Huawei records 0.9% increase in revenue for 2022, profits slump 69% y-o-y; results ‘in line with forecast despite substantial pressures’
Published: Mar 31, 2023 09:08 PM
Attendees visit the Huawei pavilion at VivaTech technology startups and innovation fair during its opening day in Paris, France, June 15, 2022. Photo:Xinhua

Attendees visit the Huawei pavilion at VivaTech technology startups and innovation fair during its opening day in Paris, France, June 15, 2022. Photo:Xinhua

Chinese telecommunications giant Huawei reported a net profit of 35.6 billion yuan ($5.18 billion) for 2022, a slump of 69 percent year-on-year, while rev-enue inched upwards by 0.9 percent to 642.3 billion yuan, a result company executives said is "in line with forecasts despite substantial pressures."

The 2022 revenue represents a tiny increase from 2021, when it hit 636.8 bil-lion yuan, but marks a big turnaround from the nearly 30 percent year-on-year sales tumble in 2021 due to US sanctions.

Profits suffered a big decline, which was mainly due to rising commodities costs, US sanctions, as well as a strong boost in research input, Chief Finan-cial Officer Meng Wanzhou said at the company's annual report press confer-ence held in South China's Shenzhen on Friday.

Huawei's annual expenditure for research and development (R&D) reached 161.5 billion yuan in 2022, representing 25.1 percent of the company's annual revenue and bringing its total R&D expenditure over the past 10 years to more than 977.3 billion yuan.

"Despite substantial pressure in 2022, our overall business results were in line with forecasts," Meng said.

In 2022, revenue from Huawei's carrier, enterprise, and consumer businesses was 284 billion yuan, 133.2 billion yuan, and 214.5 billion yuan, respectively.

Profits are falling, and the profit margins are not very high, which indicates that the firm, although making some progress, is still in a difficult period with many loopholes that need to be resolved, Fu Liang, a veteran industry analyst, told the Global Times on Friday.

Fu pointed out that the sharp slump was also due to the high basis of profits from last year, when profits were boosted by the sale of its Honor smartphone branches.

Observers also stated that increasing investment in R&D would enable the firm to quickly emerge from the shadow of US sanctions, thus helping it to find alternatives for critical components that it previously relied on the US for.

Huawei, which has been the target of a US crackdown for roughly four years, said it has adopted a business-as-usual approach since US sanctions become a "new normal" for the company. Looking ahead to 2023, "sustainable survival and development" remains a top priority, rotating chairman Eric Xu Zhijun said at the Friday conference.

"In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers…we are con-fident in our ability to rise above any challenge that comes in our way, laying a solid foundation for sustainable survival and development," Xu said.

Following the company's latest progress in countering the US ban, Xu dis-closed at the conference that Huawei has made breakthroughs in electronic design automation (EDA) tools for chips produced at 14-nanometer technolo-gy and above with partners, which indicates all domestic semiconductor firms can use the EDA tool for designing chips.

Like Huawei, a range of high-tech Chinese firms have been under intensified US crack-down over the past several years, particularly those in the semiconductor sector.

"Under such severe pressure, there will always be a breakthrough, and the higher the pressure is, the sooner the industry will make a breakthrough," Fu said. He noted that under a national-level strategy, the domestic semiconductor sector is working vigor-ously to accumulate in this area and "resolve bottlenecks one by one."

"We also believe that the Chinese technology industry as a whole will not sit idly by during the US crackdown on China's semiconductor sector… and we will support all efforts for such 'self-saving' moves," Xu said.