Huawei posts strong revenue in 2020 despite US ban

Huawei’s 2020 annual report has been published and the company reports that the numbers are in line with what was forecasted: “marginal growth”. Huawei’s sales revenue weighed in at CNY 891.4 billion ( $136.7 billion) with net profit CNY 64.6 billion ($9.9 billion). Revenue is up 3.8% YoY and profits are up 3.2% YoY. This is despite US sanctions that were set in 2019 by the Trump Administration.

Over the past year, we’ve held strong in the face of adversity. We’ve kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recover and social progress around the world. We also took this opportunity to further enhance our operations, leading to a performance that was largely in line with forecast.” - Rotating Chairman Ken Hu

Revenue from the Americas has slowed by 24.5 percent while sales from within China were 66% of the company’s revenue versus 59% in 2019. The company has seen growth in its wireless telecom business thanks to aggressive 5G rollout in China. Carrier partners had strong 5G rollouts in Europe, the Middle East, and Africa.

Although Huawei’s consumer business grew by a small percentage from 2019, its smartphone sales have dwindled, losing market share to other Chinese OEMs in some European markets. Huawei’s fourth quarter performance was the first time the company reported a decline (though slight) in sales.

As reported by Bloomberg, US sanctions placed against Huawei in 2019 has resulted in the company’s “toughest year on record”. With signs of the smartphone business slowing down, Huawei has managed to grow in other areas of business including smart agriculture, healthcare, and electric cars.

The global supply chain Huawei heavily relies on has been disrupted[…] I don’t know who will benefit from it, but definitely not the industry.” – Rotating Chairman Ken Hu

Huawei’s enterprise business has grown thanks to the company’s scenario-based solutions for various industries that helped create a digital ecosystem for the company. The company has also seen its Cloud business grow, gaining business from hospitals and helped partners to establish learning platforms that serve more than 50 million young students.

Financial statements in Huawei’s 2020 Annual Report were independently audited by KPMG.

Sources: 1 • 2