th
meeting of the 5
th
session of theBoard of Directors, the 18
th
meeting of the 5
thsession of the Board of Supervisors and 2023 Annual General Meeting, it isagreed the company terminate the implementation of the 2021 Restricted Stock Plan and repurchase and cancel allrestricted stocks granted but not yet unlocked. In 2024, the Company reduced its share capital by RMB97,402,605.00 andits capital reserve by RMB2,796,377,189.55. The Company completed the deregistration on August 15, 2024.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
40. Capital Reserves
Unit: RMB
| Item | Opening balance | Increase in the current reporting period (Note 1) | Decrease in the current reporting period (Note 2) | Closing balance |
| Share capital premium | 6,989,138,129.40 | 1,383,877,950.50 | 2,812,856,534.90 | 5,560,159,545.00 |
| Other capital reserves | 875,765,634.12 | 1,127,958,356.12 | 1,382,239,270.18 | 621,484,720.06 |
| Total | 7,864,903,763.52 | 2,511,836,306.62 | 4,195,095,805.08 | 6,181,644,265.06 |
Note 1: The increase of RMB1,382,239,270.18 in the share capital premium in the current period was due to the transferof other capital reserves to share capital premiums due to the exercise of equity-settled share-based payments.
During the current period, the Group received an international operation subsidy of RMB 2,007,056.47 from its actualcontrolling party, China Electronics Technology Group Corporation (hereinafter referred to as "CETC"). This increasedthe Group's share capital premium by RMB 1,517,235.64 and minority interests by RMB 489,820.83. Please refer to Note(XI), 5(4) for details.
The increase in share capital premium in the current reporting period of RMB121, 444.68 is due to the Group's acquisitionof the original minority shareholders' equity in its subsidiaries, Hua'an Security Electronics, Hua'an Security Intelligence,and Hua'an Security Services, resulting in the Group's ownership increasing to 100%. Please refer to Note (VII), 2(1).
The increase in other capital reserves in the current reporting period of RMB798,833,409.72 is due to the equity-settledshare-based payment; RMB329,124,946.40 was due to changes in other equity of the investees in the long-term equityinvestments accounted for by the equity method.
Note 2: The decrease of RMB2,796,377,189.55 in share capital premium in the current reporting period was due to therepurchase and cancellation of 97,402,605 restricted shares by the Company. Please refer to Note (V) 39.
The decrease of RMB 16,479,345.35 in the share premium in the current reporting period was due to the portion of equity-settled share-based payments shared by the non-controlling interests.
41. Treasury Shares
Unit: RMB
| Item | Opening balance | Increase in the current reporting period | Decrease in the current reporting period | Closing balance |
| Restricted shares incentive scheme | 2,737,987,226.55 | - | 2,737,987,226.55 | - |
| Outstanding shares | - | 310,044,296.12 | - | 310,044,296.12 |
| Total | 2,737,987,226.55 | 310,044,296.12 | 2,737,987,226.55 | 310,044,296.12 |
Note: The increase of 310,044,296.12 shares in treasury shares during the current reporting period, is due to the repurchaseof 10,000,219 shares through centralized bidding using its own funds, and the repurchased shares are held in the specialsecurities account for share repurchase.
The decrease in treasury shares includes the repurchase and cancellation of 97,402,605 restricted shares, reducing treasuryshares by RMB 2,737,987,226.55. For more details, see Note (V), 39.
.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
42. Other Comprehensive Income
Unit: RMB
| Item | Opening balance | Amounts occurred in the current reporting period | Closing balance | ||||
| The before-income-tax amount incurred during the current reporting period | Less: transfer to current period P/L from previous other comprehensive income | Less: income tax expense | Attributable to the parent company (after tax) | Attributable to minority shareholders (after tax) | |||
| Other incomes that may be reclassified subsequently to profit or loss | 44,667,516.16 | (285,156,327.33) | - | - | (156,178,002.37) | (128,978,324.96) | (111,510,486.21) |
| Including: Effect on conversion of financial statements denominated in foreign currencies | 44,667,516.16 | (285,156,327.33) | - | - | (156,178,002.37) | (128,978,324.96) | (111,510,486.21) |
| Other comprehensive income | 44,667,516.16 | (285,156,327.33) | - | - | (156,178,002.37) | (128,978,324.96) | (111,510,486.21) |
43. Surplus Reserves
Unit: RMB
| Item | Opening balance | Increase in the current reporting period | Decrease in the current reporting period | Closing balance |
| Statutory surplus reserves | 4,715,460,312.00 | - | - | 4,715,460,312.00 |
| Total | 4,715,460,312.00 | - | - | 4,715,460,312.00 |
Note: According to the Company Law of the People's Republic of China and the Articles of Association of the Company, The Company shallwithdraw the statutory surplus reserve fund at 10% of the annual net profit of the parent company, and when the accumulated amount of thestatutory surplus reserve fund reaches more than 50% of the registered capital, it may not be withdrawn. The statutory surplus reserve can beused to make up for losses or increase the share capital after approval. The accumulated amount of the Company's statutory surplus reserve isRMB 4,715,460,312.00, which exceeds 50% of the Company's share capital.
44. Retained Earnings
Unit: RMB
| Item | 2024 | 2023 (Restated) |
| Retained Earnings at the close of the prior reporting period before adjustments | 57,136,620,244.01 | 49,460,240,986.49 |
| Adjustments on retained earnings at the open of the current reporting period | - | 182,975.56 |
| Retained Earnings at the close of current he reporting period after adjustments | 57,136,620,244.01 | 49,460,423,962.05 |
| Add: Net profit attributable to the parent company for the reporting period | 11,977,327,023.54 | 14,107,726,276.26 |
| Less: withdraws on the statutory surplus reserve | - | - |
| Dividends payable on common shares (Note 1) | 8,154,034,325.40 | 6,431,425,077.70 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | 2024 | 2023 (Restated) |
| Others (Note 2) | 104,916.60 | |
| Retained earnings at the end of the current reporting period | 60,959,912,942.15 | 57,136,620,244.01 |
Note 1: According to the resolution of 2023 Annual General Meeting dated on May 10, 2024, based upon the total capital share of theCompany on the equity distribution date, for each 10 ordinary shares, the Company distributed cash dividends of RMB 9 (tax inclusive), therest of retained earnings were all carried forward for future distributions.
Note 2: The subsidiary company, EZVIZ Network, of the Group, signed a management entrustment agreement with the parent company,CETHIK Group Ltd. (hereinafter referred to as "CETHIK") for Furui Technology this year. This transaction constitutes a businesscombination under common control. For details, see Note (VI), 1. According to the management entrustment agreement, the net profitgenerated by Furui Technology in the previous year actually belongs to CETHIK.
45. Revenue / cost of sales and services
(1) Revenue and cost of sales and services
Unit: RMB
| Item | 2024 | 2023 (Restated) | ||
| Revenue | Cost | Revenue | Cost | |
| Major business | 91,848,150,416.12 | 51,450,813,344.31 | 88,735,530,906.73 | 49,331,525,439.10 |
| Other business | 647,374,702.18 | 503,044,567.90 | 605,646,703.67 | 401,243,108.47 |
| Total | 92,495,525,118.30 | 51,953,857,912.21 | 89,341,177,610.40 | 49,732,768,547.57 |
(2) Revenue (by product or business type)
Unit: RMB
| Item | 2024 | 2023 (Restated) |
| Products and services for main business (Note) | 67,963,258,099.83 | 68,781,078,704.92 |
| Constructions of main business | 2,048,116,006.90 | 2,007,188,913.81 |
| Innovative businesses | 22,484,151,011.57 | 18,552,909,991.67 |
| Including: Robotic business | 5,928,825,303.14 | 4,940,495,688.57 |
| Smart home business | 5,190,222,359.58 | 4,686,023,001.37 |
| Thermal imaging business | 4,191,132,575.45 | 3,284,778,727.13 |
| Auto electronics business | 3,919,493,044.46 | 2,706,680,020.16 |
| Storage business | 2,314,389,221.29 | 1,931,387,706.41 |
| Other innovative businesses | 940,088,507.65 | 1,003,544,848.03 |
| Total | 92,495,525,118.30 | 89,341,177,610.40 |
Note: Main business refers to the business parts other than the innovative businesses.
(3) Major business (by business type)
Unit: RMB
| Item | 2024 | |
| Revenue | Cost | |
| Product sales | 87,408,184,677.06 | 48,876,816,169.66 |
| Construction contract | 2,048,116,006.90 | 1,624,213,884.66 |
| Provide services | 2,391,849,732.16 | 949,783,289.99 |
| Total | 91,848,150,416.12 | 51,450,813,344.31 |
(4) Major business (by the time of revenue recognition)
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Unit: RMB
| Item | 2024 | |
| Revenue | Cost | |
| Recognized at a point in time | 87,408,184,677.06 | 48,876,816,169.66 |
| Recognized over time | 4,439,965,739.06 | 2,573,997,174.65 |
| Total | 91,848,150,416.12 | 51,450,813,344.31 |
46. Business Taxes and Surcharges
Unit: RMB
47. Selling Expenses
Unit: RMB
| Item | 2024 | 2023 |
| City construction and maintenance tax | 289,723,169.24 | 314,257,068.06 |
| Education surcharges | 127,072,888.33 | 136,548,924.16 |
| Real estate tax | 93,318,578.98 | 68,387,163.53 |
| Local education surcharges | 84,715,259.14 | 91,032,619.45 |
| Stamp duty | 78,856,150.38 | 83,472,191.23 |
| Tax on use of land | 14,983,870.80 | 7,973,676.69 |
| Vehicle and vessel tax | 133,510.29 | 142,212.47 |
| Others | 3,482,500.20 | 2,827,523.10 |
| Total | 692,285,927.36 | 704,641,378.69 |
Item
| Item | 2024 | 2023 (Restated) |
| Payroll | 7,332,316,817.36 | 6,810,618,419.65 |
| Marketing Expenses | 1,925,239,948.86 | 1,451,289,954.94 |
| Travelling expenses | 629,945,028.62 | 535,865,115.05 |
| Shipping, transportation, and vehicle expense | 442,927,059.62 | 399,732,317.41 |
| Office expenses | 360,077,188.10 | 292,733,211.13 |
| Depreciation and amortization expenses | 323,848,822.04 | 278,842,930.03 |
| Business hospitality expenses | 306,984,860.46 | 299,654,749.49 |
| Professional Intermediary expenses | 293,901,523.38 | 204,146,036.74 |
| Rental expenses | 55,316,900.89 | 97,873,220.30 |
| Others | 380,659,953.29 | 376,032,121.27 |
| Total | 12,051,218,102.62 | 10,746,788,076.01 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
48. Administrative Expenses
49. R&D Expenses
Unit: RMB
50. Financial Expenses
Unit: RMB
| Item | 2024 | 2023 (Restated) |
| Payroll | 1,896,569,807.90 | 1,695,038,546.31 |
| Depreciation and amortization expenses | 435,391,420.72 | 331,435,183.33 |
| Office expenses | 308,564,147.69 | 300,578,446.48 |
| Professional Intermediary expenses | 97,689,845.38 | 109,043,766.60 |
| Shipping, transportation, car expense | 63,738,885.26 | 62,205,098.49 |
| Travelling expenses | 57,416,967.08 | 48,698,135.31 |
| Business hospitality expenses | 14,512,396.60 | 12,101,649.04 |
| Others | 222,056,173.29 | 211,680,377.89 |
| Total | 3,095,939,643.92 | 2,770,781,203.45 |
Item
| Item | 2024 | 2023 |
| Payroll | 9,199,042,429.59 | 9,106,625,103.96 |
| Consumables and service fees | 1,080,897,304.01 | 827,535,055.34 |
| Depreciation and amortization expenses | 420,528,831.63 | 396,521,961.36 |
| Intermediate testing fees | 378,195,302.14 | 279,447,277.60 |
| Office expenses | 316,503,443.21 | 294,212,819.79 |
| Travelling expenses | 197,483,910.19 | 186,837,407.75 |
| New product design fees | 172,623,502.86 | 197,702,784.59 |
| Others | 98,738,668.64 | 104,065,994.08 |
| Total | 11,864,013,392.27 | 11,392,948,404.47 |
Item
| Item | 2024 | 2023 (restated) |
| Interest expenses | 355,616,402.34 | 443,682,056.79 |
| Interest expense on lease liabilities | 41,603,299.47 | 20,277,211.42 |
| Less: Interest income | 878,035,430.32 | 1,067,169,946.60 |
| Foreign exchange losses (gains) | 291,278,463.86 | (201,813,404.51) |
| Less: Capitalized specific loan interests and foreign exchange differences on specific loan | 5,815,514.68 | 6,354,148.62 |
| Others | 80,535,286.17 | 61,577,947.73 |
| Total | (114,817,493.16) | (749,800,283.79) |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
51. Other Income
Unit: RMB
52. Investment Income
Unit: RMB
| Item | 2024 | 2023 |
| Long-term equity investment gains (losses) based on the equity method | 30,668,990.87 | (29,966,477.85) |
| Investment income from other non-current financial assets during the holding period | 61,241,171.99 | 65,923,840.33 |
| Investment income (losses) from disposal of derivative financial assets | (5,998,577.35) | (90,195,333.19) |
| Income (losses) from multi-transactions business combination of enterprises not under the same control | - | 116,433,610.45 |
| Income from Debt Restructuring | 101,109,433.26 | - |
| Others | - | 1,106,664.51 |
| Total | 187,021,018.77 | 63,302,304.25 |
Note: During the reporting year, the Group and its debtor restructured accounts receivable with book value of RMB 49,360,966.74 by adjustingthe principal amount and changing the repayment terms. This reduced the original value of accounts receivable by RMB 180,617,041.15 anddecreased the allowance for bad debts by RMB 131,256,074.41. The debt forgiveness amounted to RMB 30,146,641.15. The total gainrecognized due to the debt restructuring this year was RMB 101,109,433.26.
