Hangzhou Hikvision Digital Technology Co. Ltd.
2026 Half Year Report
January to June 2026
July 25 2026Hikvision 2026 Half Year Report
Section I Important Notes Contents and Definitions
The board of directors directors 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.Hu Yangzhong the Company's legal representative Jin Yan the person in charge of the
accounting work and Zhan Junhua the person in charge of accounting department (accounting
supervisor) hereby declare and warrant that the financial statements in this half year report are
authentic accurate and complete.All directors of the Company have attended the board meeting to review this half year report.Proposed semi-annual profit distribution plan or capital reserve conversion plan for additional
shares deliberated by the board of directors during the reporting period
√Applicable □Not applicable
Whether to increase share capital by capitalizing capital reserve
□Yes √No
The profit distribution plan approved by the Company through this board of directors meeting is
as follows: Based on the total number of shares outstanding on the record date for the mid-2026 profit
distribution the Company will distribute a cash dividend of RMB5.50 (tax included) for every 10
shares to all shareholders. No bonus shares will be issued and there will be no capital reserve
conversion to increase the share capital. Authorized by the Company's annual shareholders' meeting
held on May 8 2026 the Company's mid-2026 profit distribution plan has been approved by the
board of directors meeting held on July 24 2026.
1Hikvision 2026 Half Year Report
Please read the half year report and pay particular attention to the following risk factors:
(1) Global economic downturn risks: The growth momentum of major global economies continues to diverge
and macroeconomic uncertainties have intensified due to inflation volatility and monetary policy adjustments
with regional economic imbalances becoming more pronounced. The Company relies on its global business
layout to diversify risks from single markets and flexibly adapts its operating strategies to meet local demand.However if the global economy enters a prolonged recession the Company's overall business will still be
significantly affected.
(2) Geopolitical risks: Global geopolitical competition continues to intensify regional conflicts remain
unresolved unilateralism and trade protectionism are on the rise and compliance barriers and uncertainties for
cross-border operations have significantly increased. The Company continues to optimize its global resource
layout and strengthen its localized risk management system. However if the geopolitical situation suddenly
deteriorates businesses in the relevant countries and regions will still face adverse impacts.
(3) Domestic economic transition risks: The domestic economy is in a critical period of structural transformation
and momentum conversion. The demand in some traditional sectors continues to adjust and the restoration of
market expectations still requires time. Changes in the external trade environment also continuously pose
challenges to corporate exports. The Company empowers the digital transformation of various industries with
AIoT technology; however if the transition process falls short of expectations market demand fluctuations
will have an adverse impact on the Company's business operations.
(4) Technology upgrading risks: The iteration speed of cutting-edge technologies such as artificial intelligence
internet of things big data and cloud computing continues to accelerate and the depth and breadth of the
integration of technologies with real-world scenarios keep achieving new breakthroughs. The Company has
long focused on core technology fields and relies on massive commercial practices to rapidly implement and
iterate technologies. However if it fails to accurately grasp the trends of technological evolution it will face
the risk of declining market competitiveness.
(5) Internal management risks: The Company's business scale continues to expand and new products new
businesses and global layout are constantly deepening leading to continuously increasing complexity in
organizational management and cross-regional and cross-business collaboration. The Company continues to
optimize its management system and process framework and emphasizes the construction of core talent
2Hikvision 2026 Half Year Report
pipelines. However if management capabilities cannot keep pace with the speed of business expansion it will
have an adverse impact on the Company's operational efficiency and the quality of its development.
(6) Supply chain risks: The process of regional restructuring of the global supply chain is accelerating and
geopolitical competitive measures such as technology control and trade restrictions continue to impact the
stability of the global supply system. The Company continues to improve its diversified supply network and
optimize inventory control and supply chain resilience but if a large-scale disruption occurs in core supply
links it will still have an adverse impact on the stability of the Company's production and operations.
(7) Cybersecurity risks: As AIoT scenarios continue to expand in depth the attack methods faced are becoming
increasingly complex and stealthy and targeted security threats against IoT devices and systems are
continuously escalating. The Company has always prioritized the construction of a full-link cybersecurity
system and continuously iterates the security protection capabilities of products and systems but it is still
unable to completely avoid potential security risks such as malicious attacks and data breaches.
(8) Product quality and safety risks: AIoT products have a wide range of application scenarios and cover key
areas such as people's livelihood and public safety with strict requirements for product quality and safety
standards. The Company has always placed great emphasis on product safety and quality management
establishing a full-process quality control system. However if there are any lapses in quality and safety
management it may lead to product quality issues or even major recall events which could adversely affect
the Company's operating performance.
(9) Legal and compliance risks: Global multilateral trade rules are facing continuous challenges. Regulatory
policies in areas such as data security export controls and market access are becoming increasingly stringent
and the complexity of compliance requirements for cross-border operations continues to rise. The Company
has established a full-process compliance management system covering all global operations. However if the
Company's compliance capabilities fail to adapt to changes in regulatory conditions it could have an adverse
impact on the Company's operations.
(10) Financial risks caused by reduced customer payment capacity: Macroeconomic fluctuations transmit
effects to the operating conditions and cash flow of upstream and downstream enterprises in the industrial
chain. The uncertainty of customer payment capacity and accounts receivable cycles has always existed. The
Company has consistently adhered to prudent operations and established a full-process accounts receivable
3Hikvision 2026 Half Year Report
control mechanism maintaining sufficient cash reserves. However if market liquidity continues to tighten the
Company may still face risks such as slower collections and increased bad debts.
(11) Exchange rate fluctuation risk: The Company's overseas business covers many countries and regions around
the world and there are multi-currency settlement exposures in procurement sales financing and other aspects
of daily operations. The Company uses compliant financial instruments to reasonably hedge against exchange
rate fluctuation risks. However if global foreign exchange markets experience unexpected sharp fluctuations
they will still affect the Company's financial performance and operating results.
(12) Intellectual Property Risks: The Company continuously maintains high-intensity R&D investment and has
accumulated a large number of core technological achievements in the fields related to the internet of things
establishing a systematic intellectual property protection and management mechanism. However with the
enhancement of global intellectual property protection and intensified industry competition the Company still
faces potential risks of intellectual property disputes or infringement of its core technological achievements.The above-mentioned alerts do not include all the potential risks for the Company. Investors are advised to invest
with caution.Note:
This document is a translated version of the Chinese version 2026 Half Year Report (2026 年半年度
报告) and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2026 Half Year Report may be obtained at www.cninfo.com.cn.
4Hikvision 2026 Half Year Report
CONTENTS
Section I Important Notes Contents and Definitions... 1
Section II Corporate Profile & Key Financial Data ... 7
Section III Management Discussion and Analysis ..... 11
Section IV Corporate Governance Environmental and .. 30
Section V Significant Events ....................... 32
Section VI Changes in Shares and Information about.. 43
Section VII Bonds .................................. 50
Section VIII Financial Report ...................... 51
Section IX Documents Available for Reference ...... 176
5Hikvision 2026 Half Year Report
Definitions
Term Definition
Reporting Period From January 1 2026 to June 30 2026
Articles of Association Articles of Associations for Hangzhou Hikvision Digital Technology Co. Ltd
Hikvision our Company the
Company the Listed Company Hangzhou Hikvision Digital Technology Co. Ltd
the Group our Group
CETC China Electronics Technology Group Corporation the actual controller of the Company
CETHIK CETHIK Group Co. Ltd. the controlling shareholder of the Company
Hangzhou EZVIZ Network Co. Ltd. (According to the context also refers to the corresponding
EZVIZ EZVIZ Network
business)
Hangzhou Hikrobot Co. Ltd. (According to the context also refers to the corresponding
HikRobot
business)
Shijiazhuang Sensor-Tech Intelligence Technology Co. Ltd. (According to the context also
Sensortech HikAuto
refers to the corresponding business)
HikMicro Micro Sensing Hangzhou Hikmicro Sensing Technology Co. Ltd. (According to the context also refers to the
Thermal Imaging corresponding business)
Wuhan Hikstorage Technology Co. Ltd. (According to the context also refers to the
HikSemi
corresponding business)
Hangzhou Hikimaging Technology Co. Ltd. (According to the context also refers to the
HikImaging
corresponding business)
Hangzhou Hikfire Technology Co. Ltd. (According to the context also refers to the
HikFire
corresponding business)
Hangzhou Rayin Technology Co. Ltd. (According to the context also refers to the corresponding
HikRayin
business)
A long investment cycle business prospects uncertain has the high risk and uncertainty in need
for direct or indirect investment in exploration in order for the Company to timely enter into new
areas of business. Initially disclosed in Announcement about Management Measures for Core
Innovative Business
Staff Investment in Innovative Business (www.cninfo.com.cn).In this report innovative business also refers to EZVIZ HikRobot HikAuto HikMicro
HikSemi HikImaging HikFire HikRayin and their related products.
6Hikvision 2026 Half Year Report
Section II Corporate Profile & Key Financial Data
I. Corporate information
Stock abbreviation HIKVISION Stock code 002415
Stock exchange where the shares of the Company
Shenzhen Stock Exchange
are listed
Name of the Company in Chinese 杭州海康威视数字技术股份有限公司
Abbr. of the Company name in Chinese 海康威视
Name of the Company in English HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO. LTD
Abbr. of the Company name in English HIKVISION
Legal representative Hu Yangzhong
II. Contacts and contact information
Board Secretary Securities Affairs Representative
Name Feng Wei Cai Chao
No. 518 Wulianwang Street Binjiang District No. 518 Wulianwang Street Binjiang
Address
Hangzhou District Hangzhou
Tel. 0571-88075998; 0571-89710492 0571-88075998; 0571-89710492
Fax 0571-89986895 0571-89986895
E-mail hikvision@hikvision.com hikvision@hikvision.com
III. Other relevant information
1. Company's contact information
Whether there is any change in the Company's registered address office address zip code company website or
company email address during the reporting period.□Applicable √ Inapplicable
There is no change in the Company's registered address office address zip code company website or company
email address during the reporting period. Please refer to 2025 Annual Report for details.
2. Information disclosure and place of the report
Whether there is alteration in information disclosure and place of the report during the current reporting period.□ Applicable √ Inapplicable
7Hikvision 2026 Half Year Report
The media website and the securities exchange website for the disclosure of the Company Half Year report and
the place where the Half Year Report is available for inspection remained unchanged during the reporting period.For details please refer to the 2025 Annual Report.
3. Other relevant information
Whether other relevant information has changed during the current reporting period
□ Applicable √ Inapplicable
IV. Key accounting data and financial indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□ Yes √ No
First half of 2026 First half of 2025 YoY Change
Revenue (RMB) 46822537847.07 41818040088.44 11.97%
Net profit attributable to shareholders
7895705450.115657349798.6839.57%
of the Company (RMB)
Net profit attributable to shareholders
of the Company excluding non- 7711948685.90 5489000328.37 40.50%
recurring gains and losses (RMB)
Net cash flows from operating
3231411324.585343019637.89-39.52%
activities (RMB)
Basic earnings per share (RMB/share) 0.862 0.615 40.16%
Diluted earnings per share
0.8620.61540.16%
(RMB/share)
Weighted average ROE 9.17% 6.85% 2.32%
Change between
On June 30 2026 On December 31 2025 December 31 2025 and
June 30 2026
Total assets (RMB) 137690401796.00 138049655334.62 -0.26%
Net assets attributable to shareholders
84346746543.8883348185885.621.20%
of the Company (RMB)
The total share capital of the Company as of the previous trading day of the report disclosure:
The total share capital of the Company as of the previous trading day of the report disclosure (share) 9164871550
Fully diluted earnings per share calculated with the latest share capital:
Fully diluted earnings per share (RMB/share) calculated with the latest share capital 0.862
8Hikvision 2026 Half Year Report
V. Differences in accounting data between domestic and overseas accounting standards
1. Difference in the financial report of net profits and net assets according to the disclosure of International
Financial Reporting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of International
Financial Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards in the reporting period.
3. Explanation of the differences in accounting data under domestic and overseas accounting standards
□ Applicable √ Inapplicable
VI. Items and amounts of non-recurring gains and losses
√ Applicable □ Inapplicable
Unit：RMB
Item Amount
Gain or loss from disposal of non-current assets (including the write-off for the impairment provision
(83102.12)
of assets)
The government subsidies included in the current profits and losses (excluding the government
subsidy closely related to regular course of business of the Company and government subsidy based 129501261.00
on standard quota or quantitative continuous application according to the state industrial policy)
Apart from the effective hedging activities related to the Company's normal business operations the
fair value changes in financial assets and financial liabilities held by non-financial enterprises as 67138227.90
well as the gains or losses from the disposal of these financial assets and liabilities.Gain or loss on debt restructuring 18522982.11
Other non-operating income and expenditures except the items mentioned above 39644803.76
Less: Impact of income tax 35606266.92
Impact of the minority interests (after tax) 35361141.52
Total 183756764.21
The specific situation of other profit and loss items that meet the definition of non-recurring gains and losses：
□ Applicable √ Inapplicable
9Hikvision 2026 Half Year Report
The Company does not have any specific situations of profit and loss items that meet the definition of non-
recurring gains and losses.Explanation of the situation where the non-recurring gains and losses items listed in the 'Interpretative
Announcement No. 1 on Information Disclosure of Companies Issuing Securities Publicly — Non-recurring Gains
and Losses' are defined as recurring gains and losses items.□ Applicable √ Inapplicable
The Company does not have any instances where the non-recurring gains and losses items listed in the 'Interpretative
Announcement No. 1 on Information Disclosure of Companies Issuing Securities Publicly — Non-recurring Gains
and Losses' are classified as recurring gains and losses items.
10Hikvision 2026 Half Year Report
Section III Management Discussion and Analysis
I. The principal business of the Company during the reporting period
There was no significant change for the principal business of the Company during the current reporting period.Please refer to 2025 Annual Report for details.II. Core competitiveness analysis
There was no significant change in the Company's core competitiveness during the current reporting period. For
details please refer to 2025 Annual Report.III. Core business analysis
Whether consistent with the Company's core business disclosure during the current reporting period
√Yes □ No
In the first half of 2026 the international environment is complex and changeable with global economic
recovery showing obvious regional and industry differentiation and external uncertainties persisting; the domestic
economy continues to advance toward high-quality development with continuously optimized industrial structure
and steady progress in digitalization and intelligent upgrading. Artificial intelligence technology is developing
rapidly with large-scale model applications continuously deepening bringing new opportunities to the AIoT
industry.Facing domestic and international environmental changes the Company adheres to stable operations follows
industry development trends insists on technological innovation and pays more attention to operational quality and
long-term development capabilities promoting growth with benefits and continuously enhancing supply chain
resilience and operational assurance capabilities. During the reporting period the Company oriented toward
improving operational quality consolidated its technological foundation deepened organizational transformation
optimized resource configuration promoted quality improvement and efficiency enhancement and pushed for the
deep integration of artificial intelligence technology with product innovation and operational management
continuously optimizing supply chain management and constantly strengthening operational resilience and
sustainable development capabilities.
11Hikvision 2026 Half Year Report
During the reporting period the Company achieved a total operating revenue of RMB46.82 billion
representing a year-on-year increase of 11.97%; it realized a net profit attributable to the shareholders of the
Company of RMB7.90 billion representing a year-on-year increase of 39.57%.
1. Insist on technological innovation and strengthen core capabilities
The Company has always adhered to the business development driven by technological innovation
maintaining high-level R&D investment and continuously improving the three core technology systems of IoT
sensing artificial intelligence and big data. During the reporting period the Company continued to promote the
deep integration of the Guanlan large-scale AI models with software and hardware products constantly enriching
the AI large-scale model product system around security and scenario-based digitalization businesses promoting
the continuous integration of AI capabilities into product innovation and scene applications further enhancing
product intelligence levels and scene application value. The Company continues to strengthen the core technical
capability construction of multidimensional sensing constantly expanding the application boundaries of AIoT
technologies and providing more diverse products and solutions for industrial digital transformation.
2. Improve the supply chain system and enhance support capabilities
During the reporting period the Company continuously optimized the supply chain system around key material
security and supply chain ecosystem construction constantly enhancing the supply chain security capability.Relying on the long-term accumulated supply chain management capability the Company emphasized strategic
reserves of key materials and improved product delivery security capability; continuously improved supply chain
ecosystem construction deepened upstream and downstream collaboration mechanisms and enhanced supply chain
operation efficiency and stability. The relevant measures effectively ensured the smooth operation of production
and business and provided strong support for the Company's continuous improvement of business weight and
business development.
3. Optimize the operation system to lead quality improvement and efficiency enhancement with "Digital-
Intelligent Quality"
During the reporting period the Company continued to promote the "Digital-Intelligent Quality" management
model continuously deepening the digital and intelligent construction of key business processes such as R&D
supply chain marketing and services driving the coordinated improvement of quality management R&D
innovation and operational management. The Company actively promoted the application of AI large-scale models
12Hikvision 2026 Half Year Report
in business management activities continuously enhancing operational efficiency and resource allocation levels.The Company adheres to refined operation deepens mechanism reform emphasizes cost management and operation
asset management improves risk control and compliance management systems continuously enhances operational
quality and benefits and lays a solid foundation for the Company's stable development.
4. Deepen the core business and enhance development resilience
During the reporting period the Company continues to deepen its focus on the AIoT industry actively seizing
industrial opportunities brought by the development of artificial intelligence technology and continuously
promoting the upgrading of the security industry and the development of scenario-based digitalization business. In
terms of domestic business the scenario-based digitalization business continued to expand growth space and the
SMBG channel operational efficiency was further improved; in terms of overseas business the Company adhered
to its international development strategy continuously deepened the "one country one policy" business strategy
continuously optimized product structures and marketing systems enhanced localized marketing service and
operational capabilities and actively expanded key regional markets. The Company adhered to a prudent business
approach actively responded to changes in the external environment continuously improved its risk prevention and
control capabilities and constantly strengthened the core competitiveness and development resilience of its main
business.
5. Innovative businesses continue to grow unleashing growth momentum
During the reporting period the overall revenue of the innovative businesses was RMB15.17 billion
representing a year-on-year increase of 28.93% accounting for 32.40% of the Company's total revenue. The
Company's innovative businesses have continued to maintain rapid growth with its profit level steadily improving.Hikrobot Hikmicro EZVIZ HikAuto HikSemi and other innovative businesses have continued to focus on niche
industries constantly improving product competitiveness and operational quality and further consolidating their
leading positions in the industry and becoming important growth drivers for the Company. A business layout that
is both unified and differentiated has further enhanced the Company's overall competitiveness and the synergistic
effects between the core business and innovative businesses have continued to emerge continuously improving the
AIoT industry ecosystem and providing strong support for the Company's long-term sustainable development.
13Hikvision 2026 Half Year Report
YoY changes in key financial data
Unit: RMB
First half of 2026 First half of 2025 YoY Change Note of Change
Total revenue 46822537847.07 41818040088.44 11.97% No significant change
Total operating costs 23426598006.35 22919499439.04 2.21% No significant change
Selling expenses 5822062529.86 5708759811.30 1.98% No significant change
Administrative expenses 1493403061.13 1386257017.69 7.73% No significant change
Increase in foreign currency exchange loss
Financial expenses 346237439.98 -739368414.40 146.83%
due to fluctuation in foreign exchange rate
Income Tax Expenses 1282273423.47 759413973.74 68.85% Increase with the increase in total profit
R&D investments 6168979406.20 5669772011.51 8.80% No significant change
Net cash flows from Increase in procurement and inventory
3231411324.585343019637.89-39.52%
Operating Activities spending during the reporting period
Net cash flows from
-1478787231.28 -1878812149.09 21.29% No significant change
Investment Activities
Net cash flows from
-10341903127.42 -8550575930.17 -20.95% No significant change
Financing Activities
Decrease in net cash inflow from operating
Net decrease in cash and
-8760839510.77 -5054494535.50 -73.33% activities and increase in net cash outflow
cash equivalents
from financing activities
Revenue structure
Unit：RMB
First half of 2026 First half of 2025
Proportion to total Proportion to total YoY Change
Amount Amount
revenue revenue
Total revenue 46822537847.07 100.00% 41818040088.44 100.00% 11.97%
Classified by industry
AIoT products and services 46822537847.07 100.00% 41818040088.44 100.00% 11.97%
Classified by product/business
Products and services for
30616341900.3765.39%29271794689.3770.00%4.59%
main business (Note 1)
Constructions for main
1036484458.972.21%780316256.461.87%32.83%
business
Subtotal 31652826359.34 67.60% 30052110945.83 71.86% 5.33%
Robotic business 4027882511.41 8.60% 3138354805.04 7.50% 28.34%
Thermal imaging business 2964146065.61 6.33% 2008057842.03 4.80% 47.61%
14Hikvision 2026 Half Year Report
First half of 2026 First half of 2025
Proportion to total Proportion to total YoY Change
Amount Amount
revenue revenue
Smart home business 2817179848.17 6.02% 2752441041.15 6.58% 2.35%
Auto electronics business 2763828320.43 5.90% 2352287642.16 5.63% 17.50%
Storage business 1944390380.66 4.15% 1033275636.44 2.47% 88.18%
Other innovative businesses
652284361.451.39%481512175.791.15%35.47%
(Note 2)
Subtotal 15169711487.73 32.40% 11765929142.61 28.14% 28.93%
Classified by region
Domestic 29758876223.84 63.56% 26393423147.63 63.11% 12.75%
Overseas 17063661623.23 36.44% 15424616940.81 36.89% 10.63%
Note1: Main business refers to the business parts other than innovative businesses.Note2: Other innovative businesses include the products and services of the innovative business subsidiaries such as HikFire HikRayin
and HikImaging. Same below.Note 3: The data listed in the subtotal may differ slightly from the sum of the related individual data due to rounding.Revenue structure (Note 4)
Unit: RMB 100mn
First half of 2026 First half of 2025 YoY Change
PBG 58.33 55.73 4.67%
Domestic main EBG 77.33 74.62 3.63%
business SMBG 46.18 40.67 13.55%
Other products and services for main business 5.24 7.19 -27.12%
Overseas main
Products and services for main business 129.45 122.31 5.84%
business
Innovative businesses 151.70 117.66 28.93%
Total 468.23 418.18 11.97%
Note 4: The revenue from domestic main business and overseas main business only includes Hikvision's main business's products
and services excluding revenue from innovative businesses.Note 5: Innovative businesses' revenue includes its domestic and overseas revenue.Note 6: The data listed in total may differ slightly from the sum of the related individual data due to rounding.Industries products or regions accounting for more than 10% of the Company's revenue or operating profit
√ Applicable □ Inapplicable
Unit: RMB
15Hikvision 2026 Half Year Report
Gross YoY Change YoY Change of YoY Change of
Revenue Operating costs
margin of revenue operating costs gross margin
Classified by industry
AIoT products and
46822537847.0723426598006.3549.97%11.97%2.21%4.78%
services
Classified by product/business
Products and services
30616341900.3714112358132.5253.91%4.59%-6.35%5.39%
for main business
Constructions for
1036484458.97872049187.3615.86%32.83%48.50%-8.88%
main business
Innovative businesses 15169711487.73 8442190686.47 44.35% 28.93% 16.24% 6.07%
Subtotal 46822537847.07 23426598006.35 49.97% 11.97% 2.21% 4.78%
Classified by region
Domestic 29758876223.84 15145961292.17 49.10% 12.75% 2.45% 5.12%
Overseas 17063661623.23 8280636714.18 51.47% 10.63% 1.79% 4.21%
When the statistical caliber of the Company's major business data is adjusted during the reporting period the
Company's major business data would be adjusted according to the end of the reporting period in the most recent
period.□Applicable √ Inapplicable
Total operating costs structure
Classified by industry
Unit: RMB
First half of 2026 First half of 2025
Proportion to Proportion to YoY
Industry Item
Amount operating Amount operating Change
costs costs
AIoT products and
Operating costs 23426598006.35 100.00% 22919499439.04 100.00% 2.21%
services
Classified by product/business
Unit: RMB
16Hikvision 2026 Half Year Report
First half of 2026 First half of 2025
Proportion to Proportion to
YoY
Product/business Item
Amount operating Amount operating Change
costs costs
Products and Services
Operating costs 14112358132.52 60.24% 15069807832.83 65.75% -6.35%
for main business
Constructions for main
Operating costs 872049187.36 3.72% 587229933.62 2.56% 48.50%
business
Innovative businesses Operating costs 8442190686.47 36.04% 7262461672.59 31.69% 16.24%
Subtotal Operating costs 23426598006.35 100.00% 22919499439.04 100.00% 2.21%
IV. Non-core business analysis
□Applicable √ Inapplicable
V. Analysis of assets and liabilities
1. Material changes of asset items
Unit：RMB
June 30 2026 December 31 2025 Change between
Percentage Percentage December 31
Note of significant change
Amount to total Amount to total 2025 and June
assets assets 30 2026
Cash dividend distributions
Cash and bank
37851366962.87 27.49% 46508328658.44 33.69% -6.20% lead to a decrease in cash and
balances
bank balances
Accounts
27784134749.07 20.18% 29812378945.77 21.60% -1.42% No significant change
receivable
Contract assets 937168474.60 0.68% 974450159.71 0.71% -0.03% No significant change
Increase in procurement and
Inventories 29488147922.59 21.42% 20472193858.80 14.83% 6.59% inventory due to the production
and sales scale expansion
Long-term
equity 2268302310.46 1.65% 1669074600.75 1.21% 0.44% No significant change
investment
17Hikvision 2026 Half Year Report
June 30 2026 December 31 2025 Change between
Percentage Percentage December 31
Note of significant change
Amount to total Amount to total 2025 and June
assets assets 30 2026
Fixed assets 19996832288.94 14.52% 20176914451.95 14.62% -0.10% No significant change
Construction in
2065884044.75 1.50% 1914110895.67 1.39% 0.11% No significant change
process
Right-of-use
445295372.25 0.32% 442495841.87 0.32% 0.00% No significant change
assets
Lease liabilities 271125883.28 0.20% 299390966.16 0.22% -0.02% No significant change
Contract
4919948398.90 3.57% 4200490873.07 3.04% 0.53% No significant change
liabilities
Short-term
2768663114.44 2.01% 2685866236.94 1.95% 0.06% No significant change
borrowings
Long-term
933440073.94 0.68% 1210564814.39 0.88% -0.20% No significant change
borrowings
2. Main overseas assets
□ Applicable √ Inapplicable
18Hikvision 2026 Half Year Report
3. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
Cumulativ Provision for
Sold
Foreign e fair decline in
Profit or loss from change Purchased amount
currency value value during
Item Opening balance in fair value during the amount during during Other changes Closing balance
translation changes the current
current reporting period the period the
adjustment included reporting
period
in equity period
Financial assets
1. Derivative financial assets 4792243.40 26907615.80 (5236.19) 31694623.01
2. Other non-current
589955315.748273459.6370042643.25668271418.62
financial assets
3. Receivables for financing 2430030662.65 36375382.50 2466406045.15
Subtotal of financial assets 3024778221.79 35181075.43 (5236.19) 70042643.25 36375382.50 3166372086.78
Financial liabilities 11299401.25 7370063.22 (31496.13) 3897841.90
Whether there were any material changes on the measurement attributes of major assets of the Company during the reporting period:
□ Yes √ No
4. Assets right restrictions as of the end of reporting period
Unit: RMB
Item Closing book value Reasons for being restricted
Cash and bank balance 407867779.21 Various cash deposits and other restricted funds
19Hikvision 2026 Half Year Report
Item Closing book value Reasons for being restricted
Notes receivable 1286184827.94 Endorsed to suppliers discounted to the bank
Accounts receivable 172872587.02 Pledge for long-term borrowings and recourse factoring
Contract assets 46833721.31 Pledge for long-term borrowings
Fixed assets 26952223.56 Fixed assets leased by operating leases
Intangible assets 10019491.00 Pledge for long-term borrowings
Other non-current assets 436901296.51 Pledge for long-term borrowings
Total 2387631926.55
VI. Analysis of investments
1. Overview
√Applicable □ Inapplicable
Investment during the first half of 2026 (RMB) Investment during the first half of 2025 (RMB) YoY
1087841205.321845516540.77-41.05%
2. Significant equity investment during the current reporting period
□Applicable √ Inapplicable
3. Significant non-equity investment during the current reporting period
√ Applicable □ Inapplicable
20Hikvision 2026 Half Year Report
Unit: RMB
Cumulative Reasons for not
Fixed
Investment during amount of reaching planned Disclosure
Invest assets Project Project Disclosure Index (if
Project name the current investment by the Source of funds progress and Date (if
method investme industry schedule applicable)
reporting period end of the current expected benefits applicable)
nt or not
reporting period
Announcement on
AIoT
Investment and Construction
Wuhan Intelligence Industry Self- products September
YES 76326656.06 510760295.36 Self-funding 43.46% None of Wuhan Intelligence
Park Project (Phase II) built and 23 2017
Industry Park in Wuhan (No.services
2017-036)
Announcement on
Investment and Construction
AIoT
Infrared Thermal Imaging of Infrared Thermal Imaging
Self- products January 19
Complete Machine Products YES 98494730.18 468899652.17 Self-funding 60.43% None Complete Machine Products
built and 2022
Industrial Base Project Industrial Base by the
services
holding subsidiary (No.
2022-008)
Announcement on
Investment and Construction
AIoT
HikRobot Product Self- of HikRobot Product
Self- products January 19
Industrialization Base YES 115864806.59 458038461.50 funding/borrowi 45.20% None Industrialization Base
built and 2022
Construction Project ng Construction Project by the
services
holding subsidiary (No.
2022-007)
Total -- -- -- 290686192.83 1437698409.03 -- -- -- -- --
21Hikvision 2026 Half Year Report
Note: In accordance with the Company's Authorization Management System new fixed asset investments in Wuhan Intelligence Industry Park Project were approved
by the Strategy Committee of the Board of Directors in October 2023.
4. Financial asset investment
4.1 Securities investments
□ Applicable √ Inapplicable
There no such case in the reporting period.
4.2 Derivatives investments
√ Applicable □ Inapplicable
1) Derivative investments for the purpose of hedging within the reporting period.
√ Applicable □ Inapplicable
Unit: 0000 RMB
Gain or loss
on changes Sold amount Proportion of closing
Changes in cumulative Purchased amount
Type of derivatives Initial investment Opening in fair value during the investment amount to the
fair value included in during the reporting Closing amount
investment amount amount during the reporting Company’s net assets at the
equity period
reporting period end of the reporting period
period
Foreign exchange
192729.24192729.243427.77-489329.76-244592.882.90%
contract
Total 192729.24 192729.24 3427.77 - 489329.76 - 244592.88 2.90%
Accounting policies and specific accounting In accordance with the provisions of Accounting Standards for Business Enterprises (hereinafter referred to as "ASBE") No. 22 - Recognition and
principles for hedging business during the Measurement of Financial Instruments ASBE No. 37 - Presentation of Financial Instruments and other relevant regulations and guides the
22Hikvision 2026 Half Year Report
reporting period and explanations on Company correspondingly conducted accounting and reporting for foreign exchange contracts. There was no significant changes from the previous
whether there have been significant changes reporting period.from the previous reporting period
Explanations on actual gain or loss during
There was a total of RMB18.58 million actual gains during the reporting period.the reporting period
The Company's purpose was to avoid and prevent risks of foreign exchange rate and interest rate fluctuations and prohibited any speculative
Explanations on the effect of hedging
actions further improving the Company's ability to cope with risks of foreign exchange rate fluctuations better avoiding and preventing risks of
business
foreign exchange rate and interest rate fluctuations and enhancing its financial stability.Capital source of derivatives investment The Company's own fund.Risk analysis and control measures
(including but not limited to market risk For details of the risk analysis and control measures please refer to the Announcement on Carrying out Foreign Exchange Hedging Business in
liquidity risk credit risk operational risk 2026 and the Analysis Report on the Feasibility of the Foreign Exchange Hedging Business to be Conducted in 2026 disclosed by the Company on
legal risk etc.) of holding derivatives April 18 2026.during the reporting period
Change of market price or fair value of
invested derivatives during the reporting The Company recognized and measured the fair value of derivatives in accordance with the Accounting Standards for Business Enterprises Article
period; specific methods related 22 - Recognition and Measurement of Financial Instruments. During the reporting period a total of RMB34.28 million of gains from changes in fair
assumptions and parameter setting of the value of forward foreign exchange contracts were recognized and the fair value is determined according to the exchange rate and interest rate
derivatives’ fair value analysis should be provided by banks and other pricing service institutions measured and recognized on a monthly basis.disclosed
Prosecution (if applicable) None
Announcement date for approvals of
derivatives investment from the Board of April 18 2026
Directors (if any)
Announcement date for approvals of
derivatives investment from the general Inapplicable
meeting of shareholders (if any)
23Hikvision 2026 Half Year Report
2) Derivative investments for speculative purposes during the reporting period.
□ Applicable √ Inapplicable
There is no derivative investments for speculative purposes during the reporting period.
5. Use of raised funds
□ Applicable √ Inapplicable
During the reporting period there was no use of raised fund.The details of the use of funds raised by EZVIZ Network the Company's holding subsidiary was disclosed on July 25 2026 in 2026 Half Year Report of Hangzhou
EZVIZ Network Co. Ltd. on the website of Shanghai Stock Exchange (www.sse.com.cn).VII. Disposal of significant assets and equity
1. Disposal of significant assets:
□ Applicable √ Inapplicable
There is no disposal of significant assets for the Company during the current reporting period.
2. Sale of significant equity:
□ Applicable √ Inapplicable
24Hikvision 2026 Half Year Report
VIII. Analysis of major subsidiaries and holding companies
□ Applicable √ Inapplicable
The Company has no important holding company information that should be disclosed during the current
reporting period.Information about obtaining and disposal of subsidiaries during the reporting period
□ Applicable √ Inapplicable
IX. Structural entities controlled by the Company
□ Applicable √ Inapplicable
X. Risks of the Company and risk response solutions
During the reporting period the Company has been striving to identify various risk exposures and actively adopting
mitigation measures to avoid and reduce risks:
(1) Global economic downturn risks: The growth momentum of major global economies continues to diverge
macroeconomic uncertainty intensifies due to inflation volatility and monetary policy adjustments and
regional economic imbalances become more pronounced. If the global economy falls into a prolonged
recession the Company's overall business will be significantly affected. The Company relies on its global
business layout to diversify risks from a single market flexibly adapts its operating strategies to local demand
and mitigates the impact of global economic fluctuations on its operations.
(2) Geopolitical environment risks: Global geopolitical competition continues to intensify regional conflicts
have not been effectively alleviated unilateralism and trade protectionism are on the rise and the compliance
barriers and uncertainties for cross-border business operations of enterprises have significantly increased. A
sudden deterioration of the geopolitical situation could adversely impact the Company's overseas business. The
Company continues to optimize its global resource layout improve its localized risk management system
strengthen risk identification and control of overseas operations and hedge against operational risks caused by
geopolitical changes.
(3) Domestic economic transition risks: China's economy is in a critical period of structural transformation and
momentum conversion. Demand in traditional sectors continues to adjust and the market expectation
25Hikvision 2026 Half Year Report
restoration cycle is relatively long. Combined with pressures from the external trade environment if the
domestic industrial transformation process falls short of expectations market demand fluctuations could have
an adverse impact on the Company's business operations. The Company leverages AIoT technology to
empower digital transformation across various industries seizes opportunities from the domestic economic
transition and mitigates operational pressures caused by market demand fluctuations.
(4) Technological obsolescence risk: The iteration speed of cutting-edge technologies such as artificial
intelligence Internet of Things big data and cloud computing continues to accelerate and the integration of
technologies with practical scenarios continues to deepen. If the Company cannot accurately grasp the
technological evolution trends of the industry and follow the pace of technological upgrades it will face the
risk of declining core market competitiveness. The Company has been deeply engaged in core technology
fields for a long time continuously iterating technologies through massive commercial implementation
practices keeping pace with the technological development trends of the industry and consolidating its core
competitive advantages.
(5) Internal management risks: As the Company's business scale continues to expand new products new
businesses and global layout continue to deepen the complexity of enterprise organizational management and
the difficulty of cross-regional and cross-business collaboration continue to increase. If the Company's
management capabilities cannot match the speed of business expansion it will affect overall operational
efficiency and development quality. The Company continuously optimizes its management systems and
process framework improves its governance structure strengthens the core talent pipeline construction
enhances organizational collaboration and management capabilities and aligns with the pace of business
scaling and global development.
(6) Supply Chain Risks: The globalization of the supply chain is accelerating regional restructuring compounded
by factors such as technological controls and trade restrictions the stability of the global supply chain continues
to be impacted. If major interruptions occur in core supply segments it will directly affect the stability of
production and operations. The Company continues to improve its diversified supply network optimize
inventory control models enhance the resilience and risk resistance of the supply chain and ensure the stable
and orderly development of production and operations.
