Zhi DongXi (public number: zhidxcom)
Author | Li Shuiqing
Edit | Heart edge
Zhidong reported on March 28 that after Meng Wanzhou's return to China in December 2021, she made her first public appearance as Huawei's vice chairman and chief financial officer (CFO) today, attending Huawei's 2021 annual report conference at its Headquarters in Shenzhen with Huawei's rotating chairman Guo Ping.
In 2021, Huawei achieved global sales revenue of RMB636.8 billion, down 29% year-on-year, and net profit of RMB113.7 billion, up 75.9% year-on-year.
Meng Wanzhou said that although revenue has decreased, a number of indicators such as net profit and operating cash flow are getting better, the company's capital structure is stable, and its hematopoietic capacity is continuously enhanced. However, from the financial report, we found that huawei's "secret" of making hundreds of billions of yuan last year may be more related to the sale of honor and x86 server business.
Meng Wanzhou pointed out that in the past, time was a more difficult time for Huawei, and now Huawei has passed through the "black barrier area".
In the enterprise business sector, HUAWEI CLOUD revenue is open for the first time, with revenue increasing by more than 30% in 2021 to 20.1 billion yuan, ranking second in China's IaaS market; in the consumer business segment, there are more than 220 million Huawei devices equipped with HarmonyOS (Hongmeng system), but Huawei Rotating Chairman Guo Ping said that there is no plan to launch a mobile phone equipped with HarmonyOS overseas; and in the face of everyone's attention to the smart car business, Guo Ping once again reiterated that "Huawei does not build cars."
So what is the progress of Hongmeng ecology and "car-making" business? The five "legions" attack the enterprise business, what is the record? And facing the future, is Huawei still competitive? These questions of concern have been answered in depth by two Huawei executives, and we will excerpt the main contents as follows.
▲Meng Wanzhou, vice chairman and chief financial officer of Huawei (left), Guo Ping, rotating chairman of Huawei (right)
I. Meng Wanzhou: Huawei has passed through the "black barrier area"
Meng Wanzhou said that Huawei's financial situation in 2021 is stable, and the overall operating results are in line with expectations. In the past, time was a more difficult time for Huawei, and now, Huawei has passed through the "black barrier area".
"We're getting smaller, but our profitability and cash flow access are increasing, and the company's ability to cope with uncertainty is increasing."
As Huawei previously announced, Huawei is expected to achieve sales revenue of about 634 billion yuan in 2021, down 29% year-on-year. However, Huawei's net profit reached 113.7 billion yuan, an increase of 75.9% year-on-year.
At the same time, Huawei's operating cash flow reached 59.7 billion yuan, an increase of 69.4% year-on-year; the asset-liability ratio changed well, down 4.5 pct, which shows that Huawei's financial resilience has strengthened.
Looking at Huawei's revenue distribution on the business side in 2021, its operator business revenue was 281.5 billion yuan, down 7% year-on-year, but overseas revenue still accounted for more than 50%, according to Meng Wanzhou, which is in line with expectations.
Huawei's enterprise business revenue was 102.4 billion yuan, an increase of 2.1% year-on-year, of which innovative services such as HUAWEI CLOUD and digital energy increased by more than 30%, becoming a new growth point for Huawei.
At the same time, the revenue of the consumer business reached 243.4 billion yuan, down 49.6% year-on-year. Despite restrictions on tablets and mobile phones, revenue from smart wear and smart screens increased by more than 30%.
Meng Wanzhou responded to the company's revenue decline during the period mainly due to three factors: 1, the United States multiple rounds of sanctions have put Huawei mobile phones and other businesses under great pressure. 2, China's 5G construction is not so big demand. 3. Enterprises are under pressure under the epidemic, and Huawei is the same.
Huawei's net profit in 2021 reached 113.7 billion yuan, an increase of 49.1 billion yuan year-on-year, which is said to be mainly due to the optimization of the sales structure, and the supply plan management has improved the sales gross margin. At the same time, based on the accumulation of ICT, Huawei has promoted the improvement of internal operation efficiency through digital operations.