53. Gains (Losses) from Changes in Fair Values
Unit: RMB
54. Credit Impairment Gains (Losses)
Unit: RMB
| Item | 2024 | 2023 (restated) |
| VAT refund | 1,874,624,340.02 | 1,905,727,477.36 |
| Special subsidies | 688,670,655.22 | 594,438,518.34 |
| Others | 90,387,815.63 | 59,357,247.29 |
| Total | 2,653,682,810.87 | 2,559,523,242.99 |
Sources of gains (losses) from changes in fair values
| Sources of gains (losses) from changes in fair values | 2024 | 2023 |
| Gains (losses) from changes in fair value of derivative financial assets | 26,738,543.93 | (12,770,058.36) |
| Gains (losses) from changes in fair value of other non-current financial assets | (15,184,854.90) | 5,229,385.72 |
| Gains (losses) on the changes in fair value of derivative financial liabilities | 36,205,413.40 | 30,219,930.53 |
| Total | 47,759,102.43 | 22,679,257.89 |
Item
| Item | 2024 | 2023 |
| Credit impairment gains (losses) on notes receivable | (562,417.45) | (2,492,390.65) |
| Credit impairment gains (losses) on accounts receivable | (928,758,599.26) | (743,585,106.95) |
| Credit impairment reverses gains (losses) on other receivables | (1,816,609.21) | (1,453,975.50) |
| Credit impairment gains (losses) on long-term receivables | (137,651,879.82) | (132,391,300.15) |
| Total | (1,068,789,505.74) | (879,922,773.25) |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
55. Impairment Gains (Losses) of Assets
Unit: RMB
| Item | 2024 | 2023 |
| Gains (losses) on inventory depreciation | (444,233,922.43) | (467,275,356.52) |
| Gains (losses) on impairment of contract assets (including the portion recognized in other non-current assets) | (1,680,465.16) | 3,893,081.40 |
| Total | (445,914,387.59) | (463,382,275.12) |
56. Non-operating Income
Unit: RMB
| Item | 2024 | 2023 | The amount booked into current period non-recurring profits and losses |
| Fines and confiscations | 45,474,188.29 | 71,548,457.58 | 45,474,188.29 |
| Government subsidies | 829,499.67 | 630,722.79 | 829,499.67 |
| Others | 17,433,894.39 | 15,393,939.67 | 17,433,894.39 |
| Total | 63,737,582.35 | 87,573,120.04 | 63,737,582.35 |
57. Non-operating Expenses
Unit: RMB
58. Income Tax Expenses
(1) Details of income tax expenses
Unit: RMB
| Item | 2024 | 2023 (Restated) |
| Income tax for the current reporting period | 1,797,231,764.17 | 1,839,138,688.39 |
| Deferred income tax expenses | (262,111,502.20) | (535,918,231.15) |
| Differences in filing and payment of income tax in previous reporting years | (332,648,682.48) | (359,906,588.34) |
| Total | 1,202,471,579.49 | 943,313,868.90 |
(2) Reconciliation of income tax expenses to the accounting profit
| Item | 2024 | 2023 | The amount booked into current period non-recurring profits and losses |
| Local water conservancy construction fund | 2,862,778.24 | 2,682,863.47 | - |
| Donation expenses | 2,796,454.31 | 2,078,792.44 | 2,796,454.31 |
| Losses on disposal of non-current assets | 322,794.37 | 4,832,681.02 | 322,794.37 |
| Others | 26,508,611.94 | 18,338,679.98 | 26,508,611.94 |
| Total | 32,490,638.86 | 27,933,016.91 | 29,627,860.62 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Unit: RMB
59. Notes to Consolidated Cash Flow Statement Items
(1) Cash flow from operating activities
Other cash receipts relating to operating activities
Unit: RMB
| Item | 2024 | 2023 (Restated) |
| Interest income | 750,781,420.97 | 938,159,935.34 |
| Government subsidies | 597,752,636.08 | 598,933,415.73 |
| Withdrawal of restricted currency funds | 234,681,725.23 | 115,110,998.04 |
| Others | 177,629,415.85 | 154,289,838.61 |
| Total | 1,760,845,198.13 | 1,806,494,187.72 |
Other cash payments relating to operating activities
Unit: RMB
| Item | 2024 | 2023 (Restated) |
| Office expenses and business expenses | 2,022,766,137.12 | 1,714,220,908.73 |
| R&D expense | 1,631,755,731.65 | 1,310,339,918.88 |
| Advertising and selling service | 1,295,809,508.16 | 1,100,850,473.21 |
| Travelling expense | 884,845,905.89 | 771,400,658.11 |
| Outsourcing service fees, fees for hiring intermediaries, etc. | 514,516,193.91 | 457,158,581.72 |
| Shipping and transportation expense | 506,665,944.88 | 461,937,415.90 |
| Deposits to restricted monetary funds | 242,936,375.21 | 123,808,399.08 |
| Rental expense | 59,220,236.26 | 118,308,723.14 |
| Others | 370,710,380.02 | 229,907,809.53 |
| Total | 7,529,226,413.10 | 6,287,932,888.30 |
(2) Cash flow from investing activities
Cash receipts relating to important investing activities
| Item | 2024 | 2023 (Restated) |
| Total profit | 14,343,493,640.00 | 16,099,215,632.11 |
| Income tax expenses calculated at applicable tax rates of 15% | 2,151,524,046.00 | 2,414,882,344.80 |
| Impact of non-deductible costs, expenses and losses | 191,981,349.17 | 34,413,929.90 |
| Tax effect of non-taxable income | (1,504,602.82) | (98,174,019.29) |
| Impact of deductible temporary differences or deductible losses for which no deferred income tax assets is recognized for the current period | 294,369,183.13 | 172,197,460.01 |
| Impact of using deductible temporary differences or deductible losses for which no deferred income tax assets was recognized for the prior periods | (33,438,275.11) | (117,780,210.38) |
| Differences of income tax annual filing | (332,648,682.48) | (359,906,588.34) |
| Impact by different tax rates applicable to different subsidiaries | 273,802,509.46 | 184,279,068.80 |
| Impact of additional deduction of R&D expenses | (1,327,003,879.64) | (1,272,836,446.36) |
| Others | (14,610,068.22) | (13,761,670.24) |
| Income tax expenses | 1,202,471,579.49 | 943,313,868.90 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Unit: RMB
| Item | 2024 | 2023 |
| Forward foreign exchange contract | 3,002,416,092.15 | 4,687,808,134.25 |
| Total | 3,002,416,092.15 | 4,687,808,134.25 |
Cash payments relating to important investing activities
Unit: RMB
| Item | 2024 | 2023 |
| Forward foreign exchange contract payments | 3,017,921,031.55 | 4,778,003,467.44 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 4,665,742,203.72 | 4,047,816,024.05 |
| Total | 7,683,663,235.27 | 8,825,819,491.49 |
Other cash receipts relating to investing activities
Unit: RMB
| Item | 2024 | 2023 |
| Receipts of financing lease payments | 84,419,763.14 | 121,237,455.42 |
| Total | 84,419,763.14 | 121,237,455.42 |
(3) Cash flow from financing activities
Other cash receipts relating to financing activities
Unit: RMB
| Item | 2024 | 2023 |
| Cash receipts from project fund (refer to XI 5(4) for details) | 2,007,056.47 | 5,000,000.00 |
Other cash payments relating to financing activities
Unit: RMB
| Item | 2024 | 2023 |
| Repurchase of restricted shares | 2,723,810,978.11 | 655,807,536.16 |
| Repayment of lease liabilities | 332,488,237.61 | 285,474,093.26 |
| Repurchase of outstanding shares | 310,044,296.12 | - |
| Consideration paid for the acquisition of minority shareholder equity | 10,380,041.54 | 56,000,000.00 |
| Total | 3,376,723,553.38 | 997,281,629.42 |
Changes in liabilities from financing activitiess
Unit: RMB
| Item | December 31, 2023 | 2024 | December 31, 2024 | |
| Cash changes | Non-cash changes | |||
| Lease liabilities (including lease liabilities due within one year) | 528,728,313.56 | (332,488,237.61) | 359,595,896.79 | 555,835,972.74 |
| Long-term borrowings (including loan due within one year) and short-term borrowings | 16,686,600,823.23 | (10,216,217,771.70) | 267,287,079.54 | 6,737,670,131.07 |
| Dividend payables | 253,957,413.29 | (8,637,054,517.02) | 8,383,283,896.84 | 186,793.11 |
| Total | 17,469,286,550.08 | (19,185,760,526.33) | 9,010,166,873.17 | 7,293,692,896.92 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
60. Supplementary Information about Cash Flow Statement
(1) Supplementary information about cash flow statement
Unit: RMB
| Supplementary information | 2024 | 2023 (Restated) |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 13,141,022,060.51 | 15,155,901,763.21 |
| Add: Impairment of assets | 445,914,387.59 | 463,382,275.12 |
| Provision for credit losses | 1,068,789,505.74 | 879,922,773.25 |
| Fixed assets depreciation | 1,491,731,725.01 | 1,302,911,665.68 |
| Amortization of right-of-use assets | 295,082,848.33 | 316,765,782.26 |
| Amortization of intangible assets | 99,999,893.62 | 98,924,636.89 |
| Long-term deferred expenses amortization | 97,115,766.37 | 84,144,427.77 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets | 14,539,975.31 | 5,674,511.78 |
| Fixed asset scrapping losses | 322,794.37 | 4,832,681.02 |
| Losses (gains) from changes in fair value | (47,759,102.43) | (22,679,257.89) |
| Financial expenses | 256,441,388.18 | 325,040,311.15 |
| Investment losses (gains) | (85,911,585.51) | (63,302,304.25) |
| Share-based payment based on equity settlement | 865,428,572.59 | 207,616,877.93 |
| Decrease (increase) of restricted funds | (8,254,649.98) | (8,697,401.04) |
| Decrease (increase) in deferred tax assets | (236,371,472.37) | (507,175,433.89) |
| Increase (decrease) in deferred tax liabilities | (17,155,614.66) | (54,853,902.30) |
| Decrease (increase) in inventories | (299,985,733.29) | (365,476,343.55) |
| Decrease (increase) of other operating non-current assets | (185,775,794.08) | 340,718,688.36 |
| Decrease (increase) in operating receivables | (4,018,940,188.01) | (6,132,832,357.74) |
| Increase (decrease) in operating payables | 479,604,764.25 | 4,587,526,152.69 |
| Increase (decrease) in deferred income | (91,747,518.81) | 3,864,174.60 |
| Net cash flows from operating activities | 13,264,092,022.73 | 16,622,209,721.05 |
| 2. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 36,053,042,380.29 | 49,427,967,355.78 |
| 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 Increase (decrease) in cash and cash equivalents | (13,374,924,975.49) | 9,602,843,248.26 |
(2) Net cash paid for obtaining subsidiaries during the current year
Unit: RMB
| Amounts | |
| Cash or cash equivalents paid for the business combination in previous years | 8,440,700.00 |
| Including: Zhejiang Zhiyuan Fire Safety Engineering Co., Ltd. | 8,440,700.00 |
| Net cash paid for obtaining the subsidiary | 8,440,700.00 |
(3) Constituents of cash and cash equivalents
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Unit: RMB
| Item | Closing balance | Opening balance (restated) |
| Cash | 36,053,042,380.29 | 49,427,967,355.78 |
| Including: Cash on hand | 682,023.34 | 1,785,754.92 |
| Bank deposit for payment at any time | 35,933,926,817.28 | 49,400,692,427.34 |
| Other monetary capital for payment at any time | 118,433,539.67 | 25,489,173.52 |
| Cash equivalents | - | - |
| Closing balance of cash and cash equivalents | 36,053,042,380.29 | 49,427,967,355.78 |
61. Monetary Items of Foreign Currencies
Unit: RMB
| Item | Balance in foreign currency at the end of the reporting period | Exchange rate for conversion | Balance of RMB converted at the end of the reporting period |
| Cash and bank balances | |||
| Including: USD | 521,635,040.48 | 7.1884 | 3,749,721,325.00 |
| EUR | 54,445,885.15 | 7.5257 | 409,743,397.87 |
| Accounts receivable | |||
| Including: USD | 329,067,851.99 | 7.1884 | 2,365,471,347.24 |
| EUR | 162,993,618.06 | 7.5257 | 1,226,641,071.43 |
| Accounts payable | |||
| Including: USD | 68,397,350.51 | 7.1884 | 491,667,514.41 |
| EUR | 878,420.96 | 7.5257 | 6,610,732.62 |
62. Lease
(1) As lessee
The company leases a number of assets, including houses and buildings, general equipment, special purpose equipment andtransport vehicles, ranging from 1 month to 13 years. Such assets cannot be used for loan, mortgage, guarantee and otherpurposes.
