Let's start with a map of the world:
In addition to China, Europe, the United States, Japan, South Korea and Australia are all there, as if there is nothing wrong with it.
But the real world map looks like this:
To say a cold knowledge, in the first map, in addition to China, Europe, America, Japan, South Korea and Australia, the total combined population is not as large as Chinese mouth.
As the standard of living of people around the world continues to rise, so does the spending power of developing countries. Their voices have been ignored, but fortunately their spending power has not been ignored by Chinese companies.
For example, India has become Xiaomi's largest overseas market, successfully helping Xiaomi achieve the best performance in history, with revenue exceeding 320 billion yuan in 2021.
Similarly, relying on the strong consumption capacity of developing countries with billions of people, under the huge pressure of chip supply cuts and Sanctions from Europe and the United States, Huawei's revenue in 2021 will exceed 636.8 billion, almost double that of Xiaomi.
Of course, although Huawei and Xiaomi are often compared together, they are not the same company. Huawei's core products are B-end communication fields and enterprise services, base station antenna servers, etc., mobile phones are concurrently operated (60% of revenue in the glory period); Xiaomi's core products are mobile phones, basically do not do B-end business.
We need more Huawei, and we need more millet to meet the growing demand of consumers in developing countries.
First, why huawei issued an annual report
It is often said that Huawei is not a listed company and that the annual report has no reference value.
This is a manifestation of ignorance of the capital markets.
In fact, although Huawei is not on the stock market, Huawei is on the bond market, issuing bonds in The Chinese and European capital markets, and the return on investment of Huawei bonds is very impressive and popular.
According to the requirements of the bond issuance, Huawei disclosed its annual report, and it was KPMG, one of the world's four largest accounting firms, to conduct the annual report audit for Huawei.
It can be said that the audit standards of Huawei's annual reports are higher than those of most listed companies. Judging from the detailed data disclosed by Huawei, it is also more rigorous than most listed companies.
The annual report shows that in 2021, the company's overall operating conditions are in line with expectations and financially sound. The company achieved sales revenue of RMB 636.8 billion, stable performance of operator business, steady growth of enterprise business, and rapid development of new industries in terminal business. Realized profit of RMB113.7 billion and net profit margin of 17.9%.
In 2021, Huawei increased its R&D investment, with R&D expenses of RMB142.7 billion, exceeding net profit, accounting for 22.4% of sales revenue, and the amount of R&D expenses and expense ratios were at the highest level in the past decade.
At present, Huawei's R&D investment ranks second among global enterprises.
Who's number one?
Google.
Huawei's R&D investment even exceeds Apple's revenue, which is four times that of itself, which is a very staggering number. Seemingly overloaded R&D investment is all about betting on the future.
Huawei is not listed, there is no capital pressure, 10 years of R & D investment is close to 850 billion, the next 10 years of R & D investment is expected to exceed 1500 billion. In contrast, Xiaomi next door claims to invest more than 100 billion yuan in research and development in the next 10 years, which is not an order of magnitude at all.
Second, the real world
Limited by chips, after the divestiture of Glory, Huawei's consumer business (mainly mobile phones) has fallen sharply, basically cutting off.
At one point, the consumer business, which accounted for more than 60% of receivables, shrank by more than half. It has given up a huge market and has been eaten by brands such as Apple, Samsung, and Xiaomi.
Happily, the company's enterprise business and operator business have little impact, and even in the case of a slowdown in 5G investment in 2021, it has basically maintained its original share.
One of the indicators that Star Jun pays the most attention to is the sales volume of the sub-region.
The worst decline was in China, where sales in Europe, the Middle East and Africa fell 27.3 percent in the company's overseas operations. This figure is lower than the expectations of Star Jun, if the mobile phone business is excluded, it is likely that the enterprise business and operator business will increase.
Isn't Huawei sanctioned? Why is that?
The real world is not just Europe, America, Japan, South Korea and Australia.
