Hikvision

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Hangzhou Hikvision Digital Technology Co., Ltd.
TypePublic company
State-owned enterprise
SZSE: 002415
IndustryVideo surveillance
Founded2001; 20 years ago (2001)[1]
Founder
HeadquartersHangzhou, Zhejiang, China
Area served
Worldwide
Key people
Gong Hongjia(vice-chairman)
Chen Zongnian(chairman)
Hu Yangzhong(director)
ProductsCCTV and Network Surveillance Systems
BrandsEzviz, Hilook, Hiwatch.
RevenueIncrease CN¥41.905 billion (2017)
Increase CN¥10.443 billion (2017)
Increase CN¥09.411 billion (2017)
Total assetsIncrease CN¥51.571 billion (2017)
Total equityIncrease CN¥30.358 billion (2017)
Owner
Chinese Central Government
(via China Electronics Technology HIK Group Co., Ltd.)
(38.88%)[2]
Gong Hongjia(10.30%)[2]
Xinjiang Weixun Investment Management Limited Partnership(4.82%)[2]
Number of employees
42,685[1] (2021)
Parent
CET HIK Group(direct)
China Electronics Technology Group(indirect)
SASAC(ultimate)
Chinese name
Simplified Chinese杭州海康威视数字技术股份有限公司
Traditional Chinese杭州海康威視數字技術股份有限公司
Literal meaningHangzhou Hikvision Digital Technology. Company Limited by Shares
Alternative Chinese name
Simplified Chinese海康威视
Traditional Chinese海康威視
Literal meaningHIK–vision[note 1]
Footnotes / references
in a consolidated basis (net assets and net profit excluding minority interests); in Chinese Accounting Standards[3]

Hangzhou Hikvision Digital Technology Co., Ltd., often shortened to Hikvision, is a Chinese state-owned[4] manufacturer and supplier of video surveillance equipment for civilian and military purposes, headquartered in Hangzhou, Zhejiang.[5][6] Its controlling shares are owned by the Chinese government.[3][4] Due to its involvement in alleged human rights violation and national security concerns, the company has been placed under sanctions from the U.S. government and is prevented from receiving U.S. government contracts.[7][8]

History[edit]

Hikvision was founded in 2001 by Zhejiang HIK Information Technology Co., Ltd. (Chinese: 浙江海康信息技术股份有限公司) with the company having a 51% stake and Gong Hongjia (龚虹嘉) a 13.4% stake. Hikvision is an IoT solution provider with video surveillance market as its core competency.[9] It devotes 8% of its annual revenue to research and development[citation needed] with 40,403 employees.[10]

Hikvision has been listed on the Shenzhen Stock Exchange since 2010. The company provides surveillance products to the global market via more than "2,400 partners in 155 countries and regions",[11] and has its presence in 18 locations around the world.[12]

In October 2016, the company concluded a deal to use Movidius' computer vision technology.[13]

In May 2017, Hikvision established Hikstorage, a subsidiary focused on the production of storage devices.[14]

In January 2021, the company won a US$33 million, 1,900-camera smart city project in Shanghe County, Shandong province that includes cameras with facial recognition and license plate recognition technologies.[15]

U.S. investment prohibition[edit]

In November 2020, U.S. President Donald Trump issued an executive order prohibiting any American company or individual from owning shares in companies that the United States Department of Defense has listed as having links to the People's Liberation Army, which included Hikvision.[16][17][8] In December 2020, Hikvision was removed from FTSE Russell.[18]

On January 12, 2021, the Joe Biden inaugural committee returned a $500 donation to former U.S. Senator Barbara Boxer (D-CA) after she registered as a foreign agent for Hikvision .[19]

In March 2021, the Federal Communications Commission declared that Hikvision services and equipment "pose an unacceptable risk to U.S. national security.”[20]

Market[edit]

In June 2019, Hikvision was ranked 800th in the 2019 edition of Forbes Global 2000.[21] As of 16 November 2016, Hikvision was also a constituent of the SZSE 100 Index, a blue chip index of the Shenzhen Stock Exchange, as well as the pan-China indexes CSI 300 Index, FTSE China A50 Index and Hang Seng China 50 Index.[citation needed]

Ownership[edit]

