1、 Hangzhou Hikvision Digital Technology Co.,Ltd.2018 Annual Report April 20th 2019 Hikvision 2018 Annual Report 1 To shareholders Dear Shareholders,In 2018,Hikvision realized total revenue of RMB 49.84 billion,with a year-over-year growth rate of 18.93 percent;and net profit attributable to the paren

2、t company of RMB 11.35 billion,an increase of 20.64 percent year-over-year.The Company maintained solid growth.Our business faced more challenges in 2018 than in any previous years.The Company was more cautious and conservative on sales strategy than any previous year and put more emphasis on short-

3、term risk management.However,the Company remains upbeat about growth in the domestic and overseas markets in the years ahead.We actively explored business development opportunities in both domestic and foreign markets,and continued to increase investment in product research and development(R&D)and m

4、arketing.In 2018,the Company stepped up the development of its AI Cloud software platform and facilitated the adoption of AI Cloud.In the era of AI,artificial intelligence is everywhere.We see opportunities arising from demand for perceptual AI,and recognize the difficulties in meeting the fragmente

5、d demand for perceptual AI applications.The Company offers an AI open development platform to its clients,allowing them to participate in AI applications with fragmented demands,and protecting their data at the same time.The gradual adoption of AI Cloud will help the Company promote the development

6、of intelligent Internet of Things(IoT),as well as help it advance the integration of IoT with information networks and development of the Companys big data business.To better meet clients needs and enhance operating efficiency,the Company has restructured its traditional security segments into publi

7、c business group(PBG),enterprise business group(EBG),and small and medium enterprise business group(SMBG).The Company will adopt different business strategies for its various business groups and offer a variety of products and system solutions.Meanwhile,the development of our innovative businesses i

8、s in line with our expectations.The external environment remains uncertain to some extent in 2019.However,regardless of how the external environment evolves,the Company will continue to make R&D investments to Hikvision 2018 Annual Report 2 ensure the competence of its products and system solutions,

9、ramp up investments in customer services to enhance customer satisfaction,optimize internal operations management to improve operating efficiency,push forward with its globalization strategy,and step up investments in the international markets.We remain confident about our future.The Company will ad

10、dress unconventional business challenges thoughtfully,while continually improving and growing.With an open,transparent and sincere attitude,we are ready to respond to uncertainties stemming from various challenges.We firmly believe that we can go further only by constantly improving ourselves.In clo

11、sing,we would like to express our heartfelt gratitude to all shareholders for trusting,understanding and supporting the Companys operation and management team.See far,go further!Board of Hangzhou Hikvision Digital Technology Co.,Ltd.April 2019 Hikvision 2018 Annual Report 3 Section I Important Notes

12、,Contents and Definitions The Board of Directors,Board of Supervisors,directors,supervisors and senior management of Hangzhou Hikvision Digital Technology Co.,Ltd.(hereinafter referred to as the“Company”)hereby guarantee that the information presented in this report shall be together be wholly liabl

13、e 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.Chen Zongnian,the Companys legal representative,Jin Yan,the person in charge of the accounting work,and

14、 Zhan Junhua,the person in charge of accounting department(accounting supervisor)hereby declare and warrant that the financial statements in this report are authentic,accurate and complete.The Companys chairman Chen Zongnian,and director Gong Hongjia,Qu Liyang,Hu Yangzhong,Wu Weiqi,independent direc

15、tor Lu Jianzhong,Wang Zhidong attended the board meeting to review this report in person.Independent director Cheng Tianzong and Hong Tianfeng were unable to attend the board meeting in person due to personal reasons,and authorized independent director Wang Zhidong and Lu Jianzhong to attend and exe

16、rcise the voting right on their behalf respectively.The profit distribution proposal passed upon deliberation at the meeting of the Board of Directors is set out as follows:Based on the Companys current total share capital of 9,348,465,931 shares,the Company proposed to distribute cash dividend of R

17、MB 6(tax inclusive)per each 10 shares to all shareholders,bonus share and share distribution from capital reserve is nil.Note:This document is a translated version of the Chinese version 2018 Annual Report(“2018 年年度报告”),and the published announcements in the Chinese version shall prevail.The complet

18、e published Chinese 2018 Annual Report may be obtained at .Hikvision 2018 Annual Report 4 Please read the annual report and pay particular attention to the following risk factors:1)Risk of technology upgrade:Technologies such as artificial intelligence,big data,cloud computing,and edge computing are

19、 developing rapidly,and technology diffusion is faster.If the Company cannot follow the changes in the cutting-edge technologies,or fail to realize the business innovation rapidly,the risks of future development uncertainties will increase.2)Domestic macro-economy fluctuation risk:The Companys domes

20、tic business is closely related to the investment needs of the government,enterprises and institutions.The Company adjusts its business strategy in response to the changing domestic demands.If the domestic macro-economy continues to decline,the industry demand will shrink.The Companys development wi

21、ll face great pressure;and difficulties and risks in business operation will increase.3)Trade protectionism risks in developed countries:The trend of unilateralism and trade protection in some of the countries is obviously rising.If the trend of reverse globalization is aggravated,it will affect the

22、 Companys business expansion and brand upgrading in overseas developed markets.4)Risk of global market expansion:The Companys business covers more than 150 countries and regions worldwide.If various situations such as foreign exchange rate fluctuation,debt problem,declining purchasing power,or polit

23、ical conflict occur in the country where our business is carried out,there might be adverse impact on the Companys business development.5)Risk of internal management:The continual expansion of business scale,the continuous increase of new products and new businesses,the sustained growth in total num

24、ber of employees and the significant rise of internal management complexity have posed challenges to the Companys management work and raised higher requirements on the Companys management team.The Companys sustainable development will face certain risks if the management level fails to match up with

25、 the Companys business expansion.6)Legal compliance risk:The worlds multilateral trading system is facing an impact.The local laws and regulations that business activities need to comply with are more complicated.The regulation of data worldwide is becoming stricter,and the compliance review of busi

26、ness is becoming more important.If the Companys legal compliance ability cannot keep up with the situation,it will bring risks to the Companys operations.7)Risk of cybersecurity:The Company has always attached importance and taken active measures to enhance cybersecurity performance of our products

27、and systems,However,with any Internet-connected device,there is still a possibility of deliberate attempts，including computer viruses,malicious software,hacker and similar disruptions to damage our systems or products,causing the cybersecurity issues.8)Risk of exchange rate fluctuation:The Company c

28、arries out operations in various countries and regions with different currencies.The risk of exchange rate mainly comes from foreign exchange exposures arising out of sales,purchase and financing that not settled in RMB(mainly in USD)as well as the exchange rate fluctuations,which may probably affec

29、t the profitability level of the Company.9)Risk of intellectual property(IP)rights:The Company continues to maintain the relative large scale of Hikvision 2018 Annual Report 5 R&D investment,and produces considerable technical achievements,and at the same time,implements well-organized intellectual

30、property right(IPR)protection measures.However,the risk of intellectual property disputes and the risk of intellectual property rights violations still exist.The above notices might not be all-inclusive of all other potential risks,please pay attention to the potential investment risks Hikvision 201

31、8 Annual Report 6 CONTENTS To shareholders.1 Section I Important Notes,Contents and Definitions.3 Section II Corporate Profile&Key Financial Data.9 Section III Corporate Business Summary.14 Section IV Operation Discussion and Analysis.58 Section V Significant Events.81 Section VI Changes in Shares a

32、nd Information about Shareholders.103 Section VII Information of Preferred Shares.114 Section VIII Information about Directors,Supervisors,Senior Management.115 Section IX Corporate Governance.136 Section X Corporate Bonds.148 Section XI Financial Report.149 Section XII Documents Available for Refer

33、ence.274 Hikvision 2018 Annual Report 7 Definitions Term Definition Reporting Period From January 1st 2018 to December 31st 2018 Articles of Associations Articles of Associations for Hangzhou Hikvision Digital Technology Co.,Ltd Hikvision,our Company,the Company Hangzhou Hikvision Digital Technology

34、 Co.,Ltd CETHIK CETHIK Group Co.,Ltd.Controlling Shareholder of the Company Innovative Co-investment Partnership Hangzhou Hikvision Equity Investment Partnership(Limited Partnership)EZVIZ,EZVIZ Network Inc.Hangzhou EZVIZ Network Ltd.(According to the context,also refers to the corresponding business

35、)Hikvision Robotics Hangzhou Hikvision Robtics Technology Ltd.(According to the context,also refers to the corresponding business)Hikvision Automotive Technology,Hikvision Automotive Electronics Hangzhou Hikvision Automotive Electronics Ltd.(According to the context,also refers to the corresponding

36、business)Hikvision Weiying Hangzhou Hikvision Weiying Sensor Technology Ltd.(According to the context,also refers to the corresponding business)Hikvision Storage;Hikvision Smart Storage Wuhan HIK Storage Technology Ltd.(According to the context,also refers to the corresponding business)Hikvision Hui

37、ying Hangzhou HIK Huiying Technology Ltd.(According to the context,also refers to the corresponding business)Security Industrial Base(Tonglu)Located in Tonglu economic development area,Hangzhou,Zhejiang province,purposes for production factories,warehousing logistics center.Initially disclosed in An

38、nouncement about the Companys Investment in Tonglu to Set up Wholly Owned Subsidiary and New Hikvision Security Industry Base(Tonglu)Project(关于在桐庐投资设立全资子公司及新建海康威视安防产业基地（桐庐）项目的公告)(NO.2014-044).Internet Security Industry Base Located in Binjiang district,Hangzhou,Zhejiang province,purposes for the off

39、ice building.Initially disclosed in Announcement about the Companys New Construction of Internet Security Industry Base Project(关于新建海康威视互联网安防产业基地项目的公告)(NO.2014-035).Chongqing Manufacture Base Located in Chongqing,purposes for manufacturing facility,initially disclosed in Announcement about Resolutio

