Huawei business ‘as sound as ever’

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Huawei’s chairman Liang Hua.
Huawei’s chairman Liang Hua.

Besides getting caught up in a trade war between the world's two biggest economic powers, the US and China, Huawei’s revenue increased in the first half of 2019.

Chinese telecommunications giant Huawei today announced its business results for the first half of 2019.

Huawei posted 401.3 billion yuan ($58 billion) in revenue, a 23.2% increase over the same period last year. The company's net profit margin for H1 2019 was 8.7%.

In a panel discussion last month, Huawei founder and CEO, Ren Zhengfei, had expressed fears that the telecommunications equipment was set to lose $30 billion in revenue as a result of restrictions imposed by the US government.

As the trade war between the US and China rages on, the former, which put Huawei on an export blacklist citing national security issues, has been rallying its allies to cut Huawei out of planned 5G networks, citing “national security threats” due to the company’s close ties to the Chinese government.

The blacklist has seen companies, including Alphabet’s Google and British chip designer ARM, limit or cease their relationships with the Chinese company.

Huawei has denied installing any backdoors in its networking equipment for alleged government spying.

US-China trade talks resumed today in Shanghai.

According to Huawei’s chairman, Liang Hua, operations are smooth and the organisation is as sound as ever.

The company says with effective management and an excellent performance across all financial indicators, Huawei's business has remained robust in the first half of 2019.

In Huawei’s carrier business, H1 sales revenue reached 146.5 billion yuan ($21.2 billion), with steady growth in production and shipment of equipment for wireless networks, optical transmission, data communications, IT, and related product domains, it notes.

To date, Huawei has secured 50 commercial 5G contracts and has shipped more than 150 000 base stations to markets around the world, the company says.

In Huawei’s enterprise business, H1 sales revenue was 31.6 billion yuan ($4.6 billion). Huawei says it continues to enhance its ICT portfolio across multiple domains, including cloud, artificial intelligence, campus networks, data centres, Internet of things, and intelligent computing.

Regarding the consumer business, H1 sales revenue hit 220.8 billion yuan ($32 billion). Huawei’s smartphone shipments (including Honor phones) reached 118 million units, up 24% year-on-year.

The company also saw rapid growth in its shipments of tablets, PCs, and wearables. Huawei says it is beginning to scale its device ecosystem to deliver a more seamless intelligent experience across all major user scenarios.

According to the company, to date, its mobile services ecosystem has more than 800 000 registered developers, and 500 million users worldwide.

“Revenue grew fast up through May,” says Liang. “Given the foundation we laid in the first half of the year, we continue to see growth even after we were added to the entity list. That’s not to say we don't have difficulties ahead. We do, and they may affect the pace of our growth in the short term.”

He adds: “But we will stay the course. We are fully confident in what the future holds, and we will continue investing as planned – including a total of 120 billion yuan ($17.4 billion) in R&D this year. We’ll get through these challenges, and we’re confident that Huawei will enter a new stage of growth after the worst of this is behind us.”

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