The total amount of short-term lease expenses and lease expenses of low-value assets included in profit or loss for the periodwas RMB80,310,605.02 (2023: RMB133,767,688.72).
Total lease-related cash outflows for the year is RMB 412,798,842.63 (2023: RMB 419,241,781.98)
(2) As a lessor
Operating lease as a lessor
,Unit: RMB
| Item | Lease income | Among which: income related to variable lease payments not included in lease collections |
| Special-purpose equipment lease | 101,545,490.69 | - |
| Total | 101,545,490.69 | - |
The Company's operating leases as a lessor relate to special-purpose equipment.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Financial lease as a lessor
,Unit: RMB
| Item | Profit or loss on sales | Financing proceeds | Income related to variable lease payments that are not included in net lease investments |
| Special-purpose equipment lease | 23,159,788.34 | 5,480,145.59 | - |
| Total | 23,159,788.34 | 5,480,145.59 | - |
As a lessor, the Group entered into financial lease contracts with customers in relation to special-purpose equipment.
VI. Changes in Consolidation Scope
1. Business Combination of Enterprises under the Same Control
(1) Business combination of enterprises under the same control
Furui Technology
On April 10, 2024, the Group's subsidiary, EZVIZ Network, signed a management entrustment agreement with the parentcompany, CETCHIK, and thus EZVIZ Network has achieved control over Furui Technology. Since CETCHIK is thecontrolling shareholder of both the Group and Furui Technology, and EZVIZ Network is a subsidiary of the Group, thismanagement entrustment of Furui Technology constitutes a business combination under common control.
Unit: RMB
| Name of the acquiree | Equity acquisition ratio (note) | Reason for the transaction constituting a business combination under common control. | Date of acquisition | Basis for determining the acquisition date | Income of acquiree from acquisition data to the end of the reporting period | Net profit (loss) of acquiree from acquisition data to the end of the reporting period | Income of acquire during comparison period | Net profit of acquire during comparison period |
| Hangzhou Furui Technology Co, Ltd. | 48% | Before and after the business combination, the controlling shareholder of both the Group and Furui Technology is CETCHIK, and this control is not temporary. | April 10, 2024 | Effective date of the management entrustment agreement. | - | (295,677.15) | 1,320,754.72 | 218,576.25 |
Note: The Group collectively holds 48% of the equity in EZVIZ, which is the consolidated party.
(2) Cost of business combination and goodwill
Unit: RMB
| Cost of business combination | Furui Technology |
| - Long-term payables | 9,749,569.60 |
(3) The book value of assets and liabilities of the acquiree on the date of purchase
Unit: RMB
| Furui Technology | ||
| Fair value on the date of acquisition | Fair value on the date of acquisition | |
| Assets: | ||
| Cash and bank balances | 9,642,829.41 | 8,689,008.08 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Furui Technology | ||
| Fair value on the date of acquisition | Fair value on the date of acquisition | |
| Accounts receivables | - | 1,400,000.00 |
| Other receivables | 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 |
| Tax payable | 148,972.90 | 148,972.90 |
| Total liabilities | 214,080.52 | 365,761.40 |
| Net assets: | 9,453,892.45 | 9,749,569.60 |
2. Changes of Consolidation Scope due to Other Causes
The subsidiaries newly established and incorporated in the consolidation scope during the current reporting periodas follows:
| Company Name | Time of establishment | Registered capital |
| Hangzhou Hikimaging Electronics Ltd. | March 2024 | RMB 10 million |
| Hangzhou Rayin Detection Technology Co., Ltd. | April 2024 | RMB 50 million |
| EZVIZ Vietnam LLC Co., Ltd | August 2024 | USD 0.8 million |
| Hangzhou Micro Sensing Electronics Ltd. | September 2024 | RMB 100 million |
| Guoneng Haikang Yaoshi Technology (Hangzhou) Co., Ltd. | October 2024 | RMB 100 million |
| EZVIZ Trading FZE (Note) | November 2024 | USD 0.5 million |
| Hikrobot Japan KK (Note) | December 2024 | JPY 70 million |
Note: As of the end of this year, EZVIZ Trading FZE and Hikrobot Japan KK have not yet completed their paid-in capital.
VII. Interest in Other Entities
1. Equity in Subsidiaries
(1) Composition of the corporate 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 Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | Manufacture | Establishment |
| Hangzhou EZVIZ Network Co., Ltd. | Hangzhou | Hangzhou, | Technology | Establishment |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Name | Location of operation | Place of registration | Nature of business | Acquisition method |
| Zhejiang | development | |||
| Hangzhou EZVIZ Software Ltd. | Hangzhou | Hangzhou, Zhejiang | Technology development | Establishment |
| Hangzhou Hikrobot Technology Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | Technology development | Establishment |
| Hangzhou Hikrobot Intelligence 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 stakes in Hua'an Security Intelligence, Hua'an Security Electronics, and Hua'an Security Services.
On April 30, 2024, the Group and the original minority shareholders of its subsidiary companies, Hua'an Security Intelligent and Hua'anSecurity Electronics, jointly signed the "Equity Transfer Agreement for Henan Hua'an Security Intelligent Development Co., Ltd. and HenanHikvision Hua'an Security Electronics Co., Ltd." The agreement stipulates the acquisition of 6.14% of the minority equity in Hua'an SecurityIntelligent and Hua'an Security Electronics from the original minority shareholders for RMB 5.83 million and RMB 4.42 million, respectively.Upon completion of the acquisition, the Group will hold 100% of the equity in both Hua'an Security Intelligent and Hua'an Security Electronics.The equity transfer was completed on May 31, 2024. By the end of the year, the Group had fully paid the acquisition amount.
On April 30, 2024, Hua'an Security Intelligence, a subsidiary of the Group, entered into a Share Transfer Agreement with the original minorityshareholders of Hua'an Security Services, a subsidiary of Hua'an Security Intelligence. The agreement stipulates the acquisition of 10% equityin Hua'an Security Services held by the original minority shareholders for RMB 127,400. After the acquisition, Hua'an Security Intelligencewill hold 100% equity in Hua'an Security Services. Since the Group holds 100% equity in Hua'an Security Intelligence, the Group holds 100%equity in Hua'an Security Services. On May 31, 2024, both parties completed the equity transfer. As of the end of the year, the Group hascompleted the payment for the equity acquisition.
Unit: RMB
| Cost of purchase | Hua'an Security Intelligence and its subsidiaries | Hu'an Security Electronics and its subsidiaries | Hua'an Security Service and its subsidiaries |
| Cash | 5,831,820.00 | 4,420,800.00 | 127,421.54 |
| Total cost of purchase | 5,831,820.00 | 4,420,800.00 | 127,421.54 |
| Less: net assets of subsidiaries according to the proportion of equity acquired | 5,549,503.73 | 4,845,770.23 | 106,212.26 |
| Adjustment of the difference to capital reserve | 282,316.27 | (424,970.23) | 21,209.28 |
3. Equity in Joint Ventures or Associates
(1) Aggregated financial information of insignificant joint-ventures and associates
Unit: RMB
| Closing balance / Amount for 2024 | Opening balance / Amount for 2023 | |
| Associates: | ||
| The aggregate carrying amount of investments in associates | 598,565,831.26 | 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 | 27,475,447.67 | 15,006,433.70 |
| - Other comprehensive income | - | - |
| --Total comprehensive income | 27,475,447.67 | 15,006,433.70 |
| Joint Ventures: | ||
| Total investment book value | 928,657,559.53 | 863,734,091.79 |
| The sum of the following items calculated according to the shareholding ratio |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Closing balance / Amount for 2024 | Opening balance / Amount for 2023 | |
| - Net income (loss) | 3,193,543.20 | (44,972,911.55) |
| - Other comprehensive income | - | - |
| - Total comprehensive income (loss) | 3,193,543.20 | (44,972,911.55) |
(2) There are no significant restrictions on the ability of the joint ventures or associates to transfer funds to the Group.
(3) The Group has no nrecognized commitments relating to investments in joint ventures.
(4) The Group has no contingent liabilities related to investments in joint ventures or associates.
VIII. Government subsidy
1. Liabilities relating to government subsidy
Unit: RMB
| Liabilities | Amount at the open of 2024 | Increase in 2024 | Other income 2024 | Amount at the close of 2024 | Asset-related /revenue-related |
| Special subsidy | 741,121,772.61 | 195,769,448.77 | 122,672,090.78 | 814,219,130.60 | Asset-related |
| Special subsidy | 225,137,819.73 | 95,972,837.34 | 260,817,714.14 | 60,292,942.93 | Revenue-related |
| Total | 966,259,592.34 | 291,742,286.11 | 383,489,804.92 | 874,512,073.53 |
2. Government subsidy recognized as gain or loss in the reporting period
Unit: RMB
| Subsidy item | 2024 | 2023 |
| VAT collected and refunded | 1,874,624,340.02 | 1,905,727,477.36 |
| Special subsidy | 689,500,154.89 | 595,069,241.13 |
| Total | 2,564,124,494.91 | 2,500,796,718.49 |
IX. Risks Associated with Financial InstrumentThe Company's principal financial instruments include cash and bank balances, other non-current financial assets, notesreceivable, accounts receivable, receivables for financing, other receivables, long-term receivables, part of the other non-current assets, borrowings, notes payable, accounts payable, other payables, part of the other current liabilities, long-termpayables, part of other non-current liabilities, derivative financial instruments, etc. Details of these financial instrumentsare set out in Note (V). Below are the risks associated with such financial instruments and the risk management policiesadopted by the Group to mitigate such risks. The management of the Group manages and monitors such risk exposures toensure such risks are contained within a prescribed scope.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Unit: RMB
| Item | Closing balance of 2024 | Closing balance of 2023 (restated) |
| Financial assets: | ||
| Measured at fair value through current profit and loss | ||
| Derivative financial assets | 26,775,923.93 | 37,380.00 |
| Other non-current financial assets | 472,000,082.76 | 472,184,937.66 |
| Measured at fair value through other comprehensive income | ||
| Receivables for financing | 2,291,648,244.05 | 1,594,219,832.62 |
| Measured at amortized cost | ||
| Cash and bank balances | 36,271,488,337.03 | 49,638,158,662.54 |
| Notes receivable | 2,722,596,142.46 | 2,606,071,375.74 |
| Accounts receivable | 37,910,128,735.42 | 35,816,573,511.44 |
| Other receivables | 531,344,606.50 | 571,912,035.93 |
| Other non-current assets | 51,370.95 | 2,017,718.89 |
| Long-term receivables (including those due within one year) | 1,274,780,835.91 | 1,618,419,624.99 |
| Financial liabilities | ||
| Measured at fair value through current profit and loss | ||
| Derivative financial liabilities | 1,874,341.64 | 38,079,755.04 |
| Measured at amortized cost | ||
| Short-term borrowings | 1,031,895,812.62 | 2,118,952,026.06 |
| Notes payable | 1,197,128,746.56 | 1,163,687,279.58 |
| Accounts payable | 20,185,303,107.69 | 19,163,485,888.09 |
| Other payables | 3,528,359,044.48 | 3,911,612,841.06 |
| Other current liabilities | - | 1,095,194,890.62 |
| Long-term borrowings (including those due within one year) | 5,705,774,318.45 | 14,567,648,797.17 |
| Long-term payables (including those due within one year) | 9,818,368.20 | 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 riskvariables 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 changeeffected by the change in a single risk variable, the analysis below is based on the assumption that the changes in eachvariable occurred separately.
1. Objectives, Policies and Procedures of Risk Management, and changes in the reporting period
The Group engages in risk management with the aim of achieving an appropriate balance between risk and return, wherethe negative effects of risks against the Group's operating results are minimized, in order to maximize the benefits ofshareholders and other stakeholders. Based on such objective in risk management, the underlying strategy of the Group'srisk management is to ascertain and analyze all types of risks exposures of the Group, establish appropriate risk tolerance
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
thresholds, carry out risk management procedures and perform risk monitoring on all kinds of risks in a timely and reliablemanner, 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 Companyis primarily exposed to risks relating to the currencies such as USD, EUR and etc. The Group's subsidiaries in the mainlandof China whose procurement, sales and financing are denominated in RMB, USD and EUR. Other principal activities aresettled in RMB. The Group's subsidiaries in Hong Kong and outside China are principally engaged in procurement, sales,financing and other major business activities in local currencies such as USD, EUR and etc.