40、n of the 20th Meeting of the 3rd Session Board（No：2016-068）Innovative 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

41、 disclosed in Announcement about Management Measures for Core Staff Investment in Innovative Business(核心员工跟投创新业务管理办法)().In this report,innovative business also refers to EZVIZ,Hikvision Robtics,Hikvision Hikvision 2018 Annual Report 8 Automotive Electronics,Hikvision Weiying,Hikvision Storage,Hikvis

42、ion Huiying and their related business or products.Euro Bond The Company publicly issued the bond with nominal value amounting to Euro 400 million;and the bond was settled,listed and traded on the Irish Stock Exchange on February 18th 2016.For details,please refer to Announcement about Issuing Forei

43、gn Currency Bond(关于境外发行外币债券的进展公告)(NO.2016-004)Hikvision 2018 Annual Report 9 Section II Corporate Profile&Key Financial Data I.Corporate Information Stock abbreviation HIKVISION Stock code 002415 Stock exchange where the shares of the Company are listed Shenzhen Stock Exchange Name of the Company in

44、 Chinese(if any)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(if any)HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO.,LTD Abbr.of the Company name in English(if any)HIKVISION Legal representative Chen Zongnian Registered address No.555 Qianmo Road,Binjiang Distric

45、t,Hangzhou Postal code of Registered address 310051 Business address No.518 WuLianWang Street,Binjiang District,Hangzhou Postal code of Business address 310051 Company website E-mail ; II.Contacts and contact information Board Secretary Securities Affairs Representative Name Huang Fanghong Address N

46、o.518 WuLianWang Street,Binjiang District,Hangzhou Tel.; Fax E-mail III.Information disclosure and place of the report Newspaper designated by the Company for information disclosure Securities Times,Shanghai Securities Journal Website specified by CSRC for rel

47、ease of the Annual Report Place where the Annual Report is available for inspection Office of the Board of Directors of the Company Hikvision 2018 Annual Report 10 IV.Company Registration and Alteration Organization code 996106P Changes in principle business activities since the Company w

48、as listed(if any)During the reporting period,the Company operating range newly added fire control products.After the change,the Companys business scope is:research and development(R&D)and production of electronic products(including explosion-proof electrical products,communication equipment and rela

49、ted ancillary equipment,multimedia equipment),fire control products,aircrafts,robots,intelligent equipment,auto parts and accessories,automotive electrical signal equipment;Sales of self-produced products;provide technical services,electronic technology consulting service,training service(excluding

50、the organizational training),electronic equipment installation;electrical engineering,design,construction and maintenance of intelligent system projects.(except country prohibited and restricted items,relating to the specific mandatory license certificate)(subject to ratification in accordance with

51、the project,approved by the relevant departments to operate)Changes of controlling shareholders of the Company(if any)No change during the reporting period V.Other Relevant Information Accounting firm engaged by the Company Name of the accounting firm Deloitte Touche Tohmatsu Certified Public Accoun

52、tants LLP Business address of the accounting firm 30F Bund Center 222 Yan An Road East Shanghai Name of accountants for writing signature Mou Zhenfei,Zhang Shushu Sponsor institution engaged by the Company to continuously perform its supervisory function during the Reporting Period Applicable Inappl

53、icable Financial advisor engaged by the Company to perform the duties of continuous supervision during the reporting period Applicable Inapplicable Hikvision 2018 Annual Report 11 VI.Key accounting data and Financial Indicators Whether the Company performed a retroactive adjustment or restatement of

54、 previous accounting data Yes No Unit:RMB 2018 2017 YoY Change(%)2016 Operating income(RMB)49,837,132,481.61 41,905,476,572.07 18.93%31,934,544,088.82 Net profits attributable to shareholders of the Company(RMB)11,352,869,241.32 9,410,855,084.82 20.64%7,423,683,960.91 Net profits attributable to sha

55、reholders of the Company excluding non-recurring gains and losses(RMB)10,983,228,170.60 9,177,116,964.06 19.68%7,270,742,762.47 Net cash flows from operating activities(RMB)9,114,013,286.06 7,373,160,250.68 23.61%6,216,364,642.05 Basic earnings per share(RMB/share)1.240 1.030 20.39%0.818 Diluted ear

56、nings per share(RMB/share)1.234 1.024 20.51%0.817 Weighted average ROE 33.99%34.96%-0.97%34.58%At December 31st 2018 At December 31st 2017 YoY Change(%)At December 31st 2016 Total assets(RMB)63,484,352,233.42 51,570,963,466.61 23.10%41,348,428,750.40 Net assets attributable to shareholders of the Co

57、mpany(RMB)37,590,154,638.46 30,358,072,874.22 23.82%24,285,707,211.82 The total share capital of the Company as of the previous trading day of the annual report disclosure:The total share capital of the Company as of the previous trading day of the annual report disclosure(share)9,348,465,931 Fully

58、diluted earnings per share(RMB/share)calculated with the latest share capital 1.214 Whether there is a corporate bond:Yes No Whether the Company has continuous losses in the last two years Yes No Not applicable Hikvision 2018 Annual Report 12 VII.Differences in Accounting Data between Domestic and O

59、verseas 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 asse

60、ts 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 App

61、licable 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 accoun

62、ting standards Applicable Inapplicable VIII.Key Quarterly Financial Indicators Unit：RMB Whether there is significant difference between the above individual or aggregate financial indicators and that of what disclosed in the quarterly report,half-year report Yes No 1st Quarter 2nd Quarter 3rd Quarte

63、r 4th Quarter Operating income 9,364,828,201.00 11,510,930,023.63 12,926,932,976.48 16,034,441,280.50 Net profit attributable to shareholders of the Company 1,815,964,569.77 2,331,430,966.09 3,248,407,615.14 3,957,066,090.32 Net profit attributable to shareholders of the Company excluding non-recurr

64、ing gains and losses 1,808,323,790.71 2,200,947,170.54 3,142,725,705.56 3,831,231,503.79 Net cash flows from operating activities -3,856,064,680.53 2,234,871,322.53 4,267,464,655.50 6,467,741,988.56 Hikvision 2018 Annual Report 13 IX.Items and Amounts of Non-recurring Gains and Losses Applicable Ina

65、pplicable Unit：RMB Item 2018 2017 2016 Profit or loss from disposal of non-current assets(including the write-off for the impairment provision of assets)4,975,825.83 1,585,222.50-736,149.02 The government subsidies included in the current profits and losses(excluding the government subsidy closely r

66、elated to regular course of business of the Company and government subsidy based on standard quota or quantitative continuous application according to the state industrial policy.)319,304,315.50 184,557,043.27 171,321,088.31 Net gains and losses from beginning of the reporting period to the merge da

67、te for the subsidiary merged involving enterprises under common control-42,070.90 3,949,938.20 Profits and losses attributed to change in fair value for held-for-trading financial assets and held-for-trading financial liabilities,and investment income from disposal of held-for-trading financial asse

68、ts,held-for-trading financial liabilities and available-for-sale financial assets,excluding the effective hedging business related to the regular business operation of the Company.62,153,461.82 86,740,196.23 321,708.86 Other non-operating income and expenditures except the items mentioned above 94,6

69、51,413.78 30,044,820.52 18,276,871.37 Less:Impact of income tax 84,510,487.85 50,405,620.44 36,000,258.26 The impact of the minority interests(after tax)26,933,458.36 18,741,470.42 4,192,001.02 Total 369,641,070.72 233,738,120.76 152,941,198.44 Explain the reasons if the Company classifies an item a

70、s a non-recurring gain/loss according to the definition in the,or classifies any non-recurring gain/loss item mentioned in the aforementioned note as a recurrent gain/loss item Applicable Inapplicable In the reporting period,the Company did not classify an item as a non-recurring gain/loss according

71、 to the definition in the into a recurrent gain/loss item Hikvision 2018 Annual Report 14 Section III Corporate Business Summary I.The principal business of the Company during the reporting period 1.Main Business and industry position Hikvision is a provider of video-centered intelligent IoT(Interne

72、t of Things)solution and big data services.Global research firm IHS Markit has ranked Hikvision as global No.1 in the video surveillance industry for seven consecutive years,with 22.6 percent1 of the global video surveillance market share.In the A&S Security 50 list published by A&S Security Automat

73、ion,Hikvision has been ranked No.1 in the world for three consecutive years.In 2016,Hikvision integrated deep learning algorithm into products,and launched a full range of deep learning and intelligent product families that integrate intelligent analysis capabilities throughout the entire process fr

74、om information gathering to storage application.In 2017,Hikvision led the intelligent application trend based on the fusion of cloud and edge computing architectures,innovatively launching the three-tier AI Cloud architecture of edge node,edge domain and cloud center,and vigorously promoting the dev

75、elopment and application of AI(artificial intelligence)in the IoT field.In 2018,based on the fusion of cloud and edge computing architectures,Hikvision deepened and integrated the AI Cloud product line with Two Pools,One Library and Four Platforms2 and proposed the AI Cloud data architecture with th

76、e fusion of IoT and Information Networks.During the implementation of the business,the Company focused on solving the scenario-based and fragmented AI application and the difficulties in the implementation of user needs,unified the software architecture internally and promoted the open integration s

77、trategy externally,and changed and restructured the internal organizational structure to match the business changes.Hikvision has laid a solid foundation for the arrival of the intelligent era.2.Technology Accumulation and Innovation 2.1 Technical Architecture Overview The interconnection of all thi

78、ngs is the cradle of the concept of the Internet of Things,which depicts a 1 Based on the global video surveillance market report published by IHS Markit in June 2018,with the 2017 data as the statistical basis.2 Refers to“Computing Resource Pool,Data Resource Pool,Algorithm Warehouse,Data Resource

79、Platform,Intelligent Application Platform,Resource Scheduling Platform,Operation and Service Platform.Hikvision 2018 Annual Report 15 broader scene for human beings after the Internet era.However,how to make objects see,listen,read and write like humans?How to make objects respond intellectually?And

