...Hangzhou Hikvision Digital Technology Co. Ltd.'s market leadership in China will endure. Hikvision has better technology than domestic peers, strong relationships with institutional customers (especially governments), and an extensive distribution network. These factors should enable the company to defend its market position in China. Proposed sanctions by the U.S. could cause supply and production disruption and threaten Hikvision's credit quality, if implemented. The U.S. government is contemplating possible sanctions against Chinese companies that are enabling or participating in potential human rights issues in Xinjiang province. If such sanctions materialize, they could disrupt Hikvision's supply chain given that it sources several key components from U.S. companies, including chips, memory, and graphics processing units. Finding alternative suppliers and components of comparable quality could be challenging in the short term. As a result, we will likely place the rating on the company...
