Chinese surveillance camera makers Hikvision, Dahua fall on security concerns in Australia
Investors on Wednesday dumped shares of the world’s top two security camera makers – Hangzhou Hikvision Digital Technology and Dahua Technology – after Australia’s ABC News reported that these companies’ devices were being used for spying in the country.
Hikvision, listed on the Shenzhen Stock Exchange and controlled by the Chinese government, saw the biggest daily decline this year to close 8.9 per cent down to 26.7 yuan (US$3.9) on Wednesday. Dahua, also headquartered in the eastern Chinese city of Hangzhou and listed in Shenzhen, fell 10 per cent to close at 14 yuan.
The two companies supply most of the surveillance cameras installed in Australia, including at homes, on street corners, in local council offices, at schools and universities, on buses, in shopping centres and thousands of public spaces across the country, according to the report.
It cited Fergus Hanson, head of the International Cyber Policy Centre at the Australian Strategic Policy Institute, who said “having these sorts of cameras in secure facilities just doesn’t make any sense”.
Hikvision and Dahua said they were no different from video surveillance suppliers from other countries, according to the report.
The negative media coverage on the two companies point to a growing wariness against Chinese technology suppliers in Australia. Citing national security concerns, the country last month prohibited telecommunications equipment manufacturers Huawei Technologies and ZTE Corp from taking part in domestic carriers’ planned roll-out of advanced 5G mobile networks.
Hikvision and Dahua did not immediately reply to separate requests for comments on the spying accusations reported in Australia.
In its recent interim results announcement, Hikvision warned that trade protectionism, debt problems or political conflict in countries where it does business, could adversely impact the company’s development efforts.
The shares of Hikvision and its main competitor Dahua had taken a beating last month after investors were warned that a move to ban the use of Chinese-made surveillance equipment by the US federal government could have wider ramifications on the business of the two companies.
The US Senate passed the 2019 National Defense Authorization Act last month, under which the US government will be prohibited from buying surveillance equipment from several Chinese suppliers. The US president is yet to sign the bill into law.
Founded in 2001, Hikvision has quickly morphed from a former Chinese government research institute to a highly lucrative business, partly because of its close ties to the government.
Three state-owned enterprises own a total of about 42 per cent of the company, while the rest are owned by a combination of general public shareholders and financial institutes, including 9.7 per cent from Hong Kong Securities Clearing Company.
Both Hikvision and Dahua have warned “the possibility exists that our business in the US market might be affected” after the US bill becomes effective.