80、 how to make the interconnection between things integrate into human beings production and living environment to truly form a meridian system?The application of deep learning drives the combination of artificial intelligence and the perceptual information of objects such as video,audio and text,and

81、gives objects intelligence,making it possible for the objects to respond intellectually.When intelligent objects are interconnected into a network,the intelligent Internet of Things is created.At present,the scale and scope of intelligent IoT is expanding,no longer limited to homes,production lines,

82、buildings,etc.The intelligent IoT is a new infrastructure of the intelligence era.From the perspective of computing,computing architecture with the fusion of cloud and edge is required in the intelligent era.The fusion of cloud and edge computing is a computing architecture that conforms to intellig

83、ent IoT applications and is the allocation method of computing resources that Hikvision adopts and advocates.On one hand,even if cloud computing power is strong enough,some data only needs to be locally processed and applied,and does not need to be transmitted to the cloud for processing.On the othe

84、r hand,the scale of the intelligent IoT is so large that it is unrealistic for all data to be transmitted to the cloud for processing,and the growth of bandwidth will not be able to keep up with the growth of IoT data.For example,for video cloud,a current topic in the industry,there is basically no

85、video processed in the cloud,but mainly structured data3,small videos and images that are processed by edge computing.Hikvisions AI Cloud computing architecture can be summarized as the fusion of cloud and edge computing and consists of edge nodes,edge domains and cloud centers.Edge nodes and edge d

86、omains are located in the intelligent IoT and make full use of edge computing capabilities;and cloud centers are located in the intelligent IoT or information networks to form cross-network cloud computing capabilities.Edge nodes focus on collection of multi-dimensional perception data and front-end

87、 intelligent applications;edge domains focus on aggregation of perception data and intelligent applications;and cloud centers focus on cross-network data fusion and macro comprehensive applications.3 Structured data:Data that is logically expressed and implemented by a two-dimensional table structur

88、e,strictly following the data format and length specifications,and is mainly stored and managed through a database.Hikvision 2018 Annual Report 16 From the perspective of data,the data in the intelligent IoT cannot be well used by the information system and by users until it is organized according t

89、o the models required by the information network and fused in the information network.The intelligent IoT is closely fused with various information networks such as the Internet and industry information networks to truly realize a full interaction with humans.The connection between intelligent objec

90、ts and information systems is the fusion of IoT and information Networks,which will open the data channel between the intelligent IoT and information networks;it is also the meridian system of data in the intelligent era.The fusion of IoT and information networks is the data architecture suitable fo

91、r applications under intelligent IoT and information network and the data organization form that Hikvision AI Cloud complies with and advocates.Hikvision 2018 Annual Report 17 Hikvision AI Clouds data architecture can be summarized as“the fusion of IoT and information networks,which supports resourc

92、e governance,data governance,data fusion,data services,and data applications across the intelligent IoT and information networks.The main capabilities of AI Cloud Data Fusion Platform can be summarized as horizontal cross-network fusion,vertical cross-layer convergence,dual-network three-type applic

93、ations,and data security protection.Horizontal cross-network fusion:First,regarding data source governance,it is necessary to solve the quality problem of intelligent IoT data source.Second,for intelligent analysis,it is necessary to use artificial intelligence to transform IoT data into easy-to-und

94、erstand data such as people,places,things and objects in the information network.Third,on IoT data services,it is necessary to send the data to information networks for fusion with other data while supporting intelligent applications of IoT.Finally,in respect to converged data governance,it is neces

95、sary to organize the data according to the theme library4,topic library5,tag library or relationship library,and then provides converged data services to support the development of information network data applications.Vertical cross-layer convergence:Hikvision provides data platform cascading funct

96、ion to support the upward on-demand data convergence in both the intelligent IoT and information networks.Dual-network three-type applications:In the intelligent IoT and information networks,three types of applications may be developed based on the intelligent application platform:single-scene appli

97、cations,cross-scene applications,and comprehensive applications.4 Theme Library:a business subject-oriented database.5 Topic Library:a database addressing a certain professional application.Hikvision 2018 Annual Report 18 Data security protection:In the AI Cloud Data Fusion Platform,Hikvision focuse

98、s on data protection from four angles:data collection,transmission and storage,data services,and data applications.Data security is protected at four levels:development and testing,delivery and implementation,data governance,and operation and maintenance.The number of IoT devices worldwide will exce

99、ed 20 billion by the year 20206.The intelligent IoT will be characterized by larger number of terminals,more diverse terminal types,more powerful terminal performance,more complex network architecture,more extensive data content,and more diverse business applications.Therefore,it is necessary to str

100、engthen data security protection and privacy protection at multiple levels such as terminal,network,data,platform services,and applications.2.2 AI Cloud Software and Hardware Platforms 2.2.1 AI Cloud Software Products Hikvision firmly believes that the AI Cloud architecture is a reasonable solution

101、to the fusion and application of intelligent IoT and information network.In 2018,Hikvision fully released software products of two pools,one library and four platforms based on the AI Cloud architecture by implementing the cloud-edge fusion computing architecture,and continuously deepened the implem

102、entation of the IoT-information network fusion data architecture in practice,and further integrated the two pools,one library and four platforms into an“AI Cloud Data Fusion Platform,continuously consolidating the layout in AI,big data and application areas and leading the market through technologic

103、al innovation and product innovation.6 https:/ Hikvision 2018 Annual Report 19 Through the resource management and scheduling platform,Hikvision realized the unified management of various resources such as IoT perception,computing storage,intelligent algorithm and software service.In addition,by int

104、roducing the standardization of algorithm library,the pooling of computing storage resources and other management tools,Hikvision provides unified access,centralized management,flexible scheduling,and other functions for heterogeneous computing storage resources and algorithm resources,providing mor

105、e flexible choices for users and intensifying users investments.The software in the algorithm library supports unified management scheduling of different types of intelligent algorithms from different vendors.It not only realizes the unified management scheduling of Hikvisions own algorithms for hum

106、an face,human body and vehicle,etc.,but also completes the algorithm docking with the ecological partners,which have been implemented in a number of projects.Through the data resource platform,Hikvision provides the capabilities of data convergence,data storage,data fusion,data computation,data shar

107、ing and data universal applications,supporting the fusion between business data in the information system and IoT perception data.By providing rich toolkits such as data aggregation,data governance,multi-dimensional data modeling,data sharing and opening,and universal fusion applications,the data re

108、source platform provides users with a one-stop solution to various problems such as the lack of data specifications,low data quality,difficult data convergence and management,insufficient data mining,and high data management costs,helping users to quickly realize the delivery of data platforms and s

109、upporting Hikvision 2018 Annual Report 20 data fusion and application.Hikvision takes advantage of the intelligent application platform to provide agile development,integration,and operational support for applications.The application developers can quickly develop,seamlessly integrate and rapidly de

110、ploy applications that fulfill specific business demands by following a unified integration specification for technical architecture,and leveraging the development interfaces such as device access,intelligent resolution,platform services,and universal applications provided by the intelligent applica

111、tion platform.Through the operation and maintenance service platform,Hikvision realized various functions including rapid fault identification,response tracking,service evaluation,and statistical assessment of IoT resources and IT resources,and solved the problem of unified operation and maintenance

112、 management of equipment with multiple types,large quantity and scattered distribution,which effectively improves the efficiency of fault handling and ensures the operational stability of the video surveillance system.2.2.2 AI Cloud Hardware Products In 2018,centering around the AI Cloud architectur

113、e,the Company continued to deepen and improve the layout of hardware products in respects of edge nodes,edge domains and cloud centers.Hikvision 2018 Annual Report 21 Hikvision continued to break through in imaging,fill-in light,video-structuring and intelligence technologies in front-end products,f

114、rom Darkfighter to DarkfighterX,from white fill-in light to hybrid fill-in light,from monocular structure to multi-cular structure,and from single intelligence to fully structured hybrid intelligence.Driven by the business demand,we layered products and intelligence;based on application scenarios,we

115、 fully upgrade our products through deeply understanding users needs.A rich family of future-oriented AI products was gradually formed,including light intelligence,ubiquitous intelligence,full structuring,intelligent DarkfighterX7,and hybrid intelligence8 series of products.7 Intelligent Darkfighter

116、X series cameras adopt dual light fusion+hybrid fill-in light technology,and enable capturing high-definition color feature images at night without light pollution,and are able to capture features in more distant and complex scenes through the adaptive image algorithm for feature capture.8 Hybrid in

117、telligence series cameras adopt advanced structural design,hardware architecture and high-performance intelligent chip and can perform target detection,active sensing and feature capture of people,vehicles and events in the monitoring scene;realized scene integration,device integration,installation

118、integration and business integration,and enabled efficient capture of more dimensional and more efficient data while fulfilling the coverage of the monitoring scene.Hikvision 2018 Annual Report 22 In 2018,Hikvisions back-end products continued to develop in the areas of AI intelligence,big data and

119、fused storage.Focusing on customer demands,Hikvision greatly improved the accuracy,performance and fused application level of AI for the back-end intelligent products,and continued to lead the intelligent video surveillance market.The central intelligent analysis products are oriented to industry ma

120、rkets such as safe city and smart transportation.Hikvision put forward the concept of full analysis of video intelligence,full compatibility of computing resources,and full openness of engines and data in order to form an abundant and open series of central intelligent products and ecosystem,and has

121、 achieved good market performance.In terms of big data,Hikvision 2018 Annual Report 23 Hikvision implemented fused storage and associated applications of multi-dimensional data,and fused security data with business data,laying a foundation for data governance business.The Company innovatively introd

122、uced a server for data model comparison to convert module data into fully structured information data,enabling unified management of data in a true sense.In 2018,Hikvision continued to expand the central display business field,and achieved interactive access to information,intelligent display of inf