As of December 31, 2024, except for monetary items of foreign currencies set out in Note (V) 61, the Group mainlyadopted the functional currency of each of its subsidiary to present the balance of its assets and liabilities. The foreignexchange risks arising from assets and liabilities denominated in USD and EUR (which has been converted into RMB) asfollows may generate significant impact on the operating results of the Group.
Unit: RMB
| Currency | Assets | Liabilities | ||
| Closing balance | Opening balance | Closing balance | Opening balance | |
| USD | 6,115,192,672.24 | 3,459,224,512.51 | 491,667,514.41 | 325,809,696.61 |
| EUR | 1,636,384,469.30 | 3,068,403,192.93 | 6,610,732.62 | 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 ofthe Group, and has purchased various financial derivative instruments, such as forward foreign exchange contracts tomitigate 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 foreigncurrencies 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
| Change in foreign exchange rates | 2024 | 2023 | ||
| Effect on profit | Effect on shareholders' equity | Effect on profit | Effect on shareholders' equity | |
| 5% appreciation of USD against functional currency | 281,176,257.89 | 281,176,257.89 | 156,670,740.80 | 156,670,740.80 |
| 5% depreciation of USD against functional currency | (281,176,257.89) | (281,176,257.89) | (156,670,740.80) | (156,670,740.80) |
| 5% appreciation of EUR against functional currency | 81,488,686.83 | 81,488,686.83 | 57,995,872.74 | 57,995,872.74 |
| 5% depreciation of EUR against functional currency | (81,488,686.83) | (81,488,686.83) | (57,995,872.74) | (57,995,872.74) |
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 primarilyrelated to bank borrowings bearing floating interest rate (please refer to Note (V) 24) and Note (V) 34) and bank deposits
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
bearing floating interest rate. The Group's risks of changes in the fair value of financial instruments due to changes ininterest rates are related to fixed-rate bank borrowings (please refer to Note (V) 24 and Note (V) 34) and fixed-rate bankdeposits.
The Group determines the relative proportion of fixed interest rate contracts and floating interest rate contracts based onthe prevailing market environment. On December 31, 2024, the Group's total long-term and short-term interest-bearingdebts bearing fixed interest rates amounted to RMB 5,538,078,464.46 (December 31, 2023: RMB 11,105,877,902.09).The total amount of long-term and short-term interest-bearing debts bearing floating interest rates is RMB1,165,181,524.22 (December 31, 2024: RMB5,546,156,677.17).
At present, the Group does not have any interest rate swap arrangements and will continue to pay close attention to theimpact of changes in borrowing interest rates on the interest rate risk of the Group, and will make timely adjustmentsaccording 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 changesin 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 financialinstruments. Held-for-trading equity instrument investments are all investments in unlisted held-for-trading equityinstruments.
The Group is exposed to price risk due to the holding of financial assets measured at fair value. The fair value of certainfinancial instruments is determined by the general pricing model based on discounted future cash flow method or othervaluation techniques, while the valuation techniques are based on certain valuation assumptions. Therefore, the valuationresults are highly sensitive to valuation assumptions. However, at the end of the current reporting period, the amount ofinvestment in held-for-trading equity instruments and derivative financial instruments is not significant, and the changesof the amount due to changes in price of financial instruments as a result of change in valuation assumptions is limited,accordingly, no sensitivity analysis is conducted.
1.2 Credit Risk
As of December 31, 2024, the largest credit risk exposure that may result in financial losses of the Group is mainly due tothe loss of the Group's financial assets arising from the failure of the counterparty to perform its obligations, including:
cash and bank balances (Note (V) 1), notes receivable (Note (V) 3), accounts receivable (Note (V) 4), receivables forfinancing (Note (V) 6), other receivables (Note (V) 8), contract assets (Note (V) 5 and Note (V) 22), non-current assetsdue within one year (Note (V) 10), long-term receivables (Note (V) 12), etc., and derivative financial assets that are notincluded 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, andimplement 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 provisionsare made for relevant financial assets. Therefore, the management of the Group believes that the credit risk exposure ofthe 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 controlcredit risk exposure. The Group assesses credit quality of customers and sets corresponding credit period based on thecustomer's financial status, the possibility of obtaining guarantees from third parties, credit history and other factors suchas current market conditions. The Group will regularly monitor the credit history of its customers. For customers withpoor credit history, the Group takes various measures, such as written payment reminders, shorten or cancel the creditperiod, to ensure that the overall credit risk of the Group is maintained in a controllable range. For accounts receivable
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
and contract assets, the Group uses a simplified method, that is, to measure the loss provision based on the amountequivalent 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 long-term receivables, the Group calculates the expected credit losses based on theexpected credit loss rate in the next 12 months or the entire duration based on the default risk exposure. For details of therelated expected credit loss measurement, see (Note (V) 12).
For bank acceptance bills and certificates of accounts receivable claims, the Company believes that there is no significantcredit risk and will not incur any significant losses. For financial company acceptance bills and commercial acceptancebills, the Company has set relevant policies to control credit risk exposure. The Company evaluates the credit status of theacceptor based on its financial position, credit history and other factors, such as current market conditions, and sets aninternal credit rating for the acceptor. The Company regularly monitors the credit records of the acceptors, and for theacceptors with bad credit records, the Company adopts written reminders and other means to ensure that the overall creditrisk is within a controllable range. For the acceptance bills and commercial acceptance bills receivable from financialcompanies, the Group calculates the expected credit loss based on the default risk exposure based on the expected creditloss 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, theGroup takes various measures such as written payment reminders to ensure that the Group's overall credit risk ismaintained in a controllable range. For other receivables, the Group calculates the expected credit loss based on theexpected credit loss ratio in the next 12 months or the entire duration based on the default risk exposure. For details of therelevant 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 nosignificant 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 theoperation needs of the Group and to reduce the effect of cash flow movements when managing liquidity risk. Themanagement 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 bythe Group are analyzed as below:
Unit: RMB
| December 31, 2024 | ||||
| Within one year | 1-5 years | More than 5 years | Total | |
| Non-derivative financial liabilities | ||||
| Short-term borrowings | 1,047,801,022.97 | - | - | 1,047,801,022.97 |
| Notes payable | 1,197,128,746.56 | - | - | 1,197,128,746.56 |
| Accounts payable | 20,185,303,107.69 | - | - | 20,185,303,107.69 |
| Other payables | 3,528,359,044.48 | - | - | 3,528,359,044.48 |
| Long-term borrowings (including those due within one year) | 732,114,066.41 | 4,820,841,448.18 | 518,433,071.37 | 6,071,388,585.96 |
| Long-term payables (including those due within one year) | 40,025.60 | 31,436.70 | - | 71,462.30 |
| Derivative financial liabilities | 1,874,341.64 | - | - | 1,874,341.64 |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 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
| Item | Closing fair value | |||
| Level 1 | Level 2 | Level 3 | Total | |
| I. Continuous fair value measurement | - | 2,316,549,826.34 | 472,000,082.76 | 2,788,549,909.10 |
| (I) Derivative financial assets | - | 26,775,923.93 | - | 26,775,923.93 |
| 1. Financial assets measured at fair value through profit and loss | - | 26,775,923.93 | - | 26,775,923.93 |
| (II) Other non-current financial assets | - | - | 472,000,082.76 | 472,000,082.76 |
| 1. Financial assets at fair value through profit or loss | - | 472,000,082.76 | 472,000,082.76 | |
| (III) Receivables for financing | 2,291,648,244.05 | - | 2,291,648,244.05 | |
| 1. Financial assets at fair value through other comprehensive income | - | 2,291,648,244.05 | - | 2,291,648,244.05 |
| Total assets measured continuously at fair value | - | 2,318,424,167.98 | 472,000,082.76 | 2,790,424,250.74 |
| (IV) Derivative financial liabilities | - | 1,874,341.64 | - | 1,874,341.64 |
| 1. Financial liabilities measured at fair value through profit and loss | 1,874,341.64 | - | 1,874,341.64 | |
| Total liabilities measured continuously at fair value | - | 1,874,341.64 | - | 1,874,341.64 |
2. Information on the Estimation Technique and Important Parameters Adopted as for Continuous Level 2 Fair
Value Measurement Items
Unit: RMB
| Fair value at December 31, 2024 | Estimation technique | Inputs | |
| Derivative financial assets | 26,775,923.93 | Discounted cash flow approach | Forward exchange rate Discounted rate that reflects the credit risk of counterparty |
| Derivative financial liabilities | 1,874,341.64 | Discounted cash flow approach | Forward exchange rate Discounted rate that reflects the credit risk of counterparty |
| Receivables for financing | 2,291,648,244.05 | Discounted cash flow approach | Discounted rate that reflects the credit risk of counterparty |
3. The Third Level of Fair Value Measurement Item, the Valuation Techniques and Important Parameters Used
Unit: RMB
| Items | Fair value on December 31, 2024 | Valuation techniques | Inputs |
| Other non-current financial assets-- Investment in equity instruments of companies | 472,000,082.76 | Market approach /Income approach | Comparable public companies' PB (price/book value) ratio within the same industry /Future cash flows, Discount rate |
4. The Third Level of Fair Value Measurement Item, Adjustment Information between the Opening and Closing
Book Value
Unit: RMB
| Other non-current financial assets | Amount |
| Book value on January 1, 2024 | 472,184,937.66 |
| Increase in the current reporting period | 15,000,000.00 |
| Changes in fair value booked into profit and loss during the current reporting period | (15,184,854.90) |
| Book value on December 31, 2024 | 472,000,082.76 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
The total amount of profit or loss in 2024 includes unrealized losses related to financial assets measured at fair value atthe end of the year is RMB 15,184,854.90(2023 unrealized losses: RMB5,229,385.72) and such gains or losses areincluded in changes in fair value; the realized gains of financial assets measured at fair value at the end of the currentreporting period which were included in investment income was RMB61,241,171.99 (2023: RMB65,923,840.33).
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 ValueThe Group's management team believes that financial assets and financial liabilities measured at amortized cost mainlyinclude cash and bank balances, notes receivable, accounts receivable, other receivables, some other non-current assets,non-current assets due within one year, long-term receivables, short-term borrowings, notes payable, accounts payable,other payables, part of other current liabilities, non-current liabilities due within one year, long-term borrowings, long-term payables and part of other non-current liabilities, etc., carrying value of which approximates to its fair value.
XI. Related Party Relationships and Transactions
1. Information on Parent Company of the Company
| Name of parent company | Place of registration | Nature of business | Registered capital | Shareholding ratio of parent company in the Company (%) | Percentage of voting rights of parent company to the Company (%) |
| China Electronics Technology HIK Group Ltd. (CETHIK) | Hangzhou, Zhejiang | Industrial investment | RMB 845 million | 36.93 | 36.93 |
The actual controlling party of the Company is CETC.
2. Information on the Subsidiaries of the Company
For details of the main subsidiaries of the Company, see Note ((VII)1).
3. Information on the Joint Ventures and Associated Companies of the Company
Joint ventures and associates that had related party transactions with the Group in the current reporting period, or in theprior periods and formed balances are as follows:
| Name of the associates or joint ventures | Relationship with the Company |
| Wuhu Sensortech and Hebei Sensortech (Note1) | Associated company |
| Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries (Note2) | Associated company |
| Zhiguang Hailian Big Data Technology Ltd. and its subsidiaries (Note2) | Associated company |
| Jiaxin Haishi JiaAn Zhicheng Technology Ltd. (Note2) | Associated company |
| Sanmenxia Xiaoyun Vision Technology Ltd. (Note2) | Associated company |
| Beijing Taifang Technology Ltd. (Note2) | Associated company |
| Jiangsu Haishi Kaitai Technology Co., Ltd. (Note2) | Associated company |
| Guangxi Haishi Urban Operation Management Ltd. and its subsidiaries (Note3) | Joint venture |
| Shenzhen Haishi Urban Service Operation Ltd. and its subsidiaries (Note3) | Joint venture |
| Xuzhou Kangbo Urban Operation Management Service Ltd. (Note3) | Joint venture |
| Yunnan Yinghai Parking Service Ltd. (Note3) | Joint venture |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Zhejiang City Digital Technology Ltd. (Note3) | Joint venture |
| Zhejiang Haishi Huayue Digital Technology Ltd. (Note3) | Joint venture |
Note 1: During the period from December 2016 to February 2023, Wuhu Sensortech and Hebei Sensortech were associatesof the Company. On February 28, 2023, Wuhu Sensortech and Hebei Sensortech were included in the scope of theconsolidated financial statements. During the period from January 2023 to February 2023, these two companies were stillregarded as the Company's related parties.
Note 2: Those companies are collectively referred to as "associated companies" in the following disclosures of relatedparty 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 partytransactions, receivables from related parties, and payable from related parties.
