Hikvision shares fell to a daily limit of 10% during early morning trading in Shenzhen. Some of these losses have been made up to close about 6% lower.
This would be Washington's recent attempt to stem Beijing's technological ambitions and further escalation of the US-China trade war.
"Hikvision takes these concerns very seriously and has been engaging with the US government in relation to all this since last October," a corporate spokesman said in a statement on Wednesday.
"Regardless, Hikvision takes cyber security as a company very seriously and adheres to all applicable laws and regulations in the markets in which we operate," the spokesman said.
The US Department of Commerce did not respond to requests for comment outside regular business hours.
Hikvision manufactures surveillance cameras and artificial intelligence security products. The Company states that its products can track people by facial recognition or physical characteristics such as gait, can count the number of people visiting certain areas, and recognize "unusual behavior such as violent action".
Hikvision has received international criticism for its surveillance agreements in Tibet and Xinjiang US lawmakers called for sanctions on the company last year, accusing it of supporting China in creating a "high-tech police state."
Brokerage firm Jefferies said Wednesday that a US ban would not hit Hikvision as hard as Huawei did. The company can buy vital parts for its artificial intelligence products from local dealers, said Jefferies analyst Rex Wu.
In a statement last month, Wu said he expected Hikvision's annual revenue to be boosted by "China's central government procurement platform," noting that "the public security budget in Xinjiang for 2019 is still rising "compared to a year earlier.