123、ormation,and comprehensive presentation of big data through diversified display approaches such as seamless splicing,transparency,curved surface,touch control,holographic display.For example,Hikvisions small-pitch LED products,which are based on Zhenshi image processing technology,realized ultra-hig

124、h contrast and ultra-high-definition seamless splicing display and were widely used in places such as monitoring centers and command centers.In terms of display control products,Hikvision enabled the classic products such as decoders,splicing controllers and video comprehensive platforms based on th

125、e technologies of video and audio processing,multimedia data integration,ultra-high definition,AI,and clustering and scattering control,diversifying the applications of monitoring centers and command centers,and maintained the leading position in the industry.In 2018,based on solid technology accumu

126、lation in the fields of image capture and AI algorithm,Hikvision improved the DeepinGo(明眸)series of close-range facial recognition products.In numerous edge-node applications such as access control,attendance checking,consumption,visitors management,elevator control,personnel access,etc.,the new pro

127、ducts have greatly expand the application scenarios of facial recognition technology with rapid response speed,a more friendly human-equipment interaction,and support for larger volume face comparison and live detection.The“DeepinGo”series products not only upgrade the traditional one card access co

128、ntrol system to the one face system,but also effectively improve the security,convenience and accuracy of the system.Hikvision 2018 Annual Report 24 In 2018,Hikvision continued to promote the implementation of its AI Cloud products and solutions for intelligent transportation.Based on customer deman

129、d,Hikvision integrated videos with multi-dimensional perception technologies,and created a fused domain product package which consists of intelligent traffic cameras and intelligent road terminals.To practice the core value of“improve traffic order,alleviate traffic jams,prevent traffic accidents,en

130、hance traffic safety,and facilitate transportation”,Hikvision innovated its traffic applications to help further develop the market.The“Environment-Friendly Access Control System”,equipped with snap cameras,made a technological breakthrough and solved the problem of white-light sharp flash,a light p

131、ollution problem troubling the industry for more than ten years,and was recognized with many awards.In respect to the comprehensive governance of road traffic,Hikvisions innovative applications,including“high beam inspection for vehicles”,“jaywalker”,“pedestrians first”,“snap camera system for horni

132、ng”,and“inspection of vehicles emitting black smoke”,played a role in building safe cities.As for static traffic,Hikvision launched cutting-edge radar products utilizing the technology of multi-dimensional perception:trigger-based radar and smash-proof radar,which simplifies the construction and mai

133、ntenance by discarding induction coils and solves parking problems for users,thus facilitating traffic.In 2018,Hikvision launched the development of smart fire control products.Relying on the Companys video and AI technology,combined with multi-dimensional perception,narrow-band transmission and oth

134、er IoT technologies,the front-end sensors are able to collect key fire control data and upload it to the platform in real Hikvision 2018 Annual Report 25 time for data analysis and remote monitoring.Through the integration of security and fire control businesses,we launched an integrated solution fo

135、r security and fire control,which is widely applicable to urban key units,nine small places9,schools,hospitals,banks,enterprise campuses and government buildings to enhance the level of fire control information construction in various industries and promote smart fire control constructions.2.3 AI Op

136、en Platform Based on the scenario-based and fragmented characteristics of intelligent application,we believe that open integration is the development trend of the video industry and will become a new business format in the era of intelligence.In order to achieve open integration,Hikvision establishe

137、d a complete open system.The demand for AI in the real economy is very strong and the application of AI has emerged in large numbers in a scenario-based and fragmented manner.AI applications require many conditions such as data,algorithm,computing power,products and application systems;therefore,it

138、is difficult to implement the applications in the real economy.In order to build an open and shared AI industry ecological environment and help the implementation of AI,Hikvision launched the AI open platform to provide complete services from demand mining to application release and to help industri

139、es to upgrade.The AI open platform has two purposes.The first purpose is to help customers with zero algorithm basis to develop their industrys intelligent algorithms;the open platform incorporates a number of cutting-edge technologies and has three major characteristics:1)It utilizes virtual data e

140、ngine10,transfer learning11,incremental learning12,and other technologies,and can 9 Nine small places refer to small schools or kindergartens,small hospitals,small stores,small restaurants,small hotels,small recreational bars and clubs,small Internet bars,small beauty salons or bathhouses,and small

141、production and processing enterprises.10 Virtual data engine:generates image data through 3D modeling,ray tracing,adversarial learning and other approaches;its visual effects are close to those of on-site collection.Hikvision 2018 Annual Report 26 quickly generate AI algorithms that meet scenario-ba

142、sed demands,based on a small amount of data;2)Algorithm training,compilation,optimization and deployment are all automatically implemented,and the platform provides one-stop services to customers with zero algorithm basis.The platform can be combined with Hikvisions application systems to solve the

143、last mile problem of AI visual perception applications,and implement continued collection of data and loop iterative optimization of algorithm model under production environment;and 3)Based on Hikvisions hardware foundation,the platform can easily build intelligent products with powerful sensing cap

144、abilities.The second purpose is to help AI practitioners to have their own intelligent hardware products and solutions.The large-scale implementation of AI technology in Chinas real economy requires a large number of AI practitioners to carry out continuous mass innovation with mass wisdom.However,A

145、I practitioners often lack the suitable products to carry their algorithms in the current time.For this reason,Hikvision has opened a full range of front-end and back-end AI hardware products to help AI practitioners realize their AI functions and solutions.Our open systems for equipment include:11

146、Transfer learning is a learning method for robots,enabling a robot to apply the knowledge and techniques learned from former tasks to new tasks.12 Incremental learning refers to learning new knowledge by a learning system from new samples,storing most of the knowledge it has learned and overcoming c

147、atastrophic losses of memory.The system does not have to visit original data,and is able to enhance its performance on an overall data set merely by learning new data.Hikvision 2018 Annual Report 27 1)Hikvision equipment operating system,which provides various basic capabilities of the equipment inc

148、luding image processing,coding and decoding,storage and transmission;2)Integrated development kit,which opens the equipments AI computing resources based on the container technology,enabling users to integrate their own algorithms on the product;and 3)A variety of supporting services provided in the

149、 cloud,including the compiling environment,testing environment,app stores,and authorization tools.In 2018,Hikvision successfully applied the AI open platform to intelligence upgrade in multiple areas.In pharmaceutical enterprises,the platform helped the standardized review of production behavior of

150、employees and reduced safety hazards in production.In food production enterprises,it enabled“Transparent Kitchen”and guaranteed safe production and standardized storage of food.In the field of natural resources,it empowers“weather identification”and promotes intelligent meteorological observation.In

151、 addition,due to the very fragmented business scenario,a series of problems from customers,delivery and R&D have emerged during the process of software development,delivery and maintenance,including product integration and unification,version upgrade,and repetitive development.Hikvision has comprehe

152、nsively upgraded its software engineering capabilities and practices and reconstructed the original software R&D model by establishing a Unified Software Technology Architecture.The software R&D has changed the development model from driven by market demand to driven by both market demand and techno

153、logy planning,in order to finally realize the sustainable and rapid introduction of high-quality software products to meet the rapidly growing demand of the software market,providing support for the Companys strategic planning.Hikvision 2018 Annual Report 28 Based on years of accumulation in the fro

154、nt-end field,Hikvision also introduced an evaluation system of scientific deployment of front-end video surveillance products,which links business applications with front-end constructions,defines a variety of equipment capability models and scenario evaluation models,enables the evaluation of the r

155、easonableness of the front-end construction plans and the actual construction results of front-end products,and outputs evaluation reports and optimization suggestions to guide the scientific deployment of the front-end points.3.Transformation and restructuring of business architecture Since 2009,th

156、e Company has launched solutions that carry a vertical industrial layout covering seven industries,including public security,transportation,law enforcement,finance,education and healthcare,energy,and building,and 40 sub-industries to drive the rapid development of its business and lead the security

157、industry into a solution-oriented era.To better adapt to customers demands and improve internal operational efficiency,the Company initiated the transformation and restructuring of its business architecture in 2018.Through reorganizing and integrating the resources,the Company divided its domestic b

158、usiness into three business groups of PBG(Public Business Group),EBG(Enterprise Business Group)and SMBG(Small and Medium Enterprise Business Group)to more specifically target different types of markets and customers and more effectively Hikvision 2018 Annual Report 29 coordinate internal resources.T

159、he PBG(Public Business Group)business team,which was established based on the traditional three business departments of public security,transportation and law enforcement,primarily specializes in urban governance and urban services,adapts to the block module of the administrative regions,and conform

160、s to the overall operational needs of urban governance and urban services;the EBG(Enterprise Business Group)business team,which was established based on the traditional four business departments of traditional finance,energy,building,and education and healthcare,mainly serves the traditional large-s

161、cale enterprise market,adapts to the strip model of the group enterprises and meets the vertical operation management needs of group enterprises;the SMBG(Small and Medium Enterprise Business Group)business team,which was established based on the traditional channel distribution management team,mainl

162、y focuses on the small and medium-sized enterprise market services,striving to create an industry ecosystem and platform that integrates product distribution,installation and operation and maintenance services,as well as SaaS sharing.3.1 Public Business Group(PGB):Data-driven urban governance 3.1.1

163、Principal business Digital government construction is a vital move to implement the Internet power strategy,the digital China strategy and the smart society strategy.Hikvision PBG relies on the urban big data platform to promote urban digitalization and intelligent transformation,and facilitate sust

164、ainable urban development.Centering on digital government,digital economy and digital society,Hikvision PBG establishes data sharing,exploits data value,focuses on urban governance,and creates a new era of AI Cloud Internet of Things(IoT).Data-driven urban governance uses data for analysis,decision-

165、making,management and innovation.Taking urban governance as an example,things as small as well covers and street lamps and as big as bridges and tunnels,and other matters ranging from the flow and stop of vehicles,gathering and dispersal of people to market states and public opinions,could all be an

166、alyzed and summarized through informational means such as IoT perception technology and big data analysis.Through the search and analysis of various types of data such as traffic data,tourism data,daily life consumption data,government data,medical data and leisure data,we can find all kinds of hidd

