Surveillance giants in the security industry will have a huge total output value of 500 billion yuan

Closer in years, more thieves. A community of Shanghai friends lived overnight. The six floors were robbed by thieves. Can be described as extremely crazy. From this we can see that the construction of a safe city still has a long way to go. From the needs of our side to the investment variety, we believe that the security industry will surely shine. The review paper of the “Twelfth Five-Year Plan” of the security industry suggests that the scale of the industry will double by the end of the “Twelfth Five-Year Plan” and the total output value will reach 500 billion yuan. It is noteworthy that the current A-share market involves several major security giants, the valuation is not cheap, such as Hikvision's total market value has more than 45 billion, although the company is trying to upgrade the transformation, but the success of the transformation still exists Very large uncertainty.

The deliberation draft of the “Twelfth Five-Year Plan” of the security industry recently disclosed that the industrial scale will double by the end of the “Twelfth Five-Year Plan” and the total output value will reach RMB 500 billion. The video surveillance industry hardware equipment manufacturers in the industry chain are most worthy of attention. In the era of digital surveillance, digitalization, networking, integration, intelligence and high-definition, who can become a true system developer and an open system solutions provider within five years, it will become the supremacy of the future. . Among domestic listed companies, Hikvision and Dahua are the ones that can compete for this throne.

The total output value of the "Twelfth Five-year Plan" will reach 500 billion yuan. At the 7th meeting of the Fourth Council of the China Security Association held recently, the vice chairman and secretary-general of the association and the leader of the industry's "Twelfth Five-Year Plan" drafting working group Yan Xiufeng disclosed the deliberation draft of the "12th Five-Year Plan" of the security industry: the overall goal of doubling the industrial scale by the end of the "Twelfth Five-Year Plan" period. The average annual growth rate is about 20%. In 2015, the total output value reached 500 billion yuan, and the added value was 160 billion yuan. The annual export delivery value reached 60 billion yuan or more.

Yan Xiufeng said that the reason why it can maintain a high growth rate of 20% is based on the fact that the environment for the “12th Five Year” security needs still exists, the potential for continuous deepening of applications remains strong, and the potential for technological development will have an explosive effect. Security IoT will become a new strong growth point.

Video surveillance equipment vendors are most concerned about large security systems covering: video surveillance systems, video intercom systems, access control systems, electronic patrol systems, entrance and exit control systems, anti-theft and networking alarm systems. Among them, the video surveillance system is at the core, because other systems are basically required to be combined with it, and the video surveillance system accounts for the largest proportion of the output value in the security system, reaching 40-45%. The world’s top 20 security companies are basically video surveillance equipment suppliers.

A typical video surveillance system is divided into front-end and back-end parts. The front-end mainly refers to video capture (camera), and the back-end mainly refers to video storage (DVR). The entire system specifically includes: cameras, camera accessories, control equipment and matrix, digital video equipment, video servers.

Analysis from the perspective of the entire video surveillance industry chain. The most upstream is the audio and video codec algorithm protocol standard organization. Followed by chip manufacturers, and then hardware equipment manufacturers, integrated audio and video codec processing chip and image sensor chip, through the circuit development and embedded software design or software vendors to provide software control system, developed a complete machine equipment. Software vendors provide software management systems primarily for hardware device vendors or integrators or end users. Hardware device manufacturers and software vendors mainly provide products to system integrators or operators, and sometimes directly to end users.

The reality is that telecom operators, system integrators, and software vendors are still in the initial stage of the security integration industry. In particular, the market concentration of system integrators and software vendors is very low; and the market concentration of the security chip industry at the mature stage is relatively low. High, due to the weak foundation of China's integrated circuit industry, core components such as integrated circuits for security video surveillance products are basically dependent on foreign imports. The technology is basically monopolized by foreign giants.

Therefore, the most valuable investment is the domestic hardware equipment manufacturers in the stage of industrial growth. In some areas, it has occupied a certain market share, has a certain degree of competitiveness, and industry concentration is expected to increase. Moreover, it is backed by a large local market and has the advantages of market, human resources, and electronic hardware manufacturing industry chain, and it has the conditions for globalization.

In the current era of digital-analog monitoring, the most valuable part of the core equipment DVR field is the industry's “Gemini” Hikvision and Dahua shares. The two aggregates have already occupied half of the industry. Of course, there are companies in the industry such as Dali Technology, Shenzhen Tongwei, Shenzhen Ruiming, Zhongshan Libao, Hanbang Gaoke, Kodak, Zhuoyang, Haowei, Tumin, Dongxi, Wave Grain, and Tongzhou.

However, it is worth noting that there are certain market risks in the industry. Feng Cheng, vice president of video surveillance company Dongfang Net Power, told reporters that DVR technology barriers are not high. “In the future, with the advancement of domestic AVS standards, domestic chips will be invested in large quantities, and there will be no technical barriers to competition.”

The market has broad application prospects From the perspective of macroscopic logic, more and more of the Chinese society that is accelerating the transformation are facing destabilizing factors, and the complexity of social security prevention is increasing. What is certain is that investment for the maintenance of public safety will grow steadily in the future. In addition, under the background of rising labor costs, video surveillance and other technical defense measures can greatly replace the manual, greatly improving the monitoring efficiency; moreover, video surveillance is also the most clear and easiest to start application for various applications of the Internet of Things.

