Hikvision Investment Quality Review (002415.SZ)

Quality score: 81/100 Valuation position: current price/base FV 1.02 Final signal: WATCHLIST

Core Conclusion

Hikvision is WATCHLIST. Current price of CNY36.99 is roughly in line with base FV of CNY36.38 and above conservative FV of CNY24.48, so the report does not identify enough margin of safety.

Business And Quality

Five-year revenue CAGR is 3.2% and latest-year FCF is CNY21.72bn. The 81/100 score is supported by scale, cash generation, and net cash, while competition, policy exposure, and segment evidence keep the signal on watch.

Financial Audit

The review uses fiscal 2021-2025 in CNY. Five-year average FCF/Net Income is 0.84 and OCF/Net Income is 1.12. Latest net cash is CNY38.36bn. Market value is about CNY339.01bn on roughly 9.165bn shares.

Valuation

The valuation uses normalized FCF, a 1.7% CNY 10Y yield dated 2026-07-27, and a separate balance-sheet bridge. Price/base FV of 1.02 fails the 2x gate and requires either a lower entry price or clearer reacceleration evidence.

Buy And Monitor

Current action is watchlist. Upgrade requires price/base FV below 0.70, quality score at least 75, and stronger evidence that competitive and policy concerns are over-discounted. Track revenue trend, FCF/Net Income, ROIC, net cash/debt, dividends, buybacks, and governance disclosure.

Risks

Risks include geopolitical or policy pressure, weaker end-market demand, margin compression, and cash conversion below the historical average. A sustained FCF/Net Income fall below 0.60 would reduce FV and signal.

Sources

Sources are public quote and financial data platforms, official filings or company IR, and ChinaBond for the CNY risk-free rate. Research only, not personalized investment advice.