4. Information on Other Related Parties
| Name (Note1) | Relationship |
| Shanghai Fullhan Microelectronics Co., Ltd. and its subsidiaries | The related close family members of shareholder(s) that hold(s) more than 5% shares of the Company act in concert with the actual controller of the Company |
| Guandong Hutong Technology Co., Ltd. | The related close family members of shareholder(s) that hold(s) more than 5% shares of the Company act as a director from board of this company. |
| Shenzhen Guotengan Vocational Education Technology Ltd. | Shareholder(s) that hold(s) more than 5% shares of the Company serve(s) as the director(s) of this company |
| Confirmware Technology (Hangzhou) Co., Ltd. and its subsidiaries | The Group's senior management serve(s) as director(s) of this company |
| Zhejiang Fast Line data fusion Information Technology Co., Ltd. and its subsidiaries | The Group's senior management serve(s) as director(s) of this company |
| Chengdu Guoshengtianfeng Network Technology Ltd. and its subsidiaries | The Group's senior management serve(s) as director(s) of this company |
| Shenzhen Wanyu Security Service Co., Ltd. and its subsidiaries | The Group's senior management serve(s) as director(s) of this company |
| Ningbo Industrial Internet Research Institute Co., Ltd. | The Group's independent director(s) serve(s) as director(s) of this company |
| INESA (Group) Ltd. and its subsidiaries | The Group's chairman(chairmen) of Board of the Supervisors serve(s) as director(s) of this company |
| Shanghai Vico Precision Mold & Plastics Co.,Ltd. (Note2) | The Group's chairman(chairmen) of Board of the Supervisors was(were) independent director(s) of this company |
| Bank of Tianjin Co., Ltd. and its subsidiaries | The Group's chairman(chairmen) of Board of the Supervisors serve(s) as independent director(s) of this company |
| Shenzhen Zhongtu Instrument Co., Ltd. (Note3) | The Group's former chairman(chairmen) of Board of the Supervisors was(were) the director(s) of this company |
| Subsidiaries of CETC (Note 4) | Under common control of the actual controlling party of the Company |
Note 1: Those companies (excluding subsidiaries of CETC) are collectively referred to as "other related parties" in thefollowing disclosures of related party transactions, receivables from related parties, and payable from related parties.
Note 2: Lu Jianzhong, the chairman of Board of the Supervisors of our Group, once served as an independent director ofthe corresponding company. As he departed from his position as a director of the corresponding company in June 2024,and this year marks his first year of departure. Therefore, this company is considered a related party to our Group for thisyear.
Note 3: Hong Tianfeng, the former chairman of Board of the Supervisors of the Company, once served as a director of thecorresponding company. As he departed from his position as a director of the corresponding company in April 2022, thecorresponding company was recognized as a related party of the Company between January 2023 and April 2023.
Note 4: Subsidiaries and affiliated research institutes of CETC, excluding Hikvision and its subsidiaries.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
5. Related Party Transactions
(1) Related party transactions regarding sales and purchases of goods, provision of services and receiving services
Purchase of commodities / receiving of services:
Unit: RMB
| Related party | Transaction type | 2024 | 2023 |
| Subsidiaries of CETC | Purchase of materials and receiving of services | 1,897,826,757.19 | 2,411,065,827.96 |
| Joint ventures | Purchase of materials and receiving of services | 7,651,968.58 | 2,839,703.41 |
| Associated companies | Purchase of materials and receiving of services | 281,612,997.63 | 271,039,815.54 |
| Other related parties | Purchase of materials and receiving of services | 1,189,645,482.17 | 1,286,613,375.22 |
| Total | 3,376,737,205.57 | 3,971,558,722.13 |
Sales of commodities / rendering of services:
Unit: RMB
| Related party | Transaction content | 2024 | 2023 |
| Subsidiaries of CETC | Sales of products and rendering of services | 219,280,317.07 | 269,454,480.67 |
| Joint ventures | Sales of products and rendering of services | 34,879,502.21 | 69,056,009.44 |
| Associated companies | Sales of products and rendering of services | 34,474,131.86 | 66,706,135.61 |
| Other related parties | Sales of products and rendering of services | 22,004,352.43 | 24,122,066.41 |
| Total | 310,638,303.57 | 429,338,692.13 |
Fixed Asset Purchase and Sales:
Unit: RMB
| Related party | Transaction content | 2024 | 2023 |
| Subsidiaries of CETC | Purchase of fixed assets | 1,317,219.10 | - |
| Total | 1,317,219.10 | - |
(2) Related party lease
Unit: RMB
| Lessor | Type of leased assets | Rental fee confirmed in 2024 | Rental fee confirmed in 2023 |
| Subsidiaries of CETC | Equipment | - | 10,375,908.82 |
| Subsidiaries of CETC | House | 1,670,579.23 | 2,324,068.08 |
| Total | 1,670,579.23 | 12,699,976.90 |
(3) Compensation for key managers
Unit: RMB
| Item | 2024 | 2023 |
| Compensation for key managers | 31,903,090.50 | 42,555,350.07 |
(4) Other related party transactions
Statement of capital deposits:
Unit: RMB
| Related party | Content of related party transaction | Amount occurred in 2024 | Balance at the end of the current reporting period | Amount occurred in 2023 (restated) | Opening balance (restated) |
| Subsidiaries of CETC | Deposit (withdraw from) | (13,463,687.38) | 4,000,183,725.74 | 5,482,952.03 | 4,013,647,413.12 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Related party | Content of related party transaction | Amount occurred in 2024 | Balance at the end of the current reporting period | Amount occurred in 2023 (restated) | Opening balance (restated) |
| Total | (13,463,687.38) | 4,000,183,725.74 | 5,482,952.03 | 4,013,647,413.12 |
Note: This represents the deposits made by the Group with China Electronics Technology Finance Co., Ltd. The balance oftime deposits at the end of this year is RMB4,000,000,000.00 (end of last year: RMB1,000,000,000.00), and the balance ofdemand deposits is RMB 183,725.74 (end of last year: RMB3,013,647,413.12). The interest income from deposits for this yearis RMB 47,756,631.71. (last year: RMB81,945,762.01)
Information on entrusted loans:
In 2024, the Company issued entrusted loans to its subsidiaries through China Electronics Technology Finance Co., Ltd.in the amount of RMB4,156,000,000.00 (last year: RMB2,523,000,000.00), and the amount of handling fees confirmed toChina Electronics Technology Finance Co., Ltd. was RMB415,600.00 (last year: RMB277,300.00).
Information on Working Capital Borrowing:
In 2024, Hikvision Automotive Technology Co., Ltd., a subsidiary of the Group, borrowed RMB150,000,000.00 inworking capital from China Electronics Technology Finance Co., Ltd.(last year: nil). The interest expense recognized forChina Electronics Technology Finance Co., Ltd. was RMB 128,333.33 (last year: nil).
Information on Related Entrusted ManagementOn April 10, 2024, EZVIS Network, a subsidiary of the Group, signed a agreement with the parent company, CETCHIK,for the entrustment management of Furui Technology. This transaction constituted a business combination under commoncontrol, see Note (VI), 1. Therefore, according to the agreement, EZVIS Network would pay management fee to CETCHIK.During the reporting year, the capital occupation fee of this transaction amounted to RMB 380,731.68.
Others:
During the reporting year, the Group received an international business subsidy of RMB 2,007,056.47 from the actualcontrolling party, CETC.
6. Receivables from Related Parties and Payables to Related Parties
(1) Receivables from related parties
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Note receivables and account receivables financing | Subsidiaries of CETC | 52,626,277.73 | 374,735.27 | 176,267,380.85 | 1,197,255.34 |
| Note receivables and account receivables financing | Joint ventures | 13,352,890.19 | - | 400,000.00 | - |
| Note receivables and account receivables financing | Associated companies | 4,392,879.50 | - | 22,277,196.50 | - |
| Note receivables and account receivables financing | Other related parties | 1,908,892.17 | - | 1,215,030.00 | - |
| Total | 72,280,939.59 | 374,735.27 | 200,159,607.35 | 1,197,255.34 | |
Unit: RMB
| Item | Related Party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Account receivables | Subsidiaries of CETC | 486,103,594.64 | 150,460,535.70 | 640,493,055.77 | 220,124,781.15 |
| Account receivables | Joint ventures | 26,582,054.99 | 2,439,410.80 | 59,425,217.10 | 1,625,142.58 |
| Account receivables | Associated companies | 67,058,711.03 | 10,008,346.67 | 72,319,683.18 | 8,556,237.95 |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Account receivables | Other related parties | 5,254,943.87 | 209,669.50 | 7,442,685.65 | 154,865.50 |
| Total | 584,999,304.53 | 163,117,962.67 | 779,680,641.70 | 230,461,027.18 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Prepayments | Subsidiaries of CETC | 1,357,188.83 | 7,831,067.74 |
| Prepayments | Associated companies | 667,500.73 | 118,402.50 |
| Total | 2,024,689.56 | 7,949,470.24 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Other receivables | Subsidiaries of CETC | 675,015.40 | 503,901.99 | 1,649,910.00 | 561,932.90 |
| Other receivables | Joint ventures | 45,506.53 | 373.15 | 191,713.33 | 6,768.82 |
| Other receivables | Associated companies | - | - | 4,387,500.00 | 30,273.75 |
| Total | 720,521.93 | 504,275.14 | 6,229,123.33 | 598,975.47 | |
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Long-term receivables (including those due within one year) | Subsidiaries of CETC | 119,906.12 | 983.23 | 47,210.22 | 325.75 |
| Long-term receivables (including those due within one year) | Joint ventures | 27,457,234.23 | 1,153,621.48 | 35,381,700.20 | 1,144,327.88 |
| Total | 27,577,140.35 | 1,154,604.71 | 35,428,910.42 | 1,144,653.63 | |
(2) Payables to related parties
Unit: RMB
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Notes payables | Subsidiaries of CETC | 5,438,628.32 | 1,224,954.15 |
| Notes payables | Other related parties | 1,570,383.71 | 4,390,639.49 |
| Total | 7,009,012.03 | 5,615,593.64 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Account payables | Subsidiaries of CETC | 593,917,797.74 | 877,667,364.69 |
| Account payables | Joint ventures | 1,224,799.99 | 4,068,366.04 |
| Account payables | Associated companies | 114,410,719.92 | 43,869,241.50 |
| Account payables | Other related parties | 442,181,100.83 | 410,242,953.80 |
Item
| Item | Related party | Closing balance | Opening balance |
| Short-term borrowings | Subsidiaries of CETC | 150,128,333.33 | - |
| Total | 150,128,333.33 | - |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Related party | Closing balance | Opening balance |
| Total | 1,151,734,418.48 | 1,335,847,926.03 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Contract liabilities | Subsidiaries of CETC | 4,070,684.79 | 6,277,318.83 |
| Contract liabilities | Joint ventures | 293,305.79 | 1,300,172.80 |
| Contract liabilities | Associated companies | 601,534.30 | - |
| Contract liabilities | Other related parties | 13,583.70 | 30,042.00 |
| Total | 4,979,108.58 | 7,607,533.63 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Other payables | Subsidiaries of CETC | 6,619,267.43 | 8,230,611.43 |
| Other payables | Joint ventures | 59,892.75 | - |
| Other payables | Associated companies | 696,315.00 | 20,527,386.00 |
| Other payables | Other related parties | 413,000.00 | 250,000.00 |
| Total | 7,788,475.18 | 29,007,997.43 |
Unit: RMB
Unit: RMB
XII. Share-based Payments
1. Overview of Share-based Payments
Restrictive Share Incentive SchemeAccording to the Approval of the Implementation of the Restrictive Share Incentive Scheme of Hangzhou Hikvision DigitalTechnology Co., Ltd. (Guo Zi Fen Pei [2012] No. 426) issued by the State-owned Assets Supervision and AdministrationCommission of the State Council and the Opinion the Restrictive Share Incentive Scheme of Hangzhou Hikvision DigitalTechnology Co., Ltd. (Shang Shi Bu Han [2012] No. 353) issued by China Securities Regulatory Commission, theCompany convened the ninth meeting of the second session of the Board of Directors on July 25, 2012 and the firstextraordinary 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 IncentiveScheme is to: further improve the Company's governance structure to establish a good and balanced value allocationsystem; establish a profit-sharing and restriction mechanism among shareholders, the Company and its employees, so asto provide shareholders with sustainable return; fully mobilize the positivity of core employees to support the Companyin realizing its strategies and long-term sustainable development; attract and retain core employees to ensure theCompany'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 theCompany, during which the Company may grant restricted shares to grantees under the Scheme. In principle, each grant
| Item | Related party | Closing balance | Opening balance |
| Lease liabilities (including those due within one year) | Subsidiaries of CETC | - | 5,215,883.84 |
| Total | - | 5,215,883.84 |
Item
| Item | Related Party | Closing balance | Opening balance (restated) |
| Long-term payables | Subsidiaries of CETC | 9,749,569.60 | 9,749,569.60 |
| Total | 9,749,569.60 | 9,749,569.60 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
should be at an interval of two years. After the expiry of the Scheme, no restricted shares could be granted to granteesunder the Scheme. However, all the provisions of the Scheme remain valid to the restricted shares granted under theScheme.