It is worth mentioning that the "secret" of Huawei's sharp profit increase is not unrelated to the sale of business by several subsidiaries in 2021.
In 2021, the Honor business and the X86 server business have left Huawei one after another. "Hyperfusion" is the main carrier of the original Huawei x86 server business.
The financial report data confirms this fact: Huawei's net income from processing subsidiary business reached 57.431 billion yuan in 2021, compared with only 592 million yuan in 2020. In other words, the sale of subsidiary Honor and x86 server business "super fusion" realized 57.431 billion yuan, contributing the bulk of Huawei's net profit.
In addition, Huawei's operating cash flow increased by 69.4%. Meng Wanzhou explained that this means that Huawei's income can be remitted in cash, indicating that the company's hematopoietic capacity is continuously increasing.
Second, Huawei's highest R&D investment in history! Ten years fell 845.6 billion yuan
After four years, Meng Wanzhou once again participated in huawei's financial report meeting, she admitted that the situation has changed rapidly, and this time she has been studying hard and hoping to keep up with the pace of society. She has repeatedly emphasized the idea that "long-term investment for the future is more reflective of future value", which is in line with her philosophy four years ago.
In 2021, Huawei's R&D investment has reached 22.4%, reaching a record high. It should be known that in the science and technology innovation board dominated by scientific and technological innovation enterprises, the R& D revenue ratio of many enterprises is only 5%.
According to the "European 2021 Industrial R&D Investment Scoreboard", Huawei's R&D investment accounts for the second largest in the world.
All indications are that Huawei is seeking a breakthrough like a technology startup.
At the end of the speech, Meng Wanzhou summed up the financial report results: "Huawei's greatest wealth is talent storage, thought storage, theoretical storage, engineering storage, method storage, and efficient and orderly storage of internal process management. ”
Third, is Huawei still competitive? In 2022, continue to survive
After Meng Wanzhou interpreted Huawei's financial situation in 2021, Guo Ping, Huawei's rotating chairman, made an in-depth interpretation of Huawei's business situation in 2021.
Guo Ping said that many friends are concerned, what is Huawei doing? Is Huawei still competitive? What will be the future of customer and business competition? In this regard, he interpreted it from the aspects of direction, reconstruction, and value.
1, advanced technology is not available, to the system engineering to be competitive
First of all, in terms of direction, he believes that the current focus is on digitalization, intelligence and low carbon.
Huawei survived in 2021, and at the MWC conference just held in Spain, Huawei just won many awards such as best mobile network infrastructure and best mobile innovation together with its partners, and its product strength and innovation were globally recognized. However, the problems facing Huawei are still not solved, and the main task in 2022 is still to survive.
Guo Ping stressed that Huawei's problems cannot be solved by cutting back on food and clothing, and to survive, we must increase investment in technology. Huawei should rely on continuous strong investment in R&D to achieve breakthroughs in system architecture, software systems, and theoretical exploration.
In the case that advanced technology is not available, Huawei must be competitive in system engineering.
Due to well-known reasons, Huawei has encountered difficulties in some single-point technologies such as chips, so Huawei has turned to seeking system breakthroughs to improve product competitiveness. Including hardware engineering architecture design, software capabilities and architecture, basic theories, etc. are all born for the system.
For example, when asked about chip technology, Guo Ping said: "Solving the chip problem is a complex and long process, which requires patience, and in the future, our chip solution may use a multi-core structure to improve chip performance." ”
"Talent, scientific research and innovation spirit are the three elements on which Huawei depends for its survival and development." Guo Ping said, "Huawei summarized the most challenging problems in the ICT industry and invited global talents to overcome them together. ”
Guo Ping said in an interview that in the two years before last year, Huawei recruited about 26,000 fresh graduates, of which more than 300 were "genius teenagers" defined by Huawei. In 2022, Huawei plans to recruit more than 10,000 fresh graduates, and only excellent talents can solve Huawei's current situation and make Huawei further develop.
