Huawei steps up R&D investment to improve business

Huawei – in its latest annual report – has revealed how its three main business groups such as carrier, enterprise, and consumer businesses have performed in 2022.
2023 Huawei CFO Sabrina MengRevenue from Huawei’s carrier business, which sells telecom equipment and telecom software to mobile operators, rose 0.9 percent to CNY284 billion in 2022. Huawei is still facing scrutiny in some of the top telecom equipment markets including the United States.

Revenue from Huawei’s consumer business decreased 11.9 percent to CNY214.5 billion in 2022. Huawei had already sold its Honor smartphone business.

Revenue from Huawei’s enterprise business rose 30 percent to CNY133.2 billion in 2022. Huawei’s enterprise business is mainly strong in China.

Huawei’s total revenue for 2022 rose 0.9 percent to 642.3 billion yuan. While that represented mild growth over 2021, it was still far below the record 891.3 billion yuan logged in 2019 when it was the top Android smartphone vendor globally.
2023 Huawei chairman Eric XuHuawei has generated CNY35.6 billion ($5.18 billion) in net profits. Huawei has strengthened investment in R&D, with an annual expenditure of CNY161.5 billion 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 CNY977.3 billion.

R&D spending over the year rose 13.2 percent to 161.5 billion yuan ($23.50 billion), equivalent to a quarter of company revenue.

Such spending helped Huawei with replacing components in its products that were hit by U.S. trade sanctions, Sabrina Meng, Huawei’s CFO, said. Huawei Founder Ren Zhengfei told a university in February they had replaced more than 13,000 parts.

“In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei’s operations,” said Eric Xu, Huawei’s Rotating Chairman, at the company’s annual report press conference. “In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers.”

At the end of 2022, Huawei’s liability ratio was 58.9 percent and its net cash balance was CNY176.3 billion.

Huawei’s Eric Xu said they saw areas such as green development as opportunities and were investing in 5.5th and 6th generation technology, with the hope that they may be able to start rolling out 5.5G products by 2025.