Chinese major surveillance providers saw shares plummet after statement involving US bill

Source:Global Times Published: 2018/8/3 23:28:40

Shares of the world's top two security camera makers - Hangzhou Hikvision Digital Technology and Zhejian Dahua Technology - nearly fell by the daily limit of 10 percent during Friday's trading after they said business in the US market might be affected after a US bill becomes effective.

"Hikvision is disappointed with the bill passed by both Chambers of the US Congress. This bill was quickly drafted and passed without sufficient evidence, review or investigation, resulting in ambiguous interpretations of various definitions relevant to Hikvision," said the company in a note sent to the Global Times on Friday.

"The ban represents a rejection of the US government's obligation to use a standard-based approach when evaluating security risks in federal procurement," it said.

The US passed the 2019 National Defense Authorization Act (NDAA) on Wednesday, under which the US government will be banned from buying Chinese surveillance equipment from several Chinese firms. The US president is yet to sign the bill into law.

The legislation creates an unfair burden for Hikvision based on unsubstantiated claims, and was passed despite the objections of many of our US partners who will be disproportionately affected by the ban, the Shenzhen-listed company said.

Hikvision said in a statement early Friday, warning investors that "the current vague language of the NDAA could lead to a possible expansion of the interpretations on the ban."

Hikvision's note used a man identified only as Nickelson as an example of those US businessmen that will be hurt by the bill. Nickelson's company is using Hikvision products to fulfill a contract installation at Fort Leonard Wood. Nickelson said his business will be hurt.

"This provision within the NDAA will come into effect in one or two years from being signed into law, which we expect to occur this month. The company is deploying the necessary resources to mitigate any potential negative impact," the company's statement read.

Dahua Technology, another solution provider in the global video surveillance industry based in Hangzhou, capital of East China's Zhejiang Province, also said it would further analyze and evaluate the bill's effect on the company and positively communicate with the US clients, mitigating the negative fallout, according to statement it sent to the Shenzhen Stock Exchange on Friday.

Shares of Hikvision dropped 5.89 percent at 30.03 yuan ($4.4) at Friday's closing, while Dahua Technology ended 5.89 percent lower at 15.99 yuan.



 



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