Huawei reports increase in revenue and profits despite U.S. sanctions
April 6, 2021 Category China News Round-up, Weekly
Huawei Technologies said its revenue and net profits both grew in 2020 and met targets, despite losses inflicted by U.S. sanctions. Revenue reached CNY891.4 billion, up 3.8% year-on-year, while net profits rose 3.2% to CNY64.6 billion, the company announced at a press conference titled “Riding Through the Night”. The consumer business sector’s revenue reached CNY482.9 billion, up 3.3%, with growth coming from smart watches and laptops instead of smartphones. Huawei’s growth was mainly driven by the domestic market, with sales revenue from the Chinese market increasing 15.4% to CNY584.9 billion – more than 65.6% of its total revenue. Business in all regions outside of China declined. Sales revenue from Europe, the Middle East, and Africa fell 12.2% to CNY180.8 billion, and that from the Americas fell 24.5% to CNY39.6 billion.
“Over the past year, we’ve held strong in the face of adversity,” said Ken Hu, Huawei’s rotating Chairman, adding that the company’s business performance was largely in line with its forecast. “In 2020, our enterprise business group grew rapidly, and the telco business remained stable, while the consumer business sector’s growth slowed,” Hu said. The strong 2020 report came after Huawei was put on an export blacklist by former U.S. President Donald Trump in May 2019, and U.S. trade restrictions on the company intensified over the past year. Analysts said the growth indicated that Huawei’s “survival strategy”, which included prompt adjustment of its business lines, had an initial effect, while warning that the company will continue to be tested. “The coldest point of winter has not come yet, and the impact from the U.S. semiconductor ban will gradually be seen in its financial reports this year,” Jiang Junmu, Chief Writer at Chinese telecom industry news website c114.com.cn, told the Global Times.
In response to questions concerning its chip supply, Hu told reporters at a question-and-answer session after the annual report’s release that Huawei has enough stockpiles to meet demand from enterprise consumers, but “the improvement of global chip supply depends on the rebound of the global semiconductor supply chain.” Analyst Jiang cautioned that the biggest impact will still be seen in Huawei’s consumer division, which accounted for 54.2% of the company’s total sales in 2020. The consumer group overtook Huawei’s core networking equipment business to become the biggest business department in 2018. Huawei’s consumer business revenue in 2020 managed to grow 3.3% – a stark turnaround from growth of 34% in 2019, the Global Times reports.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world