Hangzhou Hikvision Digital Technology Co, the world's largest manufacturer of video surveillance products and solutions, said on Wednesday the company takes the United States government's concerns very seriously and follows all applicable laws and regulations in the markets in which it operates.
The statement came after The New York Times reported the U.S. government was considering imposing limits on Hikvision's purchases of U.S. technology. This would hamper Hikvision's ability to do business as it is reliant on U.S. components for its products. According to the report, the potential restrictions stem from concerns including the human rights of China's surveillance sector.
Hikvision's share price plummeted 5.54 percent on the Shenzhen Stock Exchange on Wednesday.
"Hikvision takes cybersecurity very seriously as a company and follows all applicable laws and regulations in the markets we operate in," the company said in a reply to China Daily. "The company has already retained a human rights expert and former U.S. ambassador Pierre-Richard Prosper to advise the company regarding human rights compliance."
Hikvision has its products regularly tested for vulnerabilities and has received certifications for its cybersecurity standards, including the National Institute of Standards and Technology in the U.S., the company added.
Xu Lei, vice-president of Hikvision, said the company has prepared backup plans to cope with the concerns, Chinese news website Jiemian reported.
Foreign Ministry spokesman Lu Kang said on Wednesday that China opposes the U.S. "suppressing and smearing" enterprises from other countries, including China, by using state power.
China always asks its enterprises to abide by market and international rules when doing business overseas, he said, adding that it also demands other countries provide a fair and nondiscriminatory environment for Chinese companies.
A report by China Merchants Securities Co said Hikvision's U.S. business only accounts for 6 percent of its total revenue and that it takes a positive view on the company's long-term development.
"Chinese leading surveillance companies have already prepared options to cope with problems," the report added.
Global research firm IHS Markit said in a recent report that Hikvision has taken the top spot in the video surveillance industry for seven consecutive years, occupying 22.6 percent of the global video surveillance market in 2017.
The report said there will be continued strong growth in the video surveillance equipment market, and China will be a major source of the industry's revenue and growth.
Hikvision posted a total operating income of 9.94 billion yuan ($1.44 billion) in the first three months this year, up 6.17 percent year-on-year.
The company's first-quarter net profit fell 15.41 percent year-on-year to 1.54 billion yuan.
Hikvision said with recent increases in business opportunities in the domestic market and stable growth in overseas markets, the company does have a positive view on its second-quarter performance.
In 2018, the company's overseas operating income amounted to 14.19 billion yuan, accounting for 28.47 percent of its total income.