Huawei released 2021 Annual Report: revenue declined but profits increased, R&D expenditure reaches 10-year high

March 28, 2022 0 Comments

Huawei, China’s globally leading telecom equipment maker, has released its 2021 annual report on Monday. At the press conference, both Meng Wanzhou, Huawei’s CFO, who is attending for the first time in four years, and Guo Ping, Huawei’s Rotating Chairman, spoke. The company performed “in line with forecast”, according to Guo, and is “more capable of dealing with uncertainty,” according to Meng. 

In 2021, Huawei achieved 636.8 billion yuan in revenue, a 28.5% decline from last year, and 113.7 billion yuan in net profits, a 75.9% increase from last year. The company’s cash flow from operating activities reached 59.7 billion yuan, a 69.4% increase from last year.

Huawei has struggled due to the U.S.’s sanction blocking its access to most U.S. processor chips, semiconductors and other technology, for allegedly spying and posting security risks to the U.S. The company has denied the claim.

Over the past year, Huawei has been maintaining its dominance in Information and Communications Technology (ICT) infrastructure business, with its carrier business and consumer business amounting to 44.2% and 38.2% of its total revenue. Huawei’s carrier business generated 281.5 billion yuan in revenue and helped carriers around the world deploy leading 5G networks, in places such as Switzerland, Germany, Finland, the Netherlands, South Korea, and Saudi Arabia. By working with carriers and partners, Huawei has signed more than 3,000 commercial contracts for industrial 5G applications.

The company’s consumer business generated 243.4 billion yuan in revenue in 2021. In particular, revenue from the smart wearable and smart screen segments both saw a 30% increase from last year. Huawei’s HarmonyOS was used in over 220 million Huawei devices as of 2021, becoming the world’s fastest-growing mobile device operating system.

The company has also been expanding new businesses on the enterprise end. Revenue from its new businesses has achieved 102.4 billion yuan, and increased more than 30% from last year.

The company’s R&D expenditure reached 142.7 billion yuan in 2021, representing 22.4% of its total revenue, the highest percentage in the past ten years, bringing its total R&D expenditure over the past decade to over 845.6 billion yuan. In the future, Huawei plans to continuously invest in R&D.

“Huawei’s problems can not be solved by ‘cutting back on food and clothing’ ”, said Guo at Huawei’s 2021 Annual Report Press Conference, referring to a Chinese idiom meaning cutting back on essentials.

In addition to increasing R&D to bring value for customers, Huawei also aims to help achieve carbon neutrality as well as help traditional industries achieve digital transitions. For example, Huawei has been able to cut power consumption by 88% via an additive neural networks solution. Huawei has also created a smart coal mining system, which allows workers to mine remotely with panoramic video and AI detection for conveyor belts.

At the conference, Guo reiterated that “Huawei does not build cars,” adding that the company will “deeply integrate ICT capabilities which Huawei built up over 30 years with the automotive industry, to help automotive manufacturers build and sell cars.”  Huawei has built 7 intelligent automotive solutions systems and rolled out over 30 smart car parts and components.

Image Credit: Huawei

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