2. Increase technical investment and be competitive for the "three reconstructions"
After talking about the direction, Guo Ping talked about reconstruction.
Huawei will implement reconstruction in three aspects: theory, architecture, and software, and strive to be competitive in the "three reconstructions":
(1) Theoretical breakthrough: Explore the theoretical essence of computing and communication to break through the bottleneck of industrial evolution, explore world-class problems such as "approaching and surpassing Shannon Theory" in the ICT industry, and deeply cultivate underlying technologies and processes such as material equipment technology.
(2) Architecture reconstruction: does not rely on single point optimization but promotes the construction of the overall competitiveness of the system. In terms of connecting industries, let non-Moore replace Moore to enhance the competitiveness of the system; in the computing industry, reshape the computing architecture through "non-isomorphism".
(3) Software remodeling: rooted in the software industry, reconstruct the core basic software stack. Huawei has sorted out the technical system of basic software to promote Hongmeng and Euler to exert greater potential.
Guo Ping said that Huawei is still working hard to achieve the "three reconstructions". In the case of limited material processes, many links have to choose alternatives. Guo Ping also emphasized cooperation with partners and developers to create the core competitiveness of the ecosystem.
3. Huawei Cloud's revenue increased by more than 30%, and Huawei insisted on not building cars
After talking about technology, Guo Ping talked about industry. Under the wave of digital transformation, Huawei's enterprise business achieved rapid growth in 2021, achieving sales revenue of 102.4 billion yuan.
For key industries such as government, transportation, finance, energy, and manufacturing, Huawei released 11 scenario-based solutions and established legions such as coal mines, smart highways, customs, and ports to integrate resources and efficiently serve customers. More than 700 cities and 267 Fortune Global 500 companies have chosen Huawei for digital transformation, and the number of service and operation partners has grown to more than 6,000.
In the HUAWEI CLOUD sector, where revenue will grow by more than 30% in 2021, Guo Ping said that Huawei will continue to push tens of billions of dollars of research and development every year and THE ACCUMULATION OF ICT in the past 30 years to customers in the form of cloud services, so that customers and developers do not have to make wheels repeatedly.
In terms of carrier business, Huawei achieved sales revenue of 281.5 billion yuan. Together with operators and partners, Huawei has signed more than 3,000 commercial contracts for 5G industry applications, and 5G has been commercialized on a large scale in manufacturing, mining, steel, ports, and medical care.
In the consumer scenario, Huawei achieved sales revenue of 243.4 billion yuan. Sports health has become the main direction of Huawei's attack, with more than 220 million Huawei devices equipped with HarmonyOS, making it the fastest growing mobile terminal operating system in the world. However, Guo Ping pointed out that at present, Huawei has no plans to launch mobile phones equipped with HarmonyOS overseas.
When asked about Huawei's chip supply, Guo Ping replied:
"The us sanctions for many years have brought great difficulties to Huawei, especially Huawei's mobile phone business, because mobile phone chips need to have strong computing power, low power consumption and small size, and Huawei still has difficulties in obtaining them." While actively discussing the sustainable development of mobile phones with relevant parties, Huawei is also exploring the possibility of development in wearable and other fields, the company's wearable watch bracelet has more than 100 million users, and the company will look for new development opportunities in several new areas. ”
In terms of smart car solutions that many people are concerned about, Guo Ping reiterated that Huawei does not build cars, but helps car companies build good cars through more than 30 years of ICT capabilities.
Conclusion: Only by investing more can we have a future
Guo Ping said: "We still have to fight for survival, there are many difficulties to overcome, but no matter how big the difficulties are, we must also unswervingly increase investment, so that we can have a future." ”
As the environment becomes more sensitive, we can clearly feel that Huawei is talking less and less at the earnings report, which may be a strategic requirement at this stage.
However, through Meng Wanzhou and Guo's smooth and heavy narration, we still see huawei like a trapped beast trying to break free of the chain and achieve the best defense with offense. China's largest tech giant is shouting for technological innovation like a startup and seems to be well prepared to start another business.