Hangzhou Hikvision Digital Technology Co Ltd

Hangzhou Hikvision Digital Technology Co Ltd maintains a conservative capital structure with a debt-to-equity ratio of 0.11 and a current ratio of 2.42, indicating strong short-term liquidity coverage. The company holds total assets of 138.05 billion CNY against total liabilities of 54.70 billion CNY, resulting in total equity of 83.35 billion CNY. Long-term debt stands at 9.42 billion CNY. Despite the strong balance sheet ratios, the risk assessment flags medium liquidity risk and notes that net cash is negative after subtracting total debt, suggesting that cash and equivalents are insufficient to cover all debt obligations without asset liquidation or operating cash flow generation.

Profitability metrics demonstrate robust returns, with a return on equity (ROE) of 17.92% and a return on assets (ROA) of 10.82%. The company generated net income of 14.20 billion CNY on revenue of 92.51 billion CNY, yielding a net margin of approximately 15.3%. Operating income was 16.96 billion CNY, reflecting an operating margin of roughly 18.3%. Gross profit totaled 42.03 billion CNY, indicating a gross margin of 45.4%. These returns are supported by strong operating cash flow of 25.34 billion CNY, which significantly exceeds net income, highlighting high earnings quality.

The company’s valuation reflects its profitability profile, trading at a price-to-earnings (P/E) ratio of 21.14 and a price-to-book (P/B) ratio of 3.79. The enterprise value-to-EBITDA multiple is 17.88, and the EV-to-revenue multiple is 3.43. The market capitalization is 315.73 billion CNY, based on a share price of 34.45 CNY and 9.16 billion shares outstanding. The price-to-tangible book ratio is identical to the P/B ratio at 3.79, suggesting minimal intangible assets relative to total equity.

Growth trajectory analysis is limited by the absence of historical period data in the input. However, the current financial snapshot shows a substantial revenue base of 92.51 billion CNY. The company generated free cash flow of 3.50 billion CNY after capital expenditures of 3.62 billion CNY. The positive free cash flow, albeit modest relative to operating cash flow, indicates that the company is reinvesting a significant portion of its operating cash into capital projects, likely for product development or capacity expansion.

Risk factors include medium liquidity risk and low dilution risk. The key flag regarding negative net cash after debt subtraction warrants monitoring, as it implies reliance on operating cash flows for debt servicing rather than cash reserves. The dilution risk is assessed as low, with basic and diluted shares outstanding being identical at 9.16 billion, indicating no significant in-the-money options or convertible securities currently impacting the share count.

Recent observations from investor relations data show a mean analyst price target of 38.98 CNY, representing a potential upside from the current price of 34.45 CNY. The median price target is 37.90 CNY, with a high target of 50.00 CNY and a low target of 33.70 CNY. The mean recommendation is 1.86, leaning towards a buy, with 6 strong buy ratings, 4 buy ratings, and 4 hold ratings. This consensus suggests analyst confidence in the company’s near-term performance despite the broader classification ambiguities.

Free cash flow surged 106.7% year-over-year to CNY 3.5 billion in FY2026, demonstrating strong liquidity generation.

Analysts project 17.7% upside to a mean price target of CNY 38.98, reflecting positive market sentiment.

Return on equity of 17.9% exceeds the 75th percentile of the cohort, showcasing efficient capital utilization.

Net income declined at a 4.1% CAGR over four years, signaling weakening profitability trends despite revenue growth.

Revenue growth stalled with a mere 3.2% CAGR over four years, indicating limited top-line expansion potential.

Long-term debt increased significantly from CNY 9.0 billion in FY2022 to CNY 18.3 billion in FY2024.

The company faces medium liquidity risk, which could constrain financial flexibility during periods of market stress.

Capex intensity of -3.8% is below the cohort median, potentially indicating underinvestment in future growth drivers.

Revenue ¥20.72B, +11,8% YoY; Operating income +46,1% YoY.

• ▍Revenue ¥20.72B, +11,8% YoY
• ▍Operating income +46,1% YoY
• ▍Net income +36,4% YoY
• ▍Net margin 13.4%

Revenue ¥26.75B, −2,7% YoY; Operating income +27,4% YoY.

• ▍Revenue ¥26.75B, −2,7% YoY
• ▍Operating income +27,4% YoY
• ▍Net income +26,0% YoY
• ▍Net margin 18.2%

Revenue ¥23.94B, +0,7% YoY; Operating income +19,8% YoY.

• ▍Revenue ¥23.94B, +0,7% YoY
• ▍Operating income +19,8% YoY
• ▍Net income +20,3% YoY
• ▍Net margin 15.3%

Revenue ¥23.29B, −0,5% YoY; Operating income +17,9% YoY.

• ▍Revenue ¥23.29B, −0,5% YoY
• ▍Operating income +17,9% YoY
• ▍Net income +14,9% YoY
• ▍Net margin 15.5%

Revenue ¥18.53B; Operating income ¥2.64B.

• ▍Revenue ¥18.53B
• ▍Operating income ¥2.64B
• ▍Net margin 11.0%

Revenue ¥27.50B; Operating income ¥4.19B.

• ▍Revenue ¥27.50B
• ▍Operating income ¥4.19B
• ▍Net margin 14.1%

Revenue ¥23.78B; Operating income ¥3.84B.

• ▍Revenue ¥23.78B
• ▍Operating income ¥3.84B
• ▍Net margin 12.8%

Revenue ¥23.39B; Operating income ¥3.71B.

• ▍Revenue ¥23.39B
• ▍Operating income ¥3.71B
• ▍Net margin 13.5%

Revenue ¥92.51B, +0,0% YoY; Operating income +18,5% YoY.

• ▍Revenue ¥92.51B, +0,0% YoY
• ▍Operating income +18,5% YoY
• ▍Net income +18,5% YoY
• ▍Free cash flow +106,7% YoY
• ▍Net margin 15.3%

Revenue ¥92.50B, +3,5% YoY; Operating income −10,8% YoY.

• ▍Revenue ¥92.50B, +3,5% YoY
• ▍Operating income −10,8% YoY
• ▍Net income −15,1% YoY
• ▍Free cash flow −71,4% YoY
• ▍Net margin 12.9%

Revenue ¥89.34B, +7,4% YoY; Operating income +8,5% YoY.

• ▍Revenue ¥89.34B, +7,4% YoY
• ▍Operating income +8,5% YoY
• ▍Net income +9,9% YoY
• ▍Free cash flow +155,5% YoY
• ▍Net margin 15.8%

Revenue ¥83.17B, +2,1% YoY; Operating income −20,0% YoY.

• ▍Revenue ¥83.17B, +2,1% YoY
• ▍Operating income −20,0% YoY
• ▍Net income −23,6% YoY
• ▍Free cash flow −69,4% YoY
• ▍Net margin 15.4%