Hangzhou Hikvision Digital Technology : 3Q2023 Financial Report

	Hikvision 2023 Q3 Report
Stock Exchange Code：002415	Abbreviation of Securities：Hikvision
No：2023-036

Hangzhou Hikvision Digital Technology Co., Ltd.

2023 3rd Quarter Report

The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or material omissions.

Important Content Notes:

1. The Board of Directors, Board of Supervisors, directors, supervisors and senior management of Hangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as the "Company") hereby guarantee that the information presented in this report shall be together be wholly liable for the truthfulness, accuracy and completeness of its contents and free of any false records, misleading statements or material omissions, and will undertake individual and joint legal liabilities.
2. Chen Zongnian, the Company's legal representative, Jin Yan, the person in charge of the accounting work, and Zhan Junhua, the person in charge of accounting institution (accounting supervisor) hereby declare and warrant that the financial information in this report is authentic, accurate, and complete.
3. Whether the 3rd quarter report has been audited

□Yes√ No

Hikvision 2023 Q3 Report

1. Key Financial Data

1. Key Accounting Data and Financial Indicators

Whether the Company performed a retroactive adjustment or restatement of the previous accounting data

√ Yes □ No

Reasons for retroactive adjustment or restatement of the previous accounting data √ Changes in accounting policies

Unit：RMB

				YoY Change(%)				YoY Change(%)
							between 2023
		2022 Q3	between 2023 Q3		2022 Q1~Q3
			Q1~Q3 and 2022
	2023 Q3			and 2022 Q3	2023 Q1~Q3
					Q1~Q3
		Before the	After the	After the		Before the adjustment	After the adjustment	After the adjustment
		adjustment	adjustment	adjustment
Revenue (RMB)	23,704,377,795.74	22,464,020,301.15	22,464,020,301.15	5.52%	61,275,164,193.63	59,721,536,891.77	59,721,536,891.77	2.60%
Net profit attributable to
shareholders of the	3,513,299,100.33	3,081,001,112.19	3,081,936,227.11	14.00%	8,851,167,117.21	8,840,255,887.45	8,840,604,273.67	0.12%
Company (RMB)
Net profit attributable to
shareholders of the
Company excluding non-	3,425,870,315.02	2,879,656,597.51	2,880,591,712.43	18.93%	8,461,998,947.98	8,525,515,615.02	8,525,864,001.24	-0.75%
recurring gains and losses
(RMB)
Net cash flows from	-	-	-	-	5,913,853,480.95	160,117,141.04	160,117,141.04	3593.45%
operating activities (RMB)
Basic earnings per share	0.381	0.331	0.331	15.11%	0.949	0.938	0.938	1.17%
(RMB/share)
Diluted earnings per share	0.380	0.331	0.331	14.80%	0.949	0.938	0.938	1.17%

Hikvision 2023 Q3 Report

(RMB/share)
Weighted average ROE	5.05%		4.84%	4.84%	0.21%		12.59%		13.64%	13.64%		-1.05%
					On December 31, 2022		Change(%) between December 31, 2022
	On September 30, 2023				and September 30, 2023
					Before the adjustment			After the adjustment	After the adjustment
Total assets (RMB)	127,457,393,562.08					119,233,282,761.47	119,234,602,968.11			6.90%
Net assets attributable to
shareholders of the	71,512,727,362.29					68,389,154,548.76	68,388,671,139.78			4.57%
Company (RMB)

Reasons for changes in accounting policies and situations of correction of accounting errors Note:

The Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for Business Enterprises (the "Interpretation No. 16") on November 30, 2022. The scope of the initial recognition exemption for deferred income tax in the Accounting Standards for Business Enterprises No. 18-Income Tax was revised. Making it clear that the provisions on exemption of initial recognition of deferred income tax liabilities and deferred income tax assets in Accounting Standards for Business Enterprises No. 18-Income Taxes do not apply to single transactions that are not business combinations and do not affect either accounting profit or taxable income (or deductible losses) at the time of the transactions, nor do such provisions apply to single transactions whose assets and liabilities initially recognized result in equal taxable temporary differences and deductible temporary differences. This provision is effective as of January 1, 2023 and earlier application is permitted. The Group implemented this requirement from January 1, 2023, and accounted for individual transactions between the beginning of the earliest period in which the financial statements are presented and December 31, 2022 using the retrospective adjustment method, and restated the financial statements for the comparative period.