167、en problems and events,provide timely warning and reminder,carry out linked handling of events,promote coordinated management of multiple governance entities,and improve the level of refined urban governance.With AI Cloud as the core technology framework,Hikvision PBG sets up a unified intelligent p

168、erception network for cities to achieve the complete perception collection of city states,features and events,builds twin Hikvision 2018 Annual Report 30 digital cities coexisting with physical cities,establishes a unified urban big data platform,and takes advantage of this platform to carry out the

169、 sharing,development and governance of urban data,empowering the intelligent applications of various industries and fields of the cities,upgrading the integrated government service system,and enhancing the sense of well-being and security of the masses.3.1.2 Core technology:AI Cloud“Hikvision Red Di

170、gital Forest”platform“Hikvision Red Digital Forest”,the urban IoT intelligent cloud platform of Hikvision PBG under the AI Cloud architecture,is the brain center for implementing AI Cloud.Compared with the previous video networking sharing platforms,the“Hikvision Red Digital Forest”platform not only

171、 has a stronger access capabilities for video and IoT resources,but also has the capability for fusion,correlation and deep mining of IoT data and business data,the capabilities for unified management and scheduling and self-training of multiple AI algorithms,as well as the capabilities for the pool

172、ing of computing storage resource and flexible computing,which enables it to carry IoT basic application,smart applications and big data applications across multiple industries and provide strong support for the implementation of industry solutions such as smart policing,smart transportation,smart s

173、ecurity supervision,smart city management,and smart government.Cloud-edge fusion,intelligent“perception”:The“perception”capability refers to the capability to extract targets such as people,cars and objects,and their attributes such as the license plates,vehicle models and colors of cars from the vi

174、deo images.The efficient collaboration between cloud computing and edge computing greatly Hikvision 2018 Annual Report 31 enhances the systems intelligent“perception”capabilities.Based on the demands from intelligent application scenarios,the corresponding AI algorithms,computing power,data and serv

175、ices can be scheduled on demand;with part of the data processed on the edge node side and part of the data processed on the platform side,the two sides cooperatively work together to achieve optimal system performance.At the same time,the platform,with AI algorithm training capability,can train a ne

176、w AI algorithm based upon the data accumulated on it;and the new AI algorithm can be loaded into edge devices to meet the new intelligent application demands.Data fusion,deep“cognition”:The“cognition”capability means to discover the essence behind the data based on multidimensional big data mining a

177、nalysis.From the perspective of application demands,the big data“cognition”capability of a system can be built by integrating IoT data,business data and Internet data.Based on application demands,data could be converged on demand,various basic libraries,theme libraries,and topic libraries can be con

178、structed,and algorithm models such as regional collision,regularity analysis,frequency analysis,integral warning,and relational graphs can be extracted and summarized.In this way,lager amount and better quality data will be gradually accumulated,the data will support more and more in-depth applicati

179、ons.Comprehensive opening,empowering various industries:we have fully opened the data from all kinds of basic libraries,theme libraries and topic libraries,and the interfaces such as IoT basic services,intelligent analysis services,big data fused analysis services,algorithm library services,AI train

180、ing services,and intelligent application services.We also supported integration with third-party platforms to achieve the complementarity of capabilities and to support industry ecosystems.3.1.3 Industry application scenarios Hikvision PBGs solutions cover all aspects of public services.The solution

181、s in four aspects,namely public security,traffic and travel,ecological protection,and peoples livelihood services,are taken as examples to represent how intelligence and data can drive intelligent urban governance.Solutions for public security Hikvision PBG provides solutions for public security,aim

182、ing to further improve the three-dimensional social security prevention and control system,strengthen the technological prevention capabilities of public security,enhance the level of grassroots services,advance the construction of a safer China,and establish a social governance model based on colla

183、boration,co-construction,and sharing.Following the core design concept of“multi-dimensional perception,sharing and co-construction,Hikvision 2018 Annual Report 32 network-wide intelligence,and smart governance”,the Company deployed a multi-dimensional perception system in different regions and scena

184、rios,and constructed an organically integrated comprehensive three-dimensional front-end perception system,in order to achieve all-round,all-weather multi-dimensional information perception and collection.The video information data is deeply integrated with technologies such as artificial intelligen

185、ce and big data to realize dynamic information perception,accurate data analysis and business intelligent assistance,which lays a solid foundation for scientific decision-making and command,efficiently combating crimes,precise risk prevention and control,and innovative social governance.Through cons

186、tructing a public security video image information exchange resource pool with consistent technical standards and uniform requirements,implementing effective hierarchical integration of various video image resources,and facilitating point location complementation,network interconnection and platform

187、 interoperability,the networking integration of video image resources in public areas is maximized.The Company established cross-regional,cross-departmental and cross-level video image information exchange,integrated the sharing and scheduling mechanisms,and provided visualized government management

188、 supporting services for public security,transportation,railway,urban management,fire control,environment protection,forestry,safety supervision,finance,food and medicine,and other departments under the premise of ensured safety and controllability.Solutions guaranteeing“traffic and travel”Hikvision

189、 PBG furnishes“traffic and travel”solutions for scenarios such as urban traffic management,transportation hubs,public transportation,traffic network,and cargo transportation,utilizing artificial intelligence and big data technology to make“traffic and travel”safer,more convenient and more efficient.

190、In the field of urban traffic management,AI+IoT perception technology could help optimize the signal system of urban roads and alleviate urban traffic congestion;in the field of public transportation,intelligent identification technology could actively detect the abnormal behaviors of drivers and pa

191、ssengers of buses,taxis,freight vehicles,and dangerous goods vehicles,and issue timely warning to ensure the safety of public travel.The big data+Internet technology could be utilized to optimize the connection and scheduling of various traffic tools,optimize traffic network,and enhance traffic effi

192、ciency;for example,big data analysis could help bus companies optimize bus routes and optimize taxi distribution,so that the traffic and travel become more efficient and convenient.Industry solutions for safeguarding“Clear Water,Blue Sky and Green Mountains”Hikvision PBG offers a series of industry

193、solutions for safeguarding“Clear Water,Blue Sky and Green Hikvision 2018 Annual Report 33 Mountains”to achieve the comprehensive protection of air,water and ecology.Through AI visual perception technology,together with IoT technology,it is possible to detect excessive emission of industrial waste ga

194、s,open-air straw burning,smoky vehicles on the road,as well as dust on construction sites and roads in a timely manner,reducing air pollution and protecting the natural outdoor environment for the public to enjoy.The implementation of pollution source monitoring and Chief Mechanism for Rivers13 ensu

195、res that unlawful emission and emission leakage from enterprises,abnormal sewage discharge into the rivers and lakes,floating garbage on the river,and pollution risk in water sources can be discovered quickly,reducing industrial and domestic sewage pollution and guaranteeing the safety of drinking w

196、ater.The application of high-altitude observation,unmanned aerial vehicles(UAV)and other technical means could help find out ecological destruction behaviors in time within the red-line area of ecological protection including overgrazing,dam building,road repairing,mining,and soil breaking.Besides,t

197、he application of ecological environment big data exerts a positive role in pushing forward the overall protection and system restoration of mountains,rivers,forests,farmlands,lakes,and grasslands,and safeguarding“Clear Water,Blue Sky and Green Mountains.”Industry solutions for improving peoples liv

198、elihood services Hikvision PBG launches livelihood service solutions that enhance the convenience and precision service capabilities of government centers through the application of face recognition and IoT technology.For instance,by performing video identification of people who have made a reservat

199、ion and automatically arranging the order for them,the handling process can be shortened;by equipping face authentication devices in the number-taking and handling process,business handling will become more efficient and convenient;by monitoring the condition of common facilities that serve the mass

200、es and delivering the information in time,the public can be better served.Through the application of video networking and AI visual perception technology,the internal management level of government centers is enhanced.For instance,the behavior of window service personnel can be intelligently analyze

201、d in order to improve window service quality;the above technology can also conduct non-inductive attendance for internal staff,and carry out intelligent reporting of unusual events such as fights and quarrels in public areas.Based on big data analysis,face and business big data,targeted return visit

202、s could be achieved,which could help find problems easily and avoid repeated visits.13 Chief Mechanism for Rivers:Principals of party and government departments at all levels act as“river chiefs”to be responsible for organizing and leading the management and protection of the corresponding rivers an

203、d lakes.Hikvision 2018 Annual Report 34 3.2 Enterprise Business Group(EGB):Visual perception assists enterprises in reducing costs and improving efficiency 3.2.1 Principal business Digitalization has exerted a great impact on all walks of life and has become a key factor in the transformation of ent

204、erprises.Based on its understanding and insight into the business,Hikvisions EBG launches products and solutions centered on video networking and AI visual perception technology for enterprise users.In process of digital transformation,we are building a bridge between the physical world and the digi

205、tal world,propelling the Internet of Everything,and empowering industry users to realize intelligent industrial upgrades with AIOT as the core.The digital architecture of an enterprise can be divided into four layers:infrastructure,business applications,management tools,and decision-making support.A

206、s the traditional principal business of EBG,the security business focuses on the infrastructure of enterprises.In 2018,Hikvision EBG continued to enhance its insight and understanding of industry business,extended its business around the business applications and the management tools of enterprises,

207、and helped enterprise users achieve business means innovation and improve management efficiency,which significantly improved the business value recognition by users.Using visual perception as the most effective digital means,Hikvision EBG plays an important role in the digital transformation of all

208、walks of life.3.2.2 Core technology:The AI Open Platform acts as the engine.The Integrated Application Platform and the Cloud Visualized Management Platform act as two driving wheels Hikvision 2018 Annual Report 35 In the business scenarios for various sub-industries,Hikvisions EBG takes the AI Open

209、 Platform as the innovation engine and the Integrated Application Platform and the Cloud Visualized Management Platform as two driving wheels,to provide users with solutions and products based on visual perception capabilities.It takes advantage of the AI Open Platform to explore and fulfill the vis

210、ual perception demands based on personalized scenarios,utilizes the Integrated Application Platform and the Cloud Visualized Management Platform to build a video grid system and satisfy video networking demands based on privatized deployments and Internet application scenarios,jointly builds an indu

211、strial ecosystem with industry users and partners,and serves digital transformation.A one-stop algorithm customized service platform:AI Open Platform The AI Open Platform is Hikvisions one-stop algorithm customized service platform for industry users and ecological partners to meet the demands of sc

212、enario-based visual perception applications in various industries.The AI Open Platform,which has a scenario-based AI development capability,can quickly generate an AI application that meets the users demands based on a small amount of data.After the application is online for use,the new data is supe

213、rimposed and accumulated for incremental training,and the optimization algorithm is continuously iterated.Hikvision EBG relies on the AI Open Platform to enable industry users to rapidly implement applications based on AI visual perception,providing impetus for intelligent upgrade of the industries.