(7) Network security risks: As the application scenarios of the Internet of Things continue to expand network
attack methods are becoming increasingly complex and concealed. Targeted security threats against IoT
26Hikvision 2026 Half Year Report
devices and systems are continuously escalating and the Company's business still faces potential network
security risks such as malicious attacks and data leaks. The Company has established an end-to-end network
security protection system continuously iterates and optimizes security protection capabilities regularly
conducts risk inspections and effectively prevents various network security risks.
(8) Product quality and safety risks: The Company's AIoT products have a wide range of application scenarios
covering critical areas such as people's livelihood and public safety. The industry's quality and safety standards
are stringent. If there are any lapses in the Company's quality and safety management it may lead to product
quality issues or even major recall incidents damaging the Company's operations and brand reputation. The
Company strictly implements product quality and safety management establishing a full-process quality
control system for R&D production and deployment comprehensively controlling product quality and safety
risks.
(9) Legal compliance risks: Global multilateral trade rules continue to be adjusted and regulatory policies on
data security export controls market access and other areas in various countries are becoming increasingly
stringent. The complexity of cross-border compliance continues to rise. If the Company's compliance
capabilities cannot keep pace with regulatory changes operational compliance risks will arise. The Company
has established a full-process compliance system covering global operations dynamically tracks regulatory
policy updates continuously enhances cross-border compliance control capabilities and aligns with global
regulatory compliance requirements.
(10) Financial risks caused by customers' reduced payment capacity: Macroeconomic fluctuations affect the
upstream and downstream of the industrial chain and there is uncertainty in the customers' business conditions
and cash flow. The continuous tightening of market liquidity may lead to slower collections and increased bad
debts affecting the Company's financial security. The Company adheres to prudent operations establishes a
full-process collection control mechanism regularly tracks collection progress maintains sufficient cash
reserves and prevents risks of delayed collections and bad debts.
(11) Exchange rate fluctuation risk: The Company's overseas business spans many countries and regions
worldwide and multiple currency settlement exposures exist in operational aspects such as procurement sales
and financing. Sudden and unexpected significant fluctuations in the global foreign exchange market could
adversely affect the Company's financial performance and operating results. The Company uses compliant
27Hikvision 2026 Half Year Report
financial instruments to hedge exchange rate risks dynamically manages multiple currency settlement
exposures and reduces the impact of foreign exchange fluctuations on operating performance.
(12) Intellectual property risks: The global competition in the industry is becoming increasingly intense and
intellectual property protection is continuously strengthening in various countries. Although the Company has
accumulated a large number of core technologies for AIoT and established an intellectual property management
system there still exists potential risks of intellectual property disputes and infringement of core technological
achievements. The Company continues to increase R&D investment improve intellectual property protection
and management mechanisms strengthen core technology protection and proactively prevent and respond to
various intellectual property risks.The above-mentioned alerts do not include all the potential risks for the Company. Investors are advised to invest
with caution.XI. The Formulation and Implementation of Market Value Management Systems and
Valuation Enhancement Plans
Whether or not the Company has established the market value management system.√ Applicable □ Inapplicable
On April 17 2025 the Company's 6th Board of Directors convened its 5th meeting and reviewed and approved the
Market Value Management System. The system aims to legally and compliantly utilize various methods to enhance
its investment value thereby ensuring that the Company's investment value reasonably reflects its quality on the
basis of continuous improvement of the Company's operational standards and quality.Whether or not the Company has disclosed valuation enhancement plans.□ Applicable √ Inapplicable
XII. Implementation of the "Dual Improvement of Quality and Returns" Action Plan
Whether the Company disclosed the announcement of the "Dual Improvement of Quality and Returns" action
plan.√ Yes □No
To further implement the concept of high-quality development for listed companies adhere to an investor-centric
approach and genuinely protect the interests of all shareholders the Company disclosed the Announcement on the
Company's 'Dual Improvement of Quality and Returns' Action Plan on February 8 2024.
28Hikvision 2026 Half Year Report
During the reporting period the Company actively promoted the "Dual Improvement of Quality and Return" action
plan. A special assessment of the implementation and effectiveness of relevant measures for the first half year of
2026 has been completed. The Company held the 10th Meeting of the 6th Board of Directors on July 24 2026 which
reviewed and approved the assessment report. The main content is reported as follows:
Hikvision has always attached great importance to shareholder returns. On the foundation of upholding sustainable
and high-quality development the Company maintains a long-term and stable level of shareholder returns
continuously enhancing the sense of gain for investors. The Company continues to improve investor communication
mechanisms broadens diversified communication channels actively conveys company value enhances market
understanding and strengthens investor confidence.During the reporting period the Company convened the 9th meeting of the 6th board of directors and approved the
Proposal on the 2025 Annual Profit Distribution Plan and the Authorization for the Mid-2026 Dividend. Based on
the total share capital of 9164871550 shares of the Company the Company will distribute a cash dividend of
RMB7.50 per 10 shares (tax included) to all shareholders without issuing bonus shares or increasing the share
capital from capital reserves. The remaining undistributed profits will be carried forward to future years. The total
cash dividend for the 2025 annual profit distribution is RMB6.87 billion. Combined with the already implemented
mid-2025 dividend the Company's total cash dividend for the 2025 annual period is RMB10.54 billion accounting
for 74.25% of the Company's 2025 annual net profit attributable to the shareholders of the Listed Company. At the
same time the Company has requested the shareholders' meeting to authorize the board of directors to formulate a
specific mid-2026 profit distribution plan in accordance with the shareholders' meeting resolution and under the
conditions of profit distribution. On July 24 2026 the Company convened the 10th meeting of the 6th board of
directors and approved the Proposal on the Mid-2026 Profit Distribution Plan. Based on the total share capital of
the Company on the record date for the mid-2026 profit distribution the Company will distribute a cash dividend
of RMB5.50 per 10 shares (tax included) to all shareholders without issuing bonus shares or increasing the share
capital from capital reserves. The remaining undistributed profits will be carried forward to future years. Based on
the Company's current total share capital (9164871550 shares) the preliminary estimate is that the cash dividend
to be distributed will be RMB5.04 billion accounting for 63.84% of the Company's first-half 2026 net profit
attributable to the shareholders of the Listed Company. The Company's cash dividends for the 2026 annual period
will reach RMB 11.91 billion.Looking ahead the Company will continue to focus on its core strategy of intelligent connectivity adhering to
innovation-driven science and technology and market demand-oriented approaches and continuously promoting
high-quality business development. The Company will further improve its governance mechanisms deepen internal
management enhance compliance operations and the quality of information disclosure and constantly strengthen
two-way communication with investors. At the same time the Company will continue to optimize its shareholder
return mechanisms actively fulfill its corporate responsibilities and strive to enhance its intrinsic value and market
recognition creating long-term and stable value returns for stakeholders.
29Hikvision 2026 Half Year Report
Section IV Corporate Governance Environmental and Social
Responsibility
I. Changes of directors and senior management personnel
□ Applicable √ Inapplicable
There were no changes in the Company's directors and senior management during the reporting period. For details
please refer to the 2025 annual report.II. Profit distribution and capitalizing of capital reserves for the current reporting period
√ Applicable □ Inapplicable
Number of bonus shares per 10 shares (shares) 0
Dividend per 10 shares (RMB) (tax included) 5.50
Number of additional shares for every 10 shares (shares) 0
Base number of shares for the allocation plan (shares) 9164871550
Amount of cash dividend (RMB) (including tax) 5040679352.50
Amount of cash dividends in other ways (such as share
0
repurchases) (RMB)
Total cash dividends (including other methods) (RMB) 5040679352.50
Allocable profit (RMB) 45894319221.78
The ratio of total cash dividends (including other methods) to
100.00%
total profit distribution
Details of this cash dividend
Others
Detailed explanation of the proposed profit distribution or capital reserve increase plan
According to the unaudited 2026 first-half financial report prepared by the Company in accordance with China Accounting
Standards for Business Enterprises in the first half of 2026 the Company's parent entity achieved a net profit of
RMB7136612912.31 with no statutory surplus reserves extracted plus the parent entity's undistributed profit at the beginning of
the year of RMB45631359971.97 minus the actual cash dividend of RMB6873653662.50 for the 2025 fiscal year as of June
30 2026 the parent entity's profit available for distribution to shareholders is RMB45894319221.78 and the profit available for
distribution to shareholders in the consolidated financial statements is RMB66081146515.18. In summary based on the lower of
the two principles the profit available for distribution to shareholders for this year is RMB45894319221.78.Based on the total share capital as of the record date for the profit distribution plan to be implemented by the Company in mid-
2026 the Company will distribute cash dividends of RMB5.50 (tax included) for every 10 shares to all shareholders without issuing
bonus shares or increasing the share capital from capital reserves. The remaining undistributed profits will be carried forward to
future years. Based on the Company's current total share capital (9164871550 shares) a preliminary estimate suggests that the
cash dividend amount to be distributed will be RMB5.04 billion accounting for 63.84% of the net profit attributable to shareholders
of the Listed Company for the first half of 2026. The exact amount of the dividend will be subject to the Company's future equity
30Hikvision 2026 Half Year Report
distribution implementation announcement.III. The implementation of an equity incentive plan employee stock incentive plan or other
incentive plans
□ Applicable √ Inapplicable
During the reporting period the Company had no equity incentive plans employee stock incentive plans or other
employee incentive measures and their implementation.IV. The disclosure of environmental information
Whether the Listed Company and its major subsidiaries included in the list of enterprises required to legally disclose
environmental information.√Applicable □Inapplicable
Number of enterprises included in the list of enterprises legally
2
required to disclose environmental information
Query index for the report on disclosure of environmental
No. Company Name
information in accordance with the law
Zhejiang provincial department of ecology and environment -
1 Hangzhou Hikvision Electronics Co. Ltd. System on corporate environmental information disclosed in
accordance with the law: https://mlzj.sthjt.zj.gov.cn/eps/index
Hangzhou municipal department of ecology and environment -
System on corporate environmental information disclosed in
2 Hangzhou Hikmicro Sensing Technology Co. Ltd accordance with the law:
https://epb.hangzhou.gov.cn/col/col1692364/art/2026/art_65d8
6d7562b145f0ad449008cdbb3cb4.html
V. Information of social responsibilities
□ Applicable √ Inapplicable
31Hikvision 2026 Half Year Report
Section V Significant Events
I. Complete and incomplete commitments of the Company and its actual controller
shareholders related parties acquirers and other related parties for the commitments during
the current reporting period.□ Applicable √ Inapplicable
No such case during the current reporting period.II. The Company's funds used by the controlling shareholder or its related parties for non-
operating purposes.□ Applicable √ Inapplicable
No such case during the current reporting period.III. Illegal provisions of guarantees for external parties
□Applicable √ Inapplicable
No such case in the current reporting period.IV. Engagement and disengagement of the CPA firm
Has the half year report been audited
□ Yes √ No
The Company's half year report has not been audited.V. Explanation given by the Board of Directors regarding the "non-standard auditor's report"
issued by the CPA firm for the current reporting period
□ Applicable √ Inapplicable
VI. Explanation given by the Board of Directors regarding the "non-standard auditor's report"
for the prior reporting period
□ Applicable √ Inapplicable
VII. Bankruptcy and restructuring
□ Applicable √ Inapplicable
No such case during the reporting period.
32Hikvision 2026 Half Year Report
VIII. Material litigations
Material litigation and arbitration
□ Applicable √ Inapplicable
The Company had no material litigation or arbitration during the current reporting period.Other litigation matters
□ Applicable √ Inapplicable
IX. Punishments and rectifications
□ Applicable √ Inapplicable
No such case during the reporting period.X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Inapplicable
XI. Significant related-party transaction
1. Related-party transactions arising from routine daily operations
√ Applicable □ Inapplicable
33Hikvision 2026 Half Year Report
Pricing Proportion to Approved Whether
Type of Content of Trading amount
principles for the amount trading exceed the Settlement Disclosure DisclosureRelated party Relationship related related （0'000related party of similar quota (0'000 approved method date referencetransaction transaction RMB）transactions transactions. RMB） quota
Under the common
Subsidiaries or
control of the Payment on
research institutes of Procurement 178798.05 5.83% 420000.00 No
Company's actual delivery Announcement
CETC
controller. on the forecast
Procurement Both parties
Joint ventures in which of daily related-
receiving agree jointly Payment on April 18
Joint ventures the Company holds Procurement 555.30 0.02% 2100.00 No party
services and based on the delivery 2026
shares transactions in
others market price
Associates in which the Payment on 2026 (No. 2026-
Associates Procurement 11627.15 0.38% 48400.00 No
Company holds shares delivery 008)
Refer to note 1 for Payment on
Other related parties Procurement 93140.36 3.04% 200400.00 No
details delivery
Under the common
Subsidiaries or
control of the Payment on
research institutes of Sales 9626.04 0.21% 50000.00 No
Company's actual delivery
CETC Selling
controller
commercial Both parties
Joint ventures in which
goods agree jointly Payment on Same as
Joint ventures the Company holds Sales 476.12 0.01% 8300.00 No Same as above
providing based on the delivery above
shares
services and market price
Associates in which the Payment on
Associates Sales others 1237.75 0.03% 15600.00 No
Company holds shares delivery
Refer to note 1 for Payment on
Other related parties Sales 487.47 0.01% 7400.00 No
details delivery
34Hikvision 2026 Half Year Report
Pricing Proportion to Approved Whether
Type of Content of Trading amount
principles for the amount trading exceed the Settlement Disclosure DisclosureRelated party Relationship related related （0'000related party of similar quota (0'000 approved method date referencetransaction transaction RMB）transactions transactions. RMB） quota
Under the common
Subsidiaries or
control of the Renting Both parties Based on
research institutes of Lease 204.57 5.78% 800.00 No
Company's actual house to agree jointly contract Same as
CETC Same as above
controller related based on the above
Associates in which the parties market price Based on
Associates Lease 16.93 0.48% 100.00 No
Company holds shares contract
Under the common Renting Both parties
Subsidiaries or
control of the house from agree jointly Based on Same as
research institutes of Lease 2.34 0.01% 500.00 No Same as above
Company's actual related based on the contract above
CETC
controller parties market price
Total 296172.07 - 753600.00
Details on significant sales return None
Total amount of related transactions projected based on
The amount of daily related-party transactions between the Company and its related parties has not exceeded the scope of the
different categories and the actual performance during the
estimated daily related-party transaction amounts categorized by the Company.current reporting period (if any)
Reasons on significant difference between trading price and
Not applicable
market referencing price (if applicable)
Note 1: Enterprises controlled jointly controlled or serving as directors or senior management personnel by affiliated natural persons of the Company (including directors former supervisors
senior management of the Company shareholders holding more than 5% of the shares of the Company and their close family members).Note 2: The data shown in the totals may differ slightly from the sum of the relevant individual data due to rounding.
35Hikvision 2026 Half Year Report
2. Related-party transactions regarding purchase and disposal of assets or equity
□ Applicable √ Inapplicable
No such case in the reporting period.
3. Significant related-party transactions arising from joint investments on external parties
□ Applicable √ Inapplicable
No such case in the reporting period.
4. Related credit and debt transactions
□ Applicable √ Inapplicable
No related-parties' creditor's rights or debts during the reporting period.
5. Deals with related-party financial companies
√ Applicable □ Inapplicable
Deposit business
Amount incurred
Maximum daily Deposit Total deposit Total amount
Related Opening balance Closing balance
Relationship deposit limit interest amount in the withdrawn in the
party (0000 RMB) (0000 RMB)
(0000 RMB) rate range current period current period
(0000 RMB) (0000 RMB)
Under the
CETC
common control 0.05%-
Finance 1824337.27 629610.99 1430340.20 1615942.16 444009.03
of the Company's 1.15%
Co. Ltd.actual controller
Loan services
Amount incurred
Loan Total loan Total repayment
Related Loan limit Opening balance Closing balance
Relationship interest amount in the amount in the
party (0000 RMB) (0000 RMB) (0000 RMB)
rate rang current period current period
(0000 RMB) (0000 RMB)
Under the
CETC
common control
Finance 500000.00 2.11% 48700.00 10000.00 - 58700.00
of the Company's
Co. Ltd.actual controller
Credit and other financial business
36Hikvision 2026 Half Year Report
Total amount Actual amount incurred
Related party Relationship Business type
(0000 RMB) (0000 RMB)
Under the common control of Other financial
CETC Finance Co. Ltd 600000.00 128900.00
the Company's actual controller service
Note: 1. The above-mentioned actual amount of other financial service refers to the entrusted loan provided by the Company through
CETC Finance Co. Ltd to its subsidiary companies during the reporting period and the period-end balance is RMB2154 million.
2. The Company’s revolving credit facility with CETC Finance Co. Ltd during the reporting period was no more than RMB5 billion
(inclusive) with an actual transaction amount of RMB587 million all of which were loan transactions (see table above).
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √ Inapplicable
7. Other significant related party transactions
□ Applicable √ Inapplicable
No such case in the reporting period.XII. Significant contracts and their execution
1. Trusteeship contracting and leasing
1.1 Trusteeship
□ Applicable √ Inapplicable
No such case in the reporting period.
1.2 Contracting
□ Applicable √ Inapplicable
No such case in the reporting period.
1.3 Leasing
□ Applicable √ Inapplicable
No such case in the reporting period.
37Hikvision 2026 Half Year Report
2. Significant guarantees
√Applicable □ Inapplicable
Unit: 0000 RMB
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual occurrence Actual guaranteed Type of Expiration date of Fulfilled
Guaranteed party announcement of the related
cap date amount guarantee guarantee or not
guarantee cap party or
not
Hangzhou Hikvision Technology Co.April 18 2026 553700.00 November 15 2022 92317.43 Joint guarantee May 9 2029 No No
Ltd.Hangzhou Hikvision System
April 18 2026 50000.00 March 23 2021 9152.22 Joint guarantee March 26 2028 No No
Technology Co. Ltd.Hangzhou Hikvision Electronics Co.April 18 2026 10500.00 November 7 2025 3100.00 Joint guarantee March 26 2028 No No
Ltd.Hikvision Europe B.V. April 18 2026 7800.00 May 29 2026 2515.20 Joint guarantee May 28 2028 No No
Chongqing Hikvision Technology Ltd. April 18 2026 7000.00 May 15 2025 2100.00 Joint guarantee March 26 2027 No No
Hikvision UK Limited April 18 2026 3900.00 May 29 2026 299.32 Joint guarantee May 28 2028 No No
Chongqing Hikvision System
April 18 2026 2000.00 June 3 2025 79.99 Joint guarantee July 10 2026 No No
Technology Co. Ltd.Hikvision International Co. Limited April 18 2026 38900.00 Not happened during the reporting period
HIKVISION TECHNOLOGY PTE.April 18 2026 10000.00 Not happened during the reporting period
LTD.Zhengzhou Hikvision Technology Co.April 18 2026 5000.00 Not happened during the reporting period
Ltd.
38Hikvision 2026 Half Year Report
HIKVISION SYSTEM LIMITED April 18 2026 5000.00 Not happened during the reporting period
HIKVISION AUSTRALIA PTY.LTD. April 18 2026 1700.00 Not happened during the reporting period
Total guarantee cap for subsidiaries approved during the reporting Total actual guarantee amount for
695500.00 s ubsidiaries during the reporting period 366695.38
period (B1)
(B2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of the
695500.00 s ubsidiaries at the end of the reporting 109564.16
reporting period (B3)
period (B4)
Guarantees provided by subsidiaries of the Company to their subsidiaries
Guarantee
Disclosure date of
Guarantee Actual occurrence Actual guaranteed Type of Fulfilled for a
Guaranteed party announcement of the Term of guarantee
cap date amount guarantee or not related
guarantee cap
party or not
Hangzhou Hikrobot Intelligent
April 18 2026 850.00 September 15 2023 674.38 Joint guarantee Oct 31 2027 No No
Technology Co. Ltd.Hangzhou Hikrobot Intelligent Co. Ltd. April 18 2026 3000.00 September 2 2024 667.71 Joint guarantee Sep 1 2027 No No
Hikrobot Europe B.V. April 18 2026 650.00 August 29 2024 516.63 Joint guarantee July 19 2026 No No
Total actual guarantee amount for
Total guarantee cap for subsidiaries approved during the reporting
4500.00 subsidiaries during the reporting period 21715.48
period (C1)
(C2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of the
4500.00 subsidiaries at the end of the reporting 1858.72reporting period (C3）
period (C4)
The total amount of Company's guarantees (that is the total of the first three items)
Total guarantee cap approved during the reporting period Total actual guarantee amount during
700000.00388410.86
(A1+B1+C1) the reporting period（A2+B2+C2）
39Hikvision 2026 Half Year Report
Total actual guarantee balance at the
Total approved guarantee cap at the end of reporting period
700000.00 end of the reporting period 111422.88
(A3+B3+C3)
（A4+B4+C4）
Portion of the total actual guarantee (A4+B4+C4) amount in net
1.32%
assets of the Company
Of which:
The balance of guarantee for shareholders actual controllers and
0
their affiliates. (D)
Amount of debt guarantees provided directly or indirectly for
99090.67
entities with a liability-to-asset ratio over 70% (E)
Total amount of guarantee exceeding 50% of net assets (F) 0
Total guarantee amounts of the above-mentioned 3 kinds of
99090.67
guarantees (D+E+F)
Description of situations regarding unexpired guarantee contracts
where guarantee liability has occurred during the reporting period
None
or there is evidence indicating potential joint and several liability
(if any)
Description of guarantees provided to external parties in violation
None
of prescribed procedures (if any)
40Hikvision 2026 Half Year Report
3. Entrusted financial management
□Applicable √Inapplicable
No such case during the reporting period
4. Other significant contracts
□Applicable √ Inapplicable
The Company has no other significant contracts in the reporting period.XIII. Activities such as investor research communication and interviews during the reporting
period
√Applicable □ Inapplicable
Name and
Reception Reception Type of Main topics discussed Refer to detailed
Reception time institution of
place method visitors and materials provided information
visitors
Refer to the "Record Table
Institutional Jiang Guangming The Company's 2025
Headquarters Performance of Investor Relations
investors from Huatai Asset business performance
January 20 2026 conference call Activities on January 20
and Management and forecast and related
room conference 2026" published on the
individuals other investors information
CNINFO website
Refer to the " Record
Institutional Li Hai from
Headquarters Performance Table of Investor Relations
investors Guotai Fund The Company's 2025
April 18 2026 conference call Activities on April 18
and and other business performance
room conference 2026" published on the
individuals investors
CNINFO website
Refer to the "Record Table
On-site and Institutional Huang Haojun of Investor Relations
Headquarters The Company's daily
April 19 2026- online investors from Dacheng Activities from April 19
conference operations and future
May 9 2026 communicat and Fund and other 2026 to May 9 2026"
room outlook
ion individuals investors published on the CNINFO
website
Refer to the "Record Table
On-site and Institutional of Investor Relations
Headquarters Dongfang The Company's daily
May 10 2026- online investors Activities from May 10
conference Security and other operations and future
June 10 2026 communicat and 2026 to June 10 2026"
room investors outlook
ion individuals published on the CNINFO
website
XIV Other significant events
□Applicable √ Inapplicable
41Hikvision 2026 Half Year Report
The company has no other material matters to disclose during the reporting period.XV. Significant events of the Company's subsidiaries
□Applicable√ Inapplicable
42Hikvision 2026 Half Year Report
Section VI Changes in Shares and Information about Shareholders
I. Changes in share capital
1. Table of changes in share capital
Unit: Share
Changes in the period (+ -)
Before the change After the change
Share
New Shares Bonus transferred
Shares Ratio Others Sub-total Shares Ratio
Issued share from capital
reserve
1. Shares subject to conditional restriction(s) 118469371 1.29% 308469 308469 118777840 1.30%
1)State holdings
2)Shares held by State-owned corporate
3) Other domestic shares 118469371 1.29% 308469 308469 118777840 1.30%
Including: Held by domestic corporates
held by domestic natural person 118469371 1.29% 308469 308469 118777840 1.30%
4) Foreign shares
Including: Held by overseas corporates
held by overseas natural person
2. Shares without restriction 9046402179 98.71% -308469 -308469 9046093710 98.70%
1) RMB common shares 9046402179 98.71% -308469 -308469 9046093710 98.70%
2) Domestically listed foreign shares
3) Foreign shares listed overseas
4) Others
3. Total 9164871550 100.00% 0 0 9164871550 100.00%
Reason for the changes in share capital
43Hikvision 2026 Half Year Report
□Applicable √ Inapplicable
The Company's total share capital did not change during the reporting period.Due to the cancellation of the previous supervisory board and the corresponding lock-up arrangements for shares acquired by executives through share purchases the number of locked
shares held by executives has changed accordingly and thus the number of shares with restrictions has also changed.Approval for changes in share capital
□Applicable √ Inapplicable
Transfer for changes in share capital
□Applicable √ Inapplicable
Information about the implementation of share repurchase
□Applicable √ Inapplicable
The implementation progress of reducing and repurchasing shares by centralized bidding
□Applicable √ Inapplicable
Effects of changes in share capital on the basic earnings per share ("EPS") diluted EPS net assets per share attributable to common shareholders of the Company and other financial
indexes over the last year and last period
□Applicable √ Inapplicable
Other contents that the Company considers necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Inapplicable
2. Changes in restricted shares
√ Applicable □ Inapplicable
Unit: Share
Number of restricted Number of
Number of restricted Number of restricted
shares at the restricted shares at
Name of shareholder shares unlocked shares increased Restriction reasons Unlock date
beginning of the the end of the
during the period during the period
period period
Hu Yangzhong 116997358 0 0 116997358 Restricted shares for senior executives
According to the relevant
Xu Peng 28966 0 0 28966 Restricted shares for senior executives provisions of shares
Wang Qiuchao 26250 0 0 26250 Restricted shares for senior executives management for senior
44Hikvision 2026 Half Year Report
Number of restricted Number of
Number of restricted Number of restricted
shares at the restricted shares at
Name of shareholder shares unlocked shares increased Restriction reasons Unlock date
beginning of the the end of the
during the period during the period
period period
Wang Dan 17767 0 0 17767 Restricted shares for senior executives executives
He Hongli 248625 0 0 248625 Restricted shares for senior executives
Pu Shiliang 199425 0 0 199425 Restricted shares for senior executives
Guo Xudong 38355 0 0 38355 Restricted shares for senior executives
Xu Ximing 110925 0 0 110925 Restricted shares for senior executives
Huang Fanghong 299625 0 0 299625 Restricted shares for senior executives
Jin Yan 188250 0 0 188250 Restricted shares for senior executives
Cai Changyang 82125 0 0 82125 Restricted shares for senior executives
Feng Wei 0 0 352125 352125 Restricted shares for senior executives
Othernote2 201700 13656 0 188044 Restricted shares for senior executives
Total 118439371 13656 352125 118777840 -- --
Note:
1. During the reporting period the shares held by the relevant directors supervisors and senior management were correspondingly released from restrictions / or partially released from
restrictions in accordance with the relevant rules on share lock-up for directors supervisors and senior management.
2. The amount listed under the "Other" column for shareholders in the table represents the total (combined) shares held by the Company's former supervisors and senior management
personnel.II. Issuance and listing of securities
□Applicable √ Inapplicable
There were no securities issues during the reporting period
III. Total number of shareholders and their shareholdings
Unit: Share
45Hikvision 2026 Half Year Report
Total number of common shareholders at the end of the Total number of preferred shareholders with voting rights restored at the end of the
3458630
reporting period current reporting period (if any)
Particulars about shares held by common shareholders with a shareholding percentage over 5% or the Top 10 of them (Excludes shares lent through refinancing)
Share-
Total number of Increase/ The number of The number of shares Pledged marking or frozen
holding
Name of shareholder Nature of shareholder shares at the end of decrease during the shares with trading without trading percentage Shares'
the reporting period reporting period restrictions restrictions Amount (%) status
China Electronics Technology State-owned
37.28%3416996509003416996509--
HIK Group Co. Ltd. corporation
Gong Hongjia Overseas individual 10.50% 962504814 0 0 962504814 Pledged 272630000
Hangzhou Weixun Equity Domestic
Investment Partnership non-state-owned 4.92% 450795176 0 0 450795176 Pledged 6000000
(Limited Partnership) corporation
CETC Investment Holdings
State-owned corporation 2.71% 248366268 0 0 248366268 - -
Co. Ltd.Hangzhou Pukang Equity Domestic
Investment Partnership non-state-owned 1.99% 182510174 0 0 182510174 Pledged 54760000
(Limited Partnership) corporation
The 52nd Research Institute at
State-owned
China Electronics Technology 1.97% 180775044 0 0 180775044 Pledged 90000000
corporation
Group Corporation
China Life Insurance Co. Ltd.- Traditional - Ordinary
Other 1.85% 169623768 -7211786 0 169623768 - -
Insurance Product - 005L-
CT001 SH
Hu Yangzhong Domestic individual 1.70% 155996477 0 116997358 38999119 - -
Shanghai Perseverance Asset
Management Partnership
(Limited Partnership) - Other 1.23% 113000000 -144000000 0 113000000 - -
Perseverance Adjacent
Mountain 1 Yuanwang Fund
Shanghai Chongyang Strategic
Investment Co. Ltd. -
Other 0.67% 61432573 61432573 0 61432573 - -
Chongyang Strategic
Intelligence Fund
46Hikvision 2026 Half Year Report
Among the above shareholders China Electronics Technology HIK Group Co. Ltd. CETC Investment Holdings Co. Ltd. and the 52nd Research
Institute at China Electronics Technology Group Corporation are acting-in-concert parties. Mr. Gong Hongjia and Hangzhou Pukang Equity
Explanation on associated relationship or concerted actions
Investment Partnership (Limited Partnership) are acting-in-concert parties. Mr. Hu Yangzhong and Hangzhou Weixun Equity Investment Partnership
among the above-mentioned shareholders:
(Limited Partnership) are acting-in-concert parties. 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 Administrative Measures for Acquisitions of Listed Companies.Particulars about shares held by the Top 10 shareholders holding shares that are not subject to trading restriction
(Excludes loaned shares through refinancing and lock-up shares of senior executives)
Number of shares without trading Type of shares
Name of shareholders
restrictions held at the period-end Type Amount
China Electronics Technology HIK Group Co. Ltd. 3416996509 RMB common shares 3416996509
Gong Hongjia 962504814 RMB common shares 962504814
Hangzhou Weixun Equity Investment Partnership (Limited Partnership) 450795176 RMB common shares 450795176
CETC Investment Holdings Co. Ltd. 248366268 RMB common shares 248366268
Hangzhou Pukang Equity Investment Partnership (Limited Partnership) 182510174 RMB common shares 182510174
The 52nd Research Institute at China Electronics Technology Group Corporation. 180775044 RMB common shares 180775044
China Life Insurance Co. Ltd. - Traditional - Ordinary Insurance Product - 005L-CT001 SH 169623768 RMB common shares 169623768
Shanghai Perseverance Asset Management Partnership (Limited Partnership) - Perseverance
113000000 RMB common shares 113000000
Adjacent Mountain 1 Yuanwang Fund
Shanghai Chongyang Strategic Investment Co. Ltd. -Chongyang Strategic Intelligence Fund 61432573 RMB common shares 61432573
Shanghai Chongyang Strategic Investment Co. Ltd. -Chongyang Strategic Wisdom Fund 51791991 RMB common shares 51791991
Explanation on associated relationship and concerted actions Among the above shareholders China Electronics Technology HIK Group Co. Ltd. CETC Investment Holdings Co. Ltd. and the 52nd Research
top ten common shareholders holding shares without trading Institute at China Electronics Technology Group Corporation are acting-in-concert parties. Mr. Gong Hongjia and Hangzhou Pukang Equity
restrictions and among top ten shareholders and top ten Investment Partnership (Limited Partnership) are acting-in-concert parties. Mr. Hu Yangzhong and Hangzhou Weixun Equity Investment Partnership
common shareholders holding shares without trading (Limited Partnership) are acting-in-concert parties. Except for these the Company does not know whether the other shareholders are related parties
restrictions or whether they are acting-in-concert parties in accordance with the Administrative Measures for Acquisitions of Listed Companies.The shareholder Shanghai Chongyang Strategic Investment Co. Ltd. Chongyang Strategic Intelligence Fund holds 33608099 shares of the
Explanation of the top 10 shareholders' participation in margin
Company through a credit account. The shareholder Shanghai Chongyang Strategic Investment Co. Ltd. Chongyang Strategic Wisdom Fund holds
trading and securities lending business
28929935 shares of the Company through a credit account.
Shareholders holding more than 5% of the shares the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares participate in the lending of shares in the
refinancing business
47Hikvision 2026 Half Year Report
□Applicable √Inapplicable
Changes of the top 10 shareholders and the top 10 shareholders that are not subject to trading restriction compared with the previous period due to refinancing lending/repayment issues
□ Applicable √ Inapplicable
Any of the Company's top 10 common shareholders or top 10 non-restricted common shareholders conducted any agreed buy-back in the reporting period
□ Applicable √ Inapplicable
No such case during the current reporting period.IV. Shareholding changes of directors and senior management personnel
√ Applicable □ Inapplicable
Number of
Shares Number of Number of
Shares Shares held at restricted
Shares held at the decreased restricted stocks restricted
increased during the end of the stocks granted
Tenure beginning of the during the granted at the stocks granted
Name Title the current current at the end of the
status current reporting current beginning of the in the current
reporting period reporting period current
period (shares) reporting period current reporting reporting
(shares) (shares) reporting
(shares) period (shares) period (shares)
period (shares)
Hu Yangzhong Chairman Incumbent 155996477 0 0 155996477 0 0 0
Fu Baijun Director Incumbent 0 0 0 0 0 0 0
Xu Lixing Director Incumbent 0 0 0 0 0 0 0
Xu Peng Director and General Manager Incumbent 38622 0 0 38622 0 0 0
Wang Qiuchao Director Incumbent 35000 0 0 35000 0 0 0
Wu Xiaobo Independent Director Incumbent 0 0 0 0 0 0 0
Hu Ruimin Independent Director Incumbent 0 0 0 0 0 0 0
Lv Changjiang Independent Director Incumbent 0 0 0 0 0 0 0
Tan Xiaofen Independent Director Incumbent 0 0 0 0 0 0 0
Employee Representative
Wang Dan Incumbent 23690 0 0 23690 0 0 0
Director
He Hongli Senior Deputy General Manager Incumbent 331500 0 0 331500 0 0 0
Pu Shiliang Senior Deputy General Manager Incumbent 265900 0 0 265900 0 0 0
Guo Xudong Senior Deputy General Manager Incumbent 51140 0 0 51140 0 0 0
Xu Ximing Senior Deputy General Manager Incumbent 147900 0 0 147900 0 0 0
Chen Junke Senior Deputy General Manager Incumbent 0 0 0 0 0 0 0
Huang Fanghong Senior Deputy General Manager Incumbent 399500 0 0 399500 0 0 0
Senior Deputy General Manager
Jin Yan Incumbent 251000 0 0 251000 0 0 0
and Person in Charge of Finance
Cai Changyang Senior Deputy General Manager Incumbent 109500 0 0 109500 0 0 0
48Hikvision 2026 Half Year Report
Number of
Shares Number of Number of
Shares Shares held at restricted
Shares held at the decreased restricted stocks restricted
increased during the end of the stocks granted
Tenure beginning of the during the granted at the stocks granted
Name Title the current current at the end of the
status current reporting current beginning of the in the current
reporting period reporting period current
period (shares) reporting period current reporting reporting
(shares) (shares) reporting
(shares) period (shares) period (shares)
period (shares)
Senior Deputy General Manager
Feng Wei Incumbent 0 469500 0 469500 0 0 0
and Board Secretary
Total -- -- 157650229 469500 0 158119729 0 0 0
Note 1: Number shares held at the beginning of the period shares increased during the period shares decreased during the period for directors and senior management personnel above are all shares directly held by
them accordingly.V. Changes in controlling shareholders or actual controllers
Change of the controlling shareholder during the reporting period
□ Applicable √ Inapplicable
The Company's controlling shareholder has not changed during the reporting period.Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
No such change during the reporting period.VI. Information of Preferred Shares
□ Applicable √ Inapplicable
There is no preferred share existed for the Company during the current reporting period.
