Entreprise

Revenue will decrease, but profit will increase sharply

Huawei reported a record first annual earnings decline in 2021 as US sanctions continued to hurt the company.

However, Chinese tech giants focused on improving profitability, resulting in a surge in revenue last year.

Huawei Chief Financial Officer Meng Wanzhou said in a statement, “Despite the decline in revenues in 2021, the ability to make profits and generate cash flow is increasing and addressing uncertainty. The ability is increasing. “

Huawei’s annual report, released on Monday, is the first high-profile corporate event since Meng returned from Canada to China, engaging in a nearly three-year surrender battle with the United States. rice field. Meng spoke at a press conference at Huawei’s headquarters. Shenzhen.

In 2021, Huawei generated revenue of RMB 636.8 billion ($ 99.9 billion), a decrease of 28.5% year-on-year. This is the first annual revenue decline based on a published report dating back to 2002.

Meng said in a press conference on Monday that US sanctions, the “continuity of supply challenge” and slowing 5G demand in China were the main reasons for the decline in profits.

Last year’s net profit was 113.7 billion yuan, up 75.9% from the previous year.

Under former US President Donald Trump, Huawei was placed on a US blacklist called the Entity List, limiting US companies from exporting key components and software to the company. Washington is trying to reduce Huawei’s access to smartphones and other high-end chips needed. As a result, Huawei’s smartphone market share has plummeted globally.

Meanwhile, the United States called Huawei a national security threat and urged other countries not to use its communications equipment in next-generation 5G mobile networks. Huawei has repeatedly denied that it is a national security threat.

These moves have had a significant impact on the company’s business units. Huawei’s consumer sector, which sells smartphones and other products, brought in 243.4 billion yuan in 2021, down almost 50% year-on-year.

The transportation business, which includes sales of telecommunications equipment, recorded sales of 281.5 billion yuan, down about 7% from the previous year.

One of the bright spots for the company was the early enterprise business, which is now the smallest division, but one Huawei is focused on regaining that slack. Huawei’s enterprise units include cloud computing.

To counter US sanctions, Huawei has invested heavily in new areas, including the automotive industry, and is hiring more scientists to focus on technology development.

Huawei spent 142.7 billion yuan on research and development in 2021, slightly above 141.9 billion yuan in 2020.

Huawei Rotation Chairman Guo Ping said, “Relying on talent, scientific research and an innovative spirit, we will rebuild the basic theory, architecture and software paradigms and build long-term competitiveness. We will continue to increase our investment in Press release.

Huawei is not a public company, but has announced annual results that it is being audited by accounting firm KPMG.

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