The first quarter of 2025 has been a period of significant activity for Dahua Technology. The company has experienced notable fluctuations in its stock price, driven by market reactions to its financial performance and technological innovations. Concurrently, Dahua has made substantial progress in AI and big model technologies, with applications spanning various industries. This quarter has also witnessed strategic asset sales and business focus adjustments, alongside dynamic interactions with institutional investors and market analysts.

Dahua Technology's stock experienced a substantial increase on March 6, 2025, with intraday gains approaching 10%. The share price reached a high of $2.59, propelling the company's market capitalization beyond $8.55 billion.

The upward trajectory continued on March 7, as Dahua's stock hit the trading limit up, reaching $2.85. The trading volume was significant, with a turnover exceeding $714 million. The market's focus remained on the potential applications of Dahua's AI technology and large model integrated machine, which were perceived as promising drivers for future growth.

A correction followed on March 19, with Dahua's stock declining by 4.83%. This drop was accompanied by a substantial outflow of $115 million from major funds, indicating a divergence in market sentiment in the short term. Some investors took profits after the recent rally, while others remained cautious due to broader market uncertainties.

Dahua projected its net profit for 2024 to be between $400 million and $440 million. This represented a year-on-year decrease of 58% to 62%, largely attributed to the high base of non-recurring gains from the sale of Zero-Run Technology shares in 2023.

In the first three quarters of 2024, Dahua reported revenues of $3.2 billion, marking a marginal increase of 0.77% compared to the previous year. However, the company faced challenges in cash flow management, as evidenced by an extended accounts receivable turnover days figure of 209.7 days. This indicated increasing pressure on collections and the need for improved working capital management.

Dahua introduced the Galaxy Large Model, designed for sectors such as public security, transportation, and power. This model optimizes recognition accuracy and computational resource usage, supporting multimodal interaction through voice, video, and documents. This advancement underscores Dahua's commitment to enhancing AI capabilities across different sectors.

The company also launched an integrated machine for big models, incorporating modules like a knowledge middleware platform and an intelligence middleware platform. This machine offers features such as video preview and vehicle search, and has found applications in transportation and energy sectors, among others.

Dahua's subsidiary, Huaqi Intelligence, successfully adapted its AI server to work with DeepSeek's big model, contributing to the development of China's domestic big model ecosystem. This collaboration highlights Dahua's strategic focus on AI technology and its efforts to stay at the forefront of industry innovation.

Dahua developed an industrial stethoscope product equipped with vibration sensors and acoustic analysis capabilities. This product enables the detection of equipment failures and enhances safety management in industrial settings by identifying potential issues before they escalate.

Dahua reported robust growth in cloud services within overseas markets, though domestic cloud services remained primarily privately deployed. The company aims to develop a cloud platform capable of supporting tens of millions of users, reflecting its ambition to expand its cloud service capabilities and cater to growing market demands.

Dahua completed the sale of a 50.93% stake in Imou Network for $159 million, generating an estimated gain of $75 million. This move signified Dahua's exit from the smart home business, including products like smart cameras and door locks, with a commitment to not re-enter this market over the next three years.

The decision to sell Imou Network came after competitive challenges against rivals like Hikvision's Hangzhou EZVIZ Network Co., Ltd, which had achieved greater success in the smart home sector. In 2023, Imou Network recorded revenues of $282 million, amounting to just 40% of EZVIZ's sales, with a valuation of $312 million compared to EZVIZ's market capitalization exceeding $4.28 billion.

Following the sale, Dahua intends to concentrate on its core wisdom IoT solutions, which account for over 80% of its revenue. This strategic shift aims to optimize resource allocation and strengthen competitiveness in the core business areas.

Dahua has been expanding its global reach, with overseas revenue accounting for 50.35% of total sales in the first half of 2024. The company has been particularly active in countries along the "Belt and Road" initiative, leveraging AI big models to offer customized security solutions and solidifying its position in these markets.

On February 28, 2025, Dahua engaged with 13 institutional investors, including CICC and Ten Fund. The discussions centered on the application of AI technology across various industries and the growth potential of cloud services, highlighting investor interest in Dahua's technological roadmap and market strategy.

Dahua strengthened its regional market presence by signing cooperation agreements with 10 provincial dealers in the Sichuan region. This initiative seeks to enhance market penetration of Dahua's wisdom IoT products through deeper resource integration and supply chain collaboration.

While competitor Hikvision pursued business expansion through the spin-off listings of subsidiaries like Hangzhou EZVIZ Network Co., Ltd and iRobot, Dahua adopted a contrasting strategy of divesting non-core assets to focus on its video IoT business. This divergent approach reflects differing corporate strategies in response to market dynamics and competitive pressures.

In the first half of 2024, Dahua's government business saw a revenue decline of 15% to $252 million, compared to Hikvision's public sector business which decreased by 9.25% to $814 million. This comparative analysis illustrates the varying degrees of impact on government-related revenues within the industry.

With restricted access to the U.S. market, Dahua has increasingly focused on emerging markets. However, the company faces ongoing challenges related to technology export regulations and data security concerns. Additionally, while AI big models enhance operational efficiency, they present issues such as fragmented application scenarios and high computational costs that require resolution.

Dahua Technology's first quarter of 2025 was marked by strategic restructuring and innovation. Through asset sales and a refocused business strategy, Dahua aimed to solidify its position in the AI-driven wisdom IoT sector. Despite challenges in traditional business growth and market uncertainties, the company's emphasis on AI big model applications and global market expansion presents potential avenues for future development. The quarter's activities underscored the urgency for enterprises to strengthen core competencies and optimize resource allocation amid intensifying industry competition.