Third quarter security listed companies are mixed

As of October 31, listed companies in Shanghai and Shenzhen had successively released their third-quarter reports for 2012. Among these, several firms with security as their core business also unveiled their financial results. So, how did the security industry perform in the third quarter of 2012? The data from publicly traded companies provides the most reliable insights. Below are some key takeaways from the third-quarter reports of several security-focused listed companies: The performance of security stocks in the third quarter was mixed. Hikvision released its third-quarter report on October 27. From January to September, the company generated revenue of nearly 4.8 billion yuan, representing a year-on-year increase of almost 39%. Net profit attributable to the parent company stood at 1.24 billion yuan, up nearly 43% year-over-year. In the third quarter alone, revenue reached approximately 2 billion yuan, a year-on-year rise of 44%, while net profit amounted to 510 million yuan, increasing by nearly 49% year-over-year. This growth rate exceeded the 38.5% increase seen in the first half of the year, suggesting that the company's performance is accelerating. The ongoing boom in the security industry remains evident. Front-end equipment continues to drive much of the company's growth this quarter. Hikvision also anticipates that its annual net profit will increase by 30% to 50%. Dahua Technology announced its third-quarter report on October 25. In the first nine months, the company achieved operating revenue of 2.193 billion yuan, marking a year-on-year increase of 50.13%. Net profit attributable to shareholders of listed companies was 378 million yuan, up 85.08% year-over-year. In the third quarter, the company reported operating income of 896 million yuan, a year-on-year increase of 58.18%, while net profit attributable to shareholders surged to 152 million yuan, rising 102.03% compared to the same period last year. These figures indicate that Dahua's revenue and profits have been growing rapidly, with the single-quarter growth rate reaching its highest point since early 2011. The company projects its annual net profit to range between 6.05 and 7.56 billion yuan, representing a year-on-year increase of 60% to 100%. Meanwhile, Hanwang Technology released its third-quarter report on October 25. Total revenue for the first three quarters reached 300 million yuan, down 23.64% year-over-year. Despite a year-on-year increase of 86.25% in net profit, the company still incurred a loss of 38.18 million yuan. In the third quarter alone, the company's net loss widened to 19.62 million yuan, up 81.13% year-over-year. For the first nine months of 2012, the loss per share was 0.18 yuan, and the company anticipates a full-year loss. To reverse its performance, Hanwang Technology's management plans to divest certain assets and businesses in the fourth quarter, while also investing in new products, optimizing staff, and cutting costs. Other companies such as Infinova, Dinghan Technology, and Diwei Video also reported lackluster performances. Infinova posted a net loss of 9.14 million yuan in the first three quarters, a decline of 119.98% compared to the same period last year. Dinghan's net profit remained at 2.55 million yuan but was 95.99% lower than the previous year. Diwei Video Network achieved a net profit of 8.67 million yuan, a 26.69% drop compared to the same period last year. The security industry, often referred to as the "sunrise industry" within China's national economy, represents a collective application across multiple sectors. Its development follows a certain trajectory aligned with China's economic growth. However, the security industry has unique characteristics and is heavily influenced by national policies. As China shifts its economic growth model from one driven by input factors to one focused on efficiency, competition within the security industry will intensify. Building strong security brands will become a crucial path for companies seeking improved performance.