Huawei closed 2020 with record revenues and profits driven by the domestic market and in spite of the squeeze on purchases of American hi-tech components imposed by the administration of former President Donald Trump for national security reasons. While heavy unknowns are looming in 2021.
The Shenzhen giant, a leader in next-generation 5G mobile communications networks, reported annual revenues up 3.8% to 891.4 billion yuan (about $ 136.7 billion) and net profits up in the year. 3.2% to 64.6 billion yuan (nearly 10 billion dollars), for a margin that rose to 7.3%. “Over the past year, we have stood firm in the face of adversity and Huawei’s financial results have been broadly in line with forecasts,” in the midst of the global Covid-19 pandemic and intense pressure from US sanctions. Rotating president Ken Hu, speaking at the press conference also streamed, stressed his “confidence in the group’s strategy: we will continue to do our job to the end, step by step. We have seen a slowdown in the group’s strategy. growth rate and life hasn’t been easy for us. US restrictions have impacted our consumer sector, especially mobile. “
Some analysts, in fact, have stated that Huawei’s performance could deteriorate in 2021: according to the American research firm IDC, the group sold 189 million smartphones in 2020, placing itself in third place worldwide, but shipments are likely are set to fall this year to around 70 million, with a decline of 42.4% annually already in the three months to December 2020, against revenues of 220.1 billion yuan, down 11% for the first time from US sanctions. Beijing and Washington disagree on several issues, including cutting-edge trade and technology, and Joe Biden’s new administration has shown little sign of change so far, prompting founder Ren Zhengfei to steer Huawei to new growth areas such as l ‘smart agriculture, healthcare, electric cars and smart cities. “The global supply chain that Huawei relies heavily on has been disrupted,” added Hu, one of three top managers alternating in the leadership role. “I don’t know who will benefit, but definitely not the industry.”
Overall, domestic businesses accounted for more than 65% of consolidated revenues. In 2020, China was the only large country to see a positive GDP (+ 2.3%) after the containment of Covid-19, while the other major world economies recorded a contraction in growth and are still struggling with the pandemic. As for the three different business areas, the consumer business division recorded revenues of 482.9 billion yuan (74.1 billion dollars), up 3.3% annually, but slowing down from 34% in 2019. The division of the carrier business group is the one that has suffered the heaviest blow, reaching revenues of 302.8 billion yuan (46.4 billion) in fractional growth of 0.2%. One particularly positive performance was the enterprise business, including products such as cloud computing, among the points of diversification chosen: revenues rose to 100.3 billion yuan (15.4 billion dollars), with a annual increase of 23%.