Each batch of restricted shares shall not be unlocked unless fulfilling, each time, by the Company its unlock performancecriteria (including net asset yield, revenue growth rate, and economic value added), and by grantees' individualperformance criteria simultaneously. Where, during the unlocking period, any one or more unlock criteria for the Companyor individuals is or are not fulfilled, such portion of subject shares shall be cancelled. The cancelled restricted shares willbe repurchased by the Company based on the relevant regulations under the scheme.
On January 18, 2022, authorized by the 1
stextraordinary general meeting of 2022 and reviewed by the Board of Directors,the Company granted 97,402,605 restricted shares to grantees at a grant price of RMB29.71 per share ("2021 ShareIncentive Scheme"). The Lock-up Period of the Subject Shares shall last for a period of 24 months commencing on thegrant date, during which the Subject Shares granted to grantees under the scheme shall be subject to lock-up and are nottransferable. 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 forunlocking in 3 tranches: the first unlocking period shall be the 24 to 36 months following the grant date and the numberof shares to be unlocked shall be 40% of the aggregate number of the Subject Shares granted; the second unlocking periodshall be the 36 to 48 months following the grant date and the number of shares to be unlocked shall be 30% of the aggregatenumber of the Subject Shares granted; the third unlocking period shall be the 48 to 60 months following the grant date andthe number of shares to be unlocked shall be 30% of the aggregate number of the Subject Shares granted. The Companyhas completed the equity registration work in February 2022.
Unit: share
| 2021 Share Incentive Scheme | 2024 | 2023 |
| Total of equity instruments outstanding at the beginning of the reporting period | 58,441,563 | 97,402,605 |
| Total of equity instruments granted (share dividend) during the current reporting period | - | - |
| Total of equity instruments vested during the current reporting period | - | - |
| Total of equity instruments forfeited during the current reporting period (Note) | 58,441,563 | 38,961,042 |
| Total of equity instruments outstanding at the end of the reporting period | - | 58,441,563 |
| The exercise price (ex-rights) of the outstanding Share-based payments of the Company at the end of the reporting period and the remaining period of the contract | Inapplicable | 29.71/share and 36 months |
Note: The termination of share-based payments for the year is detailed in Note (XII), 4.
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
On October 22, 2015, the Company considered and approved Management Measures for Core Staff Co-Investment inInnovative Businesses (Draft) (hereafter referred to as "Management Measures") at the 2
ndextraordinary general meeting.On March 7, 2016, representative congress of labor union of Hikvision passed Implementation Provisions for ManagementMeasures for Core Staff Investment in Innovative Businesses (hereafter referred to as "Provisions"), to initiate andimplement the incentive mechanism of staff co-investment (hereafter referred to as "Staff Co-Investment Plan") ininnovative 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 (hereafterreferred 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, toestablish a trust plan, and to invest trust funds into innovative business subsidiaries. (Investment form described above isreferred 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 comprisedof medium-and-senior level management personnel and core competent staff from the Company and its subsidiaries areable to invest in all innovative businesses. Grantees of plan B are comprised of core and full-time staff from innovativebusiness subsidiaries, and could participate in investment on innovative business subsidiaries and their subsidiaries wherethey serve. The Co-Investment Platform will increase capitals annually, the corresponding increased equity of which willbe distributed to core staff who meets investment conditions pursuant to particular rules. The waiting period shall be five
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
years after equity of Co-Investment Platform is held by the staff. Within the waiting period, if the labor relationshipbetween the grantees and the Company or its subsidiaries is released or terminated, equity of Co-Investment Platform heldby the grantees shall be refunded and settled by the labor union at an agreed price pursuant to the Provisions.
The Co-Investment Platform grants Co-Investment Staff additional equity annually. The Company determines whethershare-based payment shall be constituted based on the fair value of equity instruments newly obtained by the Group's staffin Co-Investment Platform on each granting date. On December 25, 2020, the Company held the 20
th
meetings of 4
th
session of the Board of Directors, which reviewed and approved the Proposal on Revising Management Measures for CoreStaff Co-Investment in Innovative Businesses. The updated version of Management Measures for Core Staff Co-Investmentin Innovative Businesses (hereinafter referred to as "updated version of Management Measures"), The new version addsrules relating to the confirmation of shares held directly by employees under Staff Co-Investment Plan and equities ofinnovative business subsidiaries held indirectly by employees, clarifies the treatment of shares under Co-Investment Planafter the disqualification about co-investment of employees, adds rules of management committee.
On December 31, 2020, the Executive management committee of the Co-Investment Plan approved the Provisions forManagement Measures for Core Staff Investment in Innovative Businesses (hereafter referred to as "New Provisions". Inaccordance of the New Provisions, for the confirmed Plan A shares, the waiting period is five years since the employeehas worked for the Company or its subsidiaries and for the confirmed share of Plan B, the waiting period is five yearssince the employee has worked for the innovative business subsidiary corresponding to the Plan B or its subsidiaries.
2. Information of the Share-based Payment through Equity Settlements
Restrictive Share Incentive Scheme
Unit: RMB
| 2021 Share Incentive Scheme | |
| Method of determine the fair value of equity instruments at the grant date | Determined based on stock price at the grant date and the costs of restricted shares during Lock-up Period |
| Recognition basis of the number of the equity instruments qualified for vesting | Determined based on the results estimation of each vesting period and turnover rate |
| Reasons of the significant difference between the estimates of the current reporting period with that of the prior year | None |
| Accumulative amount of share-based payment through equity settlement and further included in the capital reserve | 1,111,285,178.76 |
| Total amount of the expenses recognized according to share-based payment through equity settlement in the current reporting period | 542,914,217.71 |
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
Unit: RMB
| Share Incentive Scheme of Staff Co-Investment in Innovative Businesses | |
| Method of determining the fair value of equity instruments at the grant date | Evaluated and determined based on income method at the grant date |
| Recognition basis of the number of the equity instruments qualified for vesting | Estimated based on the turnover rate of each vesting period |
| Accumulative amount of share-based payment through equity settlement and further included in the capital reserve | 951,891,607.26 |
| Total amount of the expenses recognized according to share-based payment through equity settlement in the current reporting period | 322,514,354.88 |
RMB83,074,508.22 of the total expenses of paid and confirmed by equity settlements was shared by minority shareholders.
3. There is no share-based payment through cash settlements
4. Information on modification or termination of share-based payment during the current reporting period
Restrictive Share Incentive SchemeGiven the current operating environment, which has changed significantly since the 2021 Restricted Stock Plan was
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
formulated, continuing to implement this plan to achieve the expected incentive objectives and effects has become morechallenging. On April 18, 2024, the Company convened the 20
th
meeting of the 5
th Board of Directors and the 18
thmeetingof the 5
thBoard of Supervisors, and on May 10, 2024, the 2023 Annual General Meeting was held. These meetingsreviewed and approved the Proposal on the Termination of the 2021 Restricted Stock Plan and Repurchase andCancellation of Related Restricted Stocks. The Company agreed to terminate the 2021 Restricted Stock Plan andrepurchase and cancel all restricted stocks that have been granted but not yet unlocked under the 2021 Restricted StockPlan. The cancellation registration was completed on August 15, 2024. According to the relevant provisions of theEnterprise Accounting Standards, the company has processed the accelerated exercise of this termination of the restrictedstock plan and recognized a share-based payment expense of RMB 471,167,293.91.
XIII. Commitments and Contingencies
1. Significant Commitments
(1) Capital commitments
Unit: RMB'000
| Closing balance | Opening balance | |
| Contracted but not yet recognized in financial statements | ||
| - Commitment on construction of long-term assets | 4,782,225 | 12,527,408 |
| - Commitment on external investments | 2,440 | 12,940 |
| Total | 4,784,665 | 12,540,348 |
2. Contingencies
There are no material contingencies that need to be disclosed by the Group.
XIV. Events after the Balance Sheet Date
1. Significant Unadjusted Events
As of April 17, 2025, the company has no material post-balance sheet events to disclose.
2. Profit Distribution
Pursuant to the proposal of the 5
th meeting of the 6
thsession of the Board of Directors on April 17, 2025, the Companyproposed to distribute cash dividend of RMB7.00 (tax inclusive) per each 10 shares to all shareholders. The above dividenddistribution plan is still subject to the approval of the general meeting of shareholders.
XV. Other Significant Events
1. Segment Information
1.1 Report segment determining and accounting policy
According to the Group's internal organization structure, management requirements and internal report principles, theGroup has only one operating segment, which is the research and development, production and sales of AIoT products andservices.
External revenue by geographical area & non-current assets by geographical locationUnit: RMB
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | 2024 | 2023 (Restated) |
| External revenue generated in domestic area | 60,601,005,007.24 | 60,373,572,006.00 |
| External revenue generated in overseas area | 31,894,520,111.06 | 28,967,605,604.40 |
| Total | 92,495,525,118.30 | 89,341,177,610.40 |
Unit: RMB
| Item (Note) | On December 31, 2024 | On January 1, 2024 (restated) |
| Non-current assets in domestic area | 24,071,063,742.13 | 20,706,538,602.69 |
| Non-current assets in overseas area | 878,754,968.19 | 850,027,281.25 |
| Total | 24,949,818,710.32 | 21,556,565,883.94 |
Note: the non-current assets above did not include other non-current financial assets, long-term receivables, long-termequity investment, and deferred tax assets.
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
XVI. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts Receivable
(1) Disclosure by aging
Unit: RMB
| Book balance on December 31, 2024 | Book balance on January 1, 2024 | |
| Within credit period | 2,290,185,031.06 | 9,090,405,506.46 |
| Within 1 year after exceeding credit period | 22,956,416,334.33 | 9,384,300,440.80 |
| 1-2 years after exceeding credit period | 445,308,144.39 | 508,157,816.90 |
| 2-3 years after exceeding credit period | 276,803,705.22 | 311,172,302.13 |
| 3-4 years after exceeding credit period | 220,698,222.82 | 177,209,156.93 |
| Over 4 years after exceeding credit period | 304,329,300.13 | 215,593,619.38 |
| Subtotal | 26,493,740,737.95 | 19,686,838,842.60 |
| Less: bad debts provisions | 760,119,868.00 | 670,061,176.83 |
| Book value | 25,733,620,869.95 | 19,016,777,665.77 |
(2) Classification and disclosure of by bad debts provision methods
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Carrying balance | Credit loss provision | Book value | Carrying balance | Credit loss provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage (%) | Amount | Amount | Percentage (%) | Amount | Percentage (%) | Amount | |
| Provision for bad debts on a | - | - | - | - | - | - | - | - | - | - |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Category
| Category | Closing balance | Opening balance | ||||||||
| Carrying balance | Credit loss provision | Book value | Carrying balance | Credit loss provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage (%) | Amount | Amount | Percentage (%) | Amount | Percentage (%) | Amount | |
| single basis | ||||||||||
| Provision for bad debts by portfolios | 26,493,740,737.95 | 100.00 | 760,119,868.00 | 2.87 | 25,733,620,869.95 | 19,686,838,842.60 | 100.00 | 670,061,176.83 | 3.40 | 19,016,777,665.77 |
| Total | 26,493,740,737.95 | 100.00 | 760,119,868.00 | 2.87 | 25,733,620,869.95 | 19,686,838,842.60 | 100.00 | 670,061,176.83 | 3.40 | 19,016,777,665.77 |
Accounts receivable provision for bad debts by portfolios
Unit: RMB
| Customer | Closing balance | ||
| Carrying balance | Bad debts provision | Proportion (%) | |
| Subsidiaries in the Group | 22,467,680,384.77 | - | - |
| Portfolio A | 627,695.51 | 285,820.56 | 45.53 |
| Portfolio B | 4,025,308,111.44 | 759,709,501.21 | 18.87 |
| Portfolio C | 124,546.23 | 124,546.23 | 100.00 |
| Total | 26,493,740,737.95 | 760,119,868.00 | 2.87 |
Description of accounts receivable for bad debts provision by portfolios
As part of the Company's credit risk management, the Company's accounts receivable are divided into portfolio A, portfolio B and portfolio C according to the regionaland object risk characteristics of the business, and the impairment matrix is used to determine the expected credit loss of each portfolio based on the aging of accountsreceivable over credit period. For the accounts receivable generated by the Group's subsidiaries, because the payment time is arranged by the Group according to the
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
cash flow of the companies in the Group, the Company believes that the credit risk is low and no provision for bad debts is required. The aging information can reflectthe solvency of these three types of customers when the accounts receivable are due.
(3) Bad debts provision
Unit: RMB
| Item | Amount at the opening balance | Changes in the year | Translation differences for foreign currency statements | Amount at the closing balance | ||
| Accrual | Provision /Recollect or Reverse | Transfer or write-off | ||||
| Account receivables | 670,061,176.83 | 112,125,417.00 | - | 22,066,725.83 | - | 760,119,868.00 |
| Total | 670,061,176.83 | 112,125,417.00 | - | 22,066,725.83 | - | 760,119,868.00 |
(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 year, the aggregate amount of the Company's top five accounts receivable and contract assets was RMB22,424,089,493.28 (including accountreceivables of RMB 22,423,905,493.31 and contract assets of RMB183,999.97), accounting for 84.47% of the total balance of accounts receivable and contract assetsat the end of the year, and the provision for bad debts amounted to RMB62,873,002.90.
