Chinese surveillance manufacturer to raise $500m

HANGZHOU, China—Hikvision Digital Technology, ranked by IMS Research as the largest worldwide manufacturer of DVR products, and a maker of other video surveillance products, has announced an initial public offering and is now listed on the Shenzhen Stock Exchange. Trading under symbol 002415, the company is selling an initial 50 million shares at a price of roughly $10, for a total capital raise of approximately $500 million.

Security Systems News is working to schedule a live interview with Hikvision executives, but the company indicated in a press release that it is looking to use the newly raised funds to further penetrate the United States and European markets. “This listing will allow Hikvision to invest in product research and development ... [and] ... continue to invest in its logistics and technical service centers in the US and Europe, as well as other regions and markets, in order to provide better service to customers,” the release read.

In 2009, the company's operating income was roughly $300 million, with an operating profit of roughly $100 million. The company has more than 2,700 employees, some 700 of which are engineers, according to the press release. Hikvision is a member of both ONVIF and PSIA and has been attempting to grow its sales base outside of its home China.

When ObjectVideo announced in 2007 a partnership with Hikvision, whereby the manufacturer agreed to incorporate OV analytics into its products, executives were already predicting Hikvision would be a global power in surveillance. "Under the covers," said John Clark, vice president of business development for ObjectVideo, "they're already a player in North America ... They've been very successful at selling sub-assemblies into the DVR environment. A number of companies in North America use the Hikvision board. Now they'll just turn around and brand it as their own."

Clark didn't mince words: "Their growth rate is absolutely staggering."

Kok Kheng Tan, director of OEM development for WPG System, which represents OV in Asia, described Hikvision this way in 2007: "One of their key strengths," he said, "is that, even though they are manufacturers, they have good communications with the end users and integrators so they can react quickly to the market. They have very strong engineering that can turn out new products very quickly."