The total share capital of the Company as of the previous trading day of the financial report disclosure:

The total share capital of the Company as of the previous trading day of the financial report disclosure (share)

Fully diluted earnings per share calculated using the latest share capital:

Fully diluted earnings per share (RMB/share) calculated with the latest share capital

9,330,600,931

0.949

			Hikvision 2023 Q3 Report
	2. Items and Amounts of Non-recurring Gains and Losses
	√ Applicable □ Inapplicable
			Unit：RMB
	Item	Amount occurred in the current	January 1, 2023-
		reporting period (2023 Q3)	September 30, 2023
	Profit or loss from disposal of non-current assets (including the	-9,430,072.63	-12,656,820.35
	write-off for the impairment provision of assets)
	Government subsidies included in the current profit and loss
	(except for government subsidies that are closely related to the
	Company's regular business operations, comply with national	136,101,654.70	381,206,012.59
	policies, and those that are continuously enjoyed in accordance
	with a certain standard fixed or quantitative basis)
	Profits and losses attributed to change in fair value for held-for-
	trading financial assets and held-for-trading financial liabilities;
	and investment income from disposal of held for-trading financial	542,193.75	-16,295,272.07
	assets, held-for-trading financial liabilities, and available-for-sale
	financial assets, excluding the effective hedging business related to
	the regular business operation of the Company.
	The profit and loss of business combination under different control	-	116,433,610.45
	realized in stages by multiple transactions
	Other non-operating income and expenditures except the items	14,083,115.40	64,577,632.01
	mentioned above
	Less: Impact of income tax	27,232,345.35	56,910,041.17
	Impact of the minority interests (after tax)	26,635,760.56	87,186,952.23
	Total	87,428,785.31	389,168,169.23

Details of other profit and loss items that meet the definition of non-recurring profit and loss: □ Applicable √ Inapplicable

The Company does not have other specific conditions of profit and loss items that meet the definition of non- recurring profit and loss.

Explanations on classifying any non-recurring gain/loss item mentioned in the Public-Non-recurring Gains and Losses> as recurring gain/loss item.

□ Applicable √ Inapplicable

The Company does not classify any non-recurring gain/loss item mentioned in the

1 on Information Disclosure for Companies Offering Their Securities to the Public-Non-recurring Gains and Losses> as recurring gain/loss item.

Hikvision 2023 Q3 Report

3. Information and Explanation about Variations in Key Accounting Data and Financial Indicators

√Applicable □Inapplicable

3.1 Explanation for variations in balance sheet items

				Balance on			Balance on			Change
	Item			September 30, 2023			December 31, 2022					Note of Changes
							(%)
				(RMB)			(RMB)
	Held-for-trading		23,469,021.18		12,807,438.36		83.25%		Due to fluctuation in foreign exchange
	financial assets
												rate and decrease in the scale of foreign
	Held-for-trading
		4,181,387.92	68,299,685.57	-93.88%		exchange hedging business
	financial liabilities
	Prepayments		1,176,737,421.25		534,780,120.52		120.04%		Due to increase in prepayment for lock in
					part of raw material
	Other receivables		807,450,237.15		516,503,485.58		56.33%		Increase in tax refunds receivable and
					etc.
													Part of the construction works that meet
	Contract assets		1,154,739,956.62		2,118,223,370.98		-45.49%		the conditions for collection are
													transferred to accounts receivable
													Goodwill arising from the acquisition of
	Goodwill		397,053,077.36		217,386,531.28		82.65%		Wuhu Sensortech Intelligent Technology
													Ltd.
	Notes payable		635,917,745.45		1,207,756,963.94		-47.35%		Decrease in notes settlement
	Taxes payable		1,844,339,050.35		1,234,032,138.37		49.46%		Increase in quarterly corporate income
					tax payable
	Non-current liabilities		5,033,280,741.55		868,197,272.46		479.74%		Increase in demands for long-term
	due within one year
												working capital
	Long-term borrowings		9,251,855,308.30		7,522,315,341.60		22.99%
	Other current liabilities		1,451,039,846.11	923,721,593.78		57.09%		The repurchase of public outstanding
	Other non-current		1,669,822,285.01		2,831,108,087.59		-41.02%
					shares and the completion of cancellation
	liabilities
												of the third batch of 2018 Restricted
	Capital reserves		8,312,925,536.12		10,141,153,435.32		-18.03%
					Stock Plan
	Treasury shares		2,737,987,226.55		5,316,033,650.24		-48.50%
	Other comprehensive												Increase in differences of foreign
		12,228,192.69		-42,587,158.81		128.71%		currency statement translation due to
	income
												fluctuations of exchange rate

Hikvision 2023 Q3 Report

3.2 Explanation for variations in income statement items

Items

2023 Q1 ~ 2023 Q3

2022 Q1 ~ 2022 Q3

YoY Change

Note of changes

(RMB)

(RMB)

(%)