49Hikvision 2026 Half Year Report
Section VII Bonds
□ Applicable √ Inapplicable
50Hikvision 2026 Half Year Report
Section VIII Financial Report
Audit report
Whether audit has been performed on the half year report
□ Yes √ No
The Company's 2026 Half Year Report has not been audited
51Hikvision 2026 Half Year Report
On June 30 2026
Consolidated Balance Sheet
Unit: RMB
Item Notes On June 30 2026 On December 31 2025
Current Assets:
Cash and bank balances (V)1 37851366962.87 46508328658.44
Derivative financial assets (V)2 31694623.01 4792243.40
Notes receivable (V)3 2667589974.83 3051356562.64
Accounts receivable (V)4 27784134749.07 29812378945.77
Receivables for financing (V)6 2466406045.15 2430030662.65
Prepayments (V)7 923362268.90 856749328.34
Other receivables (V)8 501788186.74 442502788.34
Inventories (V)9 29488147922.59 20472193858.80
Contract assets (V)5 937168474.60 974450159.71
Non-current assets due within one year (V)10 437028452.63 603989194.29
Other current assets (V)11 2271384506.21 1251688100.54
Total Current Assets 105360072166.60 106408460502.92
Non-current Assets:
Long-term receivables (V)12 189049373.17 225857779.77
Long-term equity investment (V)13 2268302310.46 1669074600.75
Other non-current financial assets (V)14 668271418.62 589955315.74
Fixed assets (V)15 19996832288.94 20176914451.95
Construction in progress (V)16 2065884044.75 1914110895.67
Right-of-use assets (V)17 445295372.25 442495841.87
Intangible assets (V)18 1792254018.73 1830074205.02
Goodwill (V)19 308125476.58 311187727.01
Long-term deferred expenses (V)20 127215093.40 148029527.26
Deferred tax assets (V)21 2571059629.30 2435622521.84
Other non-current assets (V)22 1898040603.20 1897871964.82
Total Non-current Assets 32330329629.40 31641194831.70
Total Assets 137690401796.00 138049655334.62
52Hikvision 2026 Half Year Report
On June 30 2026
Consolidated Balance Sheet-continued
Unit: RMB
Item Notes On June 30 2026 On December 31 2025
Current Liabilities:
Short-term borrowings (V)24 2768663114.44 2685866236.94
Derivative financial liabilities (V)25 3897841.90 11299401.25
Notes payable (V)26 612897818.96 783778534.95
Accounts payable (V)27 20832902018.65 19843949575.87
Contract liabilities (V)28 4919948398.90 4200490873.07
Payroll payable (V)29 6054027581.05 6937517142.35
Taxes payable (V)30 2146502059.75 1794091503.07
Other payables (V)31 3055415692.88 3384020094.93
Including: Dividends payable (V)31.2 29995616.97 27964450.23
Non-current liabilities due within one year (V)32 1060992244.89 3939271129.61
Other current liabilities (V)33 483285523.15 415430882.40
Total Current Liabilities 41938532294.57 43995715374.44
Non-current Liabilities:
Long-term borrowings (V)34 933440073.94 1210564814.39
Lease liabilities (V)35 271125883.28 299390966.16
Long-term payables 9749569.60 9749569.60
Provisions (V)36 115941227.04 118435375.21
Deferred income (V)37 923970367.64 863263662.53
Deferred tax liabilities (V)21 100064716.36 114583208.90
Other non-current liabilities (V)38 264209158.07 221089008.80
Total Non-current Liabilities 2618500995.93 2837076605.59
Total Liabilities 44557033290.50 46832791980.03
Owners' Equity
Share capital (V)39 9164871550.00 9164871550.00
Capital reserves (V)40 4399484471.86 4385374479.22
Other comprehensive income (V)41 (14216305.16) 23384816.83
Surplus reserves (V)42 4715460312.00 4715460312.00
Retained earnings (V)43 66081146515.18 65059094727.57
Total owners' equity attributable to owner of the
84346746543.8883348185885.62
Company
Minority equity 8786621961.62 7868677468.97
Total Owners' Equity 93133368505.50 91216863354.59
Total Liabilities and Owners' Equity 137690401796.00 138049655334.62
The accompanying notes form part of the financial statements.The financial statements were signed by the following:
Legal Representative: Hu Yangzhong;
Person in Charge of the Accounting Work: Jin Yan;
Person in Charge of the Accounting Department: Zhan Junhua
53Hikvision 2026 Half Year Report
On June 30 2026
Balance Sheet of the Parent Company
Unit: RMB
Item Notes On June 30 2026 On December 31 2025
Current Assets:
Cash and bank balances 26746619186.38 33415248877.24
Notes receivable 125470819.69 210667542.49
Accounts receivable (XVI)1 22515509537.78 15928913273.65
Receivables for financing 81407799.18 142171473.18
Prepayments 344927115.62 347313971.21
Other receivables (XⅥ)2 3819423705.54 4338105044.26
Including: Dividends receivable (XⅥ)2.2 132204288.80 23946902.38
Inventories 198167874.15 163137444.34
Contract assets 19363870.39 16874381.78
Non-current assets due within one year 53734764.31 70677786.44
Other current assets 2176287782.16 2064512390.41
Total Current Assets 56080912455.20 56697622185.00
Non-current Assets:
Long-term accounts receivable 70508593.30 1081962084.34
Long-term equity investment (XⅥ)3 10386628876.50 9735858175.55
Other non-current financial assets 321549677.89 313276218.26
Fixed assets 3371830930.63 3414637928.68
Construction in progress 205027505.22 179633779.52
Right-of-use assets 47371610.12 58043731.14
Intangible assets 423199130.00 460198889.64
Long-term deferred expenses 18432100.97 23064909.59
Deferred tax assets 286962467.15 281390428.65
Other non-current assets 51870533.83 33109877.18
Total Non-current Assets 15183381425.61 15581176022.55
Total Assets 71264293880.81 72278798207.55
54Hikvision 2026 Half Year Report
On June 30 2026
Balance Sheet of the Parent Company - continued
Unit: RMB
Item Notes On June 30 2026 On December 31 2025
Current Liabilities:
Short-term borrowings - 800467958.33
Accounts payable 778093086.79 919490298.90
Contract liabilities 226670552.04 221789610.01
Payroll payable 3225887843.44 3948883349.56
Taxes payable 1511530017.16 854566175.20
Other payables 2676426712.05 1717395865.00
Non-current liabilities due within one year 481926179.86 1491857219.20
Other current liabilities 32761195.27 33237967.67
Total Current Liabilities 8933295586.61 9987688443.87
Non-current Liabilities:
Long-term borrowings 227160000.00 454320000.00
Lease liabilities 20678360.30 28085571.51
Provisions 1288595.48 7678935.03
Deferred income 317089756.91 317205022.93
Total Non-current Liabilities 566216712.69 807289529.47
Total Liabilities 9499512299.30 10794977973.34
Owners' Equity
Share capital 9164871550.00 9164871550.00
Capital reserves 1990130497.73 1972128400.24
Surplus reserves 4715460312.00 4715460312.00
Retained earnings 45894319221.78 45631359971.97
Total Owners' Equity 61764781581.51 61483820234.21
Total Liabilities and Owners' Equity 71264293880.81 72278798207.55
55Hikvision 2026 Half Year Report
For the reporting period from January 1 2026 to June 30 2026
Consolidated Income Statement
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Total Revenue (V)44 46822537847.07 41818040088.44
Less: Total operating costs (V)44 23426598006.35 22919499439.04
Business taxes and surcharges (V)45 431879104.73 378912693.73
Selling expenses 5822062529.86 5708759811.30
Administrative expenses 1493403061.13 1386257017.69
Research and Development (R&D) expenses 6168979406.20 5669772011.51
Financial expenses (V)46 346237439.98 (739368414.40)
Including: Interest expenses 84459575.12 107112248.08
Interest income 383972908.76 281621810.18
Add: Other income (V)47 1296250218.51 1180671233.88
Investment income (losses) (V)48 659367911.34 (36631451.99)
Including: Investment gains (losses) in associated enterprise
616257839.984673722.38
and joint-venture enterprise
Termination recognition gains (losses) on financial assets
-49420.00
measured at amortized cost
Gains (losses) from changes in fair values (V)49 42551138.65 (43117443.33)
Credit impairment gains (losses) (V)50 (529616772.52) (378694171.37)
Impairment gains (losses) of assets (V)51 (233040536.21) (208566206.64)
Asset disposal income (losses) (38039.60) 7386351.06
II. Operating Profit 10368852218.99 7015255841.18
Add: Non-operating income (V)52 56439035.42 32957197.92
Less: Non-operating expenses (V)53 20017277.06 7322434.53
III. Profit Before Taxes 10405273977.35 7040890604.57
Less: Income tax expenses (V)54 1282273423.47 759413973.74
IV. Net Profit 9123000553.88 6281476630.83
4.1 Classification by continuous operation
(a) Net profit on continuous operation 9123000553.88 6281476630.83
(b) Net loss on terminated operation - -
4.2 Classification by attribution of ownership
(a) Net profit attributable to owners of parent company 7895705450.11 5657349798.68
(b) Profit or loss attributable to minority interests 1227295103.77 624126832.15
V. Other Comprehensive Income Net of Income Tax (V)41 (44317262.45) 200301615.25
Other comprehensive income attributable to owners of the
(37601121.99)133339313.91
Company net of tax
(I) Items that will not be reclassified subsequently to profit or loss - -
(II) Other comprehensive income to be reclassified to profit or
(37601121.99)133339313.91
loss in subsequent periods
1. Exchange differences arising on conversion of financial
(37601121.99)133339313.91
statements denominated in foreign currencies
Other comprehensive income attributable to minority interests net (6716140.46) 66962301.34
56Hikvision 2026 Half Year Report
Amount for the Amount for the
Item Notes
current period prior period
of tax
VI. Total Comprehensive Income 9078683291.43 6481778246.08
Total comprehensive income attributable to owners of the parent
7858104328.125790689112.59
company
Total comprehensive income attributable to minority interests 1220578963.31 691089133.49
VII. Earnings Per Share
(I) Basic earnings per share (RMB/share) (XVII)2 0.862 0.615
(II) Diluted earnings per share (RMB/share) (XⅦ)2 0.862 0.615
57Hikvision 2026 Half Year Report
For the reporting period from January 1 2026 to June 30 2026
Income Statement of the Parent Company
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Total Revenue (XVI)4 12744710979.60 10918172590.70
Less: Total operating costs (XⅥ)4 1829900350.33 1761451025.61
Business taxes and surcharges 158172605.16 127709740.15
Selling expenses 1513749532.23 1584703807.43
Administrative expenses 330756012.42 341696756.42
Research and Development (R&D) expenses 3217733371.01 3038343230.98
Financial expenses (182926025.12) (121288497.66)
Including: Interest expenses 18620377.05 35147253.23
Interest income 222289227.56 144754417.42
Add: Other income 861556617.76 777572208.70
Investment gains (losses) (XⅥ)5 1336594989.22 338412218.62
Including: Investment gains (losses) in associated enterprise
624416650.031486825.45
and joint-venture enterprise
Gains (losses) from changes in fair values 8273459.63 37607852.79
Credit impairment gains (losses) (20292689.04) (4572299.45)
Impairment gains (losses) of assets (141403.55) (3960333.90)
Asset disposal income (losses) 2148582.87 10564493.15
II. Operating Profit 8065464690.46 5341180667.68
Add: Non-operating income 8440718.92 5545382.36
Less: Non-operating expenses 6170347.64 1370006.75
III. Profit Before Taxes 8067735061.74 5345356043.29
Less: Income tax expenses 931122149.43 496598001.72
IV. Net Profit 7136612912.31 4848758041.57
V. Other Comprehensive Income Net of Income Tax - -
VI. Total Comprehensive Income 7136612912.31 4848758041.57
58Hikvision 2026 Half Year Report
For the reporting period from January 1 2026 to June 30 2026
Consolidated Cash Flow Statement
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Cash Flows from Operating Activities
Cash received from sale of goods or rendering of services 53936810738.77 49701456543.93
Receipts of tax refunds 2342064381.74 2107945151.93
Other cash receipts relating to operating activities (V)55(1) 869411462.81 812956336.79
Sub-total of cash inflows from operating activities 57148286583.32 52622358032.65
Cash payments for goods purchased and services received 34945949636.68 30095263185.08
Cash paid to and on behalf of employees 11454896091.03 10757613386.80
Payments of various types of taxes 3945349517.35 3064520777.31
Other cash payments relating to operating activities (V)55(1) 3570680013.68 3361941045.57
Sub-total of cash outflows from operating activities 53916875258.74 47279338394.76
Net Cash Flows from Operating Activities (V)56(1) 3231411324.58 5343019637.89
II. Cash Flows from Investing Activities
Cash receipts from recovery of investments 9397435604.90 2065280790.61
Cash receipts from investment income 33608603.83 49248130.84
Net cash receipts from disposals of fixed assets intangible assets and
13618097.0735758008.99
other long-term assets
Other cash receipts relating to investing activities (V)55(2) 26794203.84 58311055.86
Sub-total of cash inflows from investing activities 9471456509.64 2208597986.30
Cash payments to acquire or construct fixed assets intangible assets
1494742430.131977761423.32
and other long-term assets
Cash paid to acquire investments 9455501310.79 2109648712.07
Sub-total of cash outflows from investing activities 10950243740.92 4087410135.39
Net Cash Flows from Investing Activities (1478787231.28) (1878812149.09)
III. Cash Flows from Financing Activities
Cash receipts from borrowings 1447286003.06 2498536695.29
Sub-total of cash inflows from financing activities 1447286003.06 2498536695.29
Cash repayments of borrowings 4405440000.00 2608183590.81
Cash payments for distribution of dividends or profits or settlement of
7233213844.106798273559.09
interest expenses
Including: Dividends and profits paid by subsidiaries to minority
288645583.15276437692.96
shareholders
Other cash payments relating to financing activities (V)55(3) 150535286.38 1642655475.56
Sub-total of cash outflows from financing activities 11789189130.48 11049112625.46
Net Cash Flows from Financing Activities (10341903127.42) (8550575930.17)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
(171560476.65)31873905.87
Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents (V)56(1) (8760839510.77) (5054494535.50)
Add: Opening balance of cash and cash equivalents (V)56(2) 46204338694.43 36053042380.29
VI. Closing Balance of Cash and Cash Equivalents (V)56(2) 37443499183.66 30998547844.79
59Hikvision 2026 Half Year Report
For the reporting period from January 1 2026 to June 30 2026
Cash Flow Statements of the Parent Company
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Cash Flows from Operating Activities
Cash receipts from the sale of goods and the rendering of services 7730594653.13 11805102023.42
Receipts of tax refunds 776872088.47 588786958.46
Other cash receipts relating to operating activities 653193816.04 353492572.20
Sub-total of cash inflows from operating activities 9160660557.64 12747381554.08
Cash payments for goods acquired and services received 2269936408.42 2146780185.63
Cash payments to and on behalf of employees 4510576259.21 4211903114.69
Payments of various types of taxes 1704430559.58 1244789824.01
Other cash payments relating to operating activities 1177304476.47 1651056892.77
Sub-total of cash outflows from operating activities 9662247703.68 9254530017.10
Net Cash Flows from Operating Activities (501587146.04) 3492851536.98
II. Cash Flows from Investing Activities
Cash receipts from recovery of investments 7891760000.00 2480000000.00
Cash receipts from investment income 626452707.47 386558613.54
Net cash receipts from disposals of fixed assets intangible assets and
15118683.5831773549.41
other long-term assets
Other cash receipts relating to investing activities 39818776129.36 34938498922.64
Sub-total of cash inflows from investing activities 48352107520.41 37836831085.59
Cash payments to acquire or construct fixed assets intangible assets and
299886300.75738537831.04
other long-term assets
Cash payments to acquire investments 8033460000.00 2363300000.00
Other cash payments relating to investing activities 38429163570.35 35005948843.50
Sub-total of cash outflows from investing activities 46762509871.10 38107786674.54
Net Cash Flows from Investing Activities 1589597649.31 (270955588.95)
III. Cash Flows from Financing Activities
Cash receipts from borrowings - 829010000.00
Other cash receipts relating to financing activities 8504526223.70 10037423571.45
Sub-total of cash inflows from financing activities 8504526223.70 10866433571.45
Cash repayments of borrowings 2024160000.00 11010000.00
Cash payments for distribution of dividends or profits or settlement of
6889801211.666457105400.28
interest expenses
Other cash payments relating to financing activities 7452924666.20 10030085125.15
Sub-total of cash outflows from financing activities 16366885877.86 16498200525.43
Net Cash Flows from Financing Activities (7862359654.16) (5631766953.98)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
(771516.49)1537782.08
Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents (6775120667.38) (2408333223.87)
Add: Opening balance of cash and cash equivalents 33379572349.73 22790271523.04
VI. Closing Balance of Cash and Cash Equivalents 26604451682.35 20381938299.17
60Hikvision 2026 Half Year Report
For the reporting period from January 1 2026 to June 30 2026
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
Amount for the first half of 2026
Owner's equity attributable to the parent company
Items Minority Total owners'
Capital Less: Treasury Other comprehensive Retained
Share capital Surplus reserve interests equity
reserves share income earnings
I. Opening Balance of the Current
9164871550.004385374479.22-23384816.834715460312.0065059094727.577868677468.9791216863354.59
Period
II. Increase or Decrease in the
-14109992.64-(37601121.99)-1022051787.61917944492.651916505150.91
Current Period
(I) Total comprehensive income - - - (37601121.99) - 7895705450.11 1220578963.31 9078683291.43
(II) Owners' contributions and
-14109992.64----(11942951.29)2167041.35
reduction in capital
1. Common shares contribution
--------
from owners
2. Share-based payment recognized
-31320758.17----7034513.5438355271.71
in owners' equity
3. Others - (17210765.53) - - - - (18977464.83) (36188230.36)
(III) Profit distribution - - - - - (6873653662.50) (290691519.37) (7164345181.87)
1. Appropriation of surplus reserves - - - - - - - -
2. Distributions to shareholders - - - - - (6873653662.50) (290691519.37) (7164345181.87)
III. Closing Balance of the
9164871550.004399484471.86-(14216305.16)4715460312.0066081146515.188786621961.6293133368505.50
Current Period
Amount for the first half of 2025
Owner's equity attributable to the parent company
Items Minority Total owners'
Capital Less: Treasury Other comprehensive Retained
Share capital Surplus reserve interests equity
reserves share income earnings
I. Opening Balance of the Current
9233198326.006181644265.06310044296.12(111510486.21)4715460312.0060959912942.156831633685.2787500294748.15
Period
II. Increase or Decrease in the
-61736642.34133339313.91-(772891690.32)424886743.40(1691415892.62)
Current Period 1538486901.95
(I) Total comprehensive income - - - 133339313.91 - 5657349798.68 691089133.49 6481778246.08
(II) Owners' contributions and
-61736642.341538486901.95---29110665.46(1447639594.15)
reduction in capital
1. Common shares contribution
--------
from owners
2. Share-based payment recognized
-41311523.21----15319808.8756631332.08
in owners' equity
3. Others - 20425119.13 1538486901.95 - - - 13790856.59 (1504270926.23)
(III) Profit distribution - - - - - (6430241489.00) (295313055.55) (6725554544.55)
1. Appropriation of surplus reserves - - - - - - - -
2. Distributions to shareholders - - - - - (6430241489.00) (295313055.55) (6725554544.55)
III. Closing Balance of the Current
9233198326.006243380907.401848531198.0721828827.704715460312.0060187021251.837256520428.6785808878855.53
Period
61Hikvision 2026 Half Year Report
For the reporting period from January 1 2026 to June 30 2026
Statement of Changes in Owners' Equity of the Parent Company
Unit: RMB
Amount for the first half of 2026
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained earnings Total owners' equity
I. Opening Balance of the Current Period 9164871550.00 1972128400.24 - 4715460312.00 45631359971.97 61483820234.21
II. Increase or Decrease in the Current Period - 18002097.49 - - 262959249.81 280961347.30
(I) Total comprehensive income - - - - 7136612912.31 7136612912.31
(II) Owners' contributions and reduction in capital - 18002097.49 - - - 18002097.49
1. Common shares contribution from owners - - - - - -
2. Share-based payment recognized in owners' equity - 13497563.44 - - - 13497563.44
3. Others - 4504534.05 - - - 4504534.05
(III) Profit distribution - - - - (6873653662.50) (6873653662.50)
1. Appropriation of surplus reserves - - - - - -
2. Distributions to shareholders - - - - (6873653662.50) (6873653662.50)
III. Closing Balance of the Current Period 9164871550.00 1990130497.73 - 4715460312.00 45894319221.78 61764781581.51
Amount for the first half of 2025
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained earnings Total owners' equity
I. Opening Balance of the Current Period 9233198326.00 3849752890.09 310044296.12 4715460312.00 44480765952.49 61969133184.46
II. Increase or Decrease in the Current Period - 29958332.40 1538486901.95 - (1581483447.43) (3090012016.98)
(I) Total comprehensive income - - - - 4848758041.57 4848758041.57
(II) Owners' contributions and reduction in capital - 29958332.40 1538486901.95 - - (1508528569.55)
1. Common shares contribution from owners - - - - - -
2. Share-based payment recognized in owners' equity - 11502722.66 - - - 11502722.66
3. Others - 18455609.74 1538486901.95 - - (1520031292.21)
(III) Profit distribution - - - - (6430241489.00) (6430241489.00)
1. Appropriation of surplus reserves - - - - - -
2. Distributions to shareholders - - - - (6430241489.00) (6430241489.00)
III. Closing Balance of the Current Period 9233198326.00 3879711222.49 1848531198.07 4715460312.00 42899282505.06 58879121167.48
62Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
I. Basic information about the Company
1. Overview of the Company
Hangzhou Hikvision Digital Technology Co. Ltd. (hereinafter referred to as "Company" or "the Company" or
"Hikvision") is a Sino-foreign equity joint venture company formerly known as "Hangzhou Hikvision Digital Technology
Ltd" established on November 30 2001 in Hangzhou upon the approval letter of Hangzhou High-tech No. 604 [2001]
issued by Hangzhou High-tech Industrial Development Zone Management Committee. On June 25 2008 with approval
of document No. 598 [2008] issued by the MOFCOM (The Ministry of Commerce of the People's Republic of China) the
Company was renamed as "Hangzhou Hikvision Digital Technology Co. Ltd." headquartered in Hangzhou. On May 28
2010 the Company was listed on the Shenzhen Stock Exchange.
The main business scope of the Company and its subsidiaries (hereinafter referred to as "the Group") include
manufacturing and selling security equipment network equipment and smart devices; manufacturing and wholesaling
automotive parts and accessories; selling electronic products; providing construction engineering services; technical
services technology development technical consulting software development information system integration services
data processing and storage support services etc.
2. Date of approval for issuance of financial statements
The Company's and consolidated financial reports were approved for issuance by the 10th meeting of the 6th session of the
Board of Directors of the Company on July 24 2026.II. Basis of preparation of financial statements
Basis of preparation of financial statements
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") and relevant provisions issued by
the Ministry of Finance ("MoF"). In addition the Group has disclosed relevant financial information in accordance with
Information Disclosure and Presentation Rules for Companies Offering Securities to the Public No. 15－ General
Provisions on Financial Reporting (revised in 2023).Going concern
The Group has evaluated its going concern for 12 months going forward starting from June 30 2026 and there is no factor
that may cast significant doubt on the entity's ability to continue as a going concern. Therefore the financial statements
have been prepared on a going concern basis.
63Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Bookkeeping base and valuation principles
The Group measures the accounting elements in accordance with the accrual accounting basis. Except certain financial
instruments are measured by fair value these financial statements are prepared in accordance with the measurements basis
of historical costs. If the asset decreases in value the provision for impairment of assets should be made according to
relevant regulations.According to the historical cost measurement the assets shall be measured as per the amount of cash or cash equivalent
paid at the time of purchase or the fair value of consideration paid for the purchase of such assets. The liabilities shall be
measured in accordance with the amount of funds or assets actually received when undertaking current obligations or the
contract amount when undertaking the current obligations or the amount of cash or cash equivalents required for paying
back the debts in daily activities.The fair value is a price received by the market participants from selling asset or transferring liability during orderly
transaction at the measurement date. No matter the fair value is observable or estimated by using valuation technique the
measured and disclosed fair value in the financial statement shall be determined on this basis.When measuring non-financial assets at fair value the assets shall be measured considering the ability of market
participants to use the assets for optimal use to generate economic benefits or to sell the assets to other market participants
to use the assets for optimal use to generate economic benefits.For the financial assets measured with transaction price at the initial recognition and the use of valuation techniques
involving unobservable inputs in the subsequent fair value measurement the valuation technique is corrected in the
valuation process in order to make the initial recognition results confirmed by valuation techniques equal to the transaction
price.Based on the observable extent of the input value of the fair value and the importance of such input value to the fair value
measurement the fair value measurement is divided into three levels:
* Level 1: The input value is the unadjusted offer of the same assets or liabilities on active market acquired on
measurement date;
* Level 2: The input value is the input value of relevant assets or liabilities observable directly or indirectly in addition
to level 1 input value;
* Level 3: The input value is the non-observable input value of relevant assets or liabilities.III. Significant accounting policies and accounting estimates
Specific Accounting Policies and Accounting Estimates Disclosure:
64Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The Group has established specific accounting policies and estimates based on the actual production and operational
characteristics targeting the determination methods and selection basis for the materiality standard provision for credit
losses on accounts receivable inventory write-down fixed asset depreciation and revenue recognition. The important
judgments and accounting estimates applied by the Group in recognizing significant accounting policies as well as their
key assumptions are detailed in Note Ⅲ (35) of the financial statements.
1. Statement for compliance with Accounting Standards for Business Enterprises (ASBE)
The financial statements of the Company have been prepared in accordance with ASBE and present the Company's and
consolidated financial position as of June 30 2026 the Company's and consolidated results of operations the Company's
and consolidated changes in shareholders' equity and the Company's and consolidated cash flows for the first half of 2026
truly and completely.
2. Accounting period
The Group has adopted the calendar year as its accounting year from January 1 to December 31 each year.
3. Business cycle
The business cycle refers to the period from purchase of assets used for processing to realization of cash or cash equivalents.The Group's business cycle is usually 12 months.
4. Functional currency
Renminbi ("RMB") is the currency in the primary economic environments in which the Company and its domestic
subsidiaries are operated. The Company and its domestic subsidiaries take RMB as their functional currency. Overseas
subsidiaries of the Company determine their functional currency on the basis of the primary economic environment in
which it operates. The Group adopts RMB to prepare its financial statements.
5. Methodology for determining materiality criteria and basis for selection
Item Materiality Criteria
Significant single-item receivables with bad debt provision Single amount accounts for 10% of accounts receivable balance
Significant single-item contract assets with bad debt provision Single amount accounts for 10% of contract asset balance
Single amount of investment of construction in progress accounts for
Significant construction in progress
2% of net assets balance
Significant accounts payable other payables and contract Accounts payable other payables and contract liabilities aged more
liabilities aged over 1 year than one year account for 5% of the balance of liabilities
Minority interests representing 10% of consolidated shareholders'
Significant non-wholly owned subsidiaries
equity at the end of the reporting period
65Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Investment income of individual joint ventures/associates accounts for
10% of consolidated net profit or the year-end balance of long-term
Significant joint ventures or associates
equity investment in the enterprise accounts for 10% of the total
consolidated assets
Cash received or paid in connection with significant The amount of cash inflow or outflow from a single investing activity
investment activities accounts for 10% of cash inflow or outflow from investing activities
6. Accounting treatment methods for business combinations under common control and non-common control
Business combinations are divided into those under common control and those not under common control.
6.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or parties both before and after the combination and
that control is not transitory.Assets and liabilities obtained shall be measured at their respective book value as recorded by the combining entities at
the date of the combination. The difference between the book value of the net assets obtained and the book value of the
consideration paid for the combination is adjusted to the share premium in capital reserve. If the share premium is not
sufficient to absorb the difference any excess shall be adjusted against retained earnings.Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.
6.2 Business combinations involving enterprises under non-common control and goodwill
A business combination not involving enterprises under common control is a business combination in which all of the
combining enterprises are not ultimately controlled by the same party or parties before and after the combination.The cost of combination is the aggregate of the fair values at the acquisition date of the assets given liabilities incurred
or assumed and equity securities issued by the acquirer in exchange for control of the acquiree. If a business combination
not under the common control is realized in stages through multiple transactions the cost of the combination is the sum
of the consideration paid on the purchase date and the fair value of the equity of the purchase already held before the
purchase date on the purchase date. The intermediary expenses incurred by the acquirer in respect of auditing legal
services valuation and consultancy services etc. and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
66Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The acquiree's identifiable assets liabilities and contingent liabilities acquired by the acquirer in a business combination
that meet the recognition criteria shall be measured at fair value at the acquisition date.Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree's identifiable net assets the
difference is treated as an asset and recognized as goodwill which is measured at cost on initial recognition. Where the
cost of combination is less than the acquirer's interest in the fair value of the acquiree's identifiable net assets the acquirer
firstly reassesses the measurement of the fair values of the acquiree's identifiable assets liabilities and contingent liabilities
and measurement of the cost of combination. If after that reassessment the cost of combination is still less than the
acquirer's interest in the fair value of the acquiree's identifiable net assets the acquirer recognizes the remaining difference
immediately into profit or loss for the current period.Goodwill arising on a business combination is measured at cost less accumulated impairment losses and is presented
separately in the consolidated financial statements.
7. Criteria for determining control right and methods for preparing consolidated financial statements.
7.1 Criteria for determining control right
Control right means that an investor may control an investee; the investor may participate in relevant activities of the
investee to obtain variable rewards and also be able to use the control rights for the investee to influence its amount of
returns. The Group will re-evaluate if the change of the relevant facts and circumstances leading to the change of the
relevant elements involved in the above definition of control.
7.2 Preparation method of consolidated financial statements
The scope of consolidated financial statements shall be confirmed based on the control.The merger of subsidiary starts from the Group obtaining the control power of the subsidiary and terminates when the
Group loses the control power of the subsidiary.As for subsidiaries disposed by the Group operating results and cash flows prior to the disposal date (the date of losing
control right) have been properly included in the consolidated profit statement and consolidated cash flow statement.For a subsidiary acquired through a business combination not involving enterprises under common control the operating
results and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated income
statement and consolidated statement of cash flows.
67Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
No matter when the business combination occurs in the reporting period subsidiaries acquired through a business
combination involving enterprises under common control are included in the Group's scope of consolidation as if they had
been included in the scope of consolidation from the date when they first came under the common control of the actual
controlling party. Their operating results and cash flows from the beginning of the earliest reporting period are included
in the consolidated income statement and consolidated statement of cash flows as appropriate.The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the
uniform accounting policies and accounting periods set out by the Company.All significant intra-group balances and transactions are eliminated on consolidation.The portion of subsidiaries' equity that is not attributable to the Company is treated as minority interests and presented as
"minority equity" in the consolidated balance sheet. The portion of net profits or losses of subsidiaries for the period
attributable to minority interests is presented as "minority interests" in the consolidated income statement below the "net
profit" line item.When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority
shareholders' portion of the opening balance of owners' equity of the subsidiary the excess amount is still allocated against
minority interests.Acquisition of minority interests or disposal of interest in a subsidiary that does not result in the loss of control over the
subsidiary is accounted for as equity transactions. The book value of the total owners' equity attributable to owner of the
Company and minority equity are adjusted to reflect the changes in their relative interests in the subsidiary. The difference
between the amount by which the minority interests are adjusted and the fair value of the consideration paid or received
is adjusted to capital reserve under owners' equity. If the capital reserve is not sufficient to absorb the difference the excess
is adjusted against retained earnings.In the case that the equity of the acquiree is obtained through multiple deals in stages to finally form the business
combination not under the common control the business combination shall be handled differently based on whether it is
"package deal": where it is package deal the Company accounts each deal as a deal to obtain the control. If the deal is not
a "package deal" a deal where the control is obtained on the acquisition date will be subject to accounting. The acquiree's
equity held before the acquisition date will be re-measured based on the fair value of the equity on the acquisition date
and the difference between the fair value and book value will be included in the profit or loss in the current period. If the
acquiree's equity held before the acquisition date involves any changes in the other comprehensive income or in any other
68Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
owner's equity accounted by the equity method then it is transferred to income for the period in which it belongs at the
date of purchase.
8. Joint arrangement classification and joint operation accounting
Joint arrangements include joint operation and joint ventures. Such classification is defined based on the rights and
obligations of the joint parties in the joint arrangement taking into account the structure and legal form of such
arrangement and also the contractual provisions.The Groups investment in any joint venture is accounted by the equity method. See the details in Note (III) "18.3.2 Long-
term equity investment accounted under the equity method."
9. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are the Group's
short-term (Generally refers to due within three months from the purchase date) highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
10. Conversion of transactions and financial statements denominated in foreign currencies.
10.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded on initial recognition by applying an exchange rate that approximates the
actual spot exchange rate on the date of transaction; The exchange rate that approximates the actual spot exchange rate on
the date of transaction is calculated according to the middle price of market exchange rate at the beginning of the month
in which the transaction happened.At the balance sheet date foreign currency monetary items are translated into RMB using the spot exchange rates at the
balance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the
balance sheet date and those on initial recognition or at the previous balance sheet date are recognized in profit or loss for
the period except for exchange differences related to a specific-purpose borrowing denominated in foreign currency that
qualifies for capitalization are capitalized as part of the cost of the qualifying asset during the capitalization period.When the consolidated financial statements include foreign operation(s) if there is foreign currency monetary item
constituting a net investment in a foreign operation exchange difference arising from changes in exchange rates are
recognized as "exchange differences arising on conversion of financial statements denominated in foreign currencies" in
other comprehensive income and in profit and loss for the period upon disposal of the foreign operation.
69Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Foreign currency non-monetary items measured at historical cost are converted to the amounts in functional currency at
the spot exchange rates on the dates of the transactions.
10.2 Conversion of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements financial statements of a foreign operation are
converted from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet are
translated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items are converted at the
spot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflecting
the distribution of profits are translated at exchange rates that approximate the actual spot exchange rates on the dates of
the transactions; The difference between the converted assets and the aggregate of liabilities and shareholders' equity items
is recognized into other comprehensive income and shareholders' equity.The foreign currency cash flows and cash flows of overseas subsidiaries adopt the exchange rate similar to the spot rate at
the date of cash flows for conversion. The affected amount of cash and cash equivalents due to the change of exchange
rate as an adjustment item shall be separately listed as "the impact of cash and cash equivalents due to the change of
exchange rate" in the cash flow statement.The closing balances of the prior period and the actual amount of the prior period are presented at the converted amounts
of the prior year's financial statements.On disposal of the Group's entire interest in a foreign operation or upon a loss of control over a foreign operation due to
disposal of certain interest in it or other reasons the Group transfers the accumulated exchange differences arising on
conversion of financial statements of this foreign operation attributable to the owners' equity of the Company and presented
under shareholders' equity to profit or loss in the period in which the disposal occurs.In case of a disposal or other reason that does not result in the Group losing control over a foreign operation but only a
decrease in proportion of overseas business interests the proportionate share of accumulated exchange differences arising
on conversion of financial statements are re-attributed to minority interests and are not recognized in profit and loss under
current period. For partial disposals of equity interests in foreign operations which are associates or joint ventures the
proportionate shares of the accumulated exchange differences arising on conversion of financial statements of foreign
operations are reclassified to profit or loss under current period.
11. Financial instruments
70Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The Group recognizes a financial asset or a financial liability when it becomes a party to a contract of financial instrument.For the purchase or sale of a financial asset in conventional manner the asset to be received and the liability to be assumed
will be recognized on the trading day or the asset sold will be derecognized on the trading day.Financial assets and financial liabilities are measured by fair value upon initial recognition (the method of determining the
fair value of financial assets and financial liabilities is described in the related disclosure of the basis of accounting and
valuation principles in note (ii)). For financial assets and financial liabilities at fair value through profit and loss the
relevant trading costs will be directly charged to profit and loss of the current period. For other types of financial assets
and financial liabilities the relevant trading costs will be booked into the initial recognition amount. Upon initial
recognition of accounts receivable which have no material financing components or have not taken into consideration the
financing components in contracts with a term not exceeding one year according to Accounting Standards for Business
Enterprise No. 14 – Revenue ("Revenue Standard") such initial amount is measured by the transaction price as defined
under the Revenue Standard.Effective interest rate method refers to the method of calculating the amortized cost of financial asset or financial liability
and apportioning interest income or interest expenses to each accounting period.Effective interest rate refers to the interest rate used for discounting the estimated future cash flows of a financial asset or
a financial liability for an expected subsisting period into the account balance of the financial asset or the amortized cost
of the financial liability. When determining the effective interest rate the expected cash flows are estimated on the basis
of considering all contractual terms of the financial asset or financial liability (such as early repayment extended term
call option or other similar option) but without considering the expected credit loss.The amortized cost of a financial asset or a financial liability refers to the initial recognition amount of such financial asset
or financial liability less the repaid amount of principal plus or minus the accrued amortized amount calculated by
amortization of the difference between the initial recognition amount and the amount on maturity by using the effective
interest rate method and then deducts the accrued provision for losses (only applicable to financial assets).
