Huawei on Monday reported 113.7 billion Yuan net profits in 2021, up 75.9% year-on-year.
“Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing,” said Huawei CFO Meng Wanzhou. “And we are more capable of dealing with uncertainty.”
Meng spoke at a livestreamed event from the company’s Shenzhen headquarters. This was also her first time to meet the media since she returned to China last year after nearly three years in Canada.
“Our annual audit results indicated that our revenue for 2021 reached 636.8 billion Yuan. This was thanks to the sustained trust and support of our customers, consumers, and partners,” Meng said.
She attributed the revenue drop to the impact of US sanctions on the smartphone business, the COVID-19 pandemic and supply chain issues.
The Huawei 2021 annual report shows in 2021 that Huawei’s carrier business generated CNY281.5 billion in revenue. Third-party test results have found that 5G networks built by Huawei for customers in 13 countries, including Switzerland, Germany, Finland, the Netherlands, South Korea, and Saudi Arabia, provide the best user experience.
Huawei’s enterprise business generated CNY102.4 billion in revenue. Huawei launched 11 scenario-based solutions for key sectors such as government, transportation, finance, energy, and manufacturing. The company also established multiple dedicated teams, including a Coal Mine Team, a Smart Road Team, and a Customs & Port Team, to combine resources in a way that more efficiently serves the needs of its customers. As of 2021, over 700 cities and 267 Fortune Global 500 companies have chosen Huawei as their digital transformation partner and Huawei now works with more than 6,000 service and operation partners around the world.
Huawei’s consumer business generated CNY243.4 billion in revenue and continued to see steady sales growth in smart wearables, smart screens, true wireless stereo (TWS) earbuds. Guo Ping, Huawei Rotating Chairman, said the company hopes to find a solution to sustain its smartphone division and will ramp up investment in research seeking microchip “breakthroughs” after losing access to certain advanced technologies.
He highlighted that artificial intelligence (AI), Wifi6 connectivity, green energy, automotive and cloud computing as key areas for R&D and new business opportunities. “We are still working to reshape these three areas of the ICT industry, but we are already seeing the results of breakthroughs in certain theories and architectures,” he said.
“The real value of Huawei in particular lies in the capabilities, teams, and platforms we have built with our long-term R&D investment. They are the real key to Huawei’s long-term and sustained competitiveness,” he said.
The company’s R&D expenditure recorded a new high as it reached CNY142.7 billion in 2021. Huawei used to invest over 10% of their revenue, but in 2021, it used up to 22.4% of the company’s total revenue, ranked No. 2 of the EU industrial R&D investment scoreboard, 54.8% of Huawei staffs worked in R&D, that’s over 100,000 R&D employees globally.
“Our strategy has become clearer. We will continue to invest heavily in talent and R&D”, Meng said. “Our R&D budget will mainly be used to optimize system architecture, enhance software performance, and explore fundamental theories. We hope to provide highly reliable and trustworthy products to our customers by overcoming technology and supply challenges.
”The company aims to hire a staggering 10,000-plus college graduates in 2022, Ping said during the event. “A very important initiative that Huawei is implementing is to develop digital talent in Asia Pacific, we plan to invest 50 million US dollars to cultivate 500,000 digital professionals in the AP region,” he said. In Asia Pacific, Jun Zhang, Director of Huawei Asia-Pacific Public Relations Department told the media, in the context of accelerating digital transformation, there are strong market demands for innovative digital solutions and high-quality suppliers. “In our vision, a digital world is not just about technology. It is about people and humanity”, Huawei plans to invest US$10 million in the Asia-Pacific region to train 100,000 ICT talents, according to him.
Huawei also worked with universities in the Philippines to cultivate young and talented individuals in the ICT industry. As part of Huawei Philippines tech4all programs, the company held Seeds for the Future 7 years in the country and partnered with almost 60 universities with Huawei ICT Academy program. Its scholarship program with TOP universities also sponsored 22 scholars so far, to provide financial assistance to deserving ICT students who are already in their 3rd to 5th year in college.
