Meng Wanzhou will appear at the Huawei annual report conference tomorrow, in addition to mobile phones, chips and these points of view

The first financial reporter learned from Huawei that Huawei will hold the 2021 annual report conference at 4:30 pm on March 28. At that time, Guo Ping, huawei's rotating chairman, and Meng Wanzhou, vice chairman and CFO of Huawei, will attend the performance briefing. It is worth noting that this is also the first public appearance of Meng Wanzhou after returning to China.

At the end of last year, Huawei disclosed its overall revenue in 2021 in its New Year's speech, and it is expected to achieve sales revenue of about 634 billion yuan for the whole year.

In 1987, Ren Zhengfei, who turned 43, led a team to establish Huawei, using two multimeters and an oscilloscope to start a business in a "rotten shed" in Shenzhen. At present, Huawei has grown from a small and unknown company to a global leader in the field of communications. According to the latest release of the 2021 global communication equipment market share released by the third-party agency Dell'oro Group, Huawei once again ranked first with a market share of 29%.

However, since entering the "US entity list", the "global supply chain system" on which Huawei relies has been frequently challenged, and the limitation of core technologies such as chips has also allowed the company to start a long period of self-help. In the past three years, how has Huawei's main business developed? Under the limitations of technology, how is Huawei's spare tire plan implemented? How are overseas markets developing? The development of mobile phones and chip businesses will become the focus of this performance meeting.

Concern 1: Have you survived the "survival" stage?

After entering the LIST of US entities, Huawei still maintains the activity of various businesses, but from the perspective of impact, the impact of the "digital Berlin Wall" established by the United States on Huawei will exist for a long time.

According to Huawei's previous disclosure, in 2021, Huawei expects to achieve sales revenue of about 634 billion yuan, which is down 29% compared with 2020. In this regard, Huawei said that in 2021, the company is still in a complex and dynamic environment, and the repeated epidemics and the uncertainty brought about by geopolitics will inevitably be a normalized challenge.

"People who care about Huawei may ask: How has Huawei happened recently? Is medium- and long-term competitiveness OK? Can Huawei still help customers succeed? On March 1 this year, during the MWC2022 Barcelona exhibition, Guo Ping said in an online live broadcast that Huawei will not withdraw from overseas markets, and in the face of challenges, Huawei will adhere to globalization, significantly increase strategic investment in root technologies, and strive to achieve three reconstructions of basic theory, architecture and software, so as to continuously enhance Huawei's medium- and long-term competitiveness.

At present, Huawei's overall survival situation and whether it has crossed the "life and death line" will be the biggest focus at this performance meeting.

Concern 2: Is the chip manufacturing problem solved?

At an employee symposium in mid-last year, Huawei said it was working with industry chain partners to solve the problems of supply continuity and competitiveness. "At present, Huawei's production is not a problem, the problem of the US card neck can finally be solved, and Huawei is solving the problem of supply continuity and competitiveness with industrial chain partners."

From the perspective of Huawei's positioning, it is still an ICT system equipment supplier, and its dependence on the entire industrial chain of chips is still very strong.

In terms of chip solutions, there have been many rumors in the past two years, but Xu Zhijun, Huawei's rotating director, has said that the current chip manufacturing is "fake news".

"The current real situation is that Huawei has been relying on (chip) inventory to survive, and is also trying to solve the chip manufacturing problem, but it depends on the joint efforts of the Chinese semiconductor industry chain, and it takes a huge effort and a long time to solve it." Xu Zhijun said that the news related to Huawei chips that he sees now is all fake news, and none of them are true.

It is worth noting that on December 28 last year, Huawei Precision Manufacturing Co., Ltd. was established. However, according to Huawei's official information, the above companies do not produce chips, and their main business is the precision manufacturing of some core devices, modules, and components of Huawei's wireless, digital energy and other products, including assembly and packaging and testing.

The solution of the chip problem is also the topic of attention from the outside world at this performance meeting.

Concern 3: When will the mobile phone business resume?

As one of the troika driving Huawei's growth, Huawei's consumer business has been most affected in recent years.

From the upstream chip rush to the anti-seasonal increase in order production, and then to the further penetration of omni-channel, the market space left by Huawei after being restricted is gradually being eaten by other head mobile phone manufacturers. According to data released by Omdia, Huawei's mobile phone shipments in 2021 have dropped to 35 million units, down 81.6% from 2020, while its global market share has dropped from 15% in 2020 to about 3% in 2021.

"At present, the biggest difficulty caused to us by the stage is the mobile phone business, and everyone knows that the chip of the mobile phone needs advanced technology, the volume should be small, and the power consumption should be small." Huawei can design (Kirin chips), but no one can help us make them, they are stuck, and we and our partners in the industrial chain are still tackling the problem. Huawei executives have previously told reporters that although the supply chain situation is complicated, they will not give up and will not sell the mobile phone business in the future.

The recovery of the mobile phone industry chain is expected to be answered at the press conference.

Concern 4: Which businesses can become the new "granaries"?

After the C-end service is under pressure, the B-end service has become an important "granary" for Huawei.

Taking the coal mining corps as an example, Ren Zhengfei has said that coal mines may become a very important business growth point for Huawei. Through the combination of ICT technology and coal mining technology, Huawei can help the coal industry to carry out digital and intelligent transformation, realize a "safe, fewer people, no one, efficient" production model, and also allow coal miners to "wear suits and ties" in the future.

After the establishment of the coal mine "legion", Huawei also gradually copied the "legion" model to multiple vertical industry tracks.

In addition to the changes in the "Legion" business model, the automotive and cloud businesses also moved frequently in the past year.

Huawei's goal in the automotive track is to continue to participate in the automotive industry as a supplier of smart auto parts. Yu Chengdong, managing director of Huawei, CEO of consumer business and CEO of the intelligent vehicle solution business unit, said in an interview in January this year that Huawei will challenge the sales target of 300,000 vehicles per year in 2022, and the annual sales of cooperative car companies will reach 100 billion yuan.

In the cloud business, after making many organizational structure adjustments, it has also launched a new strategic plan, compared with the previous business model, Huawei has been more systematic since last year to provide integrated AI, 5G and other self-developed capabilities for the vertical industry to provide overall solutions.

Which businesses are expected to become the "locomotive" of Huawei's future growth is also a topic of concern to the outside world.

Concern 5: Meng Wanzhou made his public debut

Another focus of this performance meeting is Meng Wanzhou, vice chairman and CFO of Huawei.

According to Huawei's official website, Meng Wanzhou graduated from Huazhong University of Science and Technology with a master's degree. He joined Huawei in 1993 and has served as President of Huawei's Sales Finance and Treasury Management Department, President of The Financial Management Department, Chief Financial Officer of Huawei Hong Kong Corporation, and Director of International Accounting.

In 2011, Liang Hua, former CFO of Huawei, stepped down, and Meng Wanzhou, who has worked in Huawei finance for 18 years, officially became the company's managing director and CFO. In a previous board election, Meng Wanzhou was elected as vice chairman. Huawei said that in the process of huawei's rapid business development and global operation in recent years, she has led the construction of a standardized and professional system of the company's financial system and successfully implemented financial management reforms.

On December 1, 2018, Meng Wanzhou was unjustifiably detained at Vancouver Airport in Canada, and on the evening of September 25, 2021, Meng Wanzhou arrived at Shenzhen Bao'an International Airport on a chartered flight by the Chinese government.

This performance meeting is also the first public appearance of Meng Wanzhou after his return to China.