From the perspective of specific applications, it broadly covers the construction of safe cities, high-speed railways, expressway construction, metro rails, urban intelligent transportation, large-scale events, environmental management, campus monitoring, and community families. Take campus monitoring alone as an example, Anxin Securities believes that, in general, kindergarten security projects need to invest 50,000-200,000 yuan, 100,000-500,000 yuan for primary and secondary schools, and 2 million-500 million for ordinary colleges and universities. Roughly calculated, the entire campus surveillance security system market size exceeds 100 billion yuan.

According to statistics, there are currently more than 400,000 chain-type enterprises, 570,000 primary and secondary schools, 9,717,700 actually-owned enterprises, 29.84 million individual industrial and commercial households, and 80 million broadband households. Compared with the sales volume of 1 million DVRs in China in 2009, with the improvement of security awareness, the video surveillance market has huge room for growth.

The public security alarm and surveillance market will erupt. Li Mingbiao, director of the Science and Technology Management Department of the Ministry of Public Security Bureau of Science and Technology, has pointed out. 2011 is the first year of the “Twelfth Five-Year Plan”. It is necessary to further develop the city’s alarm and monitoring system throughout the country. The city’s alarm and monitoring system should be included in the planning of various local governments; the Ministry of Public Security requires the Ministry, Province, and City to be implemented. The three levels of networking, focusing on the establishment of the Ministry of the three levels of video surveillance and sharing platform, to achieve resource integration, information sharing; In addition, we must also learn from the experience of the development of urban alarm and monitoring system, to guide community technical construction and prevention of rural security System.

In October 2005, the Ministry of Public Security deployed the National Pilot Project for Urban Alarm and Monitoring System Construction (ie, the “3111” Pilot Project), identified 22 cities as ministerial pilot cities, and determined over 400 provinces, municipalities, and autonomous regions across the country. The pilot counties, cities, and districts require the completion of urban alarm and monitoring system construction in large and medium-sized cities nationwide by 2010.

During the “Twelfth Five-Year Plan” period, the urban areas in the country must basically complete the construction of the alarm and monitoring system to achieve full coverage of key areas, and the provincial and municipal level and county (district) level public security agencies complete the monitoring and alarm platform database construction. Information sharing across regions, departments, and police.

In 2011, the "3111 Project" entered the overall promotion stage and was promoted to each prefecture-level city. The total direct investment was nearly 100 billion yuan.

In the next five years, major cities in China will continue to invest huge sums of money to fully develop the city's alarm monitoring network. According to estimates of the Ministry of Public Security’s Science and Technology Bureau, the investment in the construction of a safe city in a medium-sized city will reach several billion, of which the proportion of video surveillance systems is 28%. At present, there are more than 2,300 cities and counties in China, which have great market potential.

The first to upgrade to a system developer is Wang Yiyong’s doubt that the IT industry is an industry with extremely fast technology upgrades. A large number of cases in the past have proven that technical self-restraint is likely to be ruthlessly eliminated. The result is catastrophic. The video surveillance industry has already passed the first phase of traditional analog monitoring with VCR as the core device, and it is in the second phase of the digital-analog monitoring era (front-end analog, back-end digital) with DVR as the core device, and the third phase The third phase, characterized by front-end digitization, transmission and storage networking, and streaming media management, is undergoing partial technical substitution. In general, the video surveillance industry technology presents a trend of digitization, networking, integration, and intelligence.

The current industry leader Hikvision and Dahua are at the culmination of the second era. In the DVR field, the market share of the two companies reached 61% (Haikang 45%, Dahua 16%, 2009). The mature technology market space is very small, and the front-end digital era is followed by relevant companies that first need to reconstruct the technological advantage in the front-end camera field. Accompanied by the back-end networking and intelligence.

With the development of video surveillance today, the pursuit of unified standards, open compatibility, and high-definition intelligence have gradually become mainstream requirements. Therefore, the key to future advancement in the technology path is the ability to develop solutions based on front-end digitization, back-end networking, and intelligent security system solutions. Equipment developers need to upgrade to system developers, that is, the operating system layer that standardizes and encapsulates infrastructure such as non-standard databases, software buses, and equipment; middleware layers for scheduling and management of streaming media, and application-oriented layers. Various application service module interfaces are opened; according to user requirements, various application service softwares are developed at the application layer to access the middleware layer through the network.

In terms of implementation, equipment manufacturers are required to transition to security system solution providers that provide "one-stop demand." At the same time, it changed the situation of “hard, soft, soft, soft” and vigorously promoted the R&D strength of software to adapt to the downstream applications to diversify and differentiate.

However, China Merchants Securities believes that due to the current security system with video surveillance as its core, the front-end digitalization process has only just begun. The back-end transmission network and management intelligence have only just begun, and there is still a long way to go from unified standards. This process may take five years, but it is enough to determine the market competition pattern among system developers. By then, system developers occupying a dominant position in the market will face the opportunity to upgrade to security operators.

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