Author | Utada
Produced | Tiger Sniff Technology Group
The head art | Visual China
At about 4:20 p.m. on March 28, even though Meng Wanzhou sat silently in the first row of the K-block conference hall of Huawei's Shenzhen headquarters, the long guns and short guns still keenly captured the "abnormal movement" and aimed the camera at the woman wearing a black suit with her head slightly bowed.
The 2021 Huawei annual report was released by Meng Wanzhou.
Tiger sniffing was filmed on set
Since this is the first public appearance of huawei's chief financial officer after being released and returned to China in September 2021, compared with the cold numbers in the financial statements, her appearance has released a more symbolic signal - in 2022, Huawei will continue to fight for survival, and the value created will be higher than "survival".
At the scene, Meng Wanzhou did not seem to want to talk in detail about his experience and life in the past six months. From the beginning of her speech, she quickly drew public attention from a personal perspective to this Chinese technology company that gathered 190,000 talents: "In the few months after returning to China, I felt that the motherland had changed a lot, and I was constantly learning, hoping to keep up with the pace of society. Therefore, you can also imagine that Huawei has changed a lot in this year. ”
truly. Buried in the words of this financial report is The history of Huawei's "life to death" business evolution in the past three years. And these changes are not just about the industry insights of Huawei alone.
Obviously, the battle for the survival of a Chinese high-tech enterprise is not mastered by idealization and symbolization, but by decisive abandonment and systematic counterattack.
Expected, unexpected
Shooting: Tiger sniff
The most intuitive embodiment of "difficulty" is always data.
As early as December 2021, Huawei Rotating Chairman Guo Ping pointed out in an internal New Year's speech that the company's total operating income in 2021 is expected to be 634 billion yuan. This figure is Huawei's lowest point since 2018-2020, almost the same as in 2017.
After the release of the annual report yesterday (March 28), the real data is almost the same as the forecast: Huawei's total sales in 2021 are about 636.8 billion yuan, down 28.6% from 2020 (891.3 billion).
It is worth noting that although Huawei's revenue growth rate has slowed down year by year in the past 3 years, this time, it is the first time in the past 10 years that Huawei's sales have fallen sharply.
In response to this, Meng Wanzhou gave a corresponding reply in response to a reporter's question after the release of the annual report: "First of all, the multiple rounds of sanctions by the United States have put Huawei's mobile phone and other terminal businesses under great pressure. Secondly, the construction of 5G base stations in China has been basically completed in 2020, so the 5G deployment business in China has not had so many customer needs. Third, Huawei, like the vast majority of companies around the world, has also been hit by the epidemic. ”
Among them, sanctions are the most deadly to consumer businesses.
As shown in the chart below, the "consumer business" sector where terminal products such as mobile phones are located is only half of the revenue in 2020. The cruel reality of "missing cores" and the few inventory left, so that this main business, which accounted for half of Huawei's revenue in 2019 and 2020 (54%), fell into the embarrassing situation of "no goods in the market" for a long time in 2021.
In addition, from the perspective of global regional income, although the proportion of each region has not changed much from 2020, the income of almost every region has declined, including China. The root cause is roughly the same as Meng Wanzhou's above sharing.
Interestingly, although Huawei's sales in 2021 have declined to a certain extent, its operating profit and net profit have soared by 67.5% and 76%, respectively, which is obviously a bit strange.
The reason is that we found that one of the data in the statement has a direct contribution to Huawei's net profit in 2021 - "other net income and expenditure" of about 60 billion yuan.
The main income in this "other income and expenditure" comes from the "net income from the disposal of subsidiaries and businesses" (chart below). Some analysts speculate that this income is likely to come from the relevant gains obtained from the previous "sale of glory".
An analyst pointed out that as early as the 2020 annual report, Huawei pointed out that the glory transaction will be placed in the "assets for sale" and "holding liabilities for sale", and the buyer Shenzhen Zhixin will pay the acquisition consideration in installments after 2021.
According to various speculations on the amount of this transaction (about 100 billion yuan) on the Internet around 2020, perhaps the income from the transaction may still be written into the next year's annual report.
Another analyst told Tiger Sniff that the gains obtained in this form are not uncommon in the financial reports of many giant companies, such as Tencent and Huayi, which also obtain a lot of profits through the sale of similar assets.
However, although Huawei's total revenue and profits inevitably carry the squeeze of the external environment, China's most veritable technology company still feels admirable for its determination to invest in research and development.
