Hikvision: Net Profit Slightly Ahead of Our Forecasts, Government Support Better Late Than Never

After Hikvision announced preliminary 2023 financials that are slightly above our forecasts, we hold our fair value estimate at CNY 40.50 per share pending the company’s release of complete full-year results. We view Hikvision as undervalued as the market seems to be overly pessimistic on China’s multiyear resolve in introducing automation to more industries, partially stoked by commentary that is bearish on industrial semiconductor demand in the first half of 2024. Even though government stimulus was largely absent in 2023, we believe monetary easing in January foreshadows fiscal support.