11.1 Classification confirmation and measurement of financial assets
After initial recognition the Group will adopt amortized cost fair value through other comprehensive income or fair value
through profit and loss for subsequent measurement depending on different categories of financial assets.The Group will classify a financial asset into a financial asset measured at amortized cost if the contractual terms of the
71Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding and the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows. Financial assets classified by the Group as financial asset measured by amortized
cost include cash and cash equivalents notes receivables accounts receivable other receivables long-term receivables
and certain other non-current assets among others.The Group will classify a financial asset into a financial asset measured by fair value through other comprehensive income
if the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding and the financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling the financial assets. This category of financial assets
mainly includes financial assets with a maturity of more than one year from the date of acquisition and which are presented
under other debt investments financial assets maturing within one year (inclusive) from the balance sheet date and which
are presented under non-current assets maturing within one year as well as the notes receivables classified as fair value at
the time of acquisition and their changes are included in other comprehensive income are listed in the receivables for
financing and for those have acquisition period within one year (including one year) are listed in other current assets.At the time of initial recognition the Group may on the basis of a single financial asset irrevocably designate an
investment in an equity instrument held for non-trading purpose recognized or without consideration in a business merger
not under common control as a financial asset at fair value through other comprehensive income. This type of financial
assets is presented as investment in other equity instruments.Financial assets which have satisfied one of the following conditions indicate that such financial assets are held for trading
purpose by the Group:
* The purpose of acquiring the relevant financial asset is mainly for sale in recent period.* At the time of initial recognition the relevant financial asset is a part of an identifiable portfolio of financial
instruments under collective management and there is objective evidence showing a recent and actual existence of
short-term profitable mode.* The relevant financial assets are derivatives.Financial assets at fair value through profit and loss include financial assets which are classified as financial assets at fair
value through profit and loss and financial assets designated at fair value through profit and loss:
* Financial assets which do not satisfy the conditions of being classified as financial assets measured at amortized cost
or as financial assets at fair value through other comprehensive income they will be classified as financial assets at
fair value through profit and loss.
72Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
* At the time of initial recognition in order to eliminate or substantially reduce mismatch in accounting the Group
may irrevocably designate a financial asset as a financial asset measured at fair value with changes through profit
and loss.Financial assets measured at fair value with changes recognized in profit or loss other than derivative financial assets are
presented as trading financial assets. If such financial assets have a maturity of more than one year from the balance sheet
date (or without a fixed maturity) and which are expected to be held for more than one year they will be presented under
other non-current financial assets.
11.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost adopt the effective interest rate method for subsequent measurement according
to amortized cost the profit or loss when impairment occurs or upon derecognition will be accounted in profit and loss of
the current period.The Group recognizes interest income by using effective interest rate method for financial assets measured at amortized
cost. The Group determines interest income by multiplying the balance of account balance of financial assets with the
effective interest rate except under the following circumstances:
* For acquired or generated financial assets which incurred credit impairment already their interest income will be
determined by using the amortized cost of such financial asset calculated with the credit adjusted effective interest
rate.* For acquired or generated financial assets which have not incurred credit impairment but incur credit impairment in
the subsequent period the Group will determine their interest income by using the amortized cost of such financial
assets multiplied with the effective interest rate in the subsequent period. If such financial asset ceases to have credit
impairment due to improvement in credit risk in the subsequent period then the Group should change to multiply the
effective interest rate with the balance of account balance of such financial asset instead to determine the interest
income.
11.1.2 Financial asset at fair value through other comprehensive income
The impairment loss or profit or interest income calculated by using the effective interest rate method relating to financial
asset at fair value through other comprehensive income should be accounted in the profit and loss of the current period
and other changes in fair value of such financial assets will be accounted in other comprehensive income. The amount
charged by such financial asset to the profit and loss of each period is deemed to be equal to the amount which has been
measured by amortized cost and charged to the profit and loss of each period. Upon derecognition of such financial asset
the accumulated profit or loss previously charged to other comprehensive income will be reversed from other
comprehensive income and charged to profit and loss of the current period.For non-trading equity instrument investment designated at fair value through other comprehensive income its changes
73Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
in fair value will be recognized in other comprehensive income. Upon derecognition of such financial asset the
accumulated profit or loss charged to other comprehensive income will be reversed from other comprehensive income and
charged to retained earnings. During the period when such investment in equity instruments for non-trading purpose are
held by the Group the right to receive dividends by the Group has been established and economic benefits related to
dividends are likely to flow into the Group and if the amount of dividends may be measured reliably the dividend income
is recognized and accounted in the profit and loss of the current period.
11.1.3 Financial asset at fair value through profit and loss
For financial asset at fair value through profit and loss subsequent measurement will be calculated at fair value the profit
or loss arising from changes in fair value and the dividend and interest income relating to such financial asset will be
accounted in the profit and loss of the current period.
11.2 Impairment of financial assets
For financial assets measured at amortized cost financial assets that are classified as financial asset at fair value through
other comprehensive income lease receivables and contract assets the Group will handle impairment on the basis of
expected credit loss and recognize loss provision.The Group's consideration of contract assets notes receivable and accounts receivable that are generated by transactions
regulated by revenue standards and do not contain significant financing components or that do not consider financing
components in contracts that are not more than one year old as well as those operating lease receivables formed from
transactions that are defined by the Accounting Standards for Business Enterprises No. 21-Leasing the loss reserve shall
be measured based on the amount of the expected credit loss during the entire duration.For other financial instruments other than acquired or generated financial assets which have incurred credit impairment
already the Group will assess on each balance sheet date the changes in credit risk of the relevant financial instruments
since initial recognition. If the credit risk of such financial asset has significantly increased after initial recognition the
Group will calculate its loss provision based on the amount equivalent to the expected credit loss for the entire subsisting
period. If the credit risk of such financial asset since initial recognition has not increased significantly the Group will
calculate its loss provision according to the expected credit loss amount of such financial asset for the next 12 months.The amount of increase or reversal in the provision for credit loss apart from financial assets classified as financial asset
at fair value through other comprehensive income is accounted in the profit and loss of the current period. For financial
asset classified as measured at fair value through other comprehensive income the Group will recognize its credit loss
provision in other comprehensive income and charged the impairment loss or gain to the profit and loss of the current
period and will not decrease the book value of such financial asset presented in the balance sheet.The Group has calculated the loss provision equivalent to the expected credit loss amount for the entire subsisting period
of the financial instrument in the preceding accounting period but at the balance sheet date of the current period such
74Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
financial instrument is no longer under the condition of significant increase in credit risk since initial recognition the
Group calculates the loss provision for such financial instrument on the balance sheet date of the current period according
to an amount equivalent to the expected credit loss for the next 12 months and the resulting loss provision reversal amount
will be counted as impairment gain and booked into the profit and loss of the current period.
11.2.1 Significant increase in credit risk
The Group uses available and reasonable forward-looking information with justification by comparing the default risk of
the financial instrument at the balance sheet date with the default risk on the initial recognition date to confirm whether
the credit risk of the financial instrument has significantly increased after initial recognition.The Group considers the following factors when assessing whether the credit risk has significantly increased:
(1) Whether a significant change has been caused to the internal price indicator due to changes in credit risk.
(2) Whether the external credit rating of financial instrument has actual or expected significant changes.
(3) Whether the actual or expected internal credit rating of the debtor has been downgraded.
(4) Whether adverse changes have occurred in the business finance or economic conditions which are expected to cause
significant changes in the capability of the debtor to perform debt repayment obligations.
(5) Whether actual or expected significant changes have occurred in the operating results of the debtor.
(6) Whether significant adverse changes have occurred in the supervision economic or technical environment in which
the debtor operates.
(7) Whether significant changes have occurred in the value of security pledged for the debt or the quality of guarantee
or credit enhancement provided by third parties. Such changes are expected to reduce the debtor's economic
motivation of repayment according to contractual term or influence the probability of default.
(8) Whether significant changes have occurred in the economic motivation which will lower the expectation of
repayment by the borrower according to the contractual term.
(9) Whether significant changes have occurred in the expected performance and repayment behavior of the debtor.
Whether or not the credit risks increase significantly after the foregoing assessments if any contractual payment for any
financial instrument that overdue for over (including) 30 days it indicates the credit risks of that financial instrument have
increased significantly.On the balance sheet date if the Group determines that the financial instrument only carries low credit risks then it assumes
that the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk of
default on financial instruments is low the borrower is highly able to perform its contractual cash flow obligations in the
short term and even if the economic situation and operating environment are adversely changed over a long period of time
but not necessarily reducing the borrower's performance of its contractual cash obligations the financial instrument is
considered as having a lower credit risk.
75Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
11.2.2 Financial assets which have incurred credit impairment already
When one or more events which will have adverse effect on the expected future cash flows from the financial asset of the
Group have occurred such financial asset will become a financial asset which have incurred credit impairment already.The evidence of credit impairment occurred in a financial asset includes the following observable information:
(1) Material financial difficulties have occurred in the issuer or debtor;
(2) Breach of contract by the debtor such as default or overdue for the payment of interest or repayment of principal;
(3) Due to economic or contractual considerations relating to financial difficulties of the debtor the creditor has granted
concession to the debtor under no other circumstances;
(4) The debtor is likely to go bankrupt or carry out other financial restructuring;
(5) The financial difficulties of the issuer or debtor have caused the disappearance of the active market for the financial
asset;
(6) The purchase or generation of a financial asset at a large discount such discount reflects the fact of occurrence of
credit loss.
11.2.3 Confirmation of expected credit loss
The Group confirms the expected credit loss of the relevant financial instrument according to the following method:
* In respect of financial assets and lease receivables the credit loss is the present value of the difference between the
contractual cash flow that the group should receive and the cash flow that it expects to receive.* In respect of financial assets with credit impairment on the balance sheet date but they are not acquired or generated
financial assets with credit impairment the credit loss represents the difference between the balance of the account
balance of such financial asset and the present value of the estimated future cash flows discounted by the original
effective interest rate.The factors reflected by the method used for calculating expected credit loss of financial instruments by the Group include:
an unbiased weighted average amount determined by assessing a series of probable outcomes; time value of currency;
reasonable and justifiable information relating to past events prevailing conditions and forecast of future economic
conditions obtained on the balance sheet date without incurring unnecessary additional cost or effort.
11.2.4 Write-off on financial asset
When the Group ceases to have reasonable expectation on the possible collection of all or part of the contractual cash
flows from the financial asset the account balance of such financial asset will be written off directly. Such a write-off
constitutes a derecognition of the relevant financial asset.
11.3 Transfer of financial asset
A financial asset that fulfills one of the following conditions will be de-recognized: (1) termination of contractual rights
to receive cash flows from the financial asset; (2) upon transfer of such financial asset and transfer of substantially all the
76Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
risks and rewards in respect of the ownership of such financial asset to the transferee; (3) upon transfer of such financial
asset though the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownership
of such financial asset yet it has not retained the control over such financial asset.If the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownership of such
financial asset and has retained the control over such financial asset then such transferred financial asset will continue to
be recognized and the relevant liabilities will continue to be recognized according to the level of the Group's continuous
involvement in such transferred financial asset. The relevant liabilities will be measured by the Group according to the
following method:
* If the transferred financial asset is measured by amortized cost the book value of the relevant liabilities is equivalent
to the book value of the transferred asset of continuous involvement less the amortized cost of the rights retained by
the Group (if the Group has retained the relevant rights due to transfer of the financial asset) and plus the amortized
cost of the obligations undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer
of the financial asset) and the relevant liabilities are not designated as financial liabilities at fair value through profit
and loss of the current period.* If the transferred financial asset is measured by fair value the book value of the relevant liabilities is equivalent to
the book value of the transferred asset of continuous involvement less the fair value of the rights retained by the
Group (if the Group has retained the relevant rights due to transfer of the financial asset) and plus the fair value of
the obligations undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the
financial asset) and the fair value of the rights and obligations shall be measured at the fair value on a separate basis.For full transfer which satisfies the conditions of derecognition of the financial assets the difference between the sum of
the book value of the transferred financial assets as at the date of derecognition and the consideration received from such
transfer and the accumulated amount of change in fair value originally included in other comprehensive income which
corresponds to the amount in respect of derecognition shall be recognized in the profit and loss for the current period. If
the transfer of the financial assets by the Group is designated as investment in equity instrument held for non-trading
purpose measured at fair value through other comprehensive income the accumulated gains or losses previously included
in other comprehensive income shall be transferred out from other comprehensive income and be included in retained
earnings.For transfer in part which satisfies the conditions of derecognition of the financial assets the book value of the entire
financial assets before the transfer shall be shared between the derecognized portion and the continuous recognition portion
at their respective relative fair value on the date of transfer and the difference between the sum of the consideration
received from derecognition and the accumulated amount of change in fair value originally included in other
comprehensive income which corresponds to the amount in respect of derecognition and the book value of the
derecognized portion as at the date of derecognition shall be included in the profit and loss of the current period. If the
77Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
transfer of the financial assets by the Group is designated as investment in equity instrument for non-trading purpose
measured at fair value through other comprehensive income the accumulated gains or losses previously included in other
comprehensive income shall be transferred out from other comprehensive income and be included in retained earnings.For full transfer which does not satisfy the conditions of derecognition of the financial assets the Group will continue to
recognize the entire financial assets transferred and the consideration received as a result of the asset transfer is recognized
as a liability when received.
11.4 Classification confirmation and measurement of financial liabilities and equity instruments
Pursuant to the contractual terms of the issued financial instruments and the substantive economic condition as reflected
but not in legal terms only combined with the definitions of financial liabilities and equity instruments the Group has
classified such financial instruments or the components thereof as financial liabilities or equity instruments upon initial
recognition.
11.4.1 Classification confirmation and measurement of financial liabilities
Financial liabilities are classified into financial liabilities at fair value through profit and loss of the current period and
other financial liabilities upon initial recognition.
11.4.1.1 Financial liabilities at fair value through profit and loss of the current period
Financial liabilities at fair value through profit and loss of the current period comprise of financial liabilities held for
trading purpose (including derivatives of financial liabilities) and financial liabilities designated as measured at fair value
through profit and loss of the current period. Except for derivatives of financial liabilities which are presented separately
financial liabilities at fair value through profit and loss of the current period are presented as financial liabilities held for
trading.Financial liabilities that fulfill one of the following conditions suggest that the Group assumes such financial liabilities for
trading purpose:
* Assumption of the relevant financial liabilities is mainly for the purpose of the recent repurchases.* The relevant financial liabilities upon initial recognition are part of a portfolio of identifiable financial instruments
under centralized management and available objective evidence shows the recent and actual existence of a short-
term profit-making model.* The relevant financial liabilities are derivatives.Financial liabilities can be designated upon initial recognition by the Group as financial liabilities at fair value through
profit and loss of the current period provided that they have satisfied one of the following conditions: (1) such designation
78Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
can eliminate or substantially reduce accounting mismatches; (2) managing and evaluating the performance of portfolios
of financial liabilities or portfolios of financial assets and financial liabilities on fair value basis and reporting internally
to key personnel of the Group on this basis in accordance with the risk management or investment strategies specified in
formal written documents of the Group; (3) hybrid contracts with embedded derivatives have satisfied the conditions.Financial liabilities held for trading purpose use fair value for subsequent measurement gains or losses arise from changes
in fair value and the dividends or interest expenses relating to such financial liabilities are accounted in the profit and loss
of the current period.
11.4.1.2 Other financial liabilities
Excluding transfer of financial assets not complying with derecognition conditions or financial liabilities as a result of
continuous involvement in transferred financial assets as well as the financial guarantee contracts the other financial
liabilities will be classified as financial liabilities measured at amortized cost subsequent measurement will be based on
amortized cost gains or losses on derecognition or amortization will be accounted in the profit and loss of the current
period.If the Group and the counterparty have revised or renegotiated the contract this has not resulted in the derecognition of
financial liabilities measured at amortized cost for subsequent measurement but has caused changes in the contractual
cash flows then the Group should recalculate the book value of such financial liabilities and the relevant gains or losses
shall be accounted in the profit and loss of the current period. The recalculated book value of such financial liabilities will
be determined by the Group by discounting the cash flows from the renegotiated or revised contract with the original effect
interest rate of the financial liabilities. All costs or expenses incurred in the revision or renegotiation of the contract will
be reflected in the adjusted book value of financial liabilities after such revision and will be amortized during the
remaining period of the revised financial liabilities.
11.4.2 Derecognition of financial liabilities
When the existing obligations of a financial liability have been wholly or partially discharged such financial liability or
such part of it will be derecognized. When the Group (as borrower) and the lender enter into an agreement to undertake
new financial liabilities for replacing the original financial liabilities if substantive difference exists in the contractual
terms between the new financial liabilities and the original financial liabilities the Group should derecognize the original
financial liabilities while at the same time recognizes the new financial liabilities.When a financial liability is wholly or partially derecognized the difference between the book value of the derecognized
portion and the consideration paid (including non-cash asset transferred out or new financial liabilities undertaken) will
be accounted in the profit and loss of the current period.
11.4.3 Equity instrument
Equity instrument refers to a contract which can prove the ownership of remainder interest in assets after deducting all
79Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
liabilities of the Group. The Group issues (including refinances) repurchases sells or cancels equity instruments for
treatment of changes in equity. The Group will not recognize changes in the fair value of equity instruments. Trading
expenses relating to equity transactions will be deducted from equity.The Group's distribution to holder of equity instrument is treated as profit distribution the share dividends paid out will
not affect the total equity of shareholders.
11.5 Derivatives
Derivatives include foreign exchange forward contract foreign exchange option contract and interest rate swap contract
etc. Derivatives are measured at fair value initially on the date of signing the relevant contract and will be measured at fair
value for subsequent measurement.
11.6 Offsetting between financial assets and financial liabilities
When the Group has legal right to offset the recognized financial assets and financial liabilities and such legal right is
enforceable currently while at the same time the Group plans to perform netting settlement or to liquidate the financial
asset and repay the financial liability at the same time the amount after offsetting between the financial asset and financial
liability will be presented in the balance sheet. Save as said above the financial asset and financial liability are presented
separately in the balance sheet without offsetting each other.
11.7 Reclassification of financial instruments
When the Group changes its business model for managing financial assets all affected underlying financial assets will be
reclassified. All financial liabilities are not reclassified.The Group reclassifies financial assets and applies the prospective application method for relevant accounting treatment
from the date of reclassification (i.e. the first day of the first reporting period after the change in the business model that
led to the reclassification of financial assets).If the Group reclassifies a financial asset measured at amortized cost to a financial asset at fair value through other
comprehensive income it is measured at the fair value of the financial asset at the date of reclassification. The difference
between the original book value and the fair value is recognized in other comprehensive income.
12. Notes receivables
12.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for the notes receivable for which individual credit risk assessments are conducted the Group classifies notes
receivable into different portfolios based on the nature of the acceptor.
80Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Portfolio categories Determination basis
Bank acceptance bill Notes receivable with acceptors are banks
Non-bank acceptance bill Notes receivable with acceptors are non-banks
12.2 The criteria for determining individual provisioning for bad debts
The Group separately assesses the credit risk of the notes receivable with a single significant amount and the debtor with
severe financial difficulties
13. Accounts receivable financial lease receivables and installment receivables in long-term receivables
13.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for the accounts receivable for which individual credit risk assessments are conducted the Group categorizes
accounts receivable into Portfolio A Portfolio B and Portfolio C based on shared risk characteristics. Common credit risk
characteristics adopted by the Group include the geographical location and business object.For long-term receivables the common credit risk profile adopted by the Group includes business objects.
13.2 Calculation of ageing based on age-based recognition of a portfolio of credit risk characteristics
The Group uses the ageing as a credit risk characteristic and use impairment matrix to determine the credit losses of its
accounts receivable and long-term receivables related to the financial lease and installment collection business. The ageing
is calculated from the end of the credit period. The ageing is calculated on a continuous basis when the terms and conditions
of accounts receivables and long-term receivables are modified but do not result in derecognition of them.
13.3 The criteria for determining individual provisioning for bad debts
The Group assesses the credit risk of accounts receivable with significant individual amounts and significant financial
difficulties of debtors and financial lease receivables and installment receivables in long-term receivables individually.
14. Receivables for financing
14.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for the receivables for financing for which individual credit risk assessments are conducted the rest of receivables
81Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
for financing includes bank acceptance bills and certificates of accounts receivable claims. Given the low likelihood of
incurring significant losses due to default the Group considers that the bank acceptance bills and certificates of accounts
receivable claims it holds do not pose significant credit risk.
14.2 The criteria for determining individual provisioning for bad debts
This Group individually assesses the credit risk of financing of accounts receivable where the amount is material and the
debtor has encountered severe financial difficulties.
15. Other receivables
15.1 Combination category and determination basis of bad debt provision according to credit risk characteristics
Except for other receivables for which individual credit risk assessments have been conducted the Group categorizes other
receivables into different groups by their nature and determines credit losses on a portfolio basis.
15.2 The criteria for determining individual provisioning for bad debts
The Group individually assesses the credit risk of other receivables that are material in amount and where the debtor has
encountered severe financial difficulties.
16. Inventories
16.1 Categories of inventories valuation method count system amortization method for low cost and short-lived
consumable items and packaging materials
16.1.1 Categories of inventories
The Group's inventory mainly includes finished products products in process raw materials and contract performance
costs. Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase costs of conversion
and other expenditures incurred in bringing the inventories to their present location and condition.
16.1.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
16.1.3 Inventory count system
The perpetual inventory system is maintained for stock system.
82Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
16.1.4 Amortization method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortized using the immediate write-off method.
16.2 The recognition standard and accounting method of inventory falling price reserves
At the balance sheet date inventory is measured at the lower of cost or net realizable value. When the net realizable
value is lower than the cost the inventory falling price reserves is withdrawn.Net realizable value is the amount of the estimated selling price of inventory in day-to-day activities less the estimated
costs to be incurred at completion estimated selling expenses and related taxes. The determination of net realizable value
of inventories is based on firm evidence obtained taking into account the purpose for which the inventories are held and
the effect of events after the balance sheet date.After the provision for inventory depreciation if the factors affecting the previous reduction of inventory value have
disappeared resulting in the net realizable value of the inventory being higher than its book value the amount of the
original provision for inventory depreciation shall be reversed and the amount of the reversal shall be included in the
current profit or loss.
16.3 The combination category and the basis for determining the inventory falling price reserves and the basis for
determining the net realizable value of different categories of inventories
The Group makes provision for inventory falling price reserves by inventory category for inventories with a large quantity
and low unit price. For inventories manufactured and sold in the same region having the same or similar use or purpose
and difficult to measure separately from other items provision for inventory depreciation shall be made on a consolidated
basis. The Group makes provision for inventory falling price reserves according to the nature and status of inventories.
17. Contract assets
17.1 Method and standard for determination of contract assets
Contract assets refer to the Group's right to consideration in exchange for goods or services that the Group has transferred
to a customer when that right is conditioned on something other than the passage of time. The Group's unconditional (i.e.
83Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
depending on the passage of time only) right to receive consideration from the customer is separately presented as
receivables.
17.2 Combination category and determination basis of bad debt provision according to credit risk characteristics
Consistent with accounts receivable based on common risk characteristics the Group provides for credit losses on a
portfolio basis and the common credit risk characteristics adopted include the geographical location and business object.
17.3 The criteria for determining individual provisioning for bad debts
The Group individually assesses the credit risk of contract assets that are material in amount and where the debtor has
encountered significant financial difficulties.
18. Long-term equity investment
18.1 Basis for determining joint control and significant influence over investee
Control is the power to govern an entity through participating in relevant activities of the investee; the investor is able to
obtain variable benefits from its activities and at same time to use the control rights on the investee to influence the
amount of returns. Joint control means that joint control for certain arrangement in accordance with relevant agreements;
activities relevant to the arrangement cannot be decided until obtaining the unanimous consent of parties sharing control
right. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is
not control or joint control over those policies. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee the effect of potential voting rights of the investee such as current
convertible debts current executable warrants etc. held by the investing enterprises or other parties shall be considered.
18.2 Determination of initial investment cost
For a long-term equity investment acquired through a business combination involving enterprises under common control
the shares of merged party's book value of owners' equity in the final controlling party consolidated financial statements
obtained on the merger date shall be considered as the initial investment cost of long-term equity investment. The
differences between the initial investment cost of long-term equity investment and the paid cash the transferred non-cash
assets and the book value of the assumed debts are adjusted against the capital surplus; if the capital surplus is not sufficient
to be offset the remaining balance is adjusted against retained earnings. In the case of issued equity securities treated as
consolidation consideration share of book value of owner's equity of merged party in the final controlling party
consolidated financial statements is regarded as initial investment cost of long-term equity investments on the date of
consolidation; capital reserve shall be adjusted in accordance with taking total nominal value of issued share as capital
share the difference between the initial investment cost of long-term equity investments and total book value of issued
shares; In case the capital reserve is not enough for writing down the retained earnings shall be adjusted.
84Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
For a long-term equity investment acquired through business combination not involving enterprises under common control
and the merging cost confirmed on the purchased date are regarded as the initial investment cost. In the case that the equity
of the acquiree is obtained through multiple deals in stages to finally form the business combination not under the common
control the business combination shall be handled differently based on whether it is "package deal": where it is package
deal the Company accounts each deal as a deal to obtain the control. If the deal is not a "package deal" the sum of the
account balance of the equity investment of the acquiree plus the cost of the new investment shall be used as the initial
investment cost of the long-term equity investment calculated according to the cost method. The equity originally held is
accounted for by the equity method and the relevant other comprehensive income will not be accounted for the time being.The intermediate expenses made by the combining party or purchaser for audit legal service assessment and other
management related expenses during the business merger should be included into the current profit and loss as it happens.Long-term equity investment obtained by other means other than long-term equity investment formed by business
combination shall be initially measured at cost.
18.3 Subsequent measurement and recognition of profit or loss
18.3.1 Long-term equity investment accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in the Company's financial
statements. A subsidiary is an investee that is controlled by the Group.The long-term equity investment accounted by the cost method shall be measured at its initial investment cost. If there are
additional investments or disinvestments the long-term equity investment cost shall be adjusted. Income from the
investment in the current period shall be recognized in accordance with the cash dividends or profits declared and issued
by the investee.
18.3.2 Long-term equity investment accounted for using the equity method
Except for investments in associates and joint ventures that are wholly or partly classified as holding assets for sale the
Group accounts for investment in associates and joint ventures using the equity method. An associate is an entity over
which the Group has significant influence and a joint venture is an entity over which the Group can only exercise joint
control along with other investors on the investee's net assets.Under the equity method where the initial investment cost of a long-term equity investment exceeds the Group's share of
the fair value of the investee's identifiable net assets at the time of acquisition no adjustment is made to the initial
85Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
investment cost. Where the initial investment cost is less than the Group's share of the fair value of the investee's
identifiable net assets at the time of acquisition the difference is recognized in profit or loss for the period and the cost of
the long-term equity investment is adjusted accordingly.Under the equity method the Group recognizes its share of the net profit or loss and other comprehensive income of the
investee for the period as investment income or loss and comprehensive income for the period meanwhile the book value
of the long-term equity investment shall be adjusted; The Group shall accordingly reduce the book value of the long-term
equity investment in terms of the part that shall be enjoyed according to the profit or cash dividends declared by the
invested unit to be distributed; For other changes in the owners' equity of the invested unit other than net profits and losses
other comprehensive incomes and the profit distribution the book value of long-term equity investment shall be adjusted
and be included into the capital reserves. The Group shall on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment recognize the attributable share of the net profits and losses of the invested
entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the
invested unit are different from those adopted by the Group the adjustment shall be made for the financial statements of
the invested unit in accordance with the accounting policies and accounting periods of the Group to recognize the
investment income and other comprehensive incomes. For the transaction incurred between the group and associated
enterprises and joint ventures invested or sold assets don't constitute a business the part that doesn't achieve internal
transaction profit or loss or belongs to the Group calculated according to the enjoyed ratio will be offset and the profit or
loss on investment will be confirmed on this basis. But for the unrealized loss arising from the internal transaction between
the Group and the invested unit if such transaction loss is defined as the impairment loss of the transferred asset they
cannot be offset.When the Group determines the net loss of the invested unit that shall be shared it is necessary to write-down the book
value of the long-term equity investment and other long-term equities substantially constituting the net investment of the
invested unit to zero as a limit. Besides if the Group is obliged to bear extra loss for the invested unit it shall be necessary
to determine provisions and record them to current investment loss in compliance with obligations expected to be assumed.If the invested unit realizes any net profits later the Group shall after the amount of its attributable share of profits offsets
its attributable share of the un-confirmed losses resume recognizing its attributable share of profits.
18.4 Disposal of long-term equity investments
On disposal of a long-term equity investment the difference between the proceeds actually received and the book value is
recognized in profit or loss for the period.
19. Fixed assets
86Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
19.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services for rental to others
or for administrative purposes and have useful lives of more than one accounting year. A fixed asset is recognized only
when it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can be
measured reliably. Fixed assets are initially measured at cost.Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable that
economic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measured
reliably. Meanwhile the book value of the replaced part is derecognized. Other subsequent expenditures are recognized in
profit or loss in the period in which they are incurred.
19.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month subsequent to the one in
which it is ready for intended use. The depreciation method depreciation period estimated residual value rate and annual
depreciation rate of each category of fixed assets are as follows:
Residual value rate Annual depreciation rate
Class Depreciation method Depreciation period
(%)(%)
Buildings and constructions Straight-line depreciation 20 years 10 4.5
General-purpose equipment Straight-line depreciation 3-5 years 10 18.0-30.0
Special-purpose equipment Straight-line depreciation 3-5 years 10 18.0-30.0
Means of transportation Straight-line depreciation 5 years 10 18.0
Estimated net residual value of a fixed asset is the estimated amount that the Group would currently obtain from disposal
of the asset after deducting the estimated costs of disposal if the asset were already of the age and in the condition
expected at the end of its useful life.
19.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal the
fixed asset is derecognized. When a fixed asset is sold transferred retired or damaged the amount of any proceeds on
disposal of the asset net of the book value and related taxes is recognized in profit or loss for the period.The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at
least once at each financial year-end and account for any change as a change in an accounting estimate.
87Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
20. Construction in process
Construction in progress is measured at its actual costs. The actual costs include various construction expenditures during
the construction period borrowing costs capitalized before it is ready for intended use and other relevant costs.Construction in progress is not depreciated.Construction in progress is transferred to a fixed asset when it is ready for intended use. The standards and time points for
carrying forward various types of projects under construction to fixed assets are as follows:
Item Standards and timing of carry-over as fixed assets
The main construction project and supporting projects have been substantially completed and reached
Buildings and constructions
a state of practical usability.Equipment to be installed and Relevant equipment and other supporting facilities have been installed; after debugging the equipment
commissioned can maintain normal and stable operation for a period of time.
21. Borrowing costs
Borrowing costs that can be directly attributable to the construction or production of an asset that meets the capitalization
criteria shall be capitalized when asset expenditures have occurred borrowing costs have occurred and the necessary
construction or production activities to enable the asset to reach its intended useable or saleable condition have begun.Capitalization shall cease when the asset that meets the capitalization criteria for construction or production reaches its
intended usable or saleable condition. Other borrowing costs shall be recognized as expenses in the period they occur.Where funds are borrowed under a specific-purpose borrowing the amount of interest to be capitalized is the actual interest
expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before
being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed
under general-purpose borrowings the Group determines the amount of interest to be capitalized on such borrowings by
applying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the
amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable to
the general-purpose borrowings. During the capitalization period exchange differences related to a specific-purpose
borrowing denominated in foreign currency are all capitalized. Exchange differences in connection with general-purpose
borrowings are recognized in profit or loss in the period in which they are incurred.
22. Intangible assets
22.1 Service life and its basis for determination estimate amortization method or review procedure
Intangible assets include land use right intellectual property (IP) application software and franchise etc.
88Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
An intangible asset is measured initially at cost. When an intangible asset with a finite useful life is available for use its
original cost is amortized over its estimated useful life using the straight-line method. The amortization method service
life and net residual value of various intangible assets are shown as follows:
Salvage value
Class Amortization method Service life Determination basis
rate (%)
The period for which the land is
Land use right Straight-line method 40 -50 years -
available for use
IP right Straight-line method Not more than 10 years Expected economic benefit life -
Application software Straight-line method Not more than 10 years Expected economic benefit life -
Franchised operating
Franchise Straight-line method Franchise contract duration -
period
The fees charged by the Group to those who acquire public products and services during the project operation period do
not constitute an unconditional right to receive cash. When the PPP project assets are ready for their intended use the
difference between the consideration amount of the relevant PPP project assets or the amount of confirmed construction
income and the amount of cash (or other financial assets) that is entitled to receive a determinable amount will be
recognized as intangible assets.For an intangible asset with a finite useful life the Group reviews the useful life and amortization method at the end of the
period and makes adjustments when necessary.
22.2 The accounting treatment methods and the collection scope of research and development expenditure
Expenditure during the research phase is recognized as an expense in the period in which it is incurred.Expenditure during the development phase that meets all of the following conditions at the same time is recognized as
intangible asset. Expenditure during development phase that does not meet the following conditions is recognized in profit
or loss for the period:
(1) It is technically feasible to complete the intangible asset so that it will be available for use or sale;
(2) The Group has the intention to complete the intangible asset and use or sell it;
(3) The Group can demonstrate the ways in which the intangible asset will generate economic benefits including the
evidence of the existence of a market for the output of the intangible asset or the intangible asset itself or if it is to
be used internally the usefulness of the intangible asset;
(4) The availability of adequate technical financial and other resources to complete the development and the ability to
use or sell the intangible asset; and
(5) The expenditure attributable to the intangible asset during its development phase can be reliably measured.
89Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
If the expenditures cannot be distinguished between the research phase and development phase the Group recognizes all
of them in profit or loss for the period. The costs of the intangible assets generated by internal development activities only
include the total expenditure incurred from the time point when the capitalization conditions are available to the point
when the intangible assets are used for their intended purposes; for the expenditure that already becomes an expenditure
in the profit and loss statement before the capitalization conditions are available during development of the same intangible
asset no adjustment will be made.The aggregate scope of the Group's R&D expenses includes employee compensation for personnel directly engaged in
R&D activities materials and service fees directly consumed by R&D activities depreciation expenses and amortization
expenses of intangible assets for equipment and equipment used in R&D activities rental expenses for R&D sites
intermediate testing expenses for R&D activities new product design expenses and travel transportation and
communication expenses required for research and test development. The Group uses the passing of feasibility studies and
the completion of R&D project projects after evaluation as the specific criteria for classifying R&D projects into research
and development phases.
23. Long-term assets impairment
The Group assesses at each balance sheet date whether there is any indication that the long-term equity investment fixed
assets construction in process and intangible assets with a finite useful life may be impaired. If there is any indication
that such assets may be impaired recoverable amounts are estimated for such assets. Intangible assets with indefinite
useful life and intangible assets not yet available for use are tested for impairment annually irrespective of whether there
is any indication that the assets may be impaired.Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an
individual asset the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable
amount is determined by the higher of 1) net amount of fair value of the asset or asset group deducted by the disposal
expenses; or 2) the present value of the expected future cash flows of the asset or asset group.If the recoverable amount of an asset or an asset group is less than its book value the deficit is accounted as an impairment
provision and is recognized in profit or loss for the period.Goodwill impairment test shall be conducted at the end of each year at least. Goodwill impairment test shall be conducted
in accordance with the concerned asset group or asset portfolio. That is to allocate the book value of goodwill to the asset
group or asset portfolio that is expected to benefit from the synergies of the combination in a reasonable way from the date
of purchasing. When recoverable amount of apportion-included asset group or asset portfolio of goodwill is less than book
90Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
value of goodwill impairment loss shall be recognized. Firstly amount of impairment loss shall be apportioned to the
book value of goodwill of the said asset group or asset portfolio and then book value of other assets except for goodwill
in asset group or asset portfolio shall be abated in proportion.Once the impairment loss of such assets is recognized it cannot be reversed in any subsequent period.
24. Long-term deferred expenses
Long-term deferred expenses are the expenses that are already incurred but will be shared in the current reporting period
and later periods with amortization term of more than one year. Long-term deferred expenses are evenly amortized in
installments during the expected benefit period.
25. Contract liabilities
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration received
or receivable from customers. Contract assets and contract liabilities under the same contract are presented in net terms.
26. Employee compensation
26.1 Accountant arrangement method of short-term remuneration
During accounting period when the Group's employees provide services actual short-term remuneration shall be
recognized as the liabilities and current profit and loss or relevant asset cost. The Group's employee benefits and welfare
are included into current profit and loss or relevant asset cost according to actual amount occurred during the period. If
the employee benefits and welfare is non-monetary it shall be measured according to its fair value.During the accounting period that the employees service the Group the Group pays social insurance premiums such as
medical insurance premium industrial injury insurance premium maternity insurance premium and housing accumulation
fund for its employees as well as labor union expenditure and employee education expenses calculated and withdrawn
according to the regulations corresponding employee remuneration amount shall be calculated and determined in
accordance with specified calculation and withdrawal basis and proportion to recognize corresponding liabilities and
included into the current profit and loss or relevant asset cost.
26.2 Accountant arrangement method of post-employment benefits
All post-employment benefits shall be considered as the defined contribution plan.
91Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
In the accounting period when the employee serves for the Group the deposited amount calculated based on defined
contribution plan shall be recognized as liabilities and included in the current profit and loss or relevant asset cost.
26.3 Accountant arrangement method of the termination benefits
Where the Group provides termination benefits the employee remuneration liabilities caused by such termination benefits
will be determined as the following date whichever is earlier and will be included in the current profit and loss: 1) When
the Group cannot unilaterally withdraw the termination benefits provided due to labor relation cancellation plan oremployee lay-off suggestion; or 2）when the Group determines costs or expenses in relation with the restructuring of the
paid termination benefits.
27. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency such as products quality
assurance etc. And it is probable that an outflow of economic benefits will be required to settle the obligation and the
amount of the obligation can be measured reliably.The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at
the balance sheet date taking into account factors pertaining to a contingency such as the risks uncertainties and time
value of money. Where the effect of the time value of money is material the amount of the provision is determined by
discounting the related future cash outflows.The Group estimates product quality guarantee deposits based on expected claim rates maintenance and replacement costs
etc.
28. Share-based payment
Share-based payment refers to a transaction in which the Group grants the equity instruments or undertakes the equity-
instrument-based liabilities in return for services from employees. The Group's share-based payment is an equity-settled
share-based payment.
28.1 Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees are measured at the fair value of the
equity instruments granted to employees at the grant date. Such amount is recognized as related costs or expenses on a
straight-line basis over the vesting period with a corresponding increase in capital reserve.
92Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
At each balance sheet date during the vesting period the Group makes the best estimate according to the subsequent latest
information of change in the number of employees who are granted with options that may vest etc. and revises the number
of equity instruments expected to vest. The effect of the above estimate is recognized as related costs or expenses with a
corresponding adjustment to capital reserve.
28.2 Accounting treatment related to implementation modification and termination of share-based payment arrangement
In case the Group modifies a share-based payment arrangement if the modification increases the fair value of the equity
instruments granted the Group will include the incremental fair value of the equity instruments granted in the measurement
of the amount recognized for services received. If the modification increases the number of the equity instruments granted
the Group will include the fair value of additional equity instruments granted in the measurement of the amount recognized
for services received. The increase in the fair value of the equity instruments granted is the difference between fair value
of the equity instruments before and after the modification on the date of the modification. If the Group modifies the terms
or conditions of the share-based payment arrangement in a manner that reduces the total fair value of the share-based
payment arrangement or is not otherwise beneficial to the employee the Group will continue to account for the services
received as if that modification had not occurred other than a cancellation of some or all the equity instruments granted.If cancellation of the equity instruments granted occurs during the vesting period the Group will account for the
cancellation of the equity instruments granted as an acceleration of vesting and recognize immediately the amount that
otherwise would have been recognized over the remainder of the vesting period in profit or loss for the period with a
corresponding recognition in capital reserve. When the employee or counterparty can choose whether to meet the non-
vesting condition but the condition is not met during the vesting period the Group treats it as a cancellation of the equity
instruments granted.
29. Revenue
The Group's revenue consists of product sales revenue engineering construction revenue and cloud services and other
service revenue.When (or as) a performance obligation in a contract was satisfied i.e. when (or as) the customer obtains control of relevant
goods or services the Group recognizes as revenue the amount of the transaction price that is allocated to that performance
obligation. A performance obligation is the Group's commitment to transfer to a customer a good or service (or a bundle
of goods or services) that is distinct in a contract with the customer.The Group evaluates the contract on the commencement date of the contract identifies the individual performance
obligations contained in the contract and determines whether each individual performance obligation is to be performed
over a certain period of time or at a certain point in time. Revenue is recognized over time by reference to the progress
towards complete satisfaction of the relevant performance obligation if one of the following criteria is met: (1) the customer
93Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
simultaneously receives and consumes the benefits provided by the Group's performance as the Group performs; (2) the
Group's performance creates or enhances an asset that the customer controls as the Group performs; or (3) the Group's
performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to
payment for performance completed to date. Otherwise revenue is recognized at a point in time when the customer obtains
control of the distinct good or service.If the contract contains two or more performance obligations the Group allocates the transaction price to each single
performance obligation on the contract start date in accordance with the relative proportion of the individual selling price
of the goods or services promised by each single performance obligation. However if there is strong evidence that the
contract discount or variable consideration is only related to one or more (but not all) performance obligations in the
contract the Group allocates the contract discount or variable consideration to the relevant one or more performances
obligation. Individual selling price refers to the price at which the Group sells goods or services to customers separately.Where the individual selling price cannot be directly observed the Group comprehensively considers all relevant
information that can be reasonably obtained and uses the observable input value to the maximum to estimate the individual
selling price.The Group judges whether the Group’s identity is the principal or agent when engaging in transactions based on whether
it has control over the goods or services before transferring the goods or services to customers. If the Group is able to
control the goods or services before transferring them to customers the Group is the principal responsible person and
revenue is recognized based on the total amount of consideration received or receivable. Otherwise the Group acts as an
agent and recognizes revenue based on the amount of commission or handling fee to which it is expected to be entitled
which is determined based on the net amount of the total consideration received or receivable less the consideration payable
to other related parties or based on a predetermined commission amount or proportion etc.
29.1 Revenue from sale of products
Product sales revenue is the revenue from sales of video surveillance products smart home products robotics products
and other products of the Group.According to the contract the Group recognizes revenue when the control of the product is transferred that is when the
product is handed over to the agreed carrier or delivered to the place designated by the other party for receipt. As the
delivery of the products to the customer represents the right to receive the contract consideration unconditionally and the
maturity of the payment is only subject to the passage of time the Group recognizes a receivable when the product is
delivered to the customer. When a customer prepays for a purchase the Group recognizes the transaction amount received
as a contractual liability until revenue is recognized when the product is delivered to the customer.There is variable consideration in the product sales contracts between the Group and its distributors. The Group determines
the best estimate of the variable consideration based on the expected delivery time quantity and price of the products. The
transaction price including variable consideration does not exceed the amount by which the accrued recognized revenue
94Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
is unlikely to be materially reversed at the time the relevant uncertainty is eliminated. At each balance sheet date the
Group re-estimates the amount of variable consideration that should be included in the transaction price.When the Group sells products to distributors it provides an additional purchase option under sales incentives i.e. the
Group's distributors can accumulate sales rebates when purchasing specific products from the Group and use them to offset
the price of goods in future purchases. These sales rebates provide resellers with discounts on their future purchases that
are not available to similar customers. As a result the commitment to provide the dealer with a credit for future purchases
is a separate performance obligation that is recognized as a contractual liability at the time of the sale transaction at the
transaction price apportioned to the fair value of the rebate and revenue is recognized when the reseller uses the sales
rebate offset.The Group provides quality assurance for the products sold and the quality assurance related to the products sold by the
Group cannot be purchased separately but is to assure customers that the products sold meet the established standards so
the Group carries out accounting treatment in accordance with the provisions of Accounting Standard for Business
Enterprises No. 13 - Contingencies.For product sales of the Group with sales return terms attached as the customer obtains ownership of related products the
Group recognizes revenue in accordance with the consideration (excluding expected refund amounts due to sales returns)
that the Group is expected to receive due to the transfer of products or services to the customer and recognizes expected
liabilities in accordance with expected refund amounts due to sales returns. The remaining amount subsequent to
deduction of expected costs from collecting the products (including the decrease in value of the returned products) is
recognized as an asset in accordance with the book value during the expected transfer of returned products after deducting
the costs of the above net assets carried forward.Some of the Group's product sales contracts have instalment payment clauses and there is a significant financing
component in the contract the Group determines the transaction price based on the amount payable in cash when the
customer assumes control of the products. The difference between the transaction price and the contract consideration is
amortized using the effective interest rate method during the contract period. On the contract commencement date the
Group does not consider the significant financing components in the contract if the interval between the customer obtaining
control of the products and the price being paid by the customer is not more than one year.
29.2 Project construction revenue
Project construction revenue is the revenue from constructions related to intelligent security solution projects and PPP
Projects provided by the Group.For project construction the customer is able to control the assets under construction in the course of the Group's
performance and the Group regards them as a performance obligation to be performed within a certain period of time and
the revenue is recognized according to the performance progress unless the performance progress cannot be reasonably
determined.
95Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The Group uses the output method to determine the progress of performance which is to determine the progress of
performance based on the value of engineering construction services transferred to customers. If the progress of
performance cannot be reasonably determined and the costs incurred by the Group are expected to be compensated
revenue is recognized according to the amount of costs incurred until the progress of performance can be reasonably
determined.The Group's customers make milestone payments with the Group in respect of projects in accordance with the terms of
the contract. The Group first recognizes the completed performance obligations as contract assets and reclassifies them as
accounts receivable when the payment milestone is reached; if the contract price received or receivable by the Group
exceeds the accumulated performance obligations completed the excess part is recognized as a contract liability. The
Group's contract assets and contractual liabilities under the same contract are presented on a net basis.Some of the Group's construction contracts have long-term payment clauses and there are significant financing elements
in the contracts. The Group determines the transaction price on the basis of the amount payable in cash on the assumption
that the customer will take control of the asset-building. The difference between the transaction price and the contract
consideration is amortized over the life of the contract using the effective interest method. At the commencement date of
the contract the Group expects that the interval between the customer obtaining control of the service and the customer
paying the price will not exceed one year regardless of the significant financing component existing in the contract.The Group as a private capital entered into a PPP project contract with the government and provided construction
operation maintenance and other services. The Group identifies construction services operation services and maintenance
services as individual performance obligations in the contract and allocates the transaction price to each performance
obligation based on the relative proportion of the stand-alone selling price of each performance obligation. When providing
construction services or outsourcing projects to other parties the identity of the Group is the principal responsible person
and then accounting for construction revenue to confirm the contract assets is made. After the PPP project is ready for use
the Group recognizes revenue related to operation and maintenance services.
29.3 Cloud service and other service revenue
Revenue from cloud services and other services refers to cloud services such as storage services video services and
telephone services provided by the Group maintenance services related to security projects and other services etc.For cloud services and other services the economic benefits brought by the customer are obtained and consumed at the
time of the Group's performance and the Group regards them as a performance obligation to be performed within a certain
period and the revenue is recognized according to the performance progress during the period of providing services. The
Group adopts the output approach to determine the performance progress i.e. the performance progress is determined
based on the value of the services transferred to the customer to the customer. The customer paid for the cloud services in
advance at the time of purchase so the Group recognized the cloud service payment received at the time of the transaction
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
as a contractual liability and recognized the revenue according to the performance progress during the period of the
provision of the services. The Group presents contract assets and contract liabilities under the same contract on a net basis.For the provision of operation and maintenance services to customers the economic benefits obtained and consumed by
the customers at the same time as the performance of the contract by the Group shall be regarded as the performance
obligation to be performed within a certain period of time and the revenue shall be recognized according to the
performance progress. The Group's customers make milestone payments with the Group for O&M services in accordance
with the terms of the contract. The Group first recognizes completed performance obligations as contract assets and
reclassifies them as accounts receivable when payment milestones are reached and if the contract price received or
receivable by the Group exceeds the accumulated performance obligations completed the excess part is recognized as a
contract liability. The Group's contract assets and contractual liabilities under the same contract are presented on a net
basis.For the provision of operation and maintenance services to customers the economic benefits obtained and consumed by
the customers at the same time as the performance of the contract by the Group shall be regarded as the performance
obligation to be performed within a certain period of time and the revenue shall be recognized according to the
performance progress. The Group's customers make milestone payments with the Group for O&M services in accordance
with the terms of the contract. The part of the Group that has obtained the unconditional right to receive payment is
recognized as accounts receivable and the remainder is recognized as contract assets and if the contract price received or
receivable by the Group exceeds the accumulated performance obligations completed the excess part is recognized as a
contract liability. The Group's contract assets and contractual liabilities under the same contract are presented on a net
basis.
30. Cost of contract
30.1 Cost of obtaining a contract
Incremental costs incurred by the Group to obtain a contract (that is costs that would not have occurred without a contract)
and expected to be recovered are recognized as an asset and amortized using the same basis as revenue recognition for
the goods or services to which the asset relates and included in current profit or loss. If the amortization period of the
asset does not exceed one year it is included in current profit or loss when it occurs. Other expenses incurred by the Group
in order to obtain the contract shall be included in current profit or loss when incurred unless it is clearly borne by the
customer.
30.2 Cost of contract fulfillment
The cost of the Group's performance of a contract that does not fall within the scope of accounting standards other than
the revenue standard and meets the following conditions is recognized as an asset: (1) The cost is directly related to a
current or anticipated contract; (2) The cost increases the Group's resources for fulfilling performance obligations in the
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
future; (3) The cost is expected to be recovered. The aforesaid assets are amortized on the same basis as the recognition
of income from goods or services related to the assets and are included in the current profit or loss. The Group's asset in
relation to contract costs are mainly contract performance costs and they are included in inventories based on their current
nature.
30.3 Impairment losses on assets related to contract costs
In determining impairment losses on assets related to contract costs impairment losses are first determined for other assets
recognized in accordance with other relevant ASBEs and related to the contract. Then for assets related to contract costs
whose book value is higher than the difference between the following two items the Group makes provision for
impairment for the excess to be recognized as asset impairment losses: (1) the book value of consideration expected to be
obtained by the Group for the transfer of goods or services related to the asset; (2) the estimated costs to be incurred in
connection with the transfer of such relevant goods or services.After provision for impairment is made for the asset related to contract costs if the difference between the above two items
is higher than the book value of the asset due to changes in the factors of impairment in previous periods the original
provision for impairment of the asset is reversed and included in the current profit or loss but the book value of the asset
after the reversal shall not exceed the book value of the asset on the reversal date assuming no provision for impairment
is made.
31. Governmental subsidies
Government subsidies refer to the monetary and non-monetary assets obtained by the Group from the government for free.Government subsidies are recognized when they can meet the conditions attached to the government subsidies and can be
received.If a government subsidy is a monetary asset it shall be measured at the amount received or receivable.
31.1 Judgment basis and accountant treatment of government subsidy related to asset
The government subsidies for some special subsidies and etc. are used for constructions and forms long-term assets and
therefore are categorized as government subsidy related to assets.A government grant related to an asset is recognized as deferred income and it should be evenly amortized to profit or
loss over the useful life of the related asset.
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
31.2 Judgment basis and accountant treatment of government subsidy related to income
The Group receives government subsidies including subsidies for special projects and Value-Added-Tax refund etc.which are used to compensate the group-related costs or losses and therefore are categorized as government subsidy
related to income.For a government grant related to income if the subsidy is a compensation for related expenses or losses to be incurred in
subsequent periods it is recognized as deferred income and recognized in profit or loss over the periods in which the
related costs or losses are recognized; If the subsidy such as VAT refund is a compensation for related expenses or losses
already incurred it is recognized immediately in profit or loss for the period.For government subsidies related to the Group's daily operations shall be booked into other income; for those not related
to the Group's daily operations shall be booked into non-operating income/expense.The policy-based preferential loan interest subsidy obtained by our group is directly allocated by the government to our
group and the corresponding interest subsidy offsets the relevant borrowing costs.
32. Deferred Tax Assets / Deferred Tax Liabilities
The income tax expenses include current income tax and deferred income tax.
32.1. Current Income Tax
At the balance sheet date current income tax liabilities (or assets) for the current and prior periods are measured at the
amount expected to be paid (or recovered) according to the requirements of tax laws.
32.2 Deferred Tax Assets and Deferred Tax Liabilities
For temporary differences between the book value of certain assets or liabilities and their tax base or between the nil book
value of those items that are not recognized as assets or liabilities and their tax base that can be determined according to
tax laws deferred tax assets and liabilities are recognized through the balance sheet liability method.In general all temporary differences are recognized as the relevant deferred income tax. However for deductible
temporary differences the Group recognizes the relevant deferred tax assets to the extent that it is likely to obtain the
taxable income to offset the deductible temporary differences. In addition deferred tax assets or liabilities relating to the
initial recognition of goodwill as well as those arising from transactions that are neither a business combination nor affect
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
accounting profits and taxable income (or deductible losses) and do not result in equal taxable and deductible temporary
differences are not recognized.For deductible losses and tax credits that can be carried forward deferred tax assets are recognized to the extent that it is
probable that future taxable profits will be available against which the deductible losses and tax credits can be utilized.Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries except
where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments are only recognized to the extent that it is probable that there will be taxable
profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable
future.On the balance sheet date the deferred income tax assets and deferred income tax liabilities are measured at the applicable
tax rates in the period in which the related assets are recovered or the related liabilities are recovered in accordance with
the tax laws.Current and deferred tax expenses or income are recognized in profit or loss for the period except when they arise from
transactions or events that are directly recognized in other comprehensive income or in shareholders' equity in which case
they are recognized in other comprehensive income or in shareholders' equity; and when they arise from business
combinations in which case they adjust the book value of goodwill.At the balance sheet date the book value of deferred tax assets is reviewed and reduced if it is no longer probable that
sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilized. Such
reduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
32.3 Offset of Income Tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the assets
and settle the liabilities simultaneously current tax assets and current tax liabilities are offset and presented on a net basis.When the Group has a legal right to settle current tax assets and liabilities on a net basis and deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
and liabilities simultaneously in each future period in which significant amounts of deferred tax assets or liabilities are
expected to be reversed deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
33. Lease
Lease refers to a contract that conveys the right to use an asset for a period of time in exchange for consideration.The Group assesses whether a contract is or contains a lease at the inception date. The Group does not re-assess whether
a contract contains a lease unless the terms and conditions of the contract are changed.
33.1 The Group as the lessee
33.1.1 Separating components of lease
In case the contract contains one or more lease and non-lease components the Group separates each lease component and
non-lease component and allocates the consideration to the lease and non-lease components based on the proportion of
relative stand-alone prices of the components.
33.1.2 Right-of-use assets
The Group recognizes the right-of-use assets for leases on the commencement date of the lease term except for short-term
lease and lease of low-value assets. The commencement date of the lease term refers to the date from which the lessor
makes the leased assets available for use by the Group. Right-of-use assets are initially measured at cost. The cost includes:
* Initial measurement amount of lease liabilities;
* Amount of lease payment made at or before the commencement date of the lease less any lease incentives received;
* Initial direct costs incurred by the Group;
* An estimate of any costs to be incurred by the Group in dismantling and removing the underlying asset or restoring
the site on which it is located or restoring the leased assets to the conditions as agreed under the terms of the lease
excluding costs incurred to produce inventories.The Group calculates depreciation of the right-of-use assets in accordance with the relevant depreciation provisions of
Accounting Standards for Business Enterprises No. 4 - Fixed Assets. The right-of-use asset is depreciated over the shorter
of the lease term and the useful life of the right-of-use asset unless there is a transfer of ownership or purchase option
which is reasonably certain to be exercised at the end of the lease term.The Group determines whether the right-of-use assets are impaired and accounts for the identified impairment loss in
accordance with the provisions of Accounting Standards for Business Enterprises No. 8 - Impairment of Assets.
33.1.3 Lease liabilities
The Group initially measures the lease liability on the commencement date at an amount equal to the present value of the
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
lease payments during the lease term that are not paid at that date except short-term lease and lease of low-value assets.In calculating the present value of the lease payments the Group adopts the interest rate implicit in the lease as the discount
rate. The Group uses its incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the leased asset
during the lease term including:
* Fixed payments including in-substance fixed payments less any lease incentives receivable;
* The exercise price of a purchase option if the Group is reasonably certain to exercise that option;
* Payments for terminating the lease if the lease term reflects the lessee exercising the option to terminate the lease;
* Amounts expected to be payable by the Group under residual value guarantees.After the commencement date of the lease term the Group calculates interest expense of lease liabilities in each period of
lease term at fixed periodic rate and recognizes in the current loss and profit or relevant asset costs.After the commencement date of the lease term the Group re-measures the lease liability and adjusts the corresponding
right-of-use assets under the following circumstances. If the book value of the right-of-use assets has been reduced to zero
while the lease liability needs to be further reduced the Group will recognize the difference into the current loss and profit:
* In case of any change of the lease term or any change in the valuation of the purchase option the Group re-measures
the lease liability at the present value calculated based on the modified lease payments and the revised discount rate;
* In the event of any change in the amount expected to be payable based on the residual value guarantees the Group
re-measures the lease liability at the present value calculated based on the changed lease payments and the original
discount rate.
33.1.4 Short-term lease and lease of low-value assets
The Group has elected not to recognize the right-of-use assets and lease liabilities for short-term leases and leases of low-
value assets. Short-term lease refers to lease with a term no more than 12 months from the commencement date of lease
term and without purchase option. Lease of low-value assets refers to lease for single lease asset with low value when it
is new. The Group recognizes lease payments under short-term leases and leases of low-value assets as the current loss
and profit or the relevant asset costs on a straight-line basis over each period during the lease term.
33.1.5 Lease modification
In case of lease modification the Group makes accounting treatment of such lease change as a separate lease if all of the
following conditions are met:
* Such lease modification increases the scope of the lease by adding the right to use one or more lease assets;
* The increased consideration is commensurate with the stand-alone price for the increase in scope and any appropriate
adjustments to reflect the circumstances of the particular contract.
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Where accounting treatment is not made for lease modification as a separate lease at the effective date of lease
modification the Group reallocates the contract consideration after the modification redetermines the lease term and re-
measures the lease liability based on the present value calculated according to the modified lease payments and the revised
discount rate.In the event that the lease scope is decreased or the lease term is shortened as a result of the lease modification the Group
reduces the book value of the right-of-use assets and recognizes the relevant gains or losses relating to the partial or full
termination of the lease in the income statement; for the lease liabilities re-measured due to other lease modifications the
Group adjusts the book value of the right-of-use assets accordingly.
33.2 The Group as the lessor
33.2.1 Separating components of lease
In case the contract contains both lease and non-lease components the Group allocates the contract consideration in
accordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue on portion of
transaction prices based on the respective stand-alone prices of the lease component and the non-lease component.
33.2.2 Classification criteria and accounting treatment for leases as lessors
Finance lease is a lease that substantially transfers all the risks and rewards of incidental to ownership of an underlying
asset. Operating lease refers to the leases other than finance lease.
33.2.2.1 The Group records the operating lease business as the lessor
The Group recognizes the lease payments from operating leases as rental income on a straight-line basis for all periods
over the lease term. The Group's initial direct costs incurred in connection with operating leases is capitalized as incurred
recognized in the income statement over the lease term on the same basis as the lease income.
33.2.2.2 The Group records the finance lease business as the lessor
On the commencement date of the lease term the Group uses the net lease investment as the initial book value of the
finance lease receivables and derecognizes the finance lease assets. Net lease investment is the sum of present value of
unguaranteed residual value and lease payments receivable discounted at the interest rate implicit in lease on the
commencement date of the lease term.Lease payments receivable which refer to amounts receivable by the Group from the lessee for conveying the right to use
the leased assets during the lease term include:
* Fixed payment including in-substance fixed payments by the lessee less any lease incentives payable;
* The exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
* Payments for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease;
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
* Residual value guarantees provided to the Group by the lessee a party related to the lessee or a third party unrelated
to the lessor that is capable of discharging the obligations under the guarantee.The Group calculates and recognizes the interest income in each period of the lease term according to the fixed periodic
interest rate.In financial leases in which the Group acts as a manufacturer or distributor as the lessor on the commencement date of
the lease term the Group recognizes revenue based on the lower of the fair value of the leased assets and the present value
of the lease receipts discounted at the market rate and carries forward the cost of sales based on the book value of the
leased assets after deducting the present value of the unsecured residual value.The costs incurred by the Group acting as a manufacturer or distributor as a lessor to obtain a financial lease are recognized
in profit or loss for the current period on the commencement date of the lease term.
33.2.3 Lease modification
In case of a medication of the operating lease the Group accounts for it as a new lease as of the effective date of the
modification any prepaid or accrued lease payments relating to the original lease are considered as payments for the new
lease .In case of modification of finance lease the Group accounts for the modification of a finance lease as a separate lease if
all of the following conditions are met:
* The modification increases the scope of the lease by adding the right to use one or more lease assets;
* The consideration for the lease increases by an amount that is commensurate with the stand-alone price for the
increase in scope and any appropriate adjustments to that price to reflect the circumstances of the particular contract.If a modification of finance lease is not accounted for as a separate lease the Group accounts for the changed lease under
the following circumstances:
* If the modification becomes effective on the commencement date of the lease and the lease is classified as an
operating lease the Group accounts for it as a new lease from the effective date of the lease modification and measures
as the net lease investment prior to the effective date of the lease modification as the book value of the leased asset.* If the modification becomes effective on the commencement date of the lease and the lease is classified as a finance
lease the Group accounts for it in accordance with the provisions of Accounting Standards for Business Enterprises
No. 22 - Recognition and Measurement of Financial Instruments regarding the modification or renegotiation of
contracts.
104Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
34. Debt restructuring
34.1 Recognize debt restructuring obligation as a creditor
For debt restructuring carried out by modifying other terms the Group recognizes and measures the restructured claims in
accordance with the provisions of ASBE No. 22 - Recognition and Measurement of Financial Instruments.
35. Important judgments while applying accounting policy and key assumptions and uncertainty factors applied
for accounting estimate
During the process of using accounting policy described in note (III) due to the uncertainty in operation activities the
group should judge estimate and assume the book value of the report items which may not be metered reliably. These
judgments estimates and assumptions are based on the historical experience of the Group's management and other related
factors. Differences may exist between the actual results and the Group's estimate.The Group regularly reviews the above judgments assumptions and estimations on the basis of continuous operation. If
the changes of accounting estimate only influence current period the influence amount will be affirmed during the
changing period; if it influences the current period and subsequent periods the influence amount will be recognized in the
current period and future period.- Key assumptions and uncertainties used in accounting estimate
On balance sheet date key assumptions and uncertainties for performing accounting estimates on book value of assets and
liabilities in subsequent future periods are:
Impairment provision for inventories
Except for contract performance costs inventories are measured at the lower of cost or net realizable value. For raw
materials the latest or future actual purchase price is used as the basis for determining the net realizable value; For products
in progress the net realizable value is determined by the actual selling price of the most recent or post-period finished
product less the estimated costs of the current similar type at the time of completion of the product the estimated sales
expenses and related taxes; For finished products the actual selling price of the latest or future finished product minus the
estimated selling expenses and related taxes will be incurred is used as the basis for determining the net realizable value.The Group will regularly conduct a comprehensive stocktaking to review the impairment circumstances on defective
obsoleted or slow-moving inventory if any; in addition the Group's management will regularly review the impairment
circumstance of inventory with long storage time according to the inventory aging. Based on the above procedure the
Group's management deems that the full provision amounts have been withdrawn for inventory. For details please refer
to Note (V) 9.
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Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Impairment of accounts receivable
Except for accounts receivable whose credit losses are determined on the basis of individual basis the Group adopts an
impairment matrix on a portfolio basis to determine its expected credit loss of the relevant accounts receivable. The Group
divides the risk characteristics according to the region and object of its business and divides the relevant accounts
receivable into different portfolios. Based on the historical loss rate and consider reasonable and well-founded forward-
looking information in the industry the Group determines the proportion of corresponding loss reserves for different
portfolios of various types of accounts receivable. As of June 30 2026 based on the historically loss rate and consider
reasonable and well-founded forward-looking information in the industry the Group determines the corresponding
proportion of loss provision for accounts receivable. The amount of the provision for expected credit losses will change
as the estimation of the Group. The details on the provision for expected credit losses of the accounts receivable of the
Group are given in Note (V) 4.Useful life and predicted net residual value of fixed asset
The Group's estimation of fixed assets useful life is based on the historical experience of actual usable term of fixed assets
with similar properties and functions the estimation of predicted net residual value is the amount obtained currently by
the Group from the assets after deducting the anticipated disposal expense based on the anticipated status assuming the
conditions that fixed assets' predicted useful life expires and fixed assets are at the end of useful life. The Group shall
conduct the review on the predicted service life and predicted net residual value of fixed assets at least annually. For the
current reporting period the Group's management did not see signs either indicating a shortened or extended useful life of
the Group's fixed asset or indicating a change in predicted net residual value.Accrued liabilities of product quality warranty
Accrued liabilities of product quality assurance are costs and expenses incurred to meet the established standards of
product quality assurance obligations to customers in accordance with the product contract; the Group made such an
estimation according to the predicted claim rate repair and replacement cost of relevant products. The management deems
that the current estimation on accrued liabilities of product quality warranty is reasonable however the Group will
continue to review the conditions of product repairs and will conduct adjustment if any sign indicating the need to make
adjustments on accounting estimates.Deferred tax assets and deferred tax liabilities
Deferred income tax assets and deferred income tax liabilities are measured at the applicable income tax rate during the
period when the relevant asset is expected to be recovered or the relevant debt is expected to be paid off. The expected
applicable income tax rate is determined according to the relevant current tax regulations and the actual situation of the
Group. If the estimated income tax rate is different from the original estimate the management of the Group will adjust it.
106Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The realization of deferred income tax assets mainly depends on the actual future taxable income taxable temporary
differences and the effective tax rate of temporary difference in the future applicable years. If the actual taxable income
and taxable temporary differences in the future is less than the estimation or actual tax rate is lower than the estimation
then the confirmed deferred income tax assets will be reversed and confirmed in the income statement during the
corresponding period. If the actual taxable income and taxable temporary differences in the future is more than the
estimation or actual tax rate is higher than the estimation then the deferred tax assets that are partially unrecognized
deductible losses and deductible temporary differences will be recognized and confirmed in the income statement during
the corresponding period.Goodwill impairment
When testing goodwill for impairment a pre-tax interest discount rate that appropriately reflects the current market time
value of money and asset-specific risk is determined and the present value of the projected future cash flows of the relevant
asset group or combination of asset groups containing goodwill is calculated. When the future actual result is different
from the original estimation the result of the goodwill impairment test will alter.IV. Taxes
1. Major categories of taxes and tax rates
Category of tax Basis of tax computation Tax rate
Enterprise income tax Taxable income 25% (Note 1)
For the taxable product sales revenue or taxable labor revenue the Company 6% 9% 13% and simple
VAT and its domestic subsidiaries are ordinary Value-added Tax payers; the VAT collection rate of 5% 3%
payable is the balance of input tax after deducting the deductible output tax. (Note 2-3)
City maintenance and
Actual payable turnover tax 7% 5%
construction tax
Education surcharges Actual payable turnover tax 3%
Local education
Actual payable turnover tax 2%
surcharges
Note 1: Except that the Company and subsidiaries in China are applicable to the following tax preference the Company's
other subsidiaries in China are applicable to 25% of enterprise income tax rate the overseas subsidiaries are applicable to
corresponding local tax rate.
(1) In accordance with the list of High-tech Enterprises Identified and Reported by the Zhejiang Provincial Accreditation
Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management
Work on December 28 2023 the Company was identified as the high-tech enterprise with a valid term of 3 years and
the preferential tax period is from 2023 to 2025. As of the date of approval of this report the Company is still in the
application stage for the 2026 high-tech enterprise qualification re-examination. According to the Announcement of
the State Administration of Taxation on Issues Regarding the Implementation of the Preferential Policy on Enterprise
107Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Income Tax for High-tech Enterprises in the year when the qualification of high-tech enterprises expires before the
re-certification is approved the enterprise income tax can be temporarily pre-paid at a 15% tax rate. Therefore the
enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period
(2025:15%).
According to the Announcement on the Enterprise Income Tax Policies for Promoting the High-quality Development
of Integrated Circuit Industry and Software Industry (Ministry of Finance State Administration of Taxation National
Development and Reform Commission Ministry of Industry and Information Technology Announcement [2020] No.
45) (hereinafter referred to as " Preferential Tax Policies for Integrated Circuit and Software Industries") the Company
was approved by the tax authorities in May 2026 to pay the 2025 annual corporate income tax at the rate of 10%.
(2) According to the Announcement on Continuation of the Corporate Income Tax Policy for the Western Development
(Ministry of Finance State Administration of Taxation National Development and Reform Commission
Announcement [2020] No.23) the subsidiaries of the Company Chongqing Hikvision Technology Co. Ltd.(hereinafter referred to as "Chongqing Technology") Chongqing Hikvision System Technology Co. Ltd. (hereinafter
referred to as "Chongqing System") and Chongqing EZVIZ Electronics Co. Ltd. have enjoyed preferential tax
policies for the development of the western region. Therefore the enterprise income tax is calculated and paid on the
basis of a reduced tax rate of 15% in the current reporting period (2025: 15%).
(3) According to the list of High-tech Enterprises Identified and Reported by the Zhejiang Provincial Accreditation
Agency in 2024 issued by the Leading Group Office of National High-tech Enterprise Identification Management
Work on December 26 2024 Hangzhou Hikstorage Technology Co. Ltd. ("Hikstorage Technology") a subsidiary
of the Company was identified as high-tech enterprises and the valid terms of the identification is 3 years and the
preferential tax period is from 2024 to 2026. Therefore the enterprise income tax is calculated and paid on the basis
of a reduced tax rate of 15% in the current reporting period (2025:15%).
(4) In accordance with the List of High-tech Enterprises Certified by Zhejiang Certification Institutions in 2025 issued by
the Leading Group Office of National High-tech Enterprise Identification Management Work on January 9 2026 the
Company's subsidiaries Hangzhou Hikvision System Technology Co. Ltd. (hereinafter referred to as "Hangzhou
System") Hangzhou Rayin Technology Co. Ltd. (hereinafter referred to as "Hangzhou Rayin Technology") and
Hangzhou Hikfire Technology Co. Ltd. (hereinafter referred to as "HikFire Technology") were recognized as high-
tech enterprises with valid term of 3 years and the preferential tax periods are from 2025 to 2027. Therefore the
enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period
(2025:15%).
(5) In accordance with the list of High-tech Enterprises Identified and Reported by the Zhejiang Provincial Accreditation
108Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management
Work on December 28 2023 the Company’s subsidiaries Hangzhou HikAuto Software Co. Ltd. (hereinafter referred
to as "HikAuto Software") and Hangzhou Hikimaging Technology Co. Ltd. (hereinafter referred to as "HikImaging
Technology") were identified as the high-tech enterprise and valid term is 3 years and the preferential tax period is
from 2023 to 2025. As of the date of approval of this report HikAuto Software and HikImaging Technology are still
in the application stage for the 2026 high-tech enterprise qualification re-examination. According to the Announcement
of the State Administration of Taxation on Issues Regarding the Implementation of the Preferential Policy on
Enterprise Income Tax for High-tech Enterprises in the year when the qualification of high-tech enterprises expires
before the re-certification is approved the enterprise income tax can be temporarily pre-paid at a 15% tax rate.Therefore the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current
reporting period (2025: 15%).
(6) In accordance with the list of High-tech Enterprises Identified and Reported by the Zhejiang Provincial Accreditation
Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management on
December 28 2023 the Company’s subsidiary Hangzhou Hikrobot Co. Ltd. was identified as the high-tech
enterprises and valid term is 3 years and the preferential tax period is from 2023 to 2025. As of the date of approval
of this report Hikrobot is still in the application stage for the 2026 high-tech enterprise qualification re-examination.According to the preferential tax policies for the integrated circuit industry and the software industry and the
Announcement No. 10 of 2021 of the Ministry of Industry and Information Technology of the People's Republic of
China the National Development and Reform Commission the Ministry of Finance and the State Administration of
Taxation Hikrobot is a qualified software enterprise and is exempted from enterprise income tax in the first and second
years after start of profiting and pays enterprise income tax at half of the 25% statutory tax rate in the third to fifth
years. The year of 2026 is the fourth year of HikRobot making profits and the enterprise income tax is levied at half
the statutory tax rate of 25% for this period (2025: levied at half the statutory tax rate of 25%).In accordance with the tax preferential policies for the integrated circuit and the software industries Hikrobot was
approved by the tax authority in May 2026 to be exempt from the enterprise income tax for the fiscal year 2025.
(7) In accordance with the List of High-tech Enterprises Certified by Zhejiang Certification Institutions in 2025 issued by
the Leading Group Office of National High-tech Enterprise Identification Management Work on January 9 2026 the
Company's subsidiary Hangzhou Hikmicro Sensing Technology Co. Ltd. (hereinafter referred to as "Hikmicro
Sensing") was identified as the high-tech enterprise with valid terms of 3 years and the preferential tax period is from
2025 to 2027. Therefore the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in
the current reporting period.In accordance with the tax preferential policies for the integrated circuit and the software industries Hikmicro Sensing
was approved by the tax authorities in May 2026 to be exempt from the enterprise income tax for the fiscal year 2025.
109Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
(8) In accordance with the List of High-tech Enterprises Certified by Zhejiang Certification Institutions in 2025 issued by
the Leading Group Office of National High-tech Enterprise Identification Management Work on January 9 2026
Hangzhou Microimage Software Co. Ltd. (hereinafter referred to as "Hangzhou Hikmicro Software") was identified
as the high-tech enterprise with both valid term of 3 years and the preferential tax period is from 2025 to 2027.Therefore the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current
reporting period.In accordance with tax preferential policies for the integrated circuit and the software industries Hangzhou Hikmicro
Software was approved by the tax authorities in May 2026 to pay the enterprise income tax for the 2025 fiscal year at
a reduced rate of 10%.
