Huawei sees revenue growth in 2022 despite profit decline

March 31, 2023 0 Comments

Huawei has released its 2022 annual report. With 642.3 billion RMB in revenue and 35.6 billion RMB in net profits, the performance was “in line with forecast”.

The company’s revenue grew 0.9% compared to last year’s 636.8 billion RMB. In 2022, Huawei achieved rapid growth in digital power and Huawei Cloud, which posted a total revenue of 96.1 billion RMB, accounting for 15% of total revenue.

In addition, Huawei’s enterprise business grew by 30%, significantly outpacing its carrier business, which only grew 0.9%.

“2023 is the first year that we return to business as usual with external restrictions still in place,” says Eric Xu, the outgoing rotating chairman of Huawei, who will be succeeded by Meng Wanzhou, daughter of Huawei’s founder Ran Zhengfei.

Xu was referring to sanctions and geopolitical tensions that the company still haven’t been able to recover from. In 2022, the company saw a net profit of 35.6 billion RMB, a YoY decrease of 68.7%, which is the biggest profit drop in the company’s history. Meantime, the company’s cash flow suffered a significant drop, which amounted to 17.8 billion RMB from operating activities in 2022, representing a decline of 70.2%.

What also dropped is Huawei’s consumer business revenue. With 214.5 billion RMB in revenue, it is down 11.9% compared to last year.

However, the company see it as “decline in our device business has abated”, since it saw a 49.6% YoY decline in 2021. The company attributes the outcome to a series of highlights in launching new consumer products, such as HUAWEI Mate 50 series, the new iteration of HarmonyOS, record-breaking AITO deliveries and breakthroughs in PCs, tablets, wearables, and IoT devices.

Despite its hardships, the company has invested a record high of 161.5 billion RMB in R&D, equating to 25.1% of its total revenue. As a result, the company saw a total of 120,000 active patents by the end of 2022. 7,600 of which were filed last year. In the past decade, Huawei has invested over 977.3 billion RMB in R&D, making it No.4 at the 2022 EU Industrial R&D Investment Scoreboard.

The company had 114,000 employees working in R&D by 2022, which amounts to 55.4% of its 207,000 employees. By the end of 2022, the company had 12,000 more employees in total than that at the end of 2021.

Going forward, Huawei says it will “optimize the business portfolio to enhance resilience”, continue to “invest heavily in R&D,” and “adhere to its positioning as a provider of high-quality ICT products and services,” according to the company’s statement.

The strategy of adhering to its positioning as a ICT provider echos what Eric Xu said today about Huawei’s lack of interest in building cars. The company has issued a decision-making announcement on the 31st, signed by Huawei’s founder and chairman Ren Zhengfei. The announcement made clear Huawei has no car-making plans in the next five years, and emphasized that neither “Huawei” nor “HUAWEI” can be “used in vehicle publicity and appearance.”

All photos were taken by PingWest.

Leave a Reply