As of 31 December 2017 Hikvision was owned by China Electronics Technology HIK Group Co., Ltd. (HIK Group, 中电海康集团有限公司), a wholly owned subsidiary of China Electronics Technology Group, which has a 39.59% stake.[3]: 82  China Electronics Technology Group is a state-run enterprise that is owned and supervised by the State-owned Assets Supervision and Administration Commission of the State Council. China Electronics Technology Group holds an additional 1.96% stake of Hikvision via its 52nd research institute (中国电子科技集团公司第五十二研究所).[3]: 82  The Chairman of Hikvision, Chen Zongnian (陈宗年), is also the chairman and the Party Committee Secretary of HIK Group, and Head of the aforementioned research institute.[3]: 92 

As of November 2019 the firm's largest individual shareholder was Vice Chairman Gong Hongjia with a 13% stake.[22] As of 12 2019 Fidelity International was also a major investor in Hikvision.[23]

In 2017, the third largest shareholder was a private equity fund (新疆威讯投资管理有限合伙企业; Xīnjiāng Wēixùn) which had a 7% stake,[3]: 82  which is associated with then Hikvision general manager Hu Yangzhong.[3]: 82  According to previous filing, "Xinjian Weixun" was also associated with Liu Xiang (刘翔),[24]: 57  former director (from 2015 to March 2018) and former deputy general manager of Hikvision, then deputy general manager of HIK Group, chairman of sister listed company Phenix Optical.[3]: 92 

In 2017, the fourth largest shareholder was another private equity fund (新普康投资有限合伙企业) which had a 2% stake.[3]: 92  The fund was partly owned by Gong's wife Chen Chunmei (陈春梅) and aforementioned Hu Yangzhong.[3]: 83  Hu Yangzhong also owned an additional 1.33% stake personally.[3]: 82  To sum up, those shareholders owned a combined 65.71% stake. Lastly, Hong Kong Securities Clearing Company owned 9.77%,[3]: 82  which was the nominees of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.

In 2021, IPVM.com alleged that Hikvision was created and controlled by the Chinese government.[4][25]

Ezviz office in Hangzhou

Alleged attempts to conceal government ownership[edit]

In 2015, IPVM.com criticized Hikvision for allegedly obscuring its Chinese government ownership.[26] Jeffrey He, president of Hikvision North America, had criticized the online blogger site for allegedly seeking financial gain.[27]

Alan West, in a 2016 interview published by The Times (and re-published by The Australian), suggested that Hikvision's ownership raised ethical and security concerns when it came to the usage of Hikvision's products by the British government.[5]

Controversies[edit]

Cybersecurity vulnerabilities[edit]

In May 2021, Italian public broadcaster RAI reported that Hikvision cameras automatically "opened communication channels with addresses registered in China" once connected to the internet.[28] Hikvision declined to comment on the RAI investigation.[28]

Involvement in Xinjiang re-education camps[edit]

In January 2019, the U.S. government began considering whether it should sanction Hikvision, which The Nation described as having "provided thousands of cameras that monitor mosques, schools, and concentration camps in Xinjiang."[29][30]

The U.S. government banned Hikvision from receiving federal government contracts in August 2019 due to security concerns.[31][32][33] In October 2019, Hikvision was formally placed on the Entity List by the U.S. government for its role in surveillance of Uyghurs in Xinjiang and of other ethnic and religious minorities in China.[7][34]

In response to the bans and sanctions, Hikvision has hired former U.S. ambassador Pierre-Richard Prosper "to advise the company regarding human rights compliance"[35] as well as numerous lobbyists, including former U.S. senators David Vitter[36][37] and Barbara Boxer, former U.S. congressman Toby Moffett, and a former senior OFAC official.[38]

In April 2021, the European Parliament confirmed that it had removed Hikvision thermal cameras from its premises following the approval of an amendment sponsored by Dutch MEP Lara Wolters calling for the removal of "all of Hikvision’s thermal cameras from Parliament’s premises" due to "an unacceptable risk that Hikvision, through its operations in Xinjiang, is contributing to serious human rights abuses."[39]

In July 2021, the UK Foreign Affairs Select Committee published a report stating that Hikvision cameras "have been deployed throughout Xinjiang, and provide the primary camera technology used in the internment camps".[40]