(9) In accordance with the Recording List of the Third Batch of identified High tech Enterprises of Hebei Province in
2025 issued by the Leading Group Office of Hebei Province's High-tech Enterprise Identification Management Work
on December 19 2025 the Company’s subsidiary Whst Hebei Co. Ltd. (hereinafter referred to as "Whst Hebei") was
identified as the high-tech enterprises with a valid term of 3 years and the preferential tax period is from 2025 to 2027.Starting from 2026 Whst Hebei will no longer meet the recognition criteria for high-tech enterprises therefore the
applicable income tax rate for this period is 25% (2025: 15%)
(10) In accordance with the List of High-tech Enterprises Identified and Reported by the Zhejiang Provincial Accreditation
Agency in 2023 issued by the Leading Group Office of National High-tech Enterprise Identification Management
Work on December 28 2023 Hangzhou Ezviz Software Co. Ltd. (hereinafter referred to as " EZVIZ Software ") was
identified as the high-tech enterprise and valid term is 3 years and the preferential tax period is from 2023 to 2025.As of the date of approval of this report EZVIZ Software is still in the application stage for the 2026 high-tech
enterprise qualification re-examination. According to the Announcement of the State Administration of Taxation on
Issues Regarding the Implementation of the Preferential Policy on Enterprise Income Tax for High-tech Enterprises
in the year when the qualification of high-tech enterprises expires before the re-certification is approved the enterprise
income tax can be temporarily pre-paid at a 15% tax rate. Therefore the enterprise income tax is calculated and paid
on the basis of a reduced tax rate of 15% in the current reporting period (2025: 15%)
(11) In accordance with the Provisions of the Announcement on Further Supporting the Development of Small and Micro-
sized Enterprises and Individual Businesses (Announcement No. 12 of 2023 by the Ministry of Finance and the State
Taxation Administration) Hangzhou Furui Technology Co. Ltd. ("Furui Technology") Henan Hua'an Security
Services Co. Ltd. Anhui Hikvision City Operations Services Co. Ltd. Hangzhou Xingrong Information Technology
Co. Ltd. Xinjiang CET Yihai Information Technology Co. Ltd. Guizhou Haikang Transportation Big Data Co. Ltd.and Guangzhou Hikvision Digital Technology Co. Ltd. are qualified small and micro-sized profitable enterprises and
are eligible for the preferential corporate income tax policy for small and micro-sized enterprises. The taxable income
up to CNY 3 million is reduced to 25% of the taxable income and is subject to a corporate income tax rate of 20%.Therefore the enterprise income tax for this year is calculated and paid at a reduced rate of 5%.
110Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Note 2: In accordance with the requirements of the Notice on Software Product Value-added Tax Policy (Cai Shui [2011]
No. 100) promulgated by the Ministry of Finance and the State Administration of Taxation as for self-developed software
products sales of the Company Hangzhou System HikRobot HikAuto Software Hangzhou EZVIZ Software Hikstorage
Technology Hikimaging Technology HikFire Technology Hangzhou Rayin Technology Hangzhou Microimage Software
Henan Haikang Huaan Baoquan Electronics Co. Ltd. Hangzhou Hikvision Yuanwuzhi Technology Co. Ltd. Fuyang
Baotai Shijiazhuang Sensor-Tech Intelligence Technology Co. Ltd. (hereinafter referred to as "Shijiazhuang Sensor-
Tech") the VAT shall be calculated and paid with tax rate of 13% at first then the portion with actual tax bearing excess
3% shall be refunded after State Administration of Taxation reviews .
Note 3: In accordance with the Notice of the Ministry of Finance and the State Administration of Taxation on the Additional
VAT Deduction Policy for Integrated Circuit Enterprises (Finance and Taxation [2023] No. 17) from January 1 2023 to
December 31 2027 enterprises in integrated circuit design production packaging and testing equipment and materials
are allowed to deduct an additional 15% of the current deductible input tax to deduct the tax payable. The Company's
subsidiary Hikmicro Sensing complies with the provisions of the policy and deducts an additional 15% of the current
deductible input tax to deduct the tax payable.
111Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
V. Notes to items in the consolidated financial statements
1. Cash and bank balances
Unit: RMB
Closing balance Opening balance
Item Exchange Exchange Foreign currency Foreign currency
rate for RMB amount rate for RMB amount
amount amount
conversion conversion
Cash:
RMB - - 42129.04 - - 40046.62
USD 8707.72 6.8109 59307.42 12308.04 7.0288 86510.78
EUR 24407.80 7.7671 189577.85 19019.33 8.2355 156633.66
Other
--209758.65--151336.55
currencies
Bank balance:
RMB - - 32991304746.38 - - 41662970268.99
USD 337402713.54 6.8109 2298016141.65 416985025.74 7.0288 2930904348.90
EUR 114439843.15 7.7671 888865705.73 72496081.46 8.2355 597041478.86
Other
--1194545250.70--970739325.06
currencies
Other currency
funds:
RMB - - 384296923.37 - - 278482161.52
USD 2865173.49 6.8109 19514410.10 1754333.35 7.0288 12330858.24
EUR 509470.30 7.7671 3957106.74 196043.74 8.2355 1614518.21
Other
--70365905.24--53811171.05
currencies
Total 37851366962.87 46508328658.44
Including:
Deposited in 1369580918.20 1207043600.93
overseas banks
Details of other currency funds:
Unit: RMB
Item Closing balance Opening balance
Capitals with limitations:
Bank acceptance bills 2762180.14 2403999.93
Guarantee deposits 369222087.61 242108162.73
Other security deposits 4464683.11 23148552.81
Other capitals with limitations 31418828.35 36329248.54
Subtotal 407867779.21 303989964.01
Capitals without limitations:
Third-party platform payment
tools securities account 70266566.24 42248745.01
deposits and other funds
Subtotal 70266566.24 42248745.01
112Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Total 478134345.45 346238709.02
2. Derivative financial assets
Unit: RMB
Item Closing balance Opening balance
Forward foreign exchange contract 31694623.01 4792243.40
Total 31694623.01 4792243.40
3. Notes receivable
3.1 Categories of notes receivable
Unit：RMB
Category Closing balance Opening balance
Bank acceptance bill 2389603405.61 2699892246.30
Finance company acceptance bill 69118765.04 117842770.93
Commercial acceptance bill 208867804.18 233621545.41
Total 2667589974.83 3051356562.64
3.2 At the end of the current reporting period the pledged notes receivable by the Group is nil.
3.3 At the end of the current reporting period notes receivable endorsed or discounted by the Group but not yet due at the
balance sheet day
Unit：RMB
Item Amount not derecognized as of June 30 2026
Bank acceptance bill 1264446224.88
Finance company acceptance bill 21738603.06
Total 1286184827.94
3.4 Classified disclosure by method of provision for bad debts
Unit：RMB
Closing balance
Category Account balance Credit loss provision Book value
Proportion Proportion
Amount Amount Amount
(%)(%)
Provision for bad debts of notes receivables
-----
on a single basis
Provision for bad debts of notes receivables
2668766134.97100.001176160.140.042667589974.83
by portfolios
Total 2668766134.97 100.00 1176160.14 0.04 2667589974.83
Unit：RMB
113Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Opening balance
Category Account balance Credit loss provision Book value
Proportion Proportion
Amount Amount Amount
(%)(%)
Provision for bad debts of notes receivables - - - - -
on a single basis
Provision for bad debts of notes receivables
3053000478.83100.001643916.190.053051356562.64
by portfolios
Total 3053000478.83 100.00 1643916.19 0.05 3051356562.64
Provision for bad debts of notes receivables by portfolios
Unit：RMB
Closing balance
Category
Account balance Credit loss provision Proportion (%)
Bank acceptance bill 2389603405.61 - -
Non-bank acceptance bill 279162729.36 1176160.14 0.42
Total 2668766134.97 1176160.14 0.04
Explanation of provision for bad debts of notes receivables by portfolios:
The Group classifies notes receivable into different portfolios based on the characteristics of the acceptors. The Group
believes that there is no significant credit risk to the acceptors of bank acceptance bills held by the Group so no loss
provision is made.
3.5 Provision for bad debts of notes receivables.
Unit: RMB
Provision for bad debts Expected credit loss for the entire duration
Balance as of January 1 2026 1643916.19
Provision / (Reversal) for the current period (467756.05)
Balance as of June 30 2026 1176160.14
3.6 Situation of provision.
Unit：RMB
Amount of changes changed in the current reporting period
Category Opening balance Transfer or Closing balance
Provision / (Reversal)
write-off
Notes receivable 1643916.19 (467756.05) - 1176160.14
Total 1643916.19 (467756.05) - 1176160.14
4. Accounts receivable
4.1 Disclosure by aging
Unit: RMB
Aging Closing account balance Opening account balance
Within credit period 16876824857.30 17879899419.40
Within 1 year after exceeding credit period 8876721106.18 9698902758.53
114Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Aging Closing account balance Opening account balance
1-2 years after exceeding credit period 2898343346.53 2953806491.84
2-3 years after exceeding credit period 1654983288.94 1491649171.29
3-4 years after exceeding credit period 816440208.38 805609570.01
Over 4 years after exceeding credit period 1581906040.47 1424040952.65
Accounts receivable 32705218847.80 34253908363.72
Less: Credit impairment provision 4921084098.73 4441529417.95
Book value 27784134749.07 29812378945.77
4.2 Classified disclosure of credit loss provision by methods
Unit: RMB
Closing balance
Category Account balance Credit loss provision Book value
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 32705218847.80 100.00 4921084098.73 15.05 27784134749.07
Total 32705218847.80 100.00 4921084098.73 15.05 27784134749.07
Opening balance
Category Account balance Credit loss provision Book value
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 34253908363.72 100.00 4441529417.95 12.97 29812378945.77
Total 34253908363.72 100.00 4441529417.95 12.97 29812378945.77
Provision for credit loss by portfolios for accounts receivable
Unit: RMB
Closing balance
Customer
Account balance Credit loss provision Proportion (%)
Portfolio A 832237094.11 13536875.25 1.63
Portfolio B 22105063330.43 4471765779.45 20.23
Portfolio C 9767918423.26 435781444.03 4.46
Total 32705218847.80 4921084098.73 15.05
Description of credit loss provision by portfolios for accounts receivable:
As part of the Group's credit risk management the Group uses an impairment matrix to determine expected credit losses
based on the aging of accounts receivable beyond the credit period and divides the risk characteristics account receivables
into portfolio A portfolio B and portfolio C according to the risk characteristics of business areas and objects. These three
portfolios involve a large number of customers with the same risk characteristics. Aging information is able to reflect the
solvency of these three types of customers when the accounts receivable is due.
115Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
As of June 30 2026 and January 1 2026 the credit risk and expected credit losses during the duration of accounts receivable from portfolio A are as follows:
Unit: RMB
Closing balance Opening balance
Aging Expected average Bad debt Expected average
Account balance Book value Account balance Bad debt provision Book value
loss rate (%) provision loss rate (%)
Within credit period 0.08 704206730.36 551890.94 703654839.42 0.08 700977270.42 581245.92 700396024.50
Within 1 year after exceeding credit period 5.50 111621492.75 6134704.96 105486787.79 4.85 88802399.96 4308945.51 84493454.45
1-2 years after exceeding credit period 34.59 14249780.69 4928374.62 9321406.07 52.03 4404961.12 2291860.58 2113100.54
2-3 years after exceeding credit period 65.18 681254.33 444068.75 237185.58 85.87 868260.63 745559.51 122701.12
3-4 years after exceeding credit period 100.00 490544.37 490544.37 - 100.00 444584.88 444584.88 -
Over 4 years after exceeding credit period 100.00 987291.61 987291.61 - 100.00 658625.43 658625.43 -
Total 1.63 832237094.11 13536875.25 818700218.86 1.13 796156102.44 9030821.83 787125280.61
As of June 30 2026 and January 1 2026 the credit risk and expected credit losses during the duration of accounts receivable from portfolio B are as follows:
Unit: RMB
Closing balance Opening balance
Aging Expected average Bad debt Expected average
Account balance Book value Account balance Bad debt provision Book value
loss rate (%) provision loss rate (%)
Within credit period 0.80 8107068921.94 65195335.44 8041873586.50 0.83 8547437049.73 70531462.92 8476905586.81
Within 1 year after exceeding credit period 6.50 7553272080.53 491338089.82 7061933990.71 6.08 8385596475.43 510021038.50 7875575436.93
1-2 years after exceeding credit period 32.46 2576819726.49 836539608.11 1740280118.38 29.43 2782056980.55 818721351.31 1963335629.24
2-3 years after exceeding credit period 57.66 1571647922.21 906179797.47 665468124.74 50.75 1422279828.17 721771963.35 700507864.82
3-4 years after exceeding credit period 84.40 793157769.14 669416038.49 123741730.65 81.03 792586527.86 642261047.67 150325480.19
Over 4 years after exceeding credit period 100.00 1503096910.12 1503096910.12 - 100.00 1348046599.17 1348046599.17 -
Total 20.23 22105063330.43 4471765779.45 17633297550.98 17.66 23278003460.91 4111353462.92 19166649997.99
As of June 30 2026 and January 1 2026 the credit risk and expected credit losses during the duration of accounts receivable from portfolio C are as follows:
116Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Unit: RMB
Closing balance Opening balance
Aging Expected average Bad debt Expected average
Account balance Book value Account balance Bad debt provision Book value
loss rate (%) provision loss rate (%)
Within credit period 0.30 8065549205.00 24354441.54 8041194763.46 0.24 8631485099.25 21121800.43 8610363298.82
Within 1 year after exceeding credit period 5.93 1211827532.90 71882313.96 1139945218.94 5.60 1224503883.14 68603942.32 1155899940.82
1-2 years after exceeding credit period 51.71 307273839.35 158905110.65 148368728.70 49.04 167344550.17 82073964.60 85270585.57
2-3 years after exceeding credit period 96.82 82654112.40 80025844.27 2628268.13 89.68 68501082.49 61431240.53 7069841.96
3-4 years after exceeding credit period 100.00 22791894.87 22791894.87 - 100.00 12578457.27 12578457.27 -
Over 4 years after exceeding credit period 100.00 77821838.74 77821838.74 - 100.00 75335728.05 75335728.05 -
Total 4.46 9767918423.26 435781444.03 9332136979.23 3.15 10179748800.37 321145133.20 9858603667.17
4.3 Bad debt provision
Unit: RMB
Amount of changes changed in the current reporting period Difference due to foreign
Category Opening balance currency statement Closing balance
Provision / (Reversal) Transfer or write-off translation
Accounts receivable 4441529417.95 518109124.62 29242011.22 (9312432.62) 4921084098.73
Total 4441529417.95 518109124.62 29242011.22 (9312432.62) 4921084098.73
117Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
4.4 Top five debtors based on corresponding closing balance of accounts receivable and contract assets (including the part included in other non-current assets)
At the end of the current period the aggregate amount of the Group's accounts receivable and contract assets (including the part included in other non-current assets) of top five companies
amounted to RMB2556871099.79 (of which the total amount of accounts receivable is RMB1301839889.02 and the amount of contract assets is RMB1255031210.77) accounting
for 7.20% of the total closing balance of accounts receivable and contract assets (including the part included in other non-current assets) and the amount of provision for bad debts was
RMB732189393.85.
5. Contract assets
5.1 Details of contract assets
Unit: RMB
Closing balance Opening balance
Item
Account balance Provisions for impairment Book value Account balance Provisions for impairment Book value
Constructions 2561547958.90 47247023.10 2514300935.80 2654065218.18 38616295.08 2615448923.10
Maintenance services 247031884.92 4429678.00 242602206.92 218076445.33 2902784.81 215173660.52
Less:
Contract assets that are
included in other non- 1855339722.39 35605054.27 1819734668.12 1882161712.48 25989288.57 1856172423.91
current assets (Note (V)
22)
Total 953240121.43 16071646.83 937168474.60 989979951.03 15529791.32 974450159.71
5.2 The classification and disclosure of the method of provision for impairment of contract assets (including the part included in other non-current assets)
Unit: RMB
Closing balance
Item Account balance Provisions for impairment Book value
Amount Proportion (%) Amount Provision proportion (%) Amount
Provision for impairment on a single item - - - - -
Provision for impairment by portfolio 2808579843.82 100.00 51676701.10 1.84 2756903142.72
Total 2808579843.82 100.00 51676701.10 1.84 2756903142.72
118Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Opening balance
Item Account balance Provisions for impairment Book value
Amount Proportion (%) Amount Provision proportion (%) Amount
Provision for impairment on a single item - - - - -
Provision for impairment by portfolio 2872141663.51 100.00 41519079.89 1.45 2830622583.62
Total 2872141663.51 100.00 41519079.89 1.45 2830622583.62
5.3 Provision for bad debts of contract assets (including the part included in other non-current assets) in the current period
Unit: RMB
Amount of changes changed in the current reporting period Difference due to
Category Opening balance foreign currency Closing balance
Provision / Reversal or Recovery Transfer or write-off
statement translation
Contract assets 41519079.89 10170315.95 - (12694.74) 51676701.10
Total 41519079.89 10170315.95 - (12694.74) 51676701.10
6. Receivables for financing
6.1 Receivables for financing by categories
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 2427273270.66 2398744727.65
Accounts receivable claim certificate 39132774.49 31285935.00
Total 2466406045.15 2430030662.65
119Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
6.2 At the end of the current reporting period the Group had no pledged receivables for financing.
6.3 At the end of the reporting period receivables for financing endorsed or discounted by the Group that have not yet expired on the balance sheet date.
Unit: RMB
Item Derecognized amount as of June 30 2026
Bank acceptance bill 2203817184.32
Total 2203817184.32
6.4 The Group believes that the likelihood of non-payment upon maturity of the bank acceptance bills and certificates of accounts receivable claims it holds to be very low and there is
no significant credit risk so no loss provision is made.
7. Prepayments
7.1 Prepayments by aging analysis
Unit: RMB
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 875730745.88 94.84 801575657.63 93.56
1-2 years 35732351.87 3.87 47006372.40 5.49
2-3 years 7427822.04 0.81 4379747.49 0.51
Over 3 years 4471349.11 0.48 3787550.82 0.44
Total 923362268.90 100.00 856749328.34 100.00
120Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
7.2 Details of closing balances of top five prepayments parties
As of June 30 2026 the Group's top five balances of prepayments amounted to RMB338385316.76 accounting for 36.65% of total closing balance of prepayments.
8. Other receivables
8.1 Other receivables by aging
Unit: RMB
Aging Closing balance Opening balance
Within contract period 403216964.84 352404363.64
Within 1 year 84118212.41 81152944.87
1-2 years 19774773.77 10547331.50
2-3 years 9953277.66 8480111.86
3-4 years 4487469.35 6045745.71
Over 4 years 15787346.10 13079470.64
Total 537338044.13 471709968.22
Less: Credit impairment provision 35549857.39 29207179.88
Book value 501788186.74 442502788.34
8.2 Details of other receivables by nature of the payment
Unit: RMB
Nature Closing account balance Opening account balance
Guarantee deposits 266389493.07 226597614.18
Temporary payments for receivables 151403863.92 136985334.21
Tax rebates - 1745720.62
Others 119544687.14 106381299.21
121Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Nature Closing account balance Opening account balance
Total 537338044.13 471709968.22
8.3 Accrual for bad debts of other receivables
Unit: RMB
Stage 1 Stage 2 Stage 3
Bad debts allowance Expected credit loss for the entire Expected credit loss for the entire Expected credit losses in the Total
duration (credit impairment has not duration (credit impairment has
next 12 months
occurred) occurred)
Balance on January 1 2026 2514535.62 5758013.71 20934630.55 29207179.88
Balance on January 1 2026
in the current reporting period:
--Transfer into stage 2 (600214.58) 600214.58 - -
--Transfer into stage 3 - (1958805.04) 1958805.04 -
--Accrual/(Reversal) in the current reporting period 2633258.87 4327294.30 596652.44 7557205.61
Derecognition of financial assets (including direct
--318017.46318017.46
write-downs) and transfer out
Other changes (896510.64) - - (896510.64)
Balance on June 30 2026 3651069.27 8726717.55 23172070.57 35549857.39
8.4 Provision for bad debts of other receivables
Unit: RMB
Amount of changes in the current reporting period Difference resulted from foreign currency
Category Opening balance Closing balance
Provision/ (Reversal) Transfer or write-off statements conversion
Other receivables 29207179.88 7557205.61 318017.46 (896510.64) 35549857.39
Total 29207179.88 7557205.61 318017.46 (896510.64) 35549857.39
122Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
8.5 Top five debtors based on corresponding closing balance of other receivables
At the end of current period the aggregate amount of other receivables of the top five debtors of the Group was RMB45108040.16 accounting for 8.39% of the total balance of other
receivables at the end of the reporting period and the provision for bad debts amounted to RMB398603.11.
123Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
9. Inventories
9.1 Categories of inventories
Unit: RMB
Closing balance Opening balance
Provision for decline in value of Provision for decline in value of
Category
Account balance inventories/ Impairment provision Book value Account balance inventories/ Impairment provision Book value
for contract performance cost for contract performance cost
Raw materials 10304835730.05 286790217.48 10018045512.57 6237904706.69 296228917.54 5941675789.15
Work-in-progress 1211378867.48 - 1211378867.48 756148362.21 - 756148362.21
Finished goods 18646613858.66 1191661242.69 17454952615.97 14307019021.95 1134318931.50 13172700090.45
Contract performance cost 815679986.65 11909060.08 803770926.57 614190942.61 12521325.62 601669616.99
Total 30978508442.84 1490360520.25 29488147922.59 21915263033.46 1443069174.66 20472193858.80
9.2 Provision for decline in value of inventories
Unit: RMB
The amount accrued in the The amount reversed or resold in the current Effect on conversion of financial statements
Category Opening balance Closing balance
current reporting period reporting period denominated in foreign currencies
Raw materials 296228917.54 28362778.84 37674420.35 (127058.55) 286790217.48
Finished goods 1134318931.50 206204247.14 128848321.14 (20013614.81) 1191661242.69
Contract performance cost 12521325.62 - 612265.54 - 11909060.08
Subtotal 1443069174.66 234567025.98 167135007.03 (20140673.36) 1490360520.25
The write-offs of provision for inventories in the current reporting period are due to use or sale of inventories.
124Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
10. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term receivables due within one year (Note (V) 12) 437028452.63 603989194.29
Total 437028452.63 603989194.29
11. Other current assets
Unit: RMB
Item Closing balance Opening balance
Deductible VAT input 1996828047.47 1090966736.78
Prepaid corporate income tax 147163237.29 76852469.25
Prepaid tariff 16675074.49 8607773.88
Others 110718146.96 75261120.63
Total 2271384506.21 1251688100.54
12. Long-term receivables
12.1 Details of long-term receivables
Unit: RMB
Closing balance Opening balance
Item
Account balance Loss provision Book value Account balance Loss provision Book value
Financial leases receivables 214726197.69 82341949.86 132384247.83 231571457.16 81252461.81 150318995.35
Including: Unrealized income from financing 4025201.02 - 4025201.02 4616037.69 - 4616037.69
Installment business 726201885.02 303870507.14 842518725.55 427516057.96
422331377.88415002667.59
Including: Unrealized income from financing 3843934.71 - 3843934.71 4671485.86 - 4671485.86
Employee housing loan 189823070.83 - 189823070.83 252011920.75 - 252011920.75
125Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Including: Unrealized income from financing 16183496.14 - 16183496.14 20378696.85 - 20378696.85
Subtotal 1130751153.54 626077825.80 1326102103.46 496255129.40 829846974.06
504673327.74
Less: Non-current assets due within one year (Note (V) 10) 941150183.95 437028452.63 1099686524.74 603989194.29
504121731.32495697330.45
Total 189600969.59 551596.42 189049373.17 226415578.72 557798.95 225857779.77
12.2 Disclosure by method of provision for bad debts
Unit: RMB
Closing balance Opening balance
Item
Account balance Loss provision Book value Account balance Loss provision Book value
Provision for bad debts by portfolio (including bad debts due
1130751153.54504673327.74626077825.801326102103.46496255129.40829846974.06
within one year)
Including: Portfolio of employee 189823070.83 - 189823070.83 252011920.75 - 252011920.75
Portfolio of financial leasing and installment
940928082.71504673327.74436254754.971074090182.71496255129.40577835053.31
collection customers
Total 1130751153.54 626077825.80 1326102103.46 496255129.40 829846974.06
504673327.74
Portfolio of employee
The Group believes that the employees corresponding to the employee housing loans held by the Group all have labor relations with the Group and the Group assesses that the relevant
debtors have good credit records and the Group believes that there is no significant credit risk and therefore no loss of provision is made.Portfolio of financial leasing and installment collection customers
As of June 30 2026 the credit risk and expected credit losses of long-term receivables relating to financial leasing and installment collection customers are as follows:
126Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Unit: RMB
Closing balance
Aging
Account balance Bad debts provision Forecast average loss rate (%)
Within credit period 155845016.89 1223442.96 0.79
Within 1 year after exceeding credit period 106138397.43 5763314.98 5.43
1-2 years after exceeding credit period 112825147.73 25645156.08 22.73
2-3 years after exceeding credit period 111487746.96 51897546.21 46.55
3-4 years after exceeding credit period 159962459.15 125474552.96 78.44
Over 4 years after exceeding credit period 294669314.55 294669314.55 100.00
Total 940928082.71 504673327.74 53.64
12.3 Bad debt provision
Amount of changes in the current reporting period Difference due to
Aging Opening balance foreign currency Closing balance
Provision / (Reversal) Transfer or write-off statement translation
Long-term receivables 496255129.40 4418198.34 (4000000.00) - 504673327.74
Total 496255129.40 4418198.34 (4000000.00) - 504673327.74
13. Long-term equity investment
127Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Unit: RMB
Increase/Decrease in the current reporting period Closing
Investment profit Adjustment: Other Declaration of balance
Opening balance Closing balance
The invested entity Additional Investment (loss) recognized other changes cash dividends Impairment for
(Book value) others (Book value)
investments reduction under the equity comprehensive in equity (Note or profit provision impairment
method income 1) distribution provision
1. Joint ventures
Hangzhou Haikang Intelligent
Industrial Equity Investment Fund 987145908.63 - - 621814929.46 - (253851.32) 20874811.13 - - 1587832175.64 -
Partnership (L.P.)
Guangxi Haishi Urban Operation
9417185.52--837133.60-----10254319.12-
Management Co. Ltd.Xuzhou Kangbo Urban Operation
9145311.24--9348.87-----9154660.11-
Management Service Co. Ltd.Other 3796225.38 - - 53648.83 - - - - - 3849874.21 -
Subtotal 1009504630.77 - - 622715060.76 - (253851.32) 20874811.13 - - 1611091029.08 -
2. Associates
Taifang Zhigan
31126639.12--(1773677.26)-2892587.32---32245549.18-
(Chongqing)Technology Co. Ltd.
Jiaxing Haishi JiaAn Zhicheng
28740738.36--(5126472.71)-----23614265.65-
Technology Co. Ltd.Zhiguang Hailian Big Data
27985612.07--1933446.55-----29919058.62-
Technology Co. Ltd.Terapark (Nanjing) Co. Ltd. 10483555.33 - - (934071.50) - 68152.96 - - - 9617636.79 5129141.16
Other 561233425.10 - - (556445.86) - 7866803.00 6729011.10 - - 561814771.14 -
Subtotal 659569969.98 - - (6457220.78) - 10827543.28 6729011.10 - - 657211281.38 5129141.16
Total 1669074600.75 - - 616257839.98 - 10573691.96 27603822.23 - - 2268302310.46 5129141.16
Note 1: The changes in other equity in the period were caused by the changes in equity of the investee due to increase or decrease investments from other shareholders.
128Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
14. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Investments in equity instruments (Note) 668271418.62 589955315.74
Total 668271418.62 589955315.74
Note: It refers to the Group's equity investments. The Group has no control joint control or significant influence over
these invested company.
15. Fixed assets
15.1 Details of fixed assets
Unit: RMB
Building and General-purpose Special-purpose Transportation
Item Total
construction equipment equipment vehicles
I. Original cost
1. Opening balance 19628667237.02 2942122971.96 5296793805.14 109660178.19 27977244192.31
2. Increase in the current
21066338.52281492839.71514626340.234097530.81821283049.27
reporting period
1) purchase 11897307.89 277202442.93 92649843.85 4097530.81 385847125.48
2) transferred from
9169030.634290396.78406048153.10-419507580.51
construction in progress
3) transferred from inventory - - 15928343.28 - 15928343.28
3. Decrease in the current
12160709.5734169533.3033653700.083204325.5083188268.45
reporting period
1) disposal or write-off 12160709.57 34169533.30 33653700.08 3204325.50 83188268.45
4. Difference due to foreign
(15392813.33)(13103193.04)(5863716.23)(563329.71)(34923052.31)
currency statement translation
5. Closing balance 19622180052.64 3176343085.33 5771902729.06 109990053.79 28680415920.82
II. Accumulated depreciation
1. Opening balance 3035598619.45 1647509499.43 3036549462.75 80652996.23 7800310577.86
2. Increase in the current
442548704.33188746462.60335530491.834356495.63971182154.39
reporting period
1) accrual 442548704.33 188746462.60 335530491.83 4356495.63 971182154.39
3. Decrease in the
current reporting 8071587.56 29801586.65 29111684.94 2965004.72 69949863.87
period
1) disposal or write-off 8071587.56 29801586.65 29111684.94 2965004.72 69949863.87
4. Difference due to foreign
(3489465.38)(9588961.57)(4608828.30)(291143.75)(17978399.00)
currency statement translation
5. Closing balance 3466586270.84 1796865413.81 3338359441.34 81753343.39 8683564469.38
III. Impairment provision
1. Opening balance 19162.50 - - - 19162.50
2. Closing balance 19162.50 - - - 19162.50
IV. Book value
1. Closing balance on book
16155574619.301379477671.522433543287.7228236710.4019996832288.94
value
2. Opening balance on book
16593049455.071294613472.532260244342.3929007181.9620176914451.95
value
129Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
15.2 As of June 30 2026 the book value of special-purpose equipment leased by the Group through operating leases is
RMB26952223.56.
15.3 Fixed assets of which certificates of title have not been granted as of June 30 2026 are as follows:
Unit: RMB
Item Book value Reason for certificates of title not granted
Office building for branches 10170780.71 In the process of obtaining the real estate certificates
Total 10170780.71
130Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
16. Construction in progress
16.1 Details of construction in progress
Unit: RMB
Closing balance Opening balance
Item
Account balance Provision Book value Account balance Provision Book value
Wuhan Intelligence Industry Park Product (Phase II) 510760295.36 - 510760295.36 434433639.30 - 434433639.30
Infrared Thermal Imaging Products Industrial Base
468899652.17-468899652.17370404921.99-370404921.99
Project
HikRobot Product Industrial Base Construction
458038461.50-458038461.50342173654.91-342173654.91
Project
Others 628185635.72 - 628185635.72 767098679.47 - 767098679.47
Total 2065884044.75 - 2065884044.75 1914110895.67 - 1914110895.67
16.2 Changes in significant construction in progress during the current reporting period
Unit: RMB
Transferred to Amount Accumulated O f which: amount
Budget Increase in the fixed assets invested as Construction amount of of interest Source of
Item (RMB000 Opening balance current reporting during the Closing balance proportion of in Progress
interest capitalized in the
0) period current reporting budget amount (%) funds
period (%) capitalization reporting period
Wuhan Intelligence
Industry Park Product 117534.00 434433639.30 76326656.06 - 510760295.36 43.46% 43.46% - - Self-fund
(Phase II)
Infrared Thermal Imaging
Products Industrial Base 77589.00 370404921.99 98494730.18 - 468899652.17 60.43% 60.43% - - Self-fund
Project
HikRobot Product Industrial Self-fund/
101346.00342173654.91115864806.59-458038461.5045.20%45.20%285997.01282474.43
Base Construction Project borrowing
17. Right-of-use assets
Unit: RMB
131Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Item Houses and buildings General equipment Special-purpose equipment Transportation vehicles Total
I. Original cost
1. Opening balance 804174874.84 114525.48 25866583.99 21927225.37 852083209.68
2. Increased 120206078.30 - 897453.46 6918438.72 128021970.48
(1) New Lease 120206078.30 - 897453.46 6918438.72 128021970.48
3. Decreased 112076625.04 111975.71 - 2838232.28 115026833.03
(1) The lease contract expires or terminates early 112076625.04 111975.71 - 2838232.28 115026833.03
4. Difference due to foreign currency statement translation (16971800.80) (2549.77) - (1022020.94) (17996371.51)
5. Closing balance 795332527.30 - 26764037.45 24985410.87 847081975.62
II. Accumulated depreciation
1. Opening balance 392458102.31 39257.65 5173316.80 11916691.05 409587367.81
2. Increased 90846573.92 1889.28 1322279.31 1844706.60 94015449.11
(1) Provisions 90846573.92 1889.28 1322279.31 1844706.60 94015449.11
3. Decreased 89712601.91 40272.91 - 2595599.04 92348473.86
(1) The lease contract expires or terminates early 89712601.91 40272.91 - 2595599.04 92348473.86
4. Difference due to foreign currency statement translation (8884825.34) (874.02) - (582040.33) (9467739.69)
5. Closing balance 384707248.98 - 6495596.11 10583758.28 401786603.37
III. Book value
1. Closing balance on book value 410625278.32 - 20268441.34 14401652.59 445295372.25
2. Opening balance on book value 411716772.53 75267.83 20693267.19 10010534.32 442495841.87
18. Intangible assets
18.1 Details of intangible assets
Unit: RMB
Item Land use right Intellectual property right Application software Franchise Total
I. Original cost
1. Opening balance 1873819931.81 248459758.76 417030576.65 112403981.48 2651714248.70
2. Increased - 1928285.20 14735284.70 23045.84 16686615.74
132Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Item Land use right Intellectual property right Application software Franchise Total
(1) Purchase - 1928285.20 14735284.70 23045.84 16686615.74
3. Decreased - - 4992848.58 - 4992848.58
(1) Disposal or write-off - - 4992848.58 - 4992848.58
4. Difference due to foreign currency statement translation - (43214.51) (2617254.08) - (2660468.59)
5. Closing balance 1873819931.81 250344829.45 424155758.69 112427027.32 2660747547.27
II. Accumulated amortization
1. Opening balance 247380909.55 139131207.21 355764062.47 37329800.96 779605980.19
2. Increased 19877658.14 18153827.54 12673339.95 3466467.46 54171293.09
(1) Accrual 19877658.14 18153827.54 12673339.95 3466467.46 54171293.09
3. Decreased - - 4873351.67 - 4873351.67
(1) Disposal or write-off - - 4873351.67 - 4873351.67
4. Difference due to foreign currency statement translation - (40282.89) (2404173.67) - (2444456.56)
5. Closing balance 267258567.69 157244751.86 361159877.08 40796268.42 826459465.05
III. Impairment provision
1. Opening balance - - - 42034063.49 42034063.49
2. Closing balance - - - 42034063.49 42034063.49
VI. Book value
1. Closing balance on book value 1606561364.12 93100077.59 62995881.61 29596695.41 1792254018.73
2. Opening balance on book value 1626439022.26 109328551.55 61266514.18 33040117.03 1830074205.02
18.2 At the end of the current reporting period the Group does not have any land use rights that have not been issued with certificates
133Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
19. Goodwill
Unit: RMB
Difference due to
The name of the investee or the matter Opening foreign currency
Increased Decreased Closing balance
that forming a goodwill balance statement
translation
Whst Co. Ltd. and Whst Hebei 92088117.87 - - - 92088117.87
SISTEMAS Y SERVICIOS DE
80618177.91--(2499246.10)78118931.81
COMUNICACIóN S.A. DE C.V.Henan Huaan Baoquan Intelligence
Development Co. Ltd. and its 61322871.63 - - - 61322871.63
subsidiaries
Others 77158559.60 - - (563004.33) 76595555.27
Total 311187727.01 - - (3062250.43) 308125476.58
20. Long-term deferred expenses
Unit: RMB
Difference due to
Opening foreign currency
Item Increased Amortized Other decreased Closing balance
balance statement
translation
Improvement
127650830.4113735960.0927819209.64-(2535983.60)111031597.26
expenditure for asset
Employee housing
20378696.851373204.404655997.70912407.41-16183496.14
loan deferred interest
Total 148029527.26 15109164.49 32475207.34 912407.41 (2535983.60) 127215093.40
21. Deferred tax assets/deferred tax liabilities
21.1 Deferred tax assets that are not presented on net off basis
Unit: RMB
Closing balance Opening balance
Item Deductible Deductible
temporary Deferred tax assets temporary Deferred tax assets
differences differences
Provision for impairment losses of assets 1189509199.00 298938479.17 1119730076.20 282992826.48
Provision for credit loss 4522036202.70 961350714.07 4311999173.90 908397631.86
Provisions 263384174.51 63517660.33 246454625.54 56863543.05
Accrued but unsettled liabilities 2960530217.84 510764310.28 2792079646.48 479155818.74
Unrealized profit from inter-group
4516208903.28678009713.723911533586.44618621446.58
transactions
Changes in the fair value of derivative
3594977.60898744.409972993.982493248.50
financial instruments
Government subsidies 933205235.09 151634267.71 871649529.85 142235152.75
Changes in the fair value of other non-
48914837.117337225.5757188296.748578244.51
current financial assets
Depreciation difference of fixed assets and
109181792.6420321980.92148158096.4428174763.38
amortization difference of intangible assets
Deductible losses 1036709903.93 173950994.41 1096464266.73 185789389.54
Lease liabilities 452864150.88 84392801.65 451481271.08 84413233.21
Others 189410583.78 52945545.64 146461328.98 40825157.12
Total 16225550178.36 3004062437.87 15163172892.36 2838540455.72
134Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
21.2 Deferred tax liabilities that are not presented on net off basis
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Depreciation difference of fixed assets and
1838568074.64335789087.351816873539.85329791740.84
amortization difference of intangible assets
Long-term equity investments measured by
394276358.8659141453.83380230989.3957034648.41
equity method - partnership
Changes in the fair value of derivative financial
28446266.047111566.514753565.601188391.40
instruments
Changes in the fair value of other non-current
18099354.274524838.5718099354.274524838.57
financial assets
Right-of-use assets 445295372.25 80077848.48 442495841.87 79989518.15
Valuation and appreciation of assets of business
87171428.4421792857.11104605714.1826151428.55
combinations not under common control
Others 76380669.48 24629873.08 59978380.99 18820576.86
Total 2888237523.98 533067524.93 2827037386.15 517501142.78
21.3 Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset
Unit: RMB
Closing balance Opening balance
Offset amount at the Deferred tax assets or Offset amount at the Deferred tax assets or
Item
end of the reporting liabilities at the net beginning of the liabilities at the net
period amount after offset reporting period amount after offset
Deferred tax assets 433002808.57 2571059629.30 402917933.88 2435622521.84
Deferred tax liabilities 433002808.57 100064716.36 402917933.88 114583208.90
22. Other non-current assets
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Account balance Book value Account balance Book value
provisions provisions
Contract assets 1855339722.39 35605054.27 1882161712.48 25989288.57 1856172423.91
1819734668.12
Prepayments for
72064115.03-72064115.0341015731.41-41015731.41
equipment
Prepayments for
2513554.42-2513554.42485067.24-485067.24
infrastructure
Prepayments for
3549537.67-3549537.67---
real estate
Others 178727.96 - 178727.96 198742.26 - 198742.26
Total 1933645657.47 35605054.27 1898040603.20 1923861253.39 25989288.57 1897871964.82
23. Assets with restriction in ownership or use rights
Unit: RMB
Book value at the end of the current
Item Cause of restriction
reporting period
Cash and bank balances 407867779.21 Various guarantee deposits and other restricted funds
135Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Notes receivable 1286184827.94 Endorsed to the supplier discounted to the bank
172872587.02 Pledged for long-term borrowings and recourse
Accounts receivable
factoring
Contract assets 46833721.31 Pledged for long-term borrowings
Fixed assets 26952223.56 Fixed assets leased out under operating leases
Intangible assets 10019491.00 Pledged for long-term borrowings
Other non-current assets 436901296.51 Pledge for long-term borrowings
Total 2387631926.55
Unit: RMB
Book value at the beginning of the
Item Cause of restriction
current reporting period
Cash and bank balances 303989964.01 Various guarantee deposits and other restricted funds
Notes receivable 1525932671.08 Endorsed to the supplier discounted to the bank
Accounts receivable 96475719.29 Pledged for long-term borrowings
Contract assets 57422774.91 Pledged for long-term borrowings
Fixed assets 35397385.10 Fixed assets leased out under operating leases
Intangible assets 10735168.93 Pledged for long-term borrowings
Other non-current assets 483735017.82 Pledge for long-term borrowings
Total 2513688701.14
24. Short-term borrowings
24.1 Categories of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Credit loan 1624981252.58 2603750650.74
Discounted but not expired notes 1134495951.86 82115586.20
Accounts receivable factoring 9185910.00 -
Total 2768663114.44 2685866236.94
24.2 As of June 30 2026 the Group did not have any overdue short-term loans that were failed to repay.
25. Derivative financial liabilities
Unit: RMB
Item Closing balance Opening balance
Forward foreign exchange contracts 3897841.90 11299401.25
total 3897841.90 11299401.25
26. Notes payable
List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 612897818.96 783778534.95
Total 612897818.96 783778534.95
136Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
As of June 30 2026 the Group did not have any unpaid matured notes payable.