214、Hikvision 2018 Annual Report 36 A privatized management platform:Integrated Application Platform As a privatized management platform of Hikvision EBG for enterprise video networking applications,the Integrated Application Platform relies on Hikvisions unified software technology architecture and pro

215、vides video networking business software management tools(such as smart scenic area management platform,pharmaceutical enterprise behavior supervision platform,and smart construction site management platform etc.)for different industry application scenarios,based on its core capabilities such as IoT

216、 device access and video networking services.By applying componentized development technology,the Integrated Application Platform builds industry application architecture based on business understanding,accumulates businesses with common value,responds quickly to users demands,practically pushes for

217、ward the optimization of business processes and the innovation of business methods,achieves cost reduction and efficiency enhancement,and improves customer satisfaction.The Integrated Application Platform of Hikvision EBG,which is based on visual perception AI capability,runs in a localized deployme

218、nt mode and can adapt to application scenarios of large,medium and small-sized enterprises.It offers professional enterprise applications,rich application interfaces and high quality services,working together with partners to empower corporate customers and help them reduce costs,enhance efficiency

219、and deliver better services.Hikvision 2018 Annual Report 37 An enterprise-level public cloud platform:Cloud Visualized Management Platform The Cloud Visualized Management Platform,relying on equipment access of EZVIZ Cloud,equipment management,stream media,AI model management and other IoT PaaS serv

220、ices,is a public cloud application service portal based on the industrial scenario intelligence that provides SaaS cloud services to chain business,community,general education and other sub-industries,and propels enterprises to evolve from manual operation to partially intelligent operation,and then

221、 to fully intelligent operation.Meanwhile,by continuously strengthening its basic capabilities and leveraging API openness,the Cloud Visualized Management Platform builds an ecosystem and forms ecosystem cloud service capabilities.The Cloud Visualized Management Platform offers enterprise-level SaaS

222、 services to sub-industries and dedicates to help enterprises enhance the visualization,standardization and intelligent management capabilities.Currently,it has covered the typical industry scenarios including chain retail,community,general education,logistics,etc.In the chain retail industry,the Cl

223、oud Visualized Management Platform enables managers to complete site management more efficiently through remote video inspection,and enables operators to make better marketing decisions by collecting and analyzing the structured data in multiple aspects such as customer flow,human face,human body,et

224、c.In the community scenario,the Cloud Visualized Management Platform helps property management companies achieve efficient and unified management of residents,visitors,employees and vehicles,and provides residents with safe,convenient and high quality life service experience.In general-education sch

225、ools,Hikvision 2018 Annual Report 38 the Cloud Visualized Management Platform delivers a whole set of campus security solutions to middle and primary schools as well as kindergartens,establishes intelligent campuses with the help of facial attendance and electronic class board,and provides networkin

226、g supervision system for education management departments at all levels so as to realize the networking of multi-dimensional data including video,alarm and students attendance.In the logistics industry,the Cloud Visualized Management Platform supplies video networking,vehicle networking and security

227、 check networking services for scenarios such as logistics parks and delivery lockers,and keeps upgrading centered on people,vehicle,goods,warehouse and safety to facilitate the refined operations of logistics enterprises.And in the field of alarm operation,the Cloud Visualized Management Platform s

228、upports the acquisition and processing as well as storage and analysis of mass data such as alarm signals,real-time information and video streaming media,and assists alarm operators in rapidly possessing large cross-regional alarm operational coordination capability,command and dispatch capability a

229、s well as emergency disposal service capability.In addition,the Cloud Visualized Management Platform,as a public cloud application service portal on the basis of sub-scenario-based fragmentized intelligence,relies on the AI Open Platform of the Company to carry out and implement the corporate strate

230、gy of“video+AI”.With public cloud structure,the Cloud Visualized Management Platform furnishes users with business application value as well as outstanding value in lightweight deployment,convenient implementation and ongoing optimization and upgrading.3.2.3 Industry application scenarios Hikvision

231、EBGs business covers nearly 20 sub-industries.From the perspective of business integration,the business can be summarized into four main lines:business world,social energy,better lives and wealth growth.Hikvision 2018 Annual Report 39 Industry solutions serving the“business world”Hikvision EBG offer

232、s business area solutions for manufacturing,logistics and retail,with an aim of helping business operators achieve cost reduction and efficiency enhancement and lightening management anxiety.Large video networking makes employees work centralized and intensive,while AI visual perception technology a

233、llows machine-replacing-people and results in a reduction in the number of indirect staff and a compression in the working hours of direct staff,which improves efficiency.For instance,remote video store inspection can replace the traditional offline store inspection of retail enterprises;the AI visu

234、al perception technology can be applied to analyze the waiting time of workers in the production process,optimize the time distribution of workers in different types of production teams,and reduce the indirect waiting time of direct personnel.The digitalization of behavioral standards and management

235、 practices can improve staff efficiency,and the digitization of business processes,business scenarios and production facilities can bring about process optimization and intelligent improvement of asset application efficiency.For instance,precise insight about consumers can be realized through an ana

236、lysis of distribution of passenger flow and customer group of retail stores;the“two-ticket and three-system mechanism”14 of the electric power industry can be implemented,accident prevention capability of electric power enterprises can be enhanced,and human-factor accident and serious misoperation a

237、ccident can be prevented with the help of techniques like face recognition;the digitization of electric power production facilities can be realized through intelligent reading technology for meters and the inspection efficiency can be improved thanks to the intelligent reading technology for meters.

238、Safety production assurance solutions,anti-theft solutions,as well as integrated security and fire protection solutions help reduce safety concerns.In the field of manufacturing,these solutions cover the factory area and the workshop.For instance,best practices for production line workers at pharmac

239、eutical enterprises can be 14 Two tickets:work ticket and operation ticket;three systems:shift system,tour inspection system,and equipment periodic testing and rotation system.Hikvision 2018 Annual Report 40 standardized by intelligent behavioral analysis to ensure the safety of pharmaceutical produ

240、ction;in the field of logistics and transportation,these solutions cover the whole logistic park area to realized visualized tracking of the whole process of goods movements and visualized dispatch of the platform resources.Industry solutions serving“social energy”Hikvision EBG provides a range of i

241、ndustry solutions for“social energy”,covering primary energy acquisition such as grain growing,oil extraction and coal mining,secondary energy processing such as oil refining and power generation,as well as energy use at gas stations and in the power transmission and distribution.Safe production sol

242、utions are ideal for outdoor areas and harsh environments,and reduce safety risks of personnel operations,environmental changes and equipment production through AI visual perception technology.For example,intelligent,reliable and effective remote control means are available for unattended stations t

243、o reduce personnel costs and help build ubiquitous IoT through video visualized inspection.Intelligent analysis and alarm can be used to minimize dangerous behaviors such as people intruding into dangerous zones and irregular operation,by means of AI visual perception technology;and technical suppor

244、t can be provided for the fusion of IoT and information networks through linkage with an enterprise information system.The traceability supervision solutions ensure grain production and food production,realize visualization of traceability,and assist process supervision and automatic identification.

245、For instance,real-time detection can be carried out for various indicators of the grain planting environment via dynamic environment detection,to realize real-time supervision of food production environment;all-time intelligent detection can be conducted for ensuring that staffs wearing the uniforms

246、,and supervising the kitchen environment of various catering units in the application zones by AI visual perception technology,and problems like multiple supervision departments and wide scope of supervision could be solved though linkage with regulatory information platform,to build Hikvision 2018

247、Annual Report 41 transparent kitchens.Industrial IoT solutions based on visual perception are helpful for energy enterprises to cut cost,improve quality,speed up processes and improve capital investment.For example,in the metallurgical industry,intelligent observation and analysis of short-circuit h

248、eating of cathode plate in copper electrolytic cell by thermal imaging camera effectively settles the problems of time-consuming,labor-intensive and inefficiency of traditional manual meter reading,water sprinkling and manual detection method,whereby manual inspection cost of each workshop can be re

249、duced by RMB 400,000 per year.Industry solutions serving a“better life”Hikvision EBG provides smart solutions for the healthcare,education and tourism industries.In the field of higher education,the video cloud technology can be used to provide a cloud platform for teaching resources and online clas

250、sroom solutions to achieve quality education resource sharing,and promote fair education.The classroom behavior analysis can enable quantitative evaluation on the classroom teaching effect,providing data support for making major decisions such as students learning state,occupational guidance,teacher

251、s further study directions,improvement of teaching facilities,etc.The AI visual perception technology could be applied for building a campus identity verification system taking biological characteristics(human face)as the core,which is widely applied in dormitory management,cafeteria consumption,boo

252、k borrowing and academic conference,and data association has been established for teaching,educational administration,logistics,safety guard and other information systems,providing a feasible idea for realizing big data intelligent application in campus.In the field of intelligent tourism,the AI vis