Bans[edit]

In January 2021, the United States of America banned government installations of information communication equipment from brands based in the People's Republic of China,[41] including Hikvision, which was of particular concern due to its use by over 300 government agencies.[42]

In June 2021, 224 Hikvision products were banned for one year by South Korea's Ministry of Science and ICT over forged test reports.[43]

In September 2021, the Indian Navy's headquarters "asked its all formations to 'discontinue' procurement of CCTV cameras and surveillance systems from Hikvision," according to The Week. The Week also reported that the Indian Navy had ordered the replacement and destruction of its existing Hikvision cameras.[44]

Notes[edit]

  1. ^ See also in the wiktionary for the individual meaning of the character and ; the concatenation 威視 has no meaning other than a compound word that is phonetically similar to vision.

References[edit]

  1. ^ a b "Hangzhou Hikvision Digital Technology Co Ltd". www.bloomberg.com. Bloomberg. Retrieved May 13, 2021.
  2. ^ a b c "Hikvision 2021 Quarter 1 Report January to March 2021" (PDF). 巨潮资讯网. HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO., LTD. April 17, 2021. Retrieved May 12, 2021.
  3. ^ a b c d e f g h i j k l 2017 Annual Report. Hikvision. 21 April 2018. Retrieved 11 September 2018 – via Shenzhen Stock Exchange website.
  4. ^ a b c ipvideomarket (2021-05-03). "Hikvision: Created And Controlled By China PRC Government". IPVM. Retrieved 2021-05-03.
  5. ^ a b "China funded Hikvision's CCTV with eyes across globe". The Australian. 17 September 2016. Retrieved 16 November 2016.
  6. ^ Allen-Ebrahimian, Bethany (2020-06-24). "Defense Department produces list of Chinese military-linked companies, 20 years after mandate". Axios. Retrieved 2020-06-24.
  7. ^ a b Shepardson, David (2019-10-07). "U.S. puts Hikvision, Chinese security bureaus on economic blacklist". Reuters. Retrieved 2019-10-07.
  8. ^ a b Strumpf, Dan (2021-05-25). "Chinese Surveillance-Gear Maker Hikvision Has Ties to Country's Military, Report Says". The Wall Street Journal. ISSN 0099-9660. Retrieved 2021-05-26.
  9. ^ 首次公开发行股票招股说明书摘要 [Prospectus] (PDF) (in Chinese). Hikvision. 13 May 2010. Retrieved 16 November 2016 – via China Electronics Technology Group website.
  10. ^ "About Hikvision". Bloomberg.
  11. ^ "About Hikvision". Hikvision. Retrieved 12 March 2017.
  12. ^ "Global Operations". Hikvision. Retrieved 12 March 2017.
  13. ^ Condon, Stephanie. "Movidius, Hikvision partner to make smarter security cameras". ZDNet. Retrieved 2021-05-26.
  14. ^ "Hangzhou Hikstorage Technology Co., Ltd". en.hikstorage.com. Archived from the original on 2021-04-05. Retrieved 2021-04-09.
  15. ^ Cheng, Isabella (28 January 2021). "Hikvision Wins $33 Million Smart City Project Beating 3 Integrators". IPVM. Retrieved 14 July 2021.(Subscription required.)
  16. ^ Chen, Shawna (2020-11-12). "Trump bans Americans from investing in 31 companies with links to Chinese military". Axios. Retrieved 2020-11-12.
  17. ^ Pamuk, Humeyra; Alper, Alexandra; Ali, Idrees (2020-11-12). "Trump bans U.S. investments in firms linked to Chinese military". Reuters. Retrieved 2020-11-12.
  18. ^ Kerber, Ross; Alper, Alexandra (2020-12-05). "FTSE Russell to drop eight Chinese firms after U.S. blacklisting". Reuters. Retrieved 2020-12-05.
  19. ^ Evans, Zachary (January 12, 2021). "Biden Returns Donation from Dem Ex-Senator Who Registered as Foreign Agent for China". news.yahoo.com. National Review. Retrieved January 12, 2021.
