Hikvision (002415.SZ): Surveillance overseas and Innovative business supports margin enhancement; 2Q26 beat; Neutral

Hikvision's 2Q26 revenue was up 12% YoY, or 6% lower than our estimate, reflecting the saturated surveillance demand in China. GM stayed at a high level as in 1Q26, reflecting the company's continuous product mix upgrade toward high-value products. This drove net income to increase by 41% YoY, or 25% / 11% higher than our / Bloomberg consensus estimates. The company's innovative business delivered 29% YoY growth in 1H26, with GM expansion compared to 1H25. We remain positive on the company's innovative business expansion across robotics, smart vehicles, and IoT products, along with the surveillance expansion in overseas markets, driving the company's growth in the long run. Maintain Neutral on fair valuation.