2. Other Receivables
2.1 By ccategories
Unit: RMB
| Category | Closing balance | Opening balance |
| Dividend receivables | - | 41,423,446.39 |
| Other receivables | 4,405,567,174.71 | 3,019,822,728.35 |
| Total | 4,405,567,174.71 | 3,061,246,174.74 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
2.2 Dividend receivables
Unit: RMB
| Investees | Closing balance | Opening balance |
| Subsidiaries of Hikvision | - | 41,423,446.39 |
| Total | - | 41,423,446.39 |
2.3 Other receivables
(1) Other receivables by aging
Unit: RMB
| Aging | Closing balance | Opening balance |
| Within contract period | 4,373,247,408.09 | 2,989,035,526.46 |
| Within 1 year | 24,122,882.75 | 24,581,596.42 |
| 1-2 years | 7,395,888.61 | 8,955,049.99 |
| 2-3 years | 6,172,540.83 | 1,282,544.62 |
| 3-4 years | 1,215,236.36 | 120,699.57 |
| Over 4 years | 754,319.10 | 961,843.47 |
| Subtotal | 4,412,908,275.74 | 3,024,937,260.53 |
| Less: bad debts provision | 7,341,101.03 | 5,114,532.18 |
| Book value | 4,405,567,174.71 | 3,019,822,728.35 |
(2) Other receivables by nature of the payment
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Unit: RMB
| Nature | Closing balance | Opening balance |
| Payments of subsidiaries within the Group | 4,305,122,194.83 | 2,761,272,567.36 |
| Guarantee deposit | 59,508,337.34 | 54,134,994.62 |
| Temporary payments for receivables | 38,710,852.68 | 24,622,620.38 |
| Restricted stock repurchase payments | - | 169,968,816.44 |
| Others | 9,566,890.89 | 14,938,261.73 |
| Total | 4,412,908,275.74 | 3,024,937,260.53 |
(3) Provision for bad debts of other receivables
Unit: RMB
| Item | Amount at the opening balance | Changes in the year | Translation differences for foreign currency statements | Amount at the closing balance | ||
| Accrual | Provision/ Recollect or Reverse k | Transfer or write-off | ||||
| Other receivables | 5,114,532.18 | 2,286,568.85 | - | 60,000.00 | - | 7,341,101.03 |
| total | 5,114,532.18 | 2,286,568.85 | - | 60,000.00 | - | 7,341,101.03 |
(4) Top 5 debtors of other receivables in terms of closing balance
At the end of the year, the total amount of the top five other receivables of the Company was RMB3,457,501,957.43, accounting for 78.35% of the total balance ofother receivables at the end of the year, without provision for bad debts.
3. Long-term Equity Investment
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying balance | Provisions | Book value | Carrying balance | Provisions | Book value | |
| Investment in subsidiaries | 8,234,997,797.96 | - | 8,234,997,797.96 | 7,687,757,432.17 | - | 7,687,757,432.17 |
| Investments in associated enterprises and joint ventures | 1,251,972,687.05 | - | 1,251,972,687.05 | 993,629,616.58 | - | 993,629,616.58 |
| Total | 9,486,970,485.01 | - | 9,486,970,485.01 | 8,681,387,048.75 | - | 8,681,387,048.75 |
(1) Investment in main subsidiaries
Unit: RMB
| Name of investee | Opening balance | Increase during the current reporting period | Decrease during the current reporting period | Closing balance | Write-off of impairment provision during the current reporting period | Balance of impairment loss provision at the end of the current 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 Co., Ltd. | 137,754,908.94 | 1,663,630.09 | - | 139,418,539.03 | - | - |
| Hangzhou Haikang | 8,546,368.08 | 485,830.22 | - | 9,032,198.30 | - | - |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Name of investee
| Name of investee | Opening balance | Increase during the current reporting period | Decrease during the current reporting period | Closing balance | Write-off of impairment provision during the current reporting period | Balance of impairment loss provision at the end of the current reporting period |
| Intelligence Ltd. |
Note: the increase this year is due to the participation of subsidiary employees in the restricted stock incentive plan.
(2) Investments in associated enterprises and joint ventures
Unit: RMB
| Name of investee | Opening balance | Increase/ Decrease in the current reporting period | Closing balance | Balance of impairment loss provision at the end of the current reporting period | |||||||
| Additional investments | Reduced investments | Investment income (losses) recognized under the equity method | Other comprehensive income adjustment | Other changes in equity | Declared cash dividends or profit distribution | Provision for impairment | Others | ||||
| 1. Joint Ventures | |||||||||||
| Hangzhou Haikang Intelligent Industrial Equity Investment Fund Partnership (L.P.) | 791,356,253.14 | - | - | 19,685,451.64 | - | 57,022,183.13 | - | - | - | 868,063,887.91 | - |
| Zhejiang City Digital Technology Ltd. | 29,635,485.61 | - | - | (3,765,849.98) | - | - | (5,792,258.59) | - | - | 20,077,377.04 | - |
| Zhejiang Haishi Huayue Digital Technology Ltd. | 14,067,281.65 | - | - | (362,700.73) | - | - | - | - | - | 13,704,580.92 | - |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Name ofinvestee
| Name of investee | Opening balance | Increase/ Decrease in the current reporting period | Closing balance | Balance of impairment loss provision at the end of the current reporting period | |||||||
| Additional investments | Reduced investments | Investment income (losses) recognized under the equity method | Other comprehensive income adjustment | Other changes in equity | Declared cash dividends or profit distribution | Provision for impairment | Others | ||||
| Guangxi Haishi Urban Operation Management Ltd. | 12,450,335.88 | - | - | (1,000,853.49) | - | - | - | - | - | 11,449,482.39 | - |
| Xuzhou Kangbo Urban Operation Management Service Ltd. | 11,052,348.36 | - | - | (206,602.05) | - | - | - | - | - | 10,845,746.31 | - |
| Others | 5,172,387.15 | 10,500,000.00 | - | (11,155,902.19) | - | - | - | - | - | 4,516,484.96 | |
| Subtotal | 863,734,091.79 | 10,500,000.00 | - | 3,193,543.20 | - | 57,022,183.13 | (5,792,258.59) | - | - | 928,657,559.53 | - |
| 2. Associated Companies | |||||||||||
| Zhiguang Hailian Big Data Technology Ltd. | 23,245,373.00 | - | - | 1,452,571.42 | - | - | (300,000.00) | - | - | 24,397,944.42 | - |
| Others | 106,650,151.79 | 3,000,000.00 | - | 21,356,906.12 | - | 167,910,125.19 | - | - | - | 298,917,183.10 | |
| Subtotal | 129,895,524.79 | 3,000,000.00 | - | 22,809,477.54 | - | 167,910,125.19 | (300,000.00) | - | - | 323,315,127.52 | - |
| Total | 993,629,616.58 | 13,500,000.00 | - | 26,003,020.74 | - | 224,932,308.32 | (6,092,258.59) | - | - | 1,251,972,687.05 | - |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
4. Revenue/cost of sales and services
Unit: RMB
| Item | 2024 | 2023 (Restated) | ||
| Revenue | Cost | Revenue | Cost | |
| Major business | 20,681,004,485.86 | 4,216,128,688.84 | 21,953,642,926.65 | 4,391,881,105.71 |
| Other business | 3,467,417,117.50 | 267,226,838.09 | 3,594,151,240.20 | 165,553,488.34 |
| Total | 24,148,421,603.36 | 4,483,355,526.93 | 25,547,794,166.85 | 4,557,434,594.05 |
5. Investment Income
Unit: RMB
| Item | 2024 | 2023 |
| Long-term equity investment income calculated by the cost method | 292,456,924.76 | 424,509,196.39 |
| Investment income of other non-current financial assets during the holding period | 61,241,171.99 | 65,923,840.33 |
| Investment income from debt investments | 45,379,372.42 | 30,076,287.42 |
| Long-term equity investment income(losses) measured by the equity method | 26,003,020.74 | (36,401,170.84) |
| Income from debt restructuring | 3,878,687.69 | - |
| Investment income from disposal of business assets | - | 15,902,073.63 |
| Others | - | (399,071.78) |
| Total | 428,959,177.60 | 499,611,155.15 |
6. Related Party Transactions
(1) Sales and purchase of goods, provision of services and receiving services
Purchase of goods/ receiving of services:
Unit: RMB
| Related party | Transaction type | 2024 | 2023 |
| Subsidiaries of Hikvision (Note) | Purchase of materials and receiving of services | 5,395,302,179.33 | 5,307,205,803.18 |
| Subsidiaries of CETC | Purchase of materials and receiving of services | 32,664,227.51 | 51,579,706.89 |
| Joint ventures | Purchase of materials and receiving of services | 807,264.14 | 547,169.80 |
| Associated companies | Purchase of materials and receiving of services | 469,026.55 | 71,939,278.00 |
| Other related parties | Purchase of materials and receiving of services | 17,127.81 | 20,000,000.00 |
| Total | 5,429,259,825.34 | 5,451,271,957.87 |
Note: Subsidiaries of Hikvision are subsidiaries of the Company.
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
Sales of goods/ rendering of services:
Unit: RMB
| Related party | Transaction type | 2024 | 2023 |
| Subsidiaries of Hikvision | Sales of products and rendering of services | 19,131,105,118.11 | 20,445,938,282.22 |
| Subsidiaries of CETC | Sales of products and rendering of services | 24,866,715.09 | 53,550,416.34 |
| Joint ventures | Sales of products and rendering of services | 1,673,502.60 | 7,910,493.83 |
| Other related parties | Sales of products and rendering of services | 5,753,689.86 | 5,660,404.06 |
| Total | 19,163,399,025.66 | 20,513,059,596.45 |
(2) Related party lease
Unit: RMB
| Lessor | Lease type | Lease fee recognized in 2024 | Lease fee recognized in 2023 |
| Subsidiaries of CETC | House | 1,670,579.23 | 2,324,068.08 |
| Total | 1,670,579.23 | 2,324,068.08 |
(3) Guarantees with related parties
In the current reporting period, the Company has provided guarantees for its 31 subsidiaries in an amount notexceeding an equivalent of RMB16.68 billion (2023: RMB21.74 billion).
(4) Funding to related parties
To meet the funding needs for research and development, the Company, together with the Group's subsidiariesHangzhou System, Hangzhou Rayin Technology, HikStorage Technology, HikMicro Sensing, HikRobot, HikAutoSoftware, and Hangzhou Hikvision Technology Co., Ltd. (hereinafter referred to as the "loan user companies"), andseveral banks have signed a long-term loan agreement for unified borrowing and repayment. Under this loanarrangement, the Company acts as the borrower, the loan user companies act as the users, and several banks are thelenders. The loan user companies apply for loans through the Company based on their own comprehensive fundingneeds including R&D projects, which are then approved by the banks. After approval, the loans are disbursed fromthe Company to the loan user companies. The loan term runs from December 31, 2021, to December 2, 2026. As ofDecember 31, 2024, RMB 1,066,600,000.00 (previous year: RMB 3,427,994,954.00) of the Company's long-termreceivables represents loans that have been applied for by the loan user companies. In 2024, interest incomerecognized was RMB 56,565,166.27 (previous year: RMB 75,642,852.46).
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
(5) Other related party transactions
Statement of capital deposits
Unit: RMB
Note: For the deposit that the Company deposited into China Electronics Technology Finance Co., Ltd., the totalfixed deposit amount by the end of 2024 is RMB4,000,000,000.00 (2023: RMB1,000,000,000.00), the currentdeposit amount by the end of 2024 is RMB101,015.82 (2023: RMB3,005,019,349.88) and the deposit interestincome is RMB47,752,259.82 in 2024 (2023: RMB81,941,288.77).