Business taxes and

526,331,975.20

404,250,604.06

30.20%

Increase in additional taxes caused by

surcharges

increase in the VAT credit

Financial expenses

-438,125,633.70

-937,194,664.41

53.25%

Decrease in foreign exchange gains

Decrease in investment income in

Investment income

39,763,080.90

166,250,594.06

-76.08%

joint ventures and associates and

decrease in trading gains from foreign

exchange hedging business

Gains from changes

83,987,239.15

-69,558,120.87

220.74%

Increase in gains from changes in fair

value in foreign exchange hedging

in fair value

business

3.3 Explanation for variations in cash flow statement items

Item	2023 Q1 ~ 2023 Q3	2022 Q1 ~ 2022 Q3	YoY Change	Note of changes
(RMB)	(RMB)	(%)
Net cash flows from	5,913,853,480.95	160,117,141.04	3593.45%	Increase in inventory purchases
operating activities
Net cash flows from	-3,439,635,132.46	-2,623,081,074.94	-31.13%	Increased in investment on the
investing activities	construction of industrial parks

Hikvision 2023 Q3 Report

II. Shareholder Information

1. Number of Common Shareholders and Preferred Shareholders with Resumed Voting Rights and

Information about Top 10 Shareholders

								Unit: Share
Total number of common shareholders at the		Total number of preferred shareholders (if any)
354,629	whose voting rights have been recovered at the end			0
end of the reporting period
	of the reporting period (if any)
Particulars about top 10 shareholders
		Share-		The number	Pledged, marked or
		Total shares	of common	frozen
	Nature of	holding
Name of shareholder	held at the	shares held
shareholder	percentage
	period-end	with trading	Status			Amount
		(%)
			restrictions
China Electronics Technology HIK Group Co.,	Domestic State-
owned	36.48%	3,403,879,509	-	Pledged		50,000,000
Ltd.
corporation
Gong Hongjia	Overseas	10.32%	962,504,814	-	Pledged		153,026,700
individual
	Domestic
Hangzhou Weixun Equity Investment	non-state-	4.83%	450,795,176	-	Pledged		18,900,000
Partnership (Limited Partnership)	owned
	corporation
Shanghai Perseverance Asset Management
Partnership (Limited Partnership) -	Other	4.66%	435,000,000	-	-		-
Perseverance Adjacent Mountain 1 Yuanwang
Fund
	Domestic State-
CETC Investment Holdings Co., Ltd.	owned	2.49%	232,307,903	-	-		-
	corporation
	Domestic
Hangzhou Pukang Equity Investment	non-state-	1.96%	182,510,174	-	Pledged		48,300,000
Partnership (Limited Partnership)	owned
	corporation
The 52nd Research Institute at China Electronics	Domestic State-	1.94%	180,775,044	-	-		-
Technology Group Co. Ltd.	owned
corporation
Hu Yangzhong	Domestic	1.67%	155,636,477	116,727,358	-		-
Individual
	Domestic State-
Central Huijin Investment Co., Ltd.	owned	0.69%	64,700,691	-	-		-
	corporation
Hong Kong Securities Clearing Company	Overseas	0.50%	47,002,201	-	-		-
Ltd.(HKSCC)	corporation
Particulars about shares held by the Top 10 common shareholders holding shares that are not subject to trading restriction(s)
	Number of common shares		Type of shares
Name of shareholder	without trading restrictions
Type	Number
	held at the period-end
China Electronics Technology HIK Group Co.,		3,403,879,509	RMB common shares		3,403,879,509
Ltd.
Gong Hongjia		962,504,814	RMB common shares		962,504,814

Hikvision 2023 Q3 Report

Hangzhou Weixun Equity Investment	450,795,176	RMB common shares	450,795,176
Partnership (Limited Partnership)
Shanghai Perseverance Asset Management
Partnership (Limited Partnership) -	435,000,000	RMB common shares	435,000,000
Perseverance Adjacent Mountain 1 Yuanwang
Fund
CETC Investment Holdings Co., Ltd	232,307,903	RMB common shares	232,307,903
Hangzhou Pukang Equity Investment	182,510,174	RMB common shares	182,510,174
Partnership (Limited Partnership)
The 52nd Research Institute at China Electronics	180,775,044	RMB common shares	180,775,044
Technology Group Co. Ltd
Central Huijin Investment Co., Ltd.	64,700,691	RMB common shares	64,700,691
Hong Kong Securities Clearing Company	47,002,201	RMB common shares	47,002,201
Ltd.(HKSCC)
Hu Yangzhong	38,909,119	RMB common shares	38,909,119
	China Electronics Technology HIK Group Co., Ltd., CETC Investment Holdings
	Co., Ltd. and The 52nd Research Institute at China Electronics Technology Group
	Co., Ltd. are all subject to control of China Electronics Technology Group Co. Ltd.
	Ms. Chen Chunmei, limited partner of Hangzhou Pukang Equity Investment
	Partnership (Limited Partnership), is the spouse of Mr. Gong Hongjia, overseas
Explanation on associated relationship and	individual shareholder of the Company. Hu Yangzhong, domestic individual, is
concerted actions among above shareholders	holding shares in both Hangzhou Weixun Equity Investment Partnership (Limited
	Partnership) and Hangzhou Pukang Equity Investment Partnership (Limited
	Partnership). Except for these, the Company does not know whether the other
	shareholders are related parties or whether they are acting-in-concert parties in
	accordance with the Administration of the Takeover of Listed Companies
	Procedures.

