Technology

Huawei had the lowest revenue growth in a decade


According to a report released March 31st, Huawei generated $ 136.7 billion in revenue for the group in 2020, up 3.8% from the previous year, which is believed to be growth in the lowest year in the past decade.

In a statement issued on March 31, Ken Hu Houkun, Huawei’s rotating chairman, said: “Over the past year, we have been steadfast in the face of adversity. We have continuously innovated to create value for our customers, help fight pandemics and support both economic recovery and social progress worldwide. “

Ken Hu Houkun, Huawei’s Rotating Chairman, reports Huawei’s 2020 results on March 31.

Huawei posted 891.4 billion yuan ($ 136.7 billion) in revenue in 2020, up 3.8 percent from a year ago, according to a financial report audited by KPMG Auditing Group. This is considered the lowest annual revenue growth rate in the past decade. In which, revenue from the Chinese market accounted for 65.6% of total revenue with the revenue growth in the domestic market reaching 15.4% compared to 2019.

While growth in the domestic market was high, overseas markets experienced negative growth, with sales down 12.2% in European, African and Middle Eastern markets, while sales in Asia Pacific also fell 8.7%. The decline in sales in overseas markets shows the difficulties Huawei is facing after being introduced to trade sanctions by Washington authorities over national security concerns.

In a press conference after announcing the company’s results, Ken Hu Houkun said that, although revenue from smartphones decreased last year, but income from hardware, software and services. Another has increased. “I believe you will see more hardware products, software and services from Huawei,” he said. This refers to Huawei’s so-called 1 + 8 + N strategy to develop an ecosystem of digital products beyond smartphones.

Huawei’s three core businesses, including the consumer business group, the telecommunications infrastructure business group, and the business group, generated revenue of 482.9 billion yuan ($ 75.05 billion), respectively. 302.6 billion yuan ($ 46.4 billion) and 100.3 billion yuan ($ 15.4 billion), respectively with growth of 3.3 percent, 0.2 percent, and 23. %.

Net profit rose 3.2% to 64.6 billion yuan ($ 9.9 billion) in 2020, with a net profit margin of 7.3%. In the first six months of 2020, the company’s net profit margin is 9.2%.

Mr. Ken Hu Houkun added that Huawei is satisfied with its operations in the Middle East market, which makes a “significant” contribution to the group’s revenue. The company is forecasting “positive” growth in overseas markets by 2021 when the pandemic is under control, but he declined to give any specific numbers.

Huawei said it invested 141.9 billion yuan ($ 21.7 billion), or 16.7 percent of revenue, in research and development (R&D) last year. Huawei’s cumulative investment in R&D over the past decade amounted to 720 billion yuan ($ 110.4 billion).

“Huawei is not chasing profit margins, instead we will continue to invest in research and development,” said Shi Yanli, Huawei’s Vice President of Finance.

Last year was arguably one of the biggest challenges in Huawei’s recent history. The Washington administration’s inclusion of Huawei on the Entity List limits its ability to purchase hardware, software and services from US suppliers without US government approval. That has adversely affected Huawei’s smartphone business, which lacks high-end semiconductors, and led to the company’s decision last November to sell its smartphone business. Honor for another corporation.

There will inevitably be downward pressure on Huawei’s consumer business group this year, not just due to stockpiles of smartphone components, said Bryan Ma, vice president of customer equipment research at IDC. But also because the phone business from Honor will no longer contribute to the company’s revenue.

“It’s impressive that PCs, tablets and wearables were able to offset some of those losses last year, but the difficulty is chasing Huawei due not only to the ongoing supply chain risk but also the Fierce competition comes from suppliers such as Lenovo and Apple, ”added Mr. Bryan Ma.

Due to chipset supply issues, Huawei dropped in the rankings of global smartphone brands in the fourth quarter of last year, when it shipped 33 million units worldwide, according to data from research firm Counterpoint. demand – down 41% from a year earlier – to rank as the world’s sixth largest supplier. Meanwhile, research firm TrendForce says this is the first time in six years that Huawei has slipped out of the top five, and this year the company is expected to drop to seventh place.

During a press conference with the media, Ken Hu Houkun noted that the company’s consumer business has always attracted a lot of attention, especially smartphones, but he declined forecasts of future growth of the company. “Our smartphone business is seriously affected by US sanctions,” he said. We have not seen a clear picture of the supply chain yet, so at the current stage, we cannot make a forecast about the growth of our smartphone business.

However, Ken Hu Houkun said that the launch schedule of Huawei’s new flagship phone will remain unchanged. “We believe that Huawei smartphones can still maintain their leading position in the market,” he said.

In the midst of fighting US trade sanctions, Huawei has made a major overhaul in management while expanding into areas such as cloud services and artificial intelligence. The change could reinforce the company’s forays into new growth markets like smart cars.

Huawei’s domestic competitor in smartphones, Xiaomi Corp is also entering the smart car industry competition with the announcement of its investment increasing to $ 10 billion over the next decade instead of public. initial announcement of 1.5 billion USD.

Phan Van Hoa(from SCMP)

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