  20. ^ Shepardson, David (2021-03-13). "Five Chinese companies pose threat to U.S. national security: FCC". Reuters. Retrieved 2021-03-13.
  21. ^ "Hikvision on the Forbes Global 2000 List". Forbes. June 2019. Retrieved 2019-08-28.
  22. ^ "One of China's richest men named in Hikvision securities probe". Reuters. 14 Nov 2019.
  23. ^ "Investor defends backing blacklisted Chinese firm". BBC News. 2019-12-23. Retrieved 2019-12-24.
  24. ^ 2015年年度报告 [2015 Annual Report] (PDF) (in Chinese). Hikvision. 9 April 2016. Retrieved 15 November 2016 – via Shenzhen Stock Exchange.
  25. ^ ipvideomarket (2016-08-29). "Hikvision PRC China Government Origin And Control". IPVM. Retrieved 2021-05-03.
  26. ^ "Hikvision And The Chinese Government". IPVM. 2015-12-07. Retrieved 2016-10-07.
  27. ^ Karantzoulidis, Steve (2017-02-17). "Hikvision President Chats With SSI About Cybersecurity, Privacy Concerns". www.securitysales.com. Retrieved 2017-04-05.
  28. ^ a b Rollet, Charles (17 May 2021). "Italian State News Investigates Hikvision". IPVM. Retrieved 16 July 2021.
  29. ^ "How the Left Should Respond to Ethnic Cleansing in China". The Nation. 15 January 2019. Archived from the original on 2020-02-17. The United States has considered sanctioning the Chinese surveillance giant Hikvision, which has provided thousands of cameras that monitor mosques, schools, and concentration camps in Xinjiang.
  30. ^ "China Undercover".
  31. ^ Lohr, Steve (7 August 2019). "U.S. Moves to Ban Huawei From Government Contracts". New York Times. Retrieved 10 August 2019. The prohibition was mandated by Congress...And it extends to other Chinese companies...including the telecom equipment maker ZTE and Hikvision, which develops facial-recognition technology
  32. ^ John S. McCain National Defense Authorization Act for Fiscal Year 2019, section 889(f)(3)(B), accessed 3 January 2020
  33. ^ Cockerell, Isobel (28 June 2021). "The murky Chinese surveillance company at the center of a UK health ministry scandal". Coda Story.
  34. ^ "Addition of Certain Entities to the Entity List". Federal Register. 2019-10-09. Retrieved 2020-01-03.
  35. ^ Carville, Olivia; Kahn, Jeremy (2019-05-22). "China's Hikvision Has Probably Filmed You". Bloomberg. Retrieved 2021-05-09.
  36. ^ Allen-Ebrahimian, Bethany (2019-10-29). "What a lobbyist's remarks behind closed doors tell you about Chinese money in Washington". The Washington Post (Opinion). Archived from the original on 2020-02-17. Retrieved 2019-10-30.
  37. ^ Honovich, John (2019-10-29). "Senator Vitter Becomes "Proud Member Of The Hikvision Team", Calls Out "Anti-China" Rubio". IPVM. Retrieved 2021-07-12.
  38. ^ Markay, Lachlan (2021-07-07). "Chinese surveillance firm hires former top U.S. sanctions official as lobbyist". Axios. Axios Media. Retrieved 2021-07-12.
  39. ^ Rollet, Charles (2021-04-29). "EU Parliament Removes Hikvision, Citing Human Rights Abuses". IPVM. Retrieved 2021-05-07.
  40. ^ Vallance, Chris (2021-08-14). "CCTV watchdog criticises Hikvision Uyghur response". BBC News. Retrieved 2021-08-14.
  41. ^ "Taiwan Government Bans China Tech Including Dahua and Hikvision". IPVM. 2021-08-17. Retrieved 2021-09-09.
  42. ^ Taiwan Government Bans China Tech Including Dahua and Hikvision (Motion picture). YouTube. 2021-08-17. Retrieved 2021-09-09.
  43. ^ Rollet, Charles (2021-06-22). "224 Hikvision Products Banned for One Year by South Korea". IPVM. Retrieved 2021-09-09.
  44. ^ Sagar, Pradip R (2021-09-03). "EXCLUSIVE: Indian military under target by Chinese origin surveillance systems". The Week. Retrieved 2021-09-09.