Hikvision Earnings: Unified Smart Products to Fuel Earnings Growth, Boosted by China’s Recovery

We nudge our fair value estimate on Hikvision down to CNY 39 from CNY 40.50 per share. First-quarter revenue growth fell slightly below our forecasts, and we have trimmed our revenue and earnings per share estimates for 2024-28 by up to 6%. We no longer forecast a high-growth phase in China until 2026, pushing down our five-year forward revenue compound annual growth rate to 12.5% from 13.4%. Budding economic recovery has not yet translated into more aggressive corporate investments. Regional government spending on municipal and public safety projects may remain restrained as the central government is preoccupied with big-ticket projects and managing the property sector.