27. Accounts payable
27.1 List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payments for goods 19296244818.73 18114264867.48
Payments for engineering equipment 1536657199.92 1729684708.39
Total 20832902018.65 19843949575.87
27.2 As of June 30 2026 the Group did not have any significant accounts payable with aging above one year.
28. Contract liabilities
28.1 List of contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advanced receipts from products sales 3991145550.95 3300237974.03
Advanced receipts for construction settlement payment 275331133.45 332383382.90
Advanced receipts from other services 917680872.57 788958524.94
Subtotal 5184157556.97 4421579881.87
Less: Contract liabilities included in other non-current liabilities
264209158.07221089008.80
(Note (V) 38)
Total 4919948398.90 4200490873.07
28.2 As of the end of this period the Group has no significant contract liabilities with an age exceeding one year.
28.3 Qualitative and quantitative analysis on the above contract liabilities:
Advanced receipts from product sales are prepayments for goods by customers and sales rebates provided to distributors.Revenue will be recognized when the goods are shipped to or delivered to the customer and sales rebates provided to
resellers will be recognized when resellers use sales rebates to offset the price.Advanced receipts from construction settlement payment are the part of the contract price received or receivable from the
customer for the construction project according to the contract according to the contract provisions in excess of the
cumulative completed performance obligations and the revenue will be recognized according to the performance progress
during the contract period.Advanced receipts from other services payment are the cloud service fees paid in advance by some customers and the part
of the contract price received or receivable from customers for operation and maintenance according to the contract
provisions that exceeds the cumulative completed performance obligations and the revenue will be recognized according
to the performance progress during the service period
29. Payroll payable
137Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
29.1 Details of payroll payable
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
reporting period reporting period
1. Short-term remuneration 6817332886.80 9750156011.32 10643404041.52 5924084856.60
2. Termination benefits – defined
120184255.55806235554.68796477085.78129942724.45
contribution scheme
Total 6937517142.35 10556391566.00 11439881127.30 6054027581.05
29.2 List of short-term remuneration
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
reporting period reporting period
1. Wages or salaries bonuses
6098088056.338321788955.839255967549.975163909462.19
allowances and subsidies
2. Staff welfare 53008788.46 164676956.27 214184025.41 3501719.32
3. Social insurance contributions 46137452.75 408236902.60 400762707.95 53611647.40
Including:
42021625.42386859162.15379632168.4849248619.09
Medical insurance
Injury insurance 4067651.86 19919630.12 19673702.44 4313579.54
Maternity insurance 48175.47 1458110.33 1456837.03 49448.77
4. Housing funds 4384936.21 718816605.69 721280874.79 1920667.11
5. Labor union and education fund 615713653.05 136636590.93 51208883.40 701141360.58
Subtotal 6817332886.80 9750156011.32 10643404041.52 5924084856.60
29.3 List of defined contribution plan
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
1. Basic pension insurance 115862490.56 777964027.67 768639522.25 125186995.98
2. Unemployment insurance 4321764.99 28271527.01 27837563.53 4755728.47
Subtotal 120184255.55 806235554.68 796477085.78 129942724.45
Note: The Group participates in pension insurance and unemployment insurance plans established by government agencies
in accordance with regulations. According to these plans the Group pays monthly fees to these plans in proportion to the
payment base. The Group has no other material obligation for the payment of pension benefits beyond the contributions
described above and corresponding expenses were booked into current profits and losses or corresponding assets.
30. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Corporate income tax 1513636547.63 1198882556.42
138Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Item Closing balance Opening balance
Value-added tax 435863884.46 395354482.49
City construction and maintenance tax 28530147.35 23179267.57
Education surcharges 12220786.52 9958086.04
Local education surcharges 8349825.06 7345119.73
Others 147900868.73 159371990.82
Total 2146502059.75 1794091503.07
31. Other payables
31.1 By categories
Unit: RMB
Item Closing balance Opening balance
Dividend payable 29995616.97 27964450.23
Other payables 3025420075.91 3356055644.70
Total 3055415692.88 3384020094.93
31.2 Dividends payable
Unit: RMB
Item Closing balance Opening balance
Dividends payable to minority shareholders 29995616.97 27964450.23
Total 29995616.97 27964450.23
31.3 Other payables
31.3.1 List of other payables according to the nature of the payment
Unit: RMB
Item Closing balance Opening balance
Unexpired commercial acceptance bills that were endorsed 1252688876.08 1443817084.88
Accrued expenses 1012230101.14 1139501014.09
Guarantee and deposit fees 517800203.55 507880795.13
Collection and payment on behalf 185397854.48 170071009.37
Other expense payable 57303040.66 94785741.23
Total 3025420075.91 3356055644.70
31.3.2 As of June 30 2026 the Group did not have any significant other payables aging over one year.
32. Non-current liabilities due within one year
Unit：RMB
Item Closing balance Opening balance
139Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Long-term borrowings due within one year (Note (V) 34) 707765365.52 3610693121.74
Lease liabilities due within one year (Note (V) 35) 186650069.43 156501215.32
Long-term payables due within one year (Note (V) 36) 166576809.94 172076792.55
Total 1060992244.89 3939271129.61
33. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Output VAT to be transferred 412873237.52 345654100.50
Product quality warranty 44810027.12 53607508.46
Others 25602258.51 16169273.44
Total 483285523.15 415430882.40
34. Long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan (Note 1) 346341194.44 372414883.33
Credit loan (Note 2) 1294864245.02 4448843052.80
Less：Long-term loans due within one year (Note (V) 32) 707765365.52 3610693121.74
Total 933440073.94 1210564814.39
Note 1: At the end of the reporting period the pledged loan was mainly obtained by the Group with all the rights and
benefits under related PPP projects pledged. The maturity date interval is November 5 2031 and the annual interest rate
is a floating rate adjusted in line with the adjustment of the 5-year RMB loan benchmark rate announced by the People's
Bank of China.Note 2: At the end of the reporting period the maturity period of credit loan is from December 1 2027 to September 21
2030 and the annual interest rate ranges from 1.25% to 2.51%
35. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease liabilities 457775952.71 455892181.48
Less: Lease liabilities due within one year (Note (V) 32) 186650069.43 156501215.32
Total 271125883.28 299390966.16
36. Provisions
Unit: RMB
Item Closing balance Opening balance
Product quality warranty 279411196.98 284494495.50
Others 3106840.00 6017672.26
Less: Provisional liabilities due within one year (Note (V) 32) 166576809.94 172076792.55
Total 115941227.04 118435375.21
140Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
37. Deferred income
Unit: RMB
Increase in current Decrease in current
Item Opening balance Closing balance
reporting period reporting period
Government Subsidies
863263662.53163097350.58102390645.47923970367.64
(Note (VIII) 1)
Total 863263662.53 163097350.58 102390645.47 923970367.64
38. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Contract liabilities (Note (V) 28) 264209158.07 221089008.80
Total 264209158.07 221089008.80
39. Share capital
Unit: RMB
Changes for the current reporting period
Opening
Capital reserve
balance New issue Bonus
Closing balance
conversion to Others Subtotal
of shares issue
shares
Total shares 9164871550.00 - - - - - 9164871550.00
40. Capital reserves
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
reporting period (Note 1) reporting period (Note 2)
Share premium 3781852942.27 - 26865994.35 3754986947.92
Other capital reserves 603521536.95 40975986.99 - 644497523.94
Total 4385374479.22 40975986.99 26865994.35 4399484471.86
Note 1: The increase in other capital reserve for the period of RMB31320758.17 is formed by share-based payment
settled by equity; RMB9624954.92 is formed by the change in other equity interests of the investee in the long-term
equity investment accounted for by the equity method; RMB 30273.90 was attributable to the acquisition of equity held
by the original minority shareholders of the subsidiary Shijiazhuang Sensor-Tech by the Group see Notes (VII) 2 for
details.Note 2: The decrease in share premium for this period by RMB 26865994.35 was due to the Group's acquisition of equity
held by the former minority shareholders of its subsidiary Shijiazhuang Sensor-Tech see Notes (VII) 2 for details.
41. Other comprehensive income
Unit: RMB
141Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Amounts occurred in the current reporting period
Less:
Transfer
to current
The before- period P/L Less: Attributable to Attributable to
Opening income-tax
Item from Income owner of the minority Closing balance
balance amount incurred
tax shareholders
during the current previous parent company
other expense (after tax) (after tax) reporting period
comprehe
nsive
income
Other incomes
that may be
reclassified 23384816.83 (44317262.45) - - ( 37601121.99) (6716140.46) (14216305.16)
subsequently to
profit or loss
Included: effect
on translation of
financial
statements 23384816.83 (44317262.45) - - ( 37601121.99) (6716140.46) (14216305.16)
denominated in
foreign
currencies
Other
comprehensive 23384816.83 (44317262.45) - - ( 37601121.99) (6716140.46) (14216305.16)
income
42. Surplus reserves
Unit: RMB
Increase in the Decrease in the
Item Opening balance current reporting current reporting Closing balance
period period
Statutory surplus reserves 4715460312.00 - - 4715460312.00
Total 4715460312.00 - - 4715460312.00
Note: According to the Company Law of the People's Republic of China and the Company's Articles of Association the
parent company shall withdraw the statutory surplus reserve fund at 10% of the annual net profit and when the
accumulated amount of the statutory surplus reserve fund reaches more than 50% of the registered capital it may not be
withdrew. The statutory surplus reserve can be used to make up for losses or increase the share capital after approval. The
statutory surplus reserves of the Company amount to RMB 4715460312.00 which has reached more than 50% of the
Company’s share capital.
43. Retained earnings
Unit: RMB
Item First half of 2026 First half of 2025
Retained earnings at beginning of period 65059094727.57 60959912942.15
Add: Net profit attributable to owners of the Company for 7895705450.11 5657349798.68
the current reporting period
Less: Transfer to surplus reserve - -
Dividends payable on common shares (Note) 6873653662.50 6430241489.00
Retained earnings at the end of the current reporting period 66081146515.18 60187021251.83
Note: According to the resolution of 2025 Annual General Meeting held on May 8 2026 based upon the total capital
share of the Company on the equity distribution date for each 10 common shares the Company distributed cash
dividends of RMB7.50 (tax inclusive) the rest of retained earnings were all carried forward for future distributions.
142Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
44. Revenue and operating costs
44.1 Revenue and operating cost
Unit: RMB
First half of 2026 First half of 2025
Item
Revenue Cost Revenue Cost
Major business 46584846522.04 23253261505.88 41525014671.51 22781230283.00
Other business 237691325.03 173336500.47 293025416.93 138269156.04
Total 46822537847.07 23426598006.35 41818040088.44 22919499439.04
44.2 Revenue (categorized by product or business type)
Item First half of 2026 First half of 2025
Products and services for main business (Note) 30616341900.37 29271794689.37
Constructions of main business 1036484458.97 780316256.46
Innovative businesses 15169711487.73 11765929142.61
Including: Robotic business 4027882511.41 3138354805.04
Thermal imaging business 2964146065.61 2008057842.03
Smart home business 2817179848.17 2752441041.15
Auto electronics business 2763828320.43 2352287642.16
Storage business 1944390380.66 1033275636.44
Other innovative businesses 652284361.45 481512175.79
Total 46822537847.07 41818040088.44
Note: Main business refers to the business parts other than the innovative businesses.
44.3 Major business (by business type)
Unit: RMB
First half of 2026
Item
Revenue Cost
Product sales 44361250926.32 21754571220.23
Construction contract 1036484458.97 872049187.36
Provide services 1187111136.75 626641098.29
Total 46584846522.04 23253261505.88
44.4 Major business (by the time of revenue recognition)
Unit: RMB
First half of 2026
Item
Revenue Cost
Recognized at a point in time 44361250926.32 21754571220.23
Recognized over time 2223595595.72 1498690285.65
Total 46584846522.04 23253261505.88
143Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
45. Business taxes and surcharges
Unit: RMB
Item First half of 2026 First half of 2025
City construction and maintenance tax 168693656.74 148356355.71
Real estate tax 80346352.96 72692986.17
Education surcharges 74320831.31 64211995.27
Local education surcharges 49547220.85 42807996.85
Stamp duty 44560739.05 36467533.81
Tax on use of land 11754235.01 12725051.59
Tax on use of vehicle and vessel 67627.51 72047.06
Others 2588441.30 1578727.27
Total 431879104.73 378912693.73
46. Financial expenses
Unit: RMB
Item First half of 2026 First half of 2025
Interest expenses 74669901.06 96167687.78
Interest expense on lease liabilities 10072148.49 10944560.30
Less: Interest income 383972908.76 281621810.18
Foreign exchange losses (gains) 594714106.15 (606543396.00)
Less: Capitalized specific loan interests 282474.43 -
Others 51036667.47 41684543.70
Total 346237439.98 (739368414.40)
47. Other income
Unit: RMB
Item First half of 2026 First half of 2025
VAT refund 1031712677.61 797785002.36
Special subsidies 226417389.55 347251070.73
Others 38120151.35 35635160.79
Total 1296250218.51 1180671233.88
48. Investment income (losses)
Unit: RMB
Item First half of 2026 First half of 2025
Long-term equity investment gains (losses) based on the equity method 616257839.98 4673722.38
Investment gains (losses) from disposal of derivative financial assets 18582307.65 (41578674.25)
Gain (loss) on debt restructuring 18522982.11 -
Investment gains (loss) from the disposal of long-term equity investments. - 224079.88
Investment gains (loss) from the termination of recognition of financial assets
-49420.00
measured at amortized cost.Others 6004781.60 -
Total 659367911.34 (36631451.99)
49. Gains (losses) from changes in fair values
Unit: RMB
144Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Sources of gains (losses) from changes in fair values First half of 2026 First half of 2025
Gains (losses) on the changes in fair value of derivative financial assets 26907615.80 (26750323.93)
Gains (losses) from changes in fair value of other non-current financial assets 8273459.63 37607852.79
Gains (losses) on the changes in fair value of derivative financial liabilities 7370063.22 (53974972.19)
Total 42551138.65 (43117443.33)
50. Credit impairment gains (losses)
Unit: RMB
Item First half of 2026 First half of 2025
Credit impairment gains (losses) of account receivable (518109124.62) (326139164.92)
Credit impairment gains (losses) of other receivables (7557205.61) (1616798.40)
Credit impairment gains (losses) of long-term receivables (4418198.34) (52547886.25)
Credit impairment gains (losses) of notes receivable 467756.05 1609678.20
Total (529616772.52) (378694171.37)
51. Impairment gains (losses) of assets
Unit: RMB
Item First half of 2026 First half of 2025
Gains (losses) on inventory devaluation (222870220.26) (205498860.45)
Gains (losses) on contract assets impairment (including the portion included in other
(10170315.95)1178355.48
non-current assets)
Gains (losses) on impairment of fixed assets。 - (4245701.67)Total (233040536.21) (208566206.64)
52. Non-operating income
Unit: RMB
Item The amount booked into current period First half of 2026 First half of 2025
non-recurring profits and losses
Fines and confiscations 43949066.45 27598142.65 43949066.45
Government subsidies 982489.88 1294315.29 982489.88
Others 11507479.09 4064739.98 11507479.09
Total 56439035.42 32957197.92 56439035.42
53. Non-operating expenses
Unit: RMB
The amount booked into current period non-
Item First half of 2026 First half of 2025
recurring profits and losses
Donation expenses 8165852.86 1494954.74 8165852.86
Local water conservancy construction fund 1811876.24 1721616.80 -
Others 10039547.96 4105862.99 10039547.96
Total 20017277.06 7322434.53 18205400.82
54. Income tax expenses
Unit: RMB
Item First half of 2026 First half of 2025
Current income tax expenses 1924905937.07 1213540999.19
Deferred income tax expenses (153312785.76) (95153343.99)
145Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Item First half of 2026 First half of 2025
Differences in filing and payment of income tax in previous reporting years (489319727.84) (358973681.46)
Total 1282273423.47 759413973.74
55. Notes to consolidated cash flow statement items
55.1 Cash relating to operating activities
Other cash receipts relating to operating activities
Unit: RMB
Item First half of 2026 First half of 2025
Interest income 332024352.10 233121669.73
Government subsidies 288106584.54 318253716.23
Others 249280526.17 261580950.83
Total 869411462.81 812956336.79
Other cash payments relating to operating activities
Unit: RMB
Item First half of 2026 First half of 2025
Office expenses and business expenses 971981117.39 953595728.54
Advertising and Selling services 780206074.58 769106416.13
R&D expenses 746522669.04 644800758.58
Travelling expenses 354833341.47 378323798.80
Shipping and transportation expenses 203603932.92 197908262.99
Rental expenses 44833283.55 43518098.53
Others 468699594.73 374687982.00
Total 3570680013.68 3361941045.57
55.2 Cash relating to investing activities
Other cash receipts relating to investing activities
Unit: RMB
Item First half of 2026 First half of 2025
Receipts of financing lease payments 26794203.84 35361878.15
Net Cash Received from Acquiring Subsidiaries and Other
-22949177.71
Business Units
Total 26794203.84 58311055.86
55.3 Cash relating to financing activities
Other cash payments relating to financing activities
Unit: RMB
Item First half of 2026 First half of 2025
Repayment of lease liabilities 113875286.38 104168573.61
Consideration paid for acquisition of minority shares 36660000.00 -
Repurchase of outstanding shares - 1538486901.95
Total 150535286.38 1642655475.56
146Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
56. Supplementary information about cash flow statement
56.1 Supplementary information about cash flow statement
Unit: RMB
Supplementary information First half of 2026 First half of 2025
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 9123000553.88 6281476630.83
Add: Impairment losses of assets 233040536.21 208566206.64
Provision for credit losses 529616772.52 378694171.37
Fixed assets depreciation 971182154.39 778654426.95
Amortization of right-of use assets 94015449.11 102884841.39
Amortization of intangible assets 54171293.09 52897969.98
Amortization of long-term deferred expenses 32475207.34 46361111.95
Losses (gains ) on disposal of fixed assets intangible assets and other long-
38039.60(7386351.06)
term assets
Losses (gains) from disposal of fixed assets 45062.52 37218.90
Losses (gains) from changes in fair value (42551138.65) 43117443.33
Financial expenses 29358561.44 53314962.31
Investment losses (gains) (640844929.23) 36680871.99
Share-based payment based on equity settlement 38355271.71 56631332.08
Decrease (increase) of restricted funds (103877815.20) (67101426.08)
Decrease (Increase) in deferred income tax assets (138962340.57) (114855728.16)
Increase (decrease) in deferred income tax liabilities (14350445.19) 19702384.17
Decrease (increase) in inventories (9234611953.97) (251612593.04)
Decrease (increase) in operating receivables 1853116763.58 3595520825.49
Increase (decrease) in operating payables 387487576.89 (5840272991.36)
Increase (decrease) in deferred income 60706705.11 (30291669.79)
Net cash flows from operating activities 3231411324.58 5343019637.89
2. Net changes in cash and cash equivalents:
Closing balance of cash 37443499183.66 30998547844.79
Less: Opening balance of cash 46204338694.43 36053042380.29
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase (decrease) in cash and cash equivalents (8760839510.77) (5054494535.50)
56.2 Constituents of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
Cash 37443499183.66 46204338694.43
Including: Cash on hand 500772.96 434527.61
Bank deposit for payment at any time 37372731844.46 46161655421.81
Other monetary capital for payment at any time 70266566.24 42248745.01
Cash equivalents - -
Closing balance of cash and cash equivalents 37443499183.66 46204338694.43
147Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
57. Monetary items of foreign currencies
Unit: RMB
Balance in foreign currency at Exchange rate for Balance of RMB converted at the
Item
the end of the reporting period conversion end of the reporting period
Cash and bank balances
Including: USD 330520072.59 6.8109 2251139162.40
EUR 92823065.21 7.7671 720966029.81
Accounts receivable
Including: USD 426455525.07 6.8109 2904545935.70
EUR 134655384.33 7.7671 1045881835.63
Short-term borrowing
Including: EUR 100614427.78 7.7671 781482322.02
Accounts payable
Including: USD 261390868.32 6.8109 1780307065.04
EUR 278569.67 7.7671 2163678.48
58. Lease
58.1 As a lessee
The Company leases a number of assets including houses and buildings s general-purpose equipment special-purpose equipment and
transportation vehicles ranging from 1 month to 13 years. Such assets cannot be used for loan mortgage guarantee and other purposes.The total amount of short-term lease expenses and lease expenses of low-value assets included in profit or loss for the period was
RMB52238114.89 (the first half of 2025: RMB53291060.46).The total lease-related cash outflows for the reporting period is RMB166113401.27 (the first half of 2025: RMB157459634.07).
58.2 As a lessor
Operating lease as a lessor
Unit: RMB
Including: income related to variable lease payments
Item Income from leasing
that are included in lease receipts
Special-purpose equipment 41224540.29 -
Total 41224540.29 -
The Group's operating lease as a lessor relates to Special-purpose equipment.Finance lease as a lessor
Unit: RMB
Income related to variable lease
Item Profits on sales Profits on financing payments that are not included
in net lease investments
Special-purpose equipment -
3490101.591095040.27
finance lease
Total 3490101.59 1095040.27 -
148Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
VI. Changes in consolidation scope
During this reporting period the Group did not experience any business combinations disposals of subsidiaries or
other events that would result in a change in the consolidated scope. The consolidated scope remained unchanged
compared to the previous fiscal year.
149Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
VII. Interest in other entities
1. Equity in subsidiaries
1.1 Composition of major subsidiaries of the Group
Name Location of operation Place of registration Nature of business Acquisition method
Hangzhou Hikvision System Technology Co. Ltd. Hangzhou Hangzhou Zhejiang System integration Technology development Establishment
Hangzhou Hikvision Technology Co. Ltd. Hangzhou Hangzhou Zhejiang Manufacture Establishment
Hangzhou EZVIZ Network Co. Ltd. Hangzhou Hangzhou Zhejiang Technology development Establishment
Hangzhou Hikrobot Co. Ltd. Hangzhou Hangzhou Zhejiang Technology development Establishment
2. Transactions where the ownership interest in subsidiaries changed but control was still maintained
2.1 Explanation of changes in the share of equity in subsidiaries
Acquisition of Shijiazhuang Sensor-Tech minority equity interests
On February 28 2026 the Group and its subsidiary Shijiazhuang Sensor-Tech jointly signed a "Share Transfer Agreement" with the original minority shareholder agreeing to acquire
1.9516% equity held by the original minority shareholders for RMB 46.8 million. After the acquisition the Group's equity interest in Shijiazhuang Sensor-Tech increased from 56.0969%
to 58.0485%. On March 31 2026 the share transfer was completed by both parties. As of the end of this period the Group has paid RMB 44.46 million in share transfer consideration.Acquisition cost Shijiazhuang Sensor-Tech
- Cash 46800000.00
Total acquisition cost 46800000.00
Less: Equity of the subsidiary calculated according to the
19964279.55
proportion of equity obtained
Adjustment in capital reserves 26835720.45
3. Equity in joint ventures or associates
150Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
3.1 Aggregated financial information of insignificant joint-ventures and associates
Unit：RMB
Closing balance / Amount for the first half of 2026 Opening balance / Amount for the first half of 2025
Associates:
The aggregate book value of investments in associates 657211281.38 659569969.98
The aggregate amount of the following items calculated based on the Company's equity share percentage
of the associates
- Net income (loss) (6457220.78) 11202773.52
- Other comprehensive income - -
- Total comprehensive income (loss) (6457220.78) 11202773.52
Joint Ventures:
Total investment book value 1611091029.08 1009504630.77
The aggregate amount of the following items calculated based on the Company's equity share percentage
of the associates
- Net gain (loss) 622715060.76 (6529051.14)
- Other comprehensive income - -
- Total comprehensive income (loss) 622715060.76 (6529051.14)
3.2 There are no significant restrictions on the ability of the joint ventures or associates to transfer funds to the Group.
3.3 There are no unrecognized commitments related to investment in joint ventures.
3.4 The Group has no contingent liabilities related to investments in joint ventures or associates.
151Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
VIII. Government subsidiaries
1. Liabilities relating to government subsidiaries
Unit: RMB
Amount at the open of the Transfer to other income in the Amount at the close of the
Liabilities Increase in the reporting period Asset-related /revenue-related
reporting period reporting period reporting period
Special subsidy 858338377.67 163097350.58 97898618.43 923537109.82 Asset-related
Special subsidy 4925284.86 - 4492027.04 433257.82 Revenue-related
Total 863263662.53 163097350.58 102390645.47 923970367.64
2. Government subsidy recognized as gain or loss in the reporting period
Unit: RMB
Subsidy Projects First half of 2026 First half of 2025
VAT refund 1031712677.61 797785002.36
Special subsidy 227399879.43 348545386.02
Total 1259112557.04 1146330388.38
152Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
IX. Risks associated with financial instrument
The Group's principal financial instruments include cash and bank balances other non-current financial assets notes
receivable accounts receivable receivables for financing other receivables long-term receivables some of other non-
current assets borrowings notes payable accounts payable other payables long-term payables derivative financial
instruments etc. Details of these financial instruments are set out in Note (V). Below are the risks associated with such
financial instruments and the risk management policies adopted by the Group to mitigate such risks. The management of
the Group manages and monitors such risk exposures to ensure such risks are contained within a prescribed scope.Unit: RMB
Closing balance of the current Opening balance of the current
Items
reporting period reporting period
Financial assets：
Measured at fair value through current profit and loss
Derivative financial assets 31694623.01 4792243.40
Other non-current financial assets 668271418.62 589955315.74
Measured at fair value through other comprehensive income
Receivables for financing 2466406045.15 2430030662.65
Measured at amortized cost
Cash and bank balances 37851366962.87 46508328658.44
Notes receivable 2667589974.83 3051356562.64
Accounts receivable 27784134749.07 29812378945.77
Other receivables 501788186.74 442502788.34
Other non-current assets 178727.96 198742.26
Long-term receivables (including those due within one year) 626077825.80 829846974.06
Financial liabilities:
Measured at fair value through current profit and loss
Derivative financial liabilities 3897841.90 11299401.25
Measured at amortized cost
Short-term borrowings 2768663114.44 2685866236.94
Notes payable 612897818.96 783778534.95
Accounts payable 20832902018.65 19843949575.87
Other payables 3055415692.88 3384020094.93
Long-term borrowings (including those due within one year) 1641205439.46 4821257936.13
Long-term payables (including those due within one year) 9749569.60 9749569.60
The Group adopts sensitivity analysis techniques to analyze the possible effects of rational and probable changes in risk
variables to profit or loss for the period or to the interests of shareholders. Since risk variables seldom change on a stand-
alone basis while the correlation between variables may have significant influence to the ultimate amount of change
effected by the change in a single risk variable the analysis below is based on the assumption that the changes in each
variable occurred separately.
1. Objectives policies and procedures of risk management and changes of the current reporting period
153Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The Group engages in risk management with the aim of achieving an appropriate balance between risk and return where
the negative effects of risks against the Group's operating results are minimized in order to maximize the benefits of
shareholders and other stakeholders. Based on such objective in risk management the underlying strategy of the Group's
risk management is to ascertain and analyze all types of risks exposures of the Group establish appropriate risk tolerance
thresholds carry out risk management procedures and perform risk monitoring on all kinds of risks in a timely and reliable
manner thus containing risk exposures within a prescribed scope.
1.1 Market risks
1.1.1 Foreign exchange risks
Foreign exchange risks refer to the risk that losses will occur because of changes in foreign exchange rates. The Company
is primarily exposed to risks relating to the currencies such as USD EUR and etc. The Group's subsidiaries in the mainland
of China whose procurement sales and financing are denominated in RMB USD and EUR other principal activities are
settled in RMB. The Group's subsidiaries in China Hong Kong and outside China are principally engaged in procurement
sales financing and other major business activities in local currencies such as USD EUR and etc.At the end of the reporting period except for monetary items of foreign currencies set out in Note (V) 57 the Group
mainly adopted the functional currency of each of its subsidiary to present the balance of its assets and liabilities. The
foreign exchange risks arising from assets and liabilities denominated in USD and EUR (which has been converted into
RMB) as follows may generate significant impact on the operating results of the Group.Unit: RMB
Assets Liabilities
Currencies
Closing balance Opening balance Closing balance Opening balance
USD 5155685098.10 5770890154.32 1780307065.04 1125211569.17
EUR 1766847865.44 1540513848.04 783646000.50 826698098.36
The Group has been paying close attention to the effect of fluctuation in exchange rate on the foreign exchange risks of
the Group and has purchased various financial derivative instruments such as forward foreign exchange contracts and
etc. to mitigate the foreign exchange risk exposure.Sensitivity analysis on exchange rate risk
The sensitivity analysis of the Group's foreign exchange risk includes only monetary items denominated in foreign
currencies and does not consider the impact of the purchased derivative financial instruments.With other variables unchanged the exchange rate might float within a reasonable range and has the following before-
tax effect on profit or loss and shareholders' equity for the current period:
Unit: RMB
First half of 2026 First half of 2025
Change in foreign exchange rates Effect on shareholders' Effect on shareholders'
Effect on profit Effect on profit
equity equity
5% appreciation of USD against
168768901.65168768901.65270179573.80270179573.80
functional currency
5% depreciation of USD against
(168768901.65)(168768901.65)(270179573.80)(270179573.80)
functional currency
5% appreciation of EUR against
49160093.2549160093.2580454886.4780454886.47
functional currency
5% depreciation of EUR against
(49160093.25)(49160093.25)(80454886.47)(80454886.47)
functional currency
1.1.2. Interest rate risk
The risk of changes in cash flow of financial instruments due to changes in interest rates exposed to the Group are primarily
related to bank borrowings bearing floating interest rate (please refer to (Note (V) 24) and (Note (V) 34) and bank deposits
bearing floating interest rate. The Group's risks of changes in the fair value of financial instruments due to changes in
interest rates are related to fixed-rate bank borrowings (please refer to (Note (V) 24) and (Note (V) 34) and fixed-rate bank
deposits.
154Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The Group determines the relative proportion of fixed interest rate contracts and floating interest rate contracts based on
the prevailing market environment. On June 30 2026 the Group's total long-term and short-term interest-bearing debts
bearing fixed interest rates amounted to RMB1782503737.91 (December 31 2025: RMB5941221266.80). The total
amount of long-term and short-term interest-bearing debts bearing floating interest rates is RMB1483682954.13
(December 31 2025: RMB1483787320.07).
At present the Group does not have any interest rate swap arrangements and will continue to pay close attention to the
impact of changes in borrowing interest rates on the interest rate risk of the Group and will make timely adjustments
according to the latest market conditions.The Group expects that the exposure to cash flow risk arising from floating-rate bank deposits and the exposure to changes
in fair value arising from fixed-rate bank deposits are not significant.
1.1.3. Other price risks
The Group's price risk mainly arises from investments in held-for-trading equity instruments and derivative financial
instruments. Held-for-trading equity instrument investments are all investments in unlisted held-for-trading equity
instruments.The Group is exposed to price risk due to the holding of financial assets measured at fair value. The fair value of certain
financial instruments is determined by the general pricing model based on discounted future cash flow method or other
valuation techniques while the valuation techniques are based on certain valuation assumptions. Therefore the valuation
results are highly sensitive to valuation assumptions. However at the end of the current reporting period the amount of
investment in held-for-trading equity instruments and derivative financial instruments is not significant and the risk
exposure due to changes in price of financial instruments as a result of change in valuation assumptions is not significant
accordingly no sensitivity analysis is conducted.
1.2 Credit Risk
As of June 30 2026 the largest credit risk exposure that may result in financial losses of the Group is mainly due to the
loss of the Group's financial assets arising from the failure of the counterparty to perform its obligations including: cash
and bank balance (Note (V). 1) notes receivable (Note (V). 3) accounts receivable (Note (V). 4) receivables for financing
(Note (V). 6) other receivables (Note (V). 8) contract assets (Note (V). 5) and (Note (V). 22) non-current assets due
within one year (Note (V). 10) long-term receivables (Note (V). 12) etc. and derivative financial assets that are not
included in the scope of impairment assessment and are measured at fair value through current profit or loss (Note (V). 2).As of the balance sheet date the book value of the Group's financial assets represents its maximum credit risk exposure.In order to reduce credit risk the Group has arranged a team to determine the credit limit conduct credit approval and
implement other monitoring procedures to ensure that necessary measures are taken to recover over-due debt. In addition
the Group reviews the recovery of financial assets on each balance sheet date to ensure that sufficient credit loss provisions
are made for relevant financial assets. Therefore the management of the Group believes that the credit risk exposure of
the Group has been reduced significantly.The credit risk on cash and bank balances of the Group is low as they are deposited with banks with high credit ratings.For accounts receivable contract assets and long-term receivables the Group has put in place relevant policies to control
credit risk exposure. The Group assesses credit quality of customers and sets corresponding credit period based on the
customer's financial status the possibility of obtaining guarantees from third parties credit history and other factors such
as current market conditions. The Group will regularly monitor the credit history of its customers. For customers with
poor credit history the Group takes various measures such as written payment reminders shorten or cancel the credit
period to ensure that the overall credit risk of the Group is maintained in a controllable range. For accounts receivable
and contract assets the Group uses a simplified method that is to measure the loss provision based on the amount
equivalent to the expected credit loss for the entire duration. For details of the relevant expected credit loss measurement
see (Note (V). 4 & Note (V).5. For long-term receivables the Group calculates the expected credit losses based on the
expected credit loss rate in the next 12 months or the entire duration based on the default risk exposure. For details of the
155Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
related expected credit loss measurement see Note ((V). 12).With respect to bank acceptance bills and receivables debt certificates the Company believes that there is no significant
credit risk and will not incur any significant losses due to the default of the counterparty. For financial company acceptance
bills and commercial acceptance bills the Company has set relevant policies to control credit risk exposure. The Company
evaluates the credit status of the acceptor based on its financial position credit history and other factors such as current
market conditions and sets an internal credit rating for the acceptor. The Company regularly monitors the credit records
of the acceptors and for the acceptors with bad credit records the Company adopts written reminders and other means to
ensure that the overall credit risk is within a controllable range. For the acceptance bills and commercial acceptance bills
receivable from financial companies the Group calculates the expected credit loss based on the default risk exposure based
on the expected credit loss ratio in the entire duration and the relevant expected credit loss measurement is detailed in
(Note (V) 3).For other receivables the Group regularly monitors the debtor's credit history. For debtors with poor credit history the
Group takes various measures such as written payment reminders to ensure that the Group's overall credit risk is
maintained in a controllable range. For other receivables the Group calculates the expected credit loss based on the
expected credit loss ratio in the next 12 months or the entire duration based on the default risk exposure. For details of the
relevant expected credit loss measurement see (Note (V). 8).The Group's risk exposure is distributed among multiple contractors and multiple customers so the Group has no
significant credit concentration risk.