2. Total Number of Preferred Shareholders and Information about Top 10 Preferred Shareholders

□ Applicable √ Inapplicable

Hikvision 2023 Q3 Report

III. Significant Events

√Applicable □Inapplicable

1. During the reporting period, the Company completed the third repurchase and cancellation of the 2018 Restricted Stock Plan.

On April 13, 2023 and May 9, 2023, the 17th meeting of the 5th session of the Board of Directors, the 15th meeting of the 5th session of the Board of Supervisors and 2022 Annual General Meeting reviewed and approved the Proposal of Unlocking Conditions for the Third Unlocking Period of the 2018 Restricted Plan were not Meet and the Proposal of the Repurchase of Restricted Shares that have been Granted but not yet Unlocked. As the Company performance did not meet the unlocking conditions for the third unlocking period of the 2018 Restricted Stock Plan (Revised Draft), 33,331,858 restricted shares granted but not unlocked in the current period for all grantees of the 2018 Restricted Stock Plan were repurchased and cancelled. And the Company had completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities Depository and Clearing Ltd. on July 5, 2023.

For details, please refer to The Proposal of Unlocking Conditions for the Third Unlocking Period of the 2018 Restricted Plan were not Meet and The Proposal of the Repurchase of Restricted Shares that have been Granted but not yet Unlocked (2023-021)published by the Company on www.cninfo.com.cn on April 15, 2023 and The Proposal of the Completed Cancellation of the Restricted Shares that have been Granted but not yet Unlocked for the Third Uncloking Period of the 2018 Restricted Plan (2023-028)published by the Company on www.cninfo.com.cn on July 7, 2023.

As of the end of the current reporting period, the Company has a total of 97,402,605 granted but unvested shares, accounting for 1.04% of the Company's total share capital at the end of the reporting period.

2. Matters relating to steady promotion of the spin-off of HikRobot to be listed on the SZSE ChiNext Market

On March 7, 2023, Hangzhou Hikrobot Co., Ltd. (hereinafter referred to as "HikRobot") received Notice on Accepting the Application Documents for the Initial Public Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. (SZSE Listing Review [2023] No. 252) issued by Shenzhen Stock Exchange,

Hikvision 2023 Q3 Report

and SZSE considered that application documents were completed and decided to accept. For details, please refer to the Announcement on the Application for the Initial Public Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd., a Subsidiary of the Company, is Accepted by the SZSE (Announcement No.: 2023-008) published by the Company on cninfo website (www.cninfo.com.cn) on March 8, 2023. Shenzhen Stock Exchange issed the Inquiry Letter on the Review of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. (Inquiry Letter (2023) No. 010121) on March 30, 2023, and HikRobot has submitted the Reply to the Inquiry Letter on the Review of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. on May 17, 2023. Shenzhen Stock Exchange issed the Second Inquiry Letter on the Review of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. (Inquiry Letter (2023) No. 010218) on June 30, 2023, and HikRobot has submitted the Reply to the Second Inquiry Letter on the Review of Application Documents for the Initial Public Share Offering of Shares and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. on July 27, 2023.

3. The Company's controlling shareholder disclosed its plan to increase its shareholding in the Company

The Company received a notice from China Electronics Technology HIK Group Co., Ltd. (hereinafter referred to as "CETHIK"), the Company's controlling shareholder, on October 16, 2023 that CETHIK intends to increase its shareholdings of the Company's shares through the trading system of the Shenzhen Stock Exchange through centralized bidding, block trading or other trading methods permitted by laws and regulations within 6 months from October 17, 2023. The total amount of the increased shareholdings will not be less than RMB200 million and not more than RMB300 million, and the proposed price of increased shareholdings shall not be higher than RMB40 per share (inclusive). The plan of increase shareholding will be implemented at the opportunity with the consideration of the fluctuation of Hikvision's stock price and the overall trend of the capital market. The Company will continue to pay attention to the relevant situation of this plan of increase shareholding in accordance with the Rules for the Listing of Stocks on the Shenzhen Stock Exchange and other relevant regulations, and fulfill its information disclosure obligations in a timely manner. For details, please refer to the Announcement on the Company's Controlling Shareholders' Plan to Increase the Company's Shareholding (2023-033) published by the Company on www.cninfo.com.cn on October 17, 2023.