There are also the vast number of developing countries in Asia, Africa and Latin America, everyone's money is not flying from the sky, and Huawei products with high quality and low price are safe and reliable, which has become the first choice for these countries.
Most developing countries do not have deep cooperation with European and American enterprises, and there is no need to worry about sanctions.
Even countries with U.S. military bases, such as the Philippines, have chosen to cooperate with Huawei.
In 2021, China's largest trading partner is ASEAN, which has a population of more than 700 million and is a consumer group that is far from being ignored by netizens. Huawei is in ASEAN, and the mix is booming.
Not to mention, in Africa, China's communication products are widely popularized.
Although Huawei failed to occupy the mobile phone market in Africa (the world of TRANSSION Holdings), it occupied the base station antenna market.
3. Huawei debt
At the beginning of the new year in 2022, Huawei announced that it intends to raise 4 billion yuan to supplement the working capital of the company's headquarters and subsidiaries.
In 2012, Huawei began to issue bonds in the global market for the first time; in 2019, Huawei issued bonds in China for the first time.
After the successful bond issuance, Huawei raised a total of 38 billion yuan in China for 10 times, and issued bonds in the global market for the 16th time, totaling 40.6 billion yuan of bonds and 4.6 billion US dollars of bonds.
For a company with excellent annual revenue of hundreds of billions of cash flow, issuing bonds to raise billions of dollars is almost a drop in the bucket, so why should Hua issue bonds?
In Huawei, there are two calibers on this issue: first, the asset management department believes that Huawei must issue bonds under the best circumstances, enhance social understanding and trust, and cannot issue bonds again when it is difficult; second, Ren Zhengfei has explained that there is no repayment problem for Huawei bonds, and our funds are relatively generous. With more money, we hope to give more support to universities, scientific research institutions, and standards organizations, support the development of the world, and not narrowly safeguard our own interests.
Before the epidemic, Xingkong Jun went to the Yanqi Lake Conference Center several times, and every morning he would run around Yanqi Lake, exactly 15 kilometers, full of comfort, next to the campus of the National University of Science and Technology, and sometimes went to the campus to run with his classmates. In the campus of the National University of Science and Technology, many huawei's mobile communications, energy storage and other experimental equipment were found, and according to Ren Zhengfei, some of these academic investments came from bond issuance.
According to the prospectus for the first medium-term note in 2022, in order to support the development of various businesses and the implementation of key strategies, Huawei intends to issue a medium-term note with a maturity of 3 years and a total fundraising of 4 billion yuan, which will be used to supplement the working capital of the company's headquarters and subsidiaries.
According to the announcement, ICBC is the lead underwriter of the offering, and the Agricultural Bank of China is the joint lead underwriter, with an interest rate range of 2.7%-3.3%, the first day of issuance is January 6, 2022, the payment date is January 10, and the listing date is January 11. Redemption date is January 10, 2025.
From the perspective of interest rate range, from Huawei's point of view, the financing cost is very low, in some cases, even lower than the cost of its own funds. It can not only form a certain social influence, but also raise low-cost funds. Huawei's bond issuance is still relatively cost-effective.
Fourth, Huawei's, the world's
Why are you optimistic about Huawei?
Not only because Huawei is one of the few Chinese companies that can resist international giants, but more importantly, Huawei's full shareholding explores a model different from that of capital benefits.
Huawei has no major shareholders, does not need to be listed, will not be constrained by capital constraints, and can invest huge amounts of research and development to plan for the long-term future.
The success of this model, some people will tremble.
After all, this is no longer a matter of crossing a river by touching a rock.
It can even be said that Chinese enterprises have explored a completely different enterprise development model with Chinese characteristics from the Western capital market.
In the midst of various rumors and sewage, Huawei still won the excellent result of the eighth best employer in the world, which is completely consistent with the contact between Star Sky Jun and Huawei employees.
In 2021, the average annual salary of Huawei employees will be 703,000.
Very few Huawei employees will complain about Huawei on the Internet, and even many employees who come out of Huawei are obsessed with their experiences at Huawei.