253、ual perception technology can comprehensively perceive the scenic resources,tourists behaviors and passenger flow trajectory,and represent group portraits of visitors,whereby reasonably matching resources and enhancing customer service experience;in the meantime,based on Hikvision 2018 Annual Report

254、 42 video cloud technology,live broadcasting scenic spots becomes possible and allows tourists to enjoy and share scenic spots.In the field of intelligent healthcare,the video AI recognition technology realizes the identification of reference personnel,while video networking and AI visual perception

255、 technology makes the remote supervision of medical insurance consumption possible,which facilitates medical digitalization and ensures the fairness of medical resources.Industry solutions contributing to“wealth growth”Hikvision EBG carries out a series of industry solutions dedicated to achieving“w

256、ealth growth”for various industries covering real estate asset construction,property management services and financial institution wealth management,helping industry users achieve wealth growth.The large video networking and AI visual perception technology is applied for personnel management and saf

257、ety control on construction sites during the construction process.To solve the chaos of construction site staff management,a real-name attendance management scheme for workers is used with functions such as attendance statistics and job category statistics,combining with real-name attendance system

258、and real-name enterprise management system to supervise wage payments of rural migrant workers and prevent the labor force from defaulting on wages for migrant workers.To settle the matter of difficulties in management of site accidents,a visualization solution for site safety production is used:by

259、taking advantage of high-altitude panoramic video monitoring system and intelligent safety helmet equipment,the details of site operation and the situation of safety helmet wearing of personnel are clear at a glance.Hikvision EBG empowers leading real estate developers and property management compan

260、ies through the application of technological means,so as to enhance brand effect and property management capabilities and Hikvision 2018 Annual Report 43 improve owners experience.For instance,by means of consumption structure analysis and dynamic passenger flow analysis,business planning and precis

261、e marketing of commercial properties can be strengthened;by applying parking robots,a new model of human-free parking lots can be created.Based on standardized service requirements of financial institutions,combined with application scenarios such as counter,e-banking,and self-service devices,Hikvis

262、ion EBG provides various face recognition-based identity verification methods to realize effective control of operational risks.The AI visual perception technology is applied for customer classification and behavioral information analysis so as to provide differentiated marketing services and enhanc

263、e customer experience.3.3 Small&Medium Business Group(SMBG):adapting to the transformation trend,contributing to channel upgrade,and creating a service ecosystem As the most active business group,small and medium businesses represent strong developmental vitality and growth potential.The SMB market

264、is a promising market,and the business is driven by real demands from small businesses and small units,which are less affected by changes in macroeconomic policies.At present,such demands have been continuously growing and are gradually upgrading toward visual operation management.For the SMB market

265、,Hikvision formed the SMBG business team based on the channel distribution management team,aiming to serve small and medium-sized enterprises.The Company sets up SMBG business team to closely follow the demands of SMB users and distribution customers,efficiently and flexibly provide products and ser

266、vices based on market insights,and strive to establish an eco-industrial platform for product distribution,service crowdsourcing,and SaaS sharing.Chinas SMB security market is massive,being not only a device product market,but also an engineering market,where product price premium brought by the ser

267、vice is an important“moat”of this market.In the meantime,the SMB market is a very representative long-tail market with personalized and scattered users demands.Despite of the small individual demand,the cumulative effect of scale is significant given the enormous overall quantity and the extremely w

268、ide range.In this market,the information cannot be easily delivered,the cost of brand replacement is low,and there are a large number of simple service demands without unified industry standard.Hikvision SMBG strives to achieve diversified and differentiated business development by changing marketin

269、g methods,broadening product types,deepening scenario-based demands,and innovating channel model.Hikvision 2018 Annual Report 44 Based on AI intelligence and big data,Hikvision SMBG established a comprehensive service platform integrating cloud business transactions,security services and SaaS applic

270、ations,and created a new ecosystem of security Internet;with the help of e-commerce,400 hotline,official website and other sources of traffic,Hikvision SMBG deepens access to multiple channels including security,IT and industrial equipment,and obtains information about both online and offline traffi

271、c;Hikvision SMBG builds nationwide logistics and warehousing to improve logistics turnover efficiency;it optimizes the means of controlling capital stocks,refines channel customer management,and strengthens systematic risk management;it creates a group of efficient,fast,integrated service providers

272、with standardized delivery capabilities,standardizes the service standards of the industry,expands the scale of services,enhances service revenue,builds the core competitive advantages of Hikvision SMBG,and continues to realize the value and create value centered on customers.Taking advantage of its

273、 accumulation of products,channels and services,Hikvision SMBG has comprehensively launched five major initiatives:“diversification of products,scale of online business,digitalization of business,standardization of services,and efficiency of operations”,continues to build a new distribution manageme

274、nt system and model,and creates a good user ecology to consolidate the foundation for the long-term development of the Companys SMBG business.Hikvision 2018 Annual Report 45 4.Innovative Businesses During the reporting period,the video technology-based new businesses such as EZVIZ Network,Hikvision

275、Robotics,Hikvision Automotive Electronics,Hikvision Smart Storage,Hikvision Weiying,and Hikvision Huiying maintained healthy and steady growth,contributing to the Companys long-term sustainable development.4.1 Innovative Business-EZVIZ Network Focusing on smart home business,the EZVIZ Network busine

276、ss continued to grow at a high rate in 2018,with revenues exceeding RMB 1.6 billion for the full year.EZVIZ naturally evolved from intelligent items and kits to a full house intelligent system In 2018,EZVIZ launched various new products such as all wireless Internet battery camera C3A,garden light c

277、amera LC1,all wireless video intercom battery doorbell camera DB2,Internet fingerprint password lock LT21S,smart wall switch P1 for intelligent control of the whole house,smart curtain MC1,and child accompanying robot-YingBao,and extended the existing IPC product line and smart lock,smart door viewe

278、r,smart visual doorbell and other smart home product lines,forming a full house smart home system with video technology as the core.Hikvision 2018 Annual Report 46 EZVIZ improved the intelligence of home-like scenes(business scenes,etc.)and continued to launch new products and optimize services.Unde

279、r the premise of continuously optimizing the original products and services,EZVIZ launched a new hemispherical product with customizable voices-Little Conch C4W,which allows users to record different voices such as welcome,reminders and alarms through EZVIZ APP,enriched business scenario application

280、s.In addition,EZVIZ cloud storage service is growing rapidly,and EZVIZ also explored AI-based call reminder and other businesses and received positive response from users.EZVIZ Cloud platform is further opening up,and AI empowers sub-industry applications EZVIZ Cloud has been striving to build the m

281、ost comprehensive security protection and actively improve security compliance through professional qualification certification.In 2018,EZVIZ Cloud obtained the international certification of cloud security(CSA-STAR15),once again recognized by the international cloud computing service market,which m

282、arked that EZVIZ Cloud is in line with international standards and will 15 CSA-STAR:Security Trust Assurance and Risk certification organized by Cloud Security Alliance(CSA),is an enhanced version of information safety management system ISO/IEC27001,and provides a comprehensive safety evaluation for

283、 cloud computing services combing Cloud Control Matrix and maturity evaluation module as well as complying with relevant requirements of laws,regulations and standards.Hikvision 2018 Annual Report 47 provide high-quality,high-level cloud services to overseas customers.After six years of growth,EZVIZ

284、 Cloud has become a global video cloud service platform,providing basic video cloud services to global customers and users in North America,South America,Asia Pacific,Europe,Russia,and the United Kingdom.There are currently 27 service areas covering five continents and nearly 150 countries.It links

285、and aggregates a large number of intelligent terminals and serves customers and end consumers in a variety of industries worldwide by providing acquisition,transmission,storage and deep analysis capabilities for video and audio-based IoT data.To date,the EZVIZ Cloud platform has a magnitude of 40 mi

286、llion device accesses and 30 million users,providing stable and continuous video-based comprehensive services for users across the world.Based on the basic capabilities of EZVIZs hardware+cloud,AI+open interface,EZVIZ Cloud Platform provides open device access,open basic services,open value-added se

287、rvices,and packages a number of SaaS common components around application scenarios(for example,identification components,headcount change detection components,frequency detection components,dynamic face retrieval components which can be used for applications such as VIP management,off-the-post dete

288、ction,repeating customer analysis,personnel trajectory analysis,as well as cloud live broadcasting components of industrial live broadcasting such as scenic and road condition live,preschool parents live,and Clean and Healthy Kitchen live through applying surveillance);it allows developers to quickl

289、y and easily develop their own business SaaS based on the basic capabilities of EZVIZ SaaS components,and to serve their customers by taking advantage of AI capabilities.As of the end of 2018,more than 30,000 partners have joined EZVIZ Cloud,docking more than 5,000 active applications.An open and sh

290、ared video cloud ecosystem has been initially established.Hikvision 2018 Annual Report 48 4.2 Innovative Business-Hikvision Robotics Hikvision Robotics focuses on the field of automation and specializes in intelligent manufacturing,and continues to explore,invest and rapidly develop in mobile robots

291、,machine vision and industrial-level UAVs(unmanned aerial vehicles),empowering the development of the national manufacturing industry.In the area of mobile robots,Hikvision Robotics focuses on internal logistics and the core technology of robots,provides customers with reliable AGV16 products and so

292、lutions,and continuously builds intelligent internal logistics solutions for factories,which have been widely used in 3C,automotive manufacturing,new energy,medical,tobacco and other industries.Hikvision Robotics main product,Qianmo Robot,released its third generation in 2018,which supports a variet

293、y of vision and laser positioning and navigation methods.The performance and quality of the third generation has been greatly improved to meet the application requirements in a variety of complex scenarios.Hikvision Robotics also launched new products such as automatic forklifts and hybrid robots17,

294、continuously enriching the product series of mobile robots to provide industry customers with a wider range of product selection.In the area of machine vision,Hikvision Robotics focuses on industrial visual sensing applications and specializes in the underlying algorithm software and hardware techno

