Huawei focused on ‘surviving next five years’ as revenue sinks 30%

A great deal of hope has been placed on its fast-growing enterprise unit

Trade

Image: IDGNS

6 August 2021

The chairman of Huawei has said that the aim is now to “survive” after the company’s revenue fell by almost a third during the first half of 2021.

The statement came as Huawei’s financial earnings revealed revenue of 320.4 billion yuan for H1 – a significant drop from the 454 billion yuan reported in the first half of 2020.

The Chinese tech giant has experienced a series of hurdles over the past two years, from being blacklisted by the US government to being banned from the UK’s 5G infrastructure, the effects of which have taken a significant toll on its earnings.

However, Huawei’s rotating chairman Eric Xu said on Friday that the company is focused on surviving the next five years, which will likely be based on the success of its emerging enterprise unit.

“We’ve set our strategic goals for the next five years,” he announced in a statement. “Our aim is to survive, and to do so sustainably. We’ll do this by creating practical value for our customers and partners. Despite a decline in revenue from our consumer business caused by external factors, we are confident that our carrier and enterprise businesses will continue to grow steadily.”

Despite the fall in revenue, Huawei said that the “overall performance was in line with forecasts”, with a profit margin of 9.8% – the highest since 2019.

The company is divided into three business segments: carrier, enterprise, and consumer, which generated revenues of 136.9, 42.9, and 135.7 billion yuan, respectively.

Although the enterprise unit provides a relatively small revenue in comparison to the other two segments, it has been the fastest-growing out of the three. In March, it was reported that the enterprise unit managed to achieve a 23% year-on-year growth with full-year revenues of £11 billion, as Huawei’s consumer and carrier segments grew by 3.3% and 0.2%, respectively.

The latest financial results come days after it was announced that Huawei was planning to invest $100 million in its Spark start-up programme. The move is in line with the company’s sustainability pledge, and aims to provide support for 1,000 start-ups in the Asia Pacific region over the next three years.

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