Huawei Technologies Co (華為) posted its first annual profit decline in more than a decade, after years of US sanctions all but obliterated its smartphone arm and compelled the Chinese telecom gear maker to ratchet up research spending.
The Shenzhen-based company said its net income last year plunged almost 70 percent to 35.6 billion yuan (US$5.2 billion), although the year-ago comparison was inflated by the sale of its youth-oriented Honor mobile unit.
The company added that it poured 25.1 percent of its 642.3 billion yuan revenue back into research. That is among the highest ratios in the global tech industry and reflects the Chinese telecom gear maker’s sustained intent to develop alternatives to the US components and software it can no longer access.
Photo: Bloomberg
Huawei is trying to open up new markets and businesses after US tech export restrictions gutted its smartphone business — briefly the world’s largest — and curtailed the sale of advanced gear in developed markets. Chief financial officer Meng Wanzhou (孟晚舟) — the daughter of Huawei founder Ren Zhengfei (任正飛) — joined other executives yesterday in affirming the company’s intent to continue researching ways around a blockade of vital US technologies.
“2023 will be crucial to Huawei’s sustainable survival and development,” current rotating chairman Eric Xu (徐直軍) said in a statement. “Plum blossoms tend to grow sweeter from a harsh winter’s freeze. Today, Huawei is like a plum blossom.”
The responsibility of leading that effort will fall on Meng for the greater part of this year. She is slated to join the company’s roster of rotating chairpersons next month, a six-month role that would allow her to oversee Huawei’s operations for the first time. Ren, who is turning 79 in October, has not announced his succession plan.
Meng dismissed a question about plans after ascending to her new role, saying Huawei has always been run by a “collective leadership.”
“The company will not tie its destiny to any individual. We have a clear commitment to that rule,” Meng told reporters gathered at Huawei’s leafy Shenzhen campus for an annual briefing.
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