295、logy,to provide customers with excellent machine vision products and algorithm platforms,which have been widely used in various fields of industrial automation such as 3C,electronic semiconductor and logistics,realizing positioning and guidance,measurement,defect detection,code reading,OCR recogniti

296、on and other applications.In 2018,Hikvision Robotics released 31 16 AGV：Automated Guided Vehicle 17 Hybrid robot:robot integrated functions of both mobile robot and general industrial robot(such as mechanical arm).Hikvision 2018 Annual Report 49 megapixels,43 megapixels and 50 megapixels ultra-high

297、resolution industrial cameras to actively deploy and preempt the high-end industrial camera market.At the same time,it released 8.9 megapixels,12 megapixels,20 megapixels,etc.intelligent code reading camera products to help the rapid upgrade of logistics automation.In addition,Hikvision Robotics als

298、o released series products such as smart sensors,high-precision 3D profilers,and lenses,which could meet the demands of most vision applications,to provide industry customers with one-stop visual product procurement services.Relying on Hikvisions technology accumulations in the fields of image sensi

299、ng,AI,big data analysis,etc.,Hikvision Robotics industrial-level UAVs,with video image processing as the core,based on security and focused on the industries,are widely used in various scenarios such as fire rescue,emergency command,traffic management,facility inspection,and event support and protec

300、tion.In 2018,Hikvision Robotics successively released Falcon IV series UAVs,UAV monitoring and management platforms,automatic tracking antennas,fixed and handheld defense systems,and other new products,providing industry users with complete solutions from product to system.4.3 Innovative Business-Hi

301、kvision Automotive Electronics Hikvision Automotive Electronics business is committed to the R&D,manufacturing,sales and services of Advanced Driving Assistant System(ADAS)and the related sensors,applying Hikvisions technical reserves in Hikvision 2018 Annual Report 50 image processing,video analysi

302、s,AI intelligence,video storage and other fields to the automobile industry.Since its establishment,Hikvision Automotive Electronics has completed the upgrading of its quality system and the construction of a new automated production line in accordance with the IATF16949 Standard18.Self-developed Fu

303、lly Automated Production Lines and Core Equipment Hikvision Automotive Electronics business covers OEMs and related operators of passenger cars and commercial vehicles,and the company has production lines for vehicle mounted cameras,driving recorders,360 panoramic viewing systems,streaming rearview

304、mirrors,multimedia intelligent rearview mirrors,ADAS19,radars,and etc.As of 2018,Hikvision Automotive Electronics has passed the audit and the verification of 20 OEMs and become their qualified supplier,basically covering domestic mainstream independent brands and some of the joint venture brands;th

305、e company has also implemented more than 200 fixed-point projects,of which more than 100 have been put into mass production.At the same time,relying on Hikvisions branches in more than 200 cities across China,Hikvision Automotive Electronics has realized transaction coverage of more than 500 channel

306、 partners.18IATF16949 Standard:a system standard developed by International Automotive Task Force(IATF)in relation to the R&D,manufacturing,quality control of automobiles.19 ADAS：the abbreviation of Advanced Driving Assistant System,an active safety technology,by taking advantage of various sensors

307、installed in a vehicle,is able to collect environmental data inside and outside of the vehicle immediately to recognize,detect and trace the static and dynamic objects,so as to alert the driver of potential dangers as soon as possible,draw the drivers attention and improve safety.Hikvision 2018 Annu

308、al Report 51 Product Family of Hikvision Automotive Electronics Hikvision Automotive Electronics unveiled the first-generation ADAS in 2017.The system,with the functions of front vehicle collision warning,lane departure warning and driving behavior analysis based on video analysis,has been widely us

309、ed in domestic passenger vehicles and dangerous goods transportation vehicles.In provinces that have introduced the local technical standards such as Jiangsu,Shanxi and Zhejiang,Hikvision Automotive Electronics is among the first batch of enterprises that passed the testing and certification.While i

310、ntroducing the ADAS,Hikvision Automotive Electronics also provides multi-sensor fusion solutions with video,millimeter wave radar and ultrasonic radar for autonomous driving.4.4 Innovative BusinessHikvision Smart Storage In 2018,Hikvision Smart Storage introduced the V210 series dedicated solid stat

311、e disk(SSD)for video surveillance,which supports the latest 64-layer 3D TLC NAND Flash20,and supports up to 4TB of maximum capacity.All capacities are equipped with power-down protection21 to meet the cost-effective,high-capacity and power-down protection demands in automotive and rail industries.Th

312、e 4TB mass production complements the 20 NAND Flash:Nand-flash memory is a type of flash memory,which has a non-linear internal macro-cell mode,providing cheap and effective solution for large-capacity solid state memory implementations.TLC:Triple-Level Cell,which is 3 bit per cell,1 memory storage

313、unit can store 3 bit data.21 Power-down protection:abnormal power-off will increase the chance of a SSD failure.By providing a power-down protection mechanism,the SSDs can be ensured of data integrity in the event of abnormal power failure.Hikvision 2018 Annual Report 52 gap in the domestic large-ca

314、pacity SSD mass production products,which has driven the expansion of external industrial markets of automotive and railroad and enhanced the brand awareness of the industry.At the same time,Hikvision Smart Storage participated in the formulation of GA/T 1357-2018 Public Safety Video Surveillance Ha

315、rd Disk Classification and Test Method,which promoted standardized development of video surveillance SSD.Hikvision Smart Storage also made significant breakthroughs in enterprise-class SSD,and released D200 series enterprise-class SSD,which is the first mass-produced domestically-controlled enterpri

316、se-class SATA SSD solution.Its performance and performance stability exceed the common read-intensive enterprise-class SSDs.In the area of industrial-grade SSDs,Hikvision Smart Storage released the S210M and S210N,small-sized and ultra-small-sized SSDs,with full capacity support from 64GB to 2TB,mee

317、ting the needs of miniaturization and large-capacity development of SSDs,and providing stable performance and system support for the systems.Product Family of Hikvision Smart Storage Hikvision Smart Storage provides H1,L1,H10 series video surveillance memory cards,and constantly introduces new produ

318、cts.Based on the industry application characteristics of video surveillance,Hikvision Smart Storage launched P1,L2,P10 series video surveillance memory card products,covering various industries such as public security,transportation,finance and education,applicable to various application environment

319、s;at the same time,these new products have passed the relevant certification of the Ministry of Public Security,protecting customers data security.For the personal family scenes,Hikvision Smart Storage launched the“Personal Private Cloud”H100 in 2017,which solved the problem of security and sharing

320、convenience of personal data and at the same time enabled intelligent management of photos and videos through AI technology.For office scenes in small and micro corporates,Hikvision Smart Storage launched the Hikvision Enterprise Private Network Disk H304 in 2018,Hikvision 2018 Annual Report 53 whic

321、h provided a series of programs that make office work simple and efficient,such as online documents,collaborative sharing,mobile office,organizational structure management,etc.In terms of idle drives due to upgrading under personal scenes,Hikvision Smart Storage released the single-disk H90,allowing

322、 the idle hard drive to instantly change into network disk.In 2018,Hikvision Weiying,Hikvision Huiying and other innovative businesses have developed rapidly,opening up new space for the Companys long-term development.II.Significant changes in main assets 1.Major Changes in Main Assets Major assets

323、Explanation on Major Changes Equity Assets Increased by 8.69%，mainly due to investments on Zhiguang Hailian Big Data Technology Ltd.and SanMenXiaYun Vision Technology Ltd.,and additional investments on Maxio Technology(Hangzhou)Ltd.Fixed Assets Increased by 68.07%,mainly due to transfer of the compl

324、eted Internet Video Industry Base,Security Industry Base(Tonglu)project-phase 2,and Chongqing Manufacturing Base from construction in process to fixed assets during the current reporting period.Intangible Assets Increased by 102.70%,mainly due to newly added land use rights of Chengdu Science and Te

325、chnology Base,Wuhan Science and Technology Base,and Hangzhou Innovation Industry Base.Construction in Progress Decreased by 71.03%,mainly due to transfer of the completed Internet Video Industry Base,Security Industry Base(Tonglu)project-phase 2,and Chongqing Manufacturing Base from construction in

326、process to fixed assets during the current reporting period.2.Major Overseas Assets Applicable Inapplicable III.Core Competitiveness Whether it is the video surveillance industry,the security industry,or the intelligent IoT industry,the users scenario-based demands are very scattered,indicating a ma

327、rket with demand fragmentation.Centering around its goal of better meeting the needs of a fragmented market,Hikvision has been concentrated on technology accumulation,product development,program design,marketing and service system construction,as well as supply chain delivery capabilities since its

328、inception.The Company focuses on hiring the right people and builds its global comprehensive competitive advantages through continuous accumulation.Hikvision 2018 Annual Report 54 1.Focusing on video technology and satisfying users fragmented demands with scenario-based products and solutions Video

329、technology is a very comprehensive technology,which involves optics,sensors,microelectronic technology,imaging technology,video compression technology,video storage technology,video transmission technology,low illumination and wide dynamic technology,video display technology,as well as traditional p

330、attern recognition technology,deep learning technology that is extremely popular at present,and many other related technologies.These technologies are rapidly developing and deepening.Regardless of how the market changes,the Company will continue to invest in video technology and other related techn

331、ologies,endlessly develop these technologies,and apply these technologies to products or systems to better meet users demands.Based on these video technologies,the Company develops video products and solutions.Given scenario-based video applications and the fragmented users demands,the Company needs

332、 to provide the appropriate products or solutions for different scenarios and often needs to customize them accordingly.In order to meet fragmented demands more efficiently,the Company has been continuously improving its R&D system,optimizing and developing its technology platform,product platform a

333、nd system platform to maintain its competitiveness.For example,the accumulation of big data technology and the construction of big data platform in the past few years have empowered the Company with big data capabilities.2.Maintaining a high level of R&D investments and proactive planning business development The continued high level of R&D investment is the core driving force for Hikvisions compe