1.3. Liquidity risk
The Group maintains and monitors a level of cash and cash equivalents deemed adequate by the management to meet the
operation needs of the Group and to reduce the effect of cash flow movements when managing liquidity risk. The
management of the Group monitors the usage of bank borrowings and ensures compliance with borrowing agreements.According to the term to maturity of non-discounted and remaining contract obligations the financial liabilities held by
the Group are analyzed as below:
Unit：RMB
June 30 2026
Within one year 1-5 years More than five years Total
Non-derivative financial liabilities
Short-term borrowings 2783133319.60 - - 2783133319.60
Notes payable 612897818.96 - - 612897818.96
Accounts payable 20832902018.65 - - 20832902018.65
Other payable 3055415692.88 - - 3055415692.88
Long-term borrowings (including those due
734962338.53971279986.645067548.611711309873.78
within one year)
Derivative financial liabilities 3897841.90 - - 3897841.90
X. Fair value disclosure
1. The financial assets and financial liabilities measured at fair value at the end of the reporting period
Unit：RMB
Closing fair value
Item
Level 1 Level 2 Level 3 Total
I. Continuous fair value measurement - 2494202826.26 668271418.62 3162474244.88
(I) Derivative financial assets - 31694623.01 - 31694623.01
156Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
1. Financial assets measured at fair value
-31694623.01-31694623.01
through profit and loss
(II) Other non-current financial assets - - 668271418.62 668271418.62
1. Financial assets measured at fair value
--668271418.62668271418.62
through profit and loss
(III) Receivables for financing - 2466406045.15 - 2466406045.15
1. Financial assets measured at fair value
-2466406045.15-2466406045.15
through other comprehensive income
Total assets measured continuously at fair
-2498100668.16668271418.623166372086.78
value
(IV) Derivative financial liabilities - 3897841.90 - 3897841.90
1. Financial liabilities measured at fair
-3897841.90-3897841.90
value through profit and loss
Total liabilities measured continuously at
-3897841.90-3897841.90
fair value
2. The valuation techniques and important parameters used for the Level 2 fair value measurement item
Unit: RMB
Fair value at
Estimation technique Inputs
June 30 2026
Forward exchange rate
Discounted cash flow
Derivative financial assets 31694623.01 Discounted rate that reflects the
approach
credit risk of counterparty
Forward exchange rate
Discounted cash flow
Derivative financial liabilities 3897841.90 Discounted rate that reflects the
approach
credit risk of counterparty
Discounted cash flow Discounted rate that reflects the
Receivables for financing 2466406045.15
approach credit risk of counterparty
3. The valuation techniques and important parameters used for the Level 3 fair value measurement item
Unit: RMB
Fair value at
Items Valuation techniques Inputs
June 30 2026
Comparable public companies' PB
Other non-current financial assets-- Market approach/Income (price/book value) ratio within the
668271418.62
Investment in equity instruments approach same industry/Future cash flows
Discount rate
4. The adjustment information between the opening and closing book value of the Level 3 fair value measurement
item
Unit: RMB
Other non-current financial assets Amount
Book value on January 1 2026 589955315.74
Increase in the current reporting period 70042643.25
Changes in fair value booked into profit and loss during the current reporting period 8273459.63
Book value on June 30 2026 668271418.62
The total amount included in profit or loss in the first half of 2026 includes unrealized gains of RMB8273459.63(first
half of 2025: RMB37607852.79) related to financial assets measured at fair value at the end of the current reporting
period and such gains or losses are included in the gains or losses from changes in fair value.
5. Items measured at continuous fair value. There were no transfers between levels for the current reporting period.
There was no estimation technique change for the current reporting period
157Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
6. Fair values of financial assets and financial liabilities that not measured at fair value
The Group's management team believes that financial assets and financial liabilities measured at amortized cost mainly
include cash and bank balances notes receivable accounts receivable other receivables some other non-current assets
non-current assets due within one year long-term receivables short-term borrowings notes payable accounts payable
other payables some non-current liabilities due within one year long-term borrowings long-term payables etc. book
value of which approximates to its fair value.XI. Related party relationships and transactions
1. Information on parent company of the Company
Shareholding ratio of Percentage of voting
Place of Nature of
Name Registered capital parent company in the rights of parent company
registration business
Company (%) to the Company (%)
CETHIK Group Co. Ltd. Hangzhou Industrial
RMB945 million 37.28 37.28
(CETHIK) Zhejiang investment
The actual controlling party of the Company is CETC.
2. Information on the subsidiaries of the Company
For details of the subsidiaries of the Company see (Note (VII.1)).
3. Information on the joint ventures and associates of the Company
Joint ventures and associates that had related party transactions with the Group in the current reporting period or in the
prior periods and formed balances are as follows:
Name of the associates or joint ventures Relationship with the Group
Maxio Technology (Hangzhou) Co. Ltd. and its subsidiaries (Note 1) Associate
Zhiguang Hailian Big Data Technology Co. Ltd. and its subsidiaries (Note 1) Associate
Jiaxing Haishi JiaAn Zhicheng Technology Co. Ltd. (Note 1) Associate
Sanmenxia Xiaoyun Vision Technology Co. Ltd. (Note 1) Associate
Taifang Zhigan (Chongqing) Technology Co. Ltd. and its subsidiaries (Note 1) Associate
Jiangsu Haishi Kaitai Technology Co. Ltd. (Note 1) Associate
Terapark (Nanjing) Ltd. (Note 1) Associate
Guangxi Haishi Urban Operation Management Co. Ltd. and its subsidiaries (Note 2) Joint venture
Shenzhen Haishi Urban Service Operation Co. Ltd. and its subsidiaries (Note 2) Joint venture
Xuzhou Kangbo Urban Operation Management Service Co. Ltd. (Note 2) Joint venture
Yunnan Yinghai Parking Service Co. Ltd. (Note2) Joint venture
Zhejiang City Digital Technology Co. Ltd. (Note 3) Joint venture
Zhejiang Haishihuayue Digital Technology Co. Ltd. (Note 4) Joint venture
Note 1: Those companies are collectively referred to as "associates" in the following disclosures of related party
transactions receivables from related parties and payable from related parties.Note 2: Those companies are collectively referred to as "joint ventures" in the following disclosures of related party
transactions receivables from related parties and payable from related parties.
158Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Note 3: From July 2020 to November 2025 Zhejiang City Digital Technology Co. Ltd. was a joint venture of the Group.In November 2025 the Group completed the external transfer of its equity in Zhejiang City Digital Technology Co. Ltd.The company remained an affiliate of the Group during the period from July 2020 to November 2025.Note 4: From January 2020 to February 2025 Zhejiang Haishihuayue Digital Technology Co. Ltd. was a joint venture of
the Group. In February 2025 the Group included it in consolidated financial statements. The company remained an affiliate
of the Group during the period from January 2020 to February 2025.
4. Information on other related parties
Name (Note 1) Relationship
Close family member of the Company’s above 5% shareholder(s)
Shanghai Fullhan Microelectronics Co. Ltd. and its subsidiaries act(s) as controller(s) or person(s) acting in concert with the
controller(s) of this company
Close family member of the Company’s above 5% shareholder(s)
Guangdong Hutong Technology Co. Ltd.acts as the director of this company
Shareholder(s) that hold(s) more than 5% shares of the Company
Shenzhen Guoteng'an vocational education Technology Co. Ltd.serve(s) as the director(s) of this company
The Company's senior management serve(s) as director(s) of this
Confirmware Technology (Hangzhou) Co. Ltd. and its subsidiaries
company
Zhejiang Fast Line data fusion Information Technology Co. Ltd. The Company's senior management was(were) director(s) of this
and its subsidiaries (Note2) company
Chengdu Guoshengtianfeng Network Technology Co. Ltd. and its The Company's senior management serve(s) as director(s) of this
subsidiaries company
Shenzhen Wanyu Security Service Technology Co. Ltd. and its The Company's senior management serve(s) as director(s) of this
subsidiaries company
The Company's independent director(s) serve(s) as director(s) of
Ningbo Industrial Internet Research Institute Co. Ltd.this company
The Company's former chairman(chairmen) of Board of the
INESA Group Ltd. and its subsidiaries (Note3)
Supervisors was(were) the director(s) of this company
The Company's former chairman(chairmen) of Board of the
Shanghai Vico Precision Mold & Plastics Co.Ltd. (Note 4)
Supervisors was(were) the independent director(s) of this company
The Company's former chairman(chairmen) of Board of the
Bank of Tianjin Co. Ltd. and its subsidiaries (Note5)
Supervisors serves as the independent director(s) of this company
Under common control of the actual controlling party of the
Subsidiaries of CETC (Note6)
Company
Note 1: Those companies (excluding subsidiaries of CETC) are collectively referred to as "other related parties" in the
following disclosures of related party transactions receivables from related parties and payable from related parties.Note 2: Guo Xudong the Company’s senior management served as a director of this company. Guo Xudong departed this
company in March 2025 and therefore this company was recognized as a related party of the Group from during 2025
and from Jan 2026 to March 2026.Note 3: Lu Jianzhong the Company’s former chairman of Board of the Supervisors once served as a director of this
company. Lu Jianzhong departed this company in September 2025 and departed from the chairman position of the
Company in September 2025. Therefore this company was recognized as a related party of the Group during 2025 and
from Jan 2026 to September 2026.Note 4: Lu Jianzhong the Company’s former chairman of Board of the Supervisors once served as an independent director
of this company. Lu Jianzhong departed this company in June 2024 and departed from the chairman position of the
Company in September 2025. Therefore this company was recognized as a related party of the Group from Jan 2025 to
June 2025.Note 5: Lu Jianzhong the Company’s former chairman of Board of the Supervisors served as an independent director of
this company. Lu Jianzhong departed from the chairman position of the Company in September 2025. Therefore this
company was recognized as a related party of the Group during 2025 and from Jan 2026 to September 2026.Note 6: Subsidiaries of CETC excluding Hikvision and its subsidiaries.
159Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
5. Related party transactions
5.1 Related party transactions regarding sales and purchases of goods provision of services and receiving services
Purchase of commodities / receiving of services:
Unit: RMB
Amount occurred in the Amount occurred in the first
Related party Transaction type
first half of 2026 half of 2025
Purchase of materials and
Subsidiaries of CETC 1787980465.09 1034278846.14
receiving of services
Purchase of materials and
Joint ventures 5553006.02 4353416.21
receiving of services
Purchase of materials and
Associates 116271540.34 99577523.53
receiving of services
Purchase of materials and
Other related parties 931403558.86 380085408.98
receiving of services
Total 2841208570.31 1518295194.86
Sales of commodities / rendering of services:
Unit: RMB
Amount occurred in the Amount occurred in the first
Related party Transaction content
first half of 2026 half of 2025
Sales of products and
Subsidiaries of CETC 96260355.73 60368573.76
rendering of services
Sales of products and
Joint ventures 4761168.93 7198061.83
rendering of services
Sales of products and
Associates 12377541.69 9331947.22
rendering of services
Sales of products and
Other related parties 4874688.15 11847614.71
rendering of services
Total 118273754.50 88746197.52
Fixed asset purchase and sales:
Amount occurred in the Amount occurred in the first
Related party Transaction content
first half of 2026 half of 2025
Subsidiaries of CETC Purchase fixed assets - 5267436.42
Total - 5267436.42
5.2 Related party lease
The group severs as leasee
Unit: RMB
Rental income confirmed in the first Rental fee confirmed in the first half
Lessor Type of leased assets
half of 2026 of 2025
Subsidiaries of CETC House 2045671.92 56319.31
Associates House 169335.52 -
Total 2215007.44 56319.31
The group serves as leasee
Unit: RMB
Rental fee confirmed in the first half of Rental fee confirmed in the first half
Lessor Type of leased assets
2026 of 2025
Subsidiaries of CETC House 23351.59 -
Total 23351.59 -
160Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
5.3 Transactions from other related parties
Statement of capital deposits
Unit: RMB
Balance at the end
Related party Content of related Amount occurred in Amount occurred in
of the current Opening balance
(Note) party transaction the first half of 2026 the first half of 2025 reporting period
(Withdraw)
Subsidiaries of CETC (1856019612.72) 4440090336.34 (74324.75) 6296109949.06
Deposit
Total (1856019612.72) 4440090336.34 (74324.75) 6296109949.06
Note: Deposits placed by the Group in CETC Finance Co. Ltd. including time deposits of RMB50000000.00 at the end
of the period (beginning balance: RMB50000000.00) and current deposits of RMB4390090336.34 (beginning balance:
RMB6246109949.06). Interest income earned on deposits during the period was RMB2652383.39 (first half of 2025:
RMB13230.81).Information on entrusted loan
During the current reporting period the Company issued entrusted loans of RMB1289 million (first half of 2025:
RMB2345 million) to its subsidiaries through CETC Finance Co. Ltd. and paid transaction fee of RMB128900.00 (first
half of 2025: RMB234500.00) to CETC Finance Co. Ltd.Working Capital Loan Situation
During the current reporting period the subsidiary of this Group Wuhan Hikvision Storage Technology Co. Ltd.borrowed working loans of RMB100000000.00 (first half of 2025: none). from China Electronics Technology Finance
Co. Ltd. with interest of RMB 955361.11 recognized for CETC Finance Co. Ltd. (first half of 2025: none).At the end of this period the subsidiaries of this Group Hangzhou Hikvision Automotive Technology Co. Ltd. in and
Whst Co. Ltd. had working capital loan balances of RMB 300000000.00 (beginning of period: RMB 300000000.00)
and RMB 187000000.00 (beginning of period: RMB 187000000.00) respectively from China Electronics
Technology Finance Co. Ltd. The interest recognized for China Electronics Technology Finance Co. Ltd. for this
period was RMB 3182583.33 (first half of 2025: RMB 1847222.23) and RMB 1983810.28 (first half of 2025: none)
respectively.Information on entrusted management
On 10 April 2024 EZVIZ Network a subsidiary of the Group and CETHIK the parent company of the Group entered
into an entrusted management regarding Furui Technology. According to the agreement EZVIZ Network paid the
entrusted management fee to CETHIK. During the period the amount of the entrusted management fee was
RMB232291.28 (first half of 2025: RMB237453.31).
6. Receivables from related parties and payables to related parties
6.1 Receivables from related parties
Unit: RMB
Closing balance Opening balance
Item Related Party
Account balance Bad debts provision Book value Bad debts provision
Notes receivable
and accounts Subsidiaries of CETC 33869838.17 195849.67 119145263.13 486011.50
receivable
Notes receivable Joint ventures - - 598804.83 -
and accounts
161Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Closing balance Opening balance
Item Related Party
Account balance Bad debts provision Book value Bad debts provision
receivable
Notes receivable
and accounts Associates 12271678.27 - 10899272.78 -
receivable
Notes receivable
and accounts Other related parties 1410036.69 - 3233621.00 -
receivable
Total 47551553.13 195849.67 133876961.74 486011.50
Unit: RMB
Closing balance Opening balance
Item Related Party
Account balance Bad debts provision Book value Bad debts provision
Accounts
Subsidiaries of CETC 332701383.54 185173629.66 374875770.53 211167399.98
receivable
Accounts
Joint ventures 12432931.75 1189553.36 13379632.75 1337322.50
receivable
Accounts
Associates 33123433.10 11131994.14 41456884.77 11006962.31
receivable
Accounts
Other related parties 5581851.85 316979.99 5743013.53 272584.64
receivable
Total 383839600.24 197812157.15 435455301.58 223784269.43
Unit: RMB
Closing balance Opening balance
Item Related Party
Account balance Bad debts provision Book value Bad debts provision
Contract assets (including
Subsidiaries
the portion included in 5007543.01 39058.84 4909705.07 35349.88
of CETC
other non-current assets)
Contract assets (including
the portion included in Joint ventures 5191001.20 40489.81 6753209.12 48623.11
other non-current assets)
Contract assets (including
the portion included in Associates 188075.00 1466.99 188075.00 1354.14
other non-current assets)
Contract assets (including
Other related
the portion included in - - 17100.00 123.12
parties
other non-current assets)
Total 10386619.21 81015.64 11868089.19 85450.25
Unit: RMB
Item Related Party Closing balance Opening balance
Prepayments Subsidiaries of CETC 1844955.47 772646.46
Total 1844955.47 772646.46
Unit: RMB
Closing balance Opening balance
:Item Related Party
Account balance Bad debts provision Book value Bad debts provision
Other receivables Subsidiaries of CETC 193454.25 1556.02 181934.70 786.29
Other receivables Joint ventures 137160.50 1069.85 152410.50 1097.35
Total 330614.75 2625.87 334345.20 1883.64
Unit: RMB
162Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Closing balance Opening balance
Item Related Party
Account balance Bad debts provision Book value Bad debts provision
Long-term receivables Subsidiaries
(including those due within of CETC 1498754.63 15234.94 - -
one year)
Long-term receivables
(including those due within Joint ventures 15293101.10 1019764.11 19048495.64 617949.42
one year)
Total 16791855.73 1034999.05 19048495.64 617949.42
6.2 Payables to related parties
Unit: RMB
Item Related party Closing balance Opening balance
Short-term borrowings Subsidiaries of CETC 587344047.22 487217388.61
Total 587344047.22 487217388.61
Unit: RMB
Item Related party Closing balance Opening balance
Notes Payables Subsidiaries of CETC 21042797.16 26919760.88
Notes Payables Other related parties 4416579.75 1750206.38
Total 25459376.91 28669967.26
Unit: RMB
Item Related party Closing balance Opening balance
Account payables Subsidiaries of CETC 724556519.70 732509260.10
Account payables Joint ventures 758932.07 1301743.39
Account payables Associates 69173443.94 68368304.00
Account payables Other related parties 611084948.19 398382295.10
Total 1405573843.90 1200561602.59
Unit: RMB
Item Related party Closing balance Opening balance
Contract liabilities Subsidiaries of CETC 3416871.95 24718252.58
Contract liabilities Joint ventures 3819452.18 3838356.67
Contract liabilities Associates 230807.06 417528.56
Contract liabilities Other related parties 435283.61 10354.56
Total 7902414.80 28984492.37
Unit: RMB
Item Related party Closing balance Opening balance
Other payables Subsidiaries of CETC 4838092.88 7870382.71
Other payables Joint ventures 30000.00 33000.00
Other payables Associates 792715.00 779495.00
Other payables Other related parties 372000.00 372000.00
Total 6032807.88 9054877.71
\
Unit: RMB
163Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Item Related party Closing balance Opening balance
Long-term payables Subsidiaries of CETC 9749569.60 9749569.60
Total 9749569.60 9749569.60
Unit: RMB
Item Related party Closing balance Opening balance
Lease liabilities (including
Subsidiaries of CETC 218806.59 -
those due within one year)
Total 218806.59 -
XII. Share-based payments
1. Overview of share-based payments
Scheme of Staff Co-Investment in Innovative Businesses
On October 22 2015 The Company considered and approved Management Measures for Core Staff Co-Investment in
Innovative Businesses (Draft) (hereafter referred to as "Management Measures") at the 2nd extraordinary general meeting.On March 7 2016 representative congress of labor union of Hikvision passed Implementation Provisions for Management
Measures for Core Staff Investment in Innovative Businesses (hereafter referred to as "Provisions") to initiate and
implement the incentive mechanism of staff co-investment (hereafter referred to as "Staff Co-Investment Plan") in
innovative business subsidiaries. Staff who participate in the Staff Co-Investment Plan (hereafter referred to as "Co-
Investment Staff") signed an Entrusted Investment Agreement with the labor union committee of Hikvision (hereafter
referred to as "Hikvision Labor Union") to entrust Hikvision Labor Union to make investments. Hikvision Labor Union
as a principal shall cooperate with a trust company which shall be a limited partner (LP) of a partnership enterprise to
establish a trust plan and to invest trust funds into innovative business subsidiaries. (Investment form described above is
referred to as "Co-Investment Platform").Staff Investment Plan is classified as plan A and plan B according to applicable grantees. Grantees of plan A are comprised
of medium-and-senior level management personnel and core competent staff from the Company its branches and
subsidiaries and are able to invest in all innovative businesses. Grantees of plan B are comprised of core and full-time
staff from innovative business subsidiaries and its branches and subsidiaries and could participate in investment on
innovative business subsidiaries where they serve. The Co-Investment Platform will increase capitals regularly the
corresponding increased equity of which will be distributed to core staff who meets investment conditions pursuant to
particular rules. The waiting period shall be five years after equity of Co-Investment Platform is held by the staff. Within
the waiting period if the labor relationship between the grantees and the Company or its subsidiaries is released or
terminated equity of Co-Investment Platform held by the grantees shall be refunded and settled by the labor union at an
agreed price pursuant to the Provisions.The Co-Investment Platform grants Co-Investment Staff additional equity regularly. The Group determines whether share-
based payment shall be constituted based on the fair value of equity instruments newly obtained by the Group's staff in
Co-Investment Platform on each granting date.In December 2020 Co-Investment Staff signed a Supplemental Agreement of Entrusted Investment Agreement (hereafter
referred to as "Supplemental Agreement") with Hikvision Labor Union. On December 25 2020 the Company held the
20th meeting of the 4th session of the Board of Directors and reviewed and approved the Proposal on Amending the
Management Measures for Core Staff Co-Investment in Innovative Businesses. The new version of the Management
Measures for Core Staff Co-Investment in Innovative Business (hereinafter referred to as the "new version of the
Management Measures") added the confirmation of the shares held by employees in the co-investment plan and the rights
and interests indirectly held by employees in innovative business subsidiaries clarified the approach of the co-investment
shares after the employees lost or cancelled the co-investment qualification and added the Management Committee and
other systems.On December 31 2020 the Executive Management Committee of the Co-investment Plan adopted the Implementation
Rules for the Management Measures for Core Staff Co-Investment in Innovative Businesses (hereinafter referred to as the
"new version of the Rules"). According to the new version of the Management Measures and the new version of the Rules
164Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
for the confirmed shares of plan A the waiting period is the fifth anniversary of the employee's work in the Company or
its subsidiaries. For the confirmed shares of plan B the waiting period is the fifth anniversary of the employee's work in
the innovative business subsidiary or its subordinate subsidiary company corresponding to the Plan B.
2. Information of the share-based payment through equity settlements
Scheme of Staff Co-Investment in Innovative Businesses
Unit: RMB
Scheme of Staff Co-Investment in Innovative Businesses
Method of determine the fair value of equity
Determined using the income approach on the grant date.instruments at the grant date
Recognition basis of the number of the equity
Determined by estimating the attrition rate for each vesting period.instruments qualified for vesting
Accumulative amount of share-based payment
through equity settlement and further included in the 1112457437.87
capital reserve
Total amount of the expenses recognized according
to share-based payment through equity settlement in 38355271.71
the current reporting period
Among total amount of the expenses recognized according to share-based payment through equity settlement during the
current reporting period amount of RMB7034513.54 was due to share distributions to minority shareholders.
3. There is no share-based payment through cash settlements
4. There is no amendment and termination of share-based payment during the current reporting period.
XIII. Commitments and contingencies
1. Significant commitments
1.1 Capital commitments
Unit: 000 RMB
Closing balance Opening balance
Contracted but not yet recognized in financial statements
- Commitment on construction of long-term assets 2941169 3222615
- Commitment on external investments 2440 2440
Total 2943609 3225055
2. Contingencies
The Group has no significant contingencies to be disclosed.XIV. Events after the balance sheet date
1. Significant unadjusted events
As of July 24 2026 the Company has no significant events after the balance sheet date that need to be disclosed
2. Profit distribution
165Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Pursuant to the 2025 Annual Shareholders' Meeting authorization the Company held the 10th Meeting of the 6th Board of
Directors on July 24 2026 and approved the 2026 interim profit distribution plan: based on the total share capital as of
the equity registration date when the 2026 interim profit distribution plan is implemented the Company will distribute
cash dividends of RMB 5.50 per 10 shares (tax inclusive) to all shareholders. No bonus shares will be issued and no
capital reserve will be converted into share capital.XV. Other significant events
1. Segment information
1.1 Report segment determining and accounting policy
According to the Group's internal organization structure management requirements and internal report principles the
Group has only one operating segment which is the research and development production and sales of AIoT products
and services.External revenue by geographical area & non-current assets by geographical location
Unit: RMB
Item First half of 2026 First half of 2025
External revenue generated in domestic area 29758876223.84 26393423147.63
External revenue generated in overseas area 17063661623.23 15424616940.81
Total 46822537847.07 41818040088.44
Unit: RMB
Item (Note) On June 30 2026 On January 1 2026
Non-current assets in domestic area 25692340327.07 25766322637.89
Non-current assets in overseas area 941127842.82 954163233.45
Total 26633468169.89 26720485871.34
Note: the non-current assets above did not include financial assets long-term equity investment and deferred tax assets.
166Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
XVI. Notes to major items of financial statements of the parent company
1. Accounts receivable
1.1 Disclosure by age
Unit: RMB
Closing account balance Opening account balance
Within credit period 13128032829.68 10683606534.30
Within 1 year after exceeding credit period 9087407486.87 4855584328.79
1-2 years after exceeding credit period 329239573.80 386386949.46
2-3 years after exceeding credit period 177546771.84 197514494.40
3-4 years after exceeding credit period 149521322.57 168115362.26
Over 4 years after exceeding credit period 409056922.09 383677693.76
Subtotal 23280804906.85 16674885362.97
Less: Bad debts provision 765295369.07 745972089.32
Book value 22515509537.78 15928913273.65
1.2 Classification and disclosure by bad debts provision methods
Unit: RMB
167Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Closing balance Opening balance
Account balance Bad debts provision Book value Account balance Credit loss provision Book value
Category
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount Amount Amount
(%)(%)(%)(%)
Provision
for bad
debts on a - - - - - - - - - -
single
basis
Provision
for bad
23280804906.85100.00765295369.073.2922515509537.7816674885362.97100.00745972089.324.4715928913273.65
debts by
portfolios
Total 23280804906.85 100.00 765295369.07 3.29 22515509537.78 16674885362.97 100.00 745972089.32 4.47 15928913273.65
Provision for bad debts by portfolios
Unit: RMB
Closing balance
Customer
Account balance Credit loss provision Proportion (%)
Subsidiaries in the Group 20337739299.25 - -
Portfolio A - - -
Portfolio B 2942947601.94 765177363.41 26.00
Portfolio C 118005.66 118005.66 100.00
Total 23280804906.85 765295369.07 3.29
Description of accounts receivable accrued for bad debts provision by portfolios:
As part of the Company's credit risk management the Company divided accounts receivable into portfolio A portfolio B and portfolio C according risk attributes of
1 68Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
different business area and target and determines the expected credit loss for each portfolio with an impairment matrix based on the aging of accounts receivable over
the reporting period. With respect to accounts receivable arising from companies within the Group the Company considers that the credit risk is low and is not necessary
for bad debts provisions as payments are arranged by the Group according to the cash flow each companies within the Group. The aging information can reflect the
solvency of these three types of customers when the accounts receivable are due.
1.3 Provision for bad debts
Unit：RMB
Changes in the reporting period Translation
differences for
Item Opening balance Transfer or write-off/ Closing balance
Accrual/ (reversal) foreign currency
(recovery)
statements
Accounts receivable 745972089.32 18958696.36 (364583.39) - 765295369.07
Total 745972089.32 18958696.36 (364583.39) - 765295369.07
1.4 Top five debtors based on accounts receivable and contract assets (including other non-current assets) at the end of the reporting period
At the end of the reporting period the aggregate amount of the Company's top five debtors of accounts receivable and contract assets was RMB20187781121.52
(including accounts receivable RMB 20187781121.52) accounting for 86.64% of the total accounts receivable and contract assets at the end of the reporting period
and the provision for bad debts amounted to RMB94965201.01.
2. Other receivables
2.1 Other receivables by categories
Unit: RMB
169Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Item Closing balance Opening balance
Dividends receivable 132204288.80 23946902.38
Other receivables 3687219416.74 4314158141.88
Total 3819423705.54 4338105044.26
2.2 Dividends receivable
Unit: RMB
Item Closing balance Opening balance
Subsidiaries of the Company 132204288.80 23946902.38
Total 132204288.80 23946902.38
2.3 Other receivables
Other receivables by age
Unit: RMB
Item Closing balance Opening balance
Within contract period 3660239245.94 4281648184.54
Within 1 year 23407101.31 31784056.44
1-2 years 5616935.23 1388490.85
2-3 years 1350650.29 1728137.72
3-4 years 1498517.96 1191358.75
Over 4 years 1194142.25 1198443.90
Total 3693306592.98 4318938672.20
Less: Bad debts provision 6087176.24 4780530.32
170Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Book value 3687219416.74 4314158141.88
Other receivables by nature of the payment
Unit: RMB
Nature Closing balance Opening balance
Payments by subsidiaries within the Group 3592066435.80 4207441180.79
Guarantee deposit 42641852.74 44208359.68
Temporary payments for receivables 42687962.69 45844316.12
Others 15910341.75 21444815.61
Total 3693306592.98 4318938672.20
Bad debts provision for other receivables
Unit：RMB
Changes in the reporting period Translation
differences for
Item Opening balance Closing balance
Accrual/(reversal) Transfer or write-off foreign currency
statements
Other receivables 4780530.32 1306645.92 - - 6087176.24
Total 4780530.32 1306645.92 - - 6087176.24
2.4 Top five debtors based on other receivables at the close of the reporting period
At the end of reporting period the aggregate amount of the Company's top five debtors of other receivables was RMB3150425797.22 accounting for 85.30% of the
total other receivables and the Company did not make provision for bad debts here.
171Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Item
Account balance Provisions Book value Account balance Provisions Book value
Investment in subsidiaries 8406903123.08 - 8406903123.08 8360103123.08 - 8360103123.08
Investments in associates and joint ventures 1979725753.42 - 1979725753.42 1375755052.47 - 1375755052.47
Total 10386628876.50 - 10386628876.50 9735858175.55 - 9735858175.55
3.1 Investment in subsidiaries
Unit：RMB
Write-off of Balance of
Increase during Decrease during impairment impairment loss
Name of investee Opening balance the current the current Closing balance provision during the provision at the end
reporting period reporting period current reporting of the current
period reporting period
Hangzhou Hikvision System Technology Co. Ltd. 903765761.48 - - 903765761.48 - -
Hangzhou Hikvision Technology Co. Ltd. 1116114606.67 - - 1116114606.67 - -
Hangzhou EZVIZ Network Co. Ltd. 61201821.95 - - 61201821.95 - -
Hangzhou Hikrobot Co. Ltd. 139214192.63 - - 139214192.63 - -
3.2 Investments in associates and joint ventures
Unit：RMB
1 72Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
Increase/Decrease during the current reporting period
Balance of
Investment
Other Declared cash impairment loss
Name of investee Opening balance income (losses) Provisions Additional Reduced comprehensi Other changes dividends or Closing balance provisions at the
recognized for Others
investments investments ve income in equity profit end of the current
under the impairment
adjustment distribution reporting period
equity method
1. Joint Ventures
Hangzhou Haikang
Intelligent Industrial
Equity Investment 987145908.63 - - 621814929.46 - (253851.32) 20874811.13 - - 1587832175.64 -
Fund Partnership
(L.P.)
Guangxi Haishi
Urban Operation
9417185.52--837133.60-----10254319.12-
Management Co.Ltd.Xuzhou Kangbo City
Operation
9145311.24--9348.87-----9154660.11-
Management Service
Co. Ltd
Others 3796225.38 - - 53648.83 - - - - - 3849874.21 -
Subtotal 1009504630.77 - - 622715060.76 - (253851.32) 20874811.13 - - 1611091029.08 -
2. Associates
Zhiguang Hailian Big
Data Technology Co. 27985612.07 - - 1933446.55 - - - - - 29919058.62 -
Ltd.Others 338264809.63 - - (231857.28) - 4720307.67 4037594.30 - - 338715665.72 -
Subtotal 366250421.70 - - 1701589.27 - 4720307.67 4037594.30 - - 368634724.34 -
Total 1375755052.47 - - 624416650.03 - 4466456.35 24912405.43 - - 1979725753.42 -
173Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
4. Revenue and operating costs
Unit：RMB
First half of 2026 First half of 2025
Item
Revenue Cost Revenue Cost
Major business 11313710887.41 1719350811.66 9452576649.06 1672751742.36
Other business 1431000092.19 110549538.67 1465595941.64 88699283.25
Total 12744710979.60 1829900350.33 10918172590.70 1761451025.61
5. Investment income
5.1 Details of investment income
Unit：RMB
Item First half of 2026 First half of 2025
Long-term equity investment income measured by cost method 679042689.16 312300000.00
Investment income from holding debt investment 27130868.43 24625393.17
Long-term equity investment income accounted for by the equity method 624416650.03 1486825.45
Other 6004781.60 -
Total 1336594989.22 338412218.62
XVII. Supplementary information
1. Items and amounts of non-recurring gains and losses
Unit：RMB
Item Amount Description
Profits and losses from disposal of non-current assets (83102.12) /
The government subsidies included in the current reporting period
excluding government subsidies that are closely related to the
Company's normal business operations comply with national
129501261.00/
policies and regulations are enjoyed in accordance with determined
standards and have a continuous impact on the Company's profit
and loss
Apart from the effective hedging activities related to the Company's
normal business operations the fair value changes in financial
assets and financial liabilities held by non-financial enterprises as 67138227.90 /
well as the gains or losses from the disposal of these financial assets
and liabilities.Gain or loss on debt restructuring 18522982.11 /
Other non-operating income and expense except the items
39644803.76/
mentioned above
Impact of income tax (35606266.92) /
Impact of the minority interests (35361141.52) /
Total 183756764.21 /
174Hikvision 2026 Half Year Report
Notes to Financial Statements
For the reporting period from January 1 2026 to June 30 2026
The preparation basis of the non-recurring profit and loss statement
According to the provisions of the China Securities Regulatory Commission’s Explanatory Announcement No. 1 on
Company Information Disclosure for Publicly Offered Securities — Non-recurring Profit and Loss (Revised in 2023)
non-recurring gains and losses refer to gains or losses arising from transactions and events that are not directly related to
a company’s normal business operations as well as those that are related but due to their special nature and sporadic
occurrence affect the ability of financial statement users to make accurate judgments regarding the Company’s operating
performance and profitability.
2. Return on net assets and earnings per share
The return on net assets and earnings per share have been prepared by Hangzhou Hikvision Digital Technology Co. Ltd.in accordance with the Information Disclosure and Presentation Rules for Companies Making Public Offering of
Securities No. 9 – Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revised in 2010) issued
by China Securities Regulatory Commission.Unit：RMB
Weighted Earnings per share
Profit for the reporting period average return on Basic earnings per Diluted earnings per
net assets share share
Net profit attributable to ordinary shareholders of the
9.17%0.8620.862
Company
Net profit excluding non-recurring items of profit or loss
8.95%0.8410.841
attributable to ordinary shareholders of the Company
175Hikvision 2026 Half Year Report
Section IX Documents Available for Reference
1. The half year report was signed by the Company's legal representative.
2. The financial report was signed and sealed by the person in charge of the Company the person in charge
of accounting work and person in charge of accounting organization.
3. Original copy of all the Company's documents and announcements were published on the newspapers
designated by CSRC within the reporting period.The above documents are completely placed at the Company's Board of Directors' office.Hangzhou Hikvision Digital Technology Co. Ltd.Chairman: Hu Yangzhong
July 25 2026
Note:
This document is a translated version of the Chinese version 2026 Half Year Report (2026 年半年度报告)
and the published announcements in the Chinese version shall prevail. The complete published Chinese
2026 Half Year Report may be obtained at www.cninfo.com.cn.
176
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