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ESMC: Huawei 2021 Consumer Revenue Cut in Half, with Significant Net Profit Increase

Electronics Supply and Manufacturing (ESM) China, the China branch of AspenCore (the largest electronic industry media group, headquartered in Cambridge, MA, USA), recently reported that Huawei just released its 2021 annual report. The company reported a total revenue of RMB 636.8 billion (around US$100 billion) in 2021, which reflects a year-over-year decline of 28.6 percent. This is the first time in a decade for Huawei to report a revenue decline. Its consumer business saw the sharpest drop of 49.6 percent. The company explained that this sharp decline was the result of rounds of U.S. sanctions, the covid impact, and a decline in demand. However, in the meantime, Huawei’s net profit reported an eye-catching year-over-year increase of 76 percent. Diving deep into its annual report numbers shows that the vast majority of the net profit increase came from the sale of its high-end mobile device branch Honor. The company sold Honor last year due to the cut-off of its chip supply from Taiwan as a result of U.S. sanctions. The annual report also showed Huawei’s cloud services achieved a 34 percent growth. On the investment side, Huawei devoted 22.4 percent of its annual revenue into research and development (R&D). In the past decade, the company spent more than RMB 845 billion (around US$133 billion) on R&D. The report also mentioned that, in the future, Huawei plans to focus on using less advanced manufacturing processes to achieve product competitiveness.
Source: ESM China, March 29, 2022