In 2021, in the case of a decrease in gross profit from sales, Huawei still increased its R&D investment (142.6 billion yuan), and R&D accounted for 22.4% of total revenue. In the past 10 years, Huawei's cumulative investment in research and development has exceeded 845 billion yuan.
Even corresponding to the number of talents, Huawei's R&D personnel in 2021 increased by 2,000 compared with 2020, while non-R&D personnel decreased by 4,000.
As Meng Wanzhou said at the end of the annual report, "Customer value takes precedence over shareholder interests, and Huawei's investment in research and development has never been constrained by profits." This is what Huawei has always insisted on - 10% of its revenue is fixed in the field of research and development every year, which has been written into Huawei's "Basic Law".
"The value of a business is not just reflected in the results of the financial statements. For high-tech companies like Huawei, strong investment in the future can better illustrate the true value of an enterprise. ”
Three years of transformation, when to see the best replacement for mobile phones
We found that the "status" of the three major businesses in the 2021 Huawei annual report has undergone subtle changes:
The "consumer business", which was once at the top, was adjusted to the end, while the "enterprise business", the only sector of the three major businesses to achieve steady growth (2.1%), rose to the second place in weight.
Image from Huawei's 2021 annual report
The enterprise business includes all of Huawei's 2B services and products related to cutting-edge technology. Since 3 years ago, it has been advertised as an emerging sector that can help Huawei reverse the war.
After almost losing the most profitable consumer business, you can think of a variety of new technologies such as big data, artificial intelligence, and cloud computing, which Huawei uses as a sword to find the weakest cuts in every traditional industry.
Especially since 2019, the frequently changing organizational structure of Huawei's "cloud and computing" business, the unfortunate fate of Huawei's intelligent vehicle business, and the successive establishment of "10 major legions such as coal, smart highways, and smart photovoltaics" are enough to illustrate this point.
However, many enterprise-level sectors, including "Huawei Cloud Computing", "ICT Products and Solutions", and "Digital Energy", have never disclosed financial data separately in the annual report. Some people even speculate that a part of the revenue may also be included in the operator business, after all, in many traditional industries, Huawei is still "linking" new services through operator advantages.
But this time, in an interview, Meng Wanzhou disclosed for the first time HUAWEI CLOUD's sales data in 2021 - "sales revenue reached 20.1 billion yuan, achieving a 34% year-on-year increase"
The "regional organization" division at the bottom of 2021 represents Huawei's most high-profile products and services today
On the other hand, Guo Ping, Huawei's current rotating chairman, almost turned the second half of the annual report meeting into a "customer-facing new technology business value mobilization conference":
Whether it is the energy-saving value of "additive neural networks" or the power consumption advantages of the third-generation semiconductor gallium nitride, Huawei's ambition to gain traditional market share in the three dimensions of "digitalization, intelligence and low carbon" cannot be hidden.
Of course, in Huawei's enterprise business, starting from 2020, the most high-profile business segment is not "automotive solutions". Even the term "Huawei car" has become an enduring hot topic and traffic password in the industry for three years.
However, from Huawei Xu Zhijun shouting "no car" at a conference where auto people gathered in 2019, to Guo Ping, another rotating chairman at the 2021 annual report meeting, reiterating "no car" for the Nth time, we can only be more curious: How much pressure has Huawei given to the auto industry?
And the facts are all in the annual report: this intelligent car solution business group, which has lost a lot of talent and changed its architecture frequently in the past year, but still has a scale of 5,000 people, will invest up to $1 billion in 2021, an increase of 50% year-on-year.
However, the automotive market in 2021 also gave us another piece of data for reference:
In the past year, although Huawei has reached cooperation with allies such as Xiaokang, BAIC, and Ningde Times, and successfully listed 2 new models, the sales performance of each model has not been eye-catching; in addition, Huawei's internal question about "whether to build a car" is also continuing to waver. However, there have been recent indications that the idea of Yu Chengdong, the head of automotive BU, who wants to "make up for the sales of the mobile phone business" by "selling cars", seems to have not changed.
At present, the automobile business has not yet brought considerable benefits to Huawei, and even in the future for a long time, like Tesla's miserable monthly delivery volume in the early years: investment is far greater than revenue, burning money has become the norm, personnel turmoil will continue, and a big mouth with idol power will continue to output "stories, beliefs and love" to fans.
But there is no problem with adhering to this market direction.
At the same time, we also happen to raise a question: to build such a large and expensive team of automotive talents, just to be a strong and offensive intelligent full-stack supplier?
Sounds a bit less worthwhile.