Statement of entrusted lendingIn April 2024, the Company convened the 20
th meeting of the 5
thBoard of Directors, which deliberated and approvedthe Proposal on Providing Financial Assistance to Subsidiaries. The Company will provide related-party loan limitsof up to RMB 800 million each to Hangzhou HikImaging Electronics Ltd. and Zhejiang HikFire Technology Co.,Ltd., (hereafter referred to as "Zhejiang Hikfire"). These loans are intended to meet the operating capital needs ofeach innovative business subsidiary, with specific loan amounts provided based on actual business requirements.The proposal was approved by the Company's shareholders' meeting on May 10, 2024. The validity period of therelated-party loan limits is three years from the date of approval by the shareholders' meeting, and the limits(balances) can be used in batches and cycled within the validity period. The annual interest rate for related-partyloans will be determined through negotiation between the parties, in compliance with relevant laws and regulations,and will be set according to market principles, with specific terms outlined in the contract. Upon the effectivenessof this proposal, any unused portion of the related-party loan limit obtained by Zhejiang HikFire on April 15, 2023,automatically become invalid
In April 2023, the Company convened the 17
th meeting of the 5
thBoard of Directors, which reviewed and approvedthe Proposal on Providing Financial Assistance to Subsidiaries. The proposal includes providing affiliated loanlimits of up to RMB 600 million to HikImaging Technology, RMB 600 million to Hangzhou Rayin Techonology,RMB 400 million to Hikfire Technology, RMB 200 million to Zhejiang HikFire, and RMB 500 million to WuhuSensortech. These funds are intended to meet the operational funding needs of each innovative business subsidiary,with specific loan amounts determined based on actual business requirements. The resolution was approved by thecompany's shareholders on April 15, 2023. The validity period of the affiliated loan limits is three years from the
| Related Party (Note) | Content of related party transaction | Amount occurred during the current reporting period | Closing balance at the end of the current reporting period | Amount occurred during the prior reporting period | Opening balance at the beginning of the current reporting period |
| Subsidiaries of CETC | Deposit into (withdraw from) current deposits | (4,918,334.06) | 4,000,101,015.82 | 4,985,831.20 | 4,005,019,349.88 |
| Total | (4,918,334.06) | 4,000,101,015.82 | 4,985,831.20 | 4,005,019,349.88 |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
date of approval by the shareholders, and the limits (balances) can be used in batches and recycled within the validityperiod. The annual interest rate for affiliated loans will be determined through negotiation between the parties incompliance with relevant laws and regulations, and will be set according to market principles, with specific termsspecified in the contract. Upon the effectiveness of this resolution, any unused affiliated loan limits obtained byHikImagingTechnology, Hangzhou Rayin Technology, and HikFire Technology on May 13, 2022, automaticallybecome invalid.
During the current reporting year, the Company issued entrusted loans to its subsidiaries through China ElectronicsTechnology Finance Co., Ltd. in the amount of RMB 4,156,000,000.00 (previous year: RMB 2,523,000,000.00).The investment income recognized from entrusted loans was RMB 45,379,372.42 (previous year: RMB30,076,287.42), and the handling fees recognized for China Electronics Technology Finance Co., Ltd. were RMB415,600.00 (previous year: RMB 277,300.00). At the end of the reporting year, the balance of entrusted loans issuedby the Company through China Electronics Technology Finance Co., Ltd. to its subsidiaries was RMB1,705,000,000.00 (end of previous year: RMB 1,663,000,000.00).
OtherDuring the year, the Company received RMB 820,937.88 as an international operation subsidy from its actualcontrolling party, CETC.
7. Receivables from Related Parties and Payables to Related Parties
(1) Receivables from related parties
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Bad debts provision | Carrying balance | Bad debts provision | ||
| Notes receivable and receivables for financing | Subsidiaries of Hikvision | 37,741,590.86 | - | 78,686,478.44 | - |
| Notes receivable and receivables for financing | Subsidiaries of CETC | 10,513,675.00 | 86,212.14 | 30,036,696.08 | 207,253.20 |
| Notes receivable and receivables for financing | Associates | 552,692.21 | - | - | - |
| Total | 48,807,958.07 | 86,212.14 | 108,723,174.52 | 207,253.20 | |
Unit: RMB
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Bad debts provision | Carrying balance | Bad debts provision | ||
| Account receivables | Subsidiaries of Hikvision | 22,467,680,384.77 | - | 15,710,430,253.38 | - |
| Account receivables | Subsidiaries of CETC | 178,548,603.77 | 83,196,754.77 | 239,193,519.53 | 93,713,214.14 |
| Account receivables | Joint ventures | 6,892,208.90 | 902,328.46 | 8,035,455.55 | 368,023.86 |
| Account receivables | Associates | 9,332,521.72 | 6,872,408.87 | 8,012,788.72 | 4,626,280.98 |
| Account receivables | Other related parties | 3,223,980.57 | 82,171.25 | 2,789,778.82 | 54,524.86 |
| Total | 22,665,677,699.73 | 91,053,663.35 | 15,968,461,796.00 | 98,762,043.84 | |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Prepayments | Subsidiaries of Hikvision | 168,075,014.96 | 1,849,870.06 |
| Prepayments | Subsidiaries of CETC | 546,123.27 | 2,023,660.38 |
| Total | 168,621,138.23 | 3,873,530.44 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Bad debts provision | Carrying balance | Bad debts provision | ||
| Other receivables (not including dividend receivables) | Subsidiaries of Hikvision | 4,305,122,194.83 | - | 2,761,272,567.36 | - |
| Other receivables (not including dividend receivables) | Subsidiaries of CETC | 125,015.40 | 1,256.99 | 1,149,910.00 | 218,482.90 |
| Other receivables (not including dividend receivables) | Joint ventures | 10,630.33 | 87.17 | 16,837.13 | 116.18 |
| Other receivables (not including dividend receivables) | Associates | - | - | 1,012,500.00 | 6,986.25 |
| Total | 4,305,257,840.56 | 1,344.16 | 2,763,451,814.49 | 225,585.33 | |
Unit: RMB
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Bad debts provision | Carrying balance | Bad debts provision | ||
| Dividend receivable | Subsidiaries of Hikvision | - | - | 41,423,446.39 | - |
| Total | - | - | 41,423,446.39 | - | |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Other current assets | Subsidiaries of Hikvision | 1,705,000,000.00 | 1,663,000,000.00 |
| Total | 1,705,000,000.00 | 1,663,000,000.00 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Carrying balance | Bad debts provision | Carrying balance | Bad debts provision | ||
| Long-term receivables (including those due within one year) | Subsidiaries of Hikvision | 1,066,600,000.00 | - | 3,427,994,954.00 | - |
| Long-term receivables (including those due within one year) | Subsidiaries of CETC | 119,906.12 | 983.23 | 47,210.22 | 325.75 |
| Total | 1,066,719,906.12 | 983.23 | 3,428,042,164.22 | 325.75 | |
(2) Payables to related parties
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Accounts payable | Subsidiaries of Hikvision | 689,778,641.24 | 723,182,432.60 |
| Accounts payable | Subsidiaries of CETC | 10,610,293.12 | 9,360,219.51 |
| Total | 700,388,934.36 | 732,542,652.11 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Contract liabilities | Subsidiaries of Hikvision | 1,120,699.61 | 6,294,170.87 |
| Contract liabilities | Subsidiaries of CETC | 433,257.00 | 382,321.75 |
| Contract liabilities | Other related parties | 1,000.50 | 2,052.00 |
Notes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Related party | Closing balance | Opening balance |
| Total | 1,554,957.11 | 6,678,544.62 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Other payables | Subsidiaries of Hikvision | 247,950,838.31 | 105,286,603.62 |
| Other payables | Subsidiaries of CETC | 529,940.00 | 640,040.00 |
| Other payables | Joint ventures | 6,000.00 | - |
| Other payables | Associates | 10,000.00 | 19,996,880.00 |
| Other payables | Other related parties | 113,000.00 | 100,000.00 |
| Total | 248,609,778.31 | 126,023,523.62 |
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Lease liabilities (including those due within one year) | Subsidiaries of CETC | - | 5,215,883.84 |
| Total | - | 5,215,883.84 |
8. Supplementary Information to the Cash Flow Statement
(1) Supplementary information to the cash flow statement
Unit: RMB
| Supplementary information | 2024 | 2023 |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 9,484,641,144.09 | 10,552,055,515.88 |
| Add: Assets impairment provision | 98,433.91 | (2,652,989.00) |
| Credit loss provision | 114,296,061.01 | 98,343,814.70 |
| Depreciation of fixed assets | 400,803,736.88 | 394,552,937.63 |
| Amortization of intangible assets | 11,963,785.89 | 19,203,854.89 |
| Depreciation of right of use assets | 43,289,525.77 | 60,032,344.15 |
| Amortization of long-term deferred expenses | 21,896,303.07 | 18,328,579.31 |
| Losses (gains) on disposal of fixed assets, intangible assets and other long-term assets | 7,215,529.29 | (1,072,329.19) |
| Financial expenses | 37,079,820.87 | 113,727,235.45 |
| Losses(gains)from change in fair value | 31,637,646.48 | (2,475,310.72) |
| Investment losses(gains | (425,080,489.91) | (499,611,155.15) |
| Share-based payment through equity settlement | 465,571,241.07 | 87,813,763.64 |
| Decrease (increase) in restricted funds | (11,358,859.44) | 43,774,289.78 |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Supplementary information | 2024 | 2023 |
| Decrease (increase) in deferred income tax assets | 16,231,468.48 | (152,253,958.67) |
| Decrease in inventories | 55,453,299.85 | 91,007,632.42 |
| Decrease (increase) in operating receivables | (7,821,898,315.65) | 4,966,174,990.63 |
| Increase (decrease) in operating payables | (703,839,540.74) | 838,972,476.93 |
| Increase (decrease) in deferred income | (44,429,536.28) | (53,059,016.05) |
| Net cash flow from operating activities | 1,683,571,254.64 | 16,572,862,676.63 |
| 2. Net change in cash and cash equivalents: | ||
| Closing balance of cash | 22,790,271,523.04 | 36,354,702,554.38 |
| Less: Opening balance of cash | 36,354,702,554.38 | 27,771,201,246.40 |
| Add: Closing balance of cash equivalents | - | - |
| Less: Opening balance of cash equivalents | - | - |
| Net increase (decrease) in cash and cash equivalents | (13,564,431,031.34) | 8,583,501,307.98 |
(2) Composition of cash and cash equivalents
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 22,790,271,523.04 | 36,354,702,554.38 |
| Including: Cash on hand | 252,041.30 | 311,652.18 |
| Bank deposit for payment at any time | 22,699,753,574.91 | 36,354,378,020.77 |
| Other currency funds for payment at any time | 90,265,906.83 | 12,881.43 |
| II. Cash equivalents | - | - |
| III. Closing balance of cash and cash equivalents | 22,790,271,523.04 | 36,354,702,554.38 |
On December 31, 2024, the Company's closing balance of other currency funds was RMB 113,532,375.06(December 31, 2023: RMB 11,920,490.22), of which RMB 23,266,468.23 (December 31, 2023: RMB11,907,608.79) were various guarantee deposits, other restricted funds, and etc., not cash or cash equivalents.XVII. Supplementary Information
1. Details of Non-Recurring Profit or Loss
Unit: RMB
| Item | Amount | Description |
| Profit or loss from disposal of non-current assets | (14,862,769.68) | / |
| The government subsidies recognized in the current period's profit or loss, except for those closely related to the company's normal operations, in compliance with national policy, and | 566,828,064.11 | / |
Hikvision 2024 Annual ReportNotes to Financial StatementsFor the reporting period from January 1, 2024 to December 31, 2024
| Item | Amount | Description |
| enjoyed according to established standards, which have a sustained impact on the company's profit or loss. | ||
| Apart from the effective hedging activities related to the company's normal business operations, the fair value changes in financial assets and financial liabilities held by non-financial enterprises, as well as the gains or losses from the disposal of these financial assets and liabilities. | 41,760,525.08 | / |
| The current period net income of subsidiaries constituting business combination under common control from the start of the period to the combination date | (295,677.15) | / |
| Income or loss from debt restructuring | 101,109,433.26 | / |
| The share-based payment expenses recognized in one-time due to the cancellation or amendment of the equity incentive plan | (471,167,293.91) | / |
| Other non-operating income and expense except the items mentioned above | 53,766,054.09 | / |
| Impact of income tax | (20,093,234.14) | / |
| The impact of minority equity | (94,579,719.28) | / |
| Total | 162,465,382.38 | / |
The Basis for Preparing the Schedule of Non-recurring Gains and Losses:
According to the provisions of the China Securities Regulatory Commission's "Announcement No. 1 on the Interpretationof Information Disclosure for Publicly Issued Securities - Non-recurring Gains and Losses (2023 Revision)," non-recurring gains and losses refer to the gains and losses arising from transactions and events that are not directly related tothe company's normal business operations, or although related to normal business operations, are of a special nature andoccur infrequently, thereby affecting the ability of financial statement users to make correct judgments about thecompany's operating performance and profitability.
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 ofSecurities No. 9 – Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revised in 2010) issuedby China Securities Regulatory Commission.
Unit: RMB
| Profit for the reporting period | Weighted average return on net assets (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the Company | 15.34 | 1.297 | 1.297 |
| Net profit excluding non-recurring items of profit or loss attributable to ordinary shareholders of the Company | 15.14 | 1.280 | 1.280 |
Section XI Documents Available for Reference
1. The financial report was signed and sealed by the person in charge of the Company, the person incharge of accounting work and person in charge of accounting organization (Accounting Supervisor);
2. The original audit report containing the seal of the accounting firm and the signature and seal ofthe certified public accountant;
3. Original versions and copies of all the Company's documents and announcements that werepublicly disclosed on the website designated by CSRC during the reporting period.
The above documents are completely placed at the Company's board of directors' office.
Hangzhou Hikvision Digital Technology Co., Ltd.
Chairman: Hu Yangzhong
April 19, 2025
Note:
This document is a translated version of the Chinese version 2024 Annual Report ("2024年年度报告"), and the published announcements in the Chinese version shall prevail. The complete publishedChinese 2024 Annual Report may be obtained at www.cninfo.com.cn.