Meng Wanzhou attended Huawei's 2021 financial report meeting
On the afternoon of March 28, Huawei held the 2021 annual report press conference in Shenzhen, and Huawei's rotating chairman Guo Ping and Huawei CFO Meng Wanzhou attended the performance briefing, which was also meng Wanzhou's first appearance after returning to China.
As Guo Ping said, "In 2021, we survived." Under the continued impact of the sanctions imposed, Huawei's global sales revenue in 2021 was 636.807 billion yuan, down 28.6% year-on-year, of which operator business revenue was 281.469 billion yuan, down 7% year-on-year, consumer business was 243.431 billion yuan, down 49.6% year-on-year, and enterprise business revenue was 102.444 billion yuan, a slight increase of 2.1% year-on-year.
On the other hand, Huawei's net profit in 2021 was 113.718 billion yuan, an increase of 75.9% year-on-year. It is worth noting that the increase in its net profit came from the growth of 67.5% of its operating profit, while half of the operating profit came from other net income and expenditure from the sale of its Honor business and Super fusion digital technology co., Ltd. If you exclude this one-time income, Huawei's net profit figure last year was lower than in 2020.
Science and technology + talent, an important starting point for future development
After Huawei was included in the entity list by the United States, whether Huawei can maintain sustained growth, and even whether it can cross the "life and death line", has always been a hot topic of concern in the industry.
Despite the decline in revenue, Huawei has maintained its level of investment in research and development: its research and development expenses in 2021 were 142.666 billion yuan, almost the same as in 2020, which made its research and development expense ratio hit a new high, reaching 22.4%.
Guo Ping said that in the future, Huawei will rely on strong investment in research and development to solve the problem of survival and development, and will continue to promote theoretical breakthroughs, architecture reconstruction, software reshaping and other "three reconstructions".
In terms of basic theory, Huawei will explore the theoretical nature of computing and communication by exploring world-class problems in the ICT industry (such as approaching and surpassing Shannon's theorem), as well as deepening the underlying technologies and processes including materials and equipment, in order to break through the bottleneck of industrial evolution.
In terms of architecture design, Huawei will no longer rely on single point optimization, but will build a systematic overall competitiveness by connecting industries, computing industries, and carbon-neutral technologies.
In terms of software, Huawei will take root in the basic software capabilities and reconstruct the core basic software stack. For example, to create the core basic software advantages of cloud-native PaaS + SaaS to enhance the competitive advantage of cloud services, and to promote the construction of Kunpeng/Ascend industry ecology, so as to form its core capabilities in the field of open source software.
"We need to be competitive with systems engineering when advanced processes are not available." Guo Ping said.
In addition, Guo Ping pointed out that Huawei has always maintained its attraction to talents, especially top talents. In the past two years, Huawei has recruited about 26,000 fresh graduates, of which more than 300 are "talented teenagers" as defined by Huawei. In 2022, Huawei will also plan to continue to recruit more than 10,000 fresh graduates.
"Only excellent talents can solve Huawei's current situation and let Huawei develop step by step." Guo Ping said.
New directions in three businesses
Judging from the annual report, the carrier business around 5G is still Huawei's largest business, especially the overseas business has achieved certain growth. At present, Huawei has provided 5G network deployment for 13 countries including Switzerland, Germany, Finland, the Netherlands, South Korea, and Saudi Arabia.
Although the consumer business has been hit hard, Huawei has made progress in the fields of smart wear and smart screens. On the surface, this is in line with the current development trend of global smart terminals, but behind it is actually the intelligent interconnection ecology that Huawei has built with smart phones as the core for many years. Perhaps, the HarmonyOS operating system will play a greater role in the future.
Huawei's enterprise business has not declined, and under the support of its ICT technologies including 5G and intelligent interconnection ecosystem, Huawei is gradually providing digital transformation solutions for various industries and application scenarios.
At the press conference, Guo Ping once again mentioned Huawei's "coal army", and the metaphor of "digging coal in a suit and tie" shows Huawei's determination to use long-term accumulated ICT technology to promote the digital transformation of the coal industry. At present, digital transformation has become an urgent need in traditional industries, so Huawei's enterprise business will have a broader space for development.
For the old topic of car manufacturing, Guo Ping reiterated that Huawei does not build cars, but uses huawei's accumulated technology for more than 30 years to deeply integrate with the automotive industry to help car companies build and sell good cars.
Guo Ping, rotating chairman of Huawei, source: Visual China
Crack the chip puzzle
How Huawei cracks the problem of chip restrictions has also attracted widespread attention.
Guo Ping said at the meeting that chip supply cuts have a great impact on Huawei's mobile phone business, but the business continuity of To B is still guaranteed. In the future, Huawei will exchange stacking and area for performance, and use less advanced processes to make products more competitive.
Judging from Guo Ping's statement, Huawei is still affected by chip restrictions. Because it is difficult to become a chip manufacturer in a short period of time, it has to adopt a compromise approach of avoiding the heavy and light, focusing on the to B field, while the To C side is looking for a way out in the non-smart phone field such as wearables to minimize the negative impact from the chip.
In fact, in recent years, Huawei's Hubble Investment has been carrying out in-depth layout of the semiconductor supply chain, and its investment targets cover semiconductor materials, RF chips, displays, analog chips, EDA, testing, CIS image sensors, lidar, lithography machines, third-generation semiconductors, artificial intelligence and many other segments. According to relevant statistics, as of now, Hubble Investment has invested in 65 companies.
In addition, Huawei established a precision manufacturing co., LTD. at the end of last year, covering 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). While the business does not include semiconductor manufacturing, this shows that Huawei is actively improving its supply chain.
It can be seen that Huawei has been taking a different approach to chip supply. 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." "Therefore, if Huawei wants to really solve this problem, it still needs time and patience."
2022: Continue to survive
For the outlook for 2022, Guo Ping said that it is still necessary to "continue to survive." "There is no doubt that Huawei is still in danger and needs to remain sober at all times and always have a sense of crisis to deal with threats from all sides."
Judging from the 2021 annual report, Huawei's goal is very clear, that is, to closely focus on the "old bank" operator business, not to lose the consumer business, and to take the enterprise business as the entry point for new growth, and comprehensively deepen the digital transformation.
Of course, Huawei will not give up the chip business, and the company is actively coping with and seeking a way out of difficulties through investment and self-research.
Meng Wanzhou said that the past few years have been a more difficult time for Huawei, and now, Huawei is slowly passing through the "black barrier area". ■
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