Introduction
Huawei's most annual report is coming! In 2021, the net profit increased by 75.9%, and the per capita income exceeded 800,000 yuan.
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On the afternoon of March 28, Huawei held the 2021 annual report press conference, and Meng Wanzhou, vice chairman of Huawei and CFO, made his debut and attended the event after returning to China.
In 2021, the overall operation is stable
According to the report released by Huawei, Huawei's overall operation is stable, achieving global sales revenue of 636.8 billion yuan, down 28.6% year-on-year, and net profit of 113.7 billion yuan, an increase of 75.9% year-on-year. In addition, Huawei's operating cash flow was 59.7 billion yuan, an increase of 69.4% year-on-year, and the asset-liability ratio was 57.8%, down 4.5 percentage points.
The summary of sales revenue in the past five years is as follows:
Meng Wanzhou, Chief Financial Officer of Huawei, said: "Our scale has become smaller, but our profitability and cash flow acquisition capabilities are increasing, and the company's ability to cope with uncertainty is constantly improving. ”
2021 Business Review
China market: Operator services benefit from the continuous deepening of domestic 5G construction and relatively stable development; enterprise services grow healthily under the accelerated digitalization and intelligent transformation of the industry; consumer services adhere to high quality, develop to scenarios and ecology, and provide consumers with excellent experiences. The overall sales revenue was RMB 413299 million.
EMEA: Operators' businesses have benefited from the construction of 5G network infrastructure and maintained stable operations; enterprise services have grown rapidly with the acceleration of industry digitalization and intelligent transformation; and consumer services have actively expanded the HMS ecosystem and integrated products. The overall sales revenue was RMB 131467 million.
Asia-Pacific region: Operator services benefit from the acceleration of 5G network construction and industry application progress, and business operations remain stable; enterprise services benefit from the deepening and acceleration of enterprise digitalization and intelligent transformation, healthy growth; consumer services HMS ecological innovation is developing rapidly, effectively growing in all smart scenarios. The overall sales revenue was RMB 53,675 million.
Americas region: Operator services have benefited from the new construction of 5G networks and increased customer investment, and steady growth; enterprise services have achieved steady growth by leading the digital and intelligent development of the industry; and consumer services have expanded and developed healthily in the HMS ecosystem, effectively growing in all smart scenarios. The overall sales revenue was RMB29,225 million.
After analyzing the financial report, Meng Wanzhou said that Huawei's biggest wealth is not on the statement, but in people.
On whether Huawei has passed the darkest hour? Meng Wanzhou said: "For Huawei in 2021, we may have passed through the 'black barrier area' of this disaster. She also said, "The real value of Huawei lies in the long-term investment in research and development, the research and development capabilities, research and development teams, and research and development platforms that have been precipitated and accumulated, which is the core of Huawei's long-term and sustainable competitiveness."
Do not increase revenue but increase profits
Since 2011, Huawei has divided its business into three segments: carrier business, consumer business, and enterprise business.
Specifically
In 2021, Huawei's carrier business achieved sales revenue of 281.5 billion yuan. Huawei has helped global operators deploy leading 5G networks, and according to third-party reports, Huawei has built the best user experience of 5G networks in 13 countries, including Switzerland, Germany, Finland, the Netherlands, South Korea, and Saudi Arabia. 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.
Huawei's enterprise business achieved 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.
Huawei's terminal business achieved sales revenue of 243.4 billion yuan. Smart wearables, smart screens, TWS headsets and consumer cloud services all continued to grow, with wearables and smart screen business revenue increasing by more than 30% year-on-year. With more than 220 million Huawei devices equipped with HarmonyOS, it is the fastest growing mobile terminal operating system in the world.
So, why did Huawei's net profit soar 75.9% year-on-year in 2021, setting a record high of 113.7 billion yuan, when its revenue scale fell by 28.6% year-on-year?
According to the financial report, although Huawei's net profit in 2021 reached 113.7 billion yuan, an increase of 75.9% year-on-year, this significant increase was mainly attributed to Huawei's "net income from the disposal of subsidiaries and businesses".
According to Huawei's annual report, Huawei's "net income from the disposal of subsidiaries and businesses" in 2021 was as high as 57.431 billion yuan (compared with only 592 million yuan in 2020), mainly from the sale of two subsidiaries" "Glory" and "Super Fusion Technology Co., Ltd."
According to the annual report, Huawei reached an agreement with Shenzhen Zhixin New Information Technology Co., Ltd. ("Shenzhen Zhixin") at the end of 2020 to sell all of its Glory business to Shenzhen Zhixin, and the major assets and liabilities involved in the transaction were reported as "assets held for sale" under "other assets" and "holding liabilities for sale" under "other liabilities" on December 31, 2020. In 2021, the assets and liabilities related to the Glory business were completed. According to the terms of the relevant agreement, Shenzhen Zhixin will pay the acquisition consideration in installments.
In addition, huawei sold all the interests of its wholly-owned subsidiary "Super Fusion" (Huawei X86 server business) to a third party in the fourth quarter of 2021, and the relevant assets and liabilities were completed in the same year. Hyperfusion and its subsidiaries manufacture and sell server products. Apart from cash and cash equivalents, the related assets and liabilities disposed of are mainly inventories, machinery and equipment, accounts payable and other payables, which are not material to the Group. Based on the terms of the relevant agreement and the transaction arrangement, the buyer will also pay the purchase consideration in installments.
That is to say, of Huawei's net profit of 113.7 billion yuan in 2021, 57.431 billion yuan came from part of the transaction money obtained from the sale of the two subsidiaries of Honor and Super Fusion.
Therefore, if the impact of this part of the revenue on net profit is deducted, then Huawei's net profit from its main business in 2021 is 56.269 billion yuan, compared with the same period last year (Huawei's net profit in 2020 was 64.6 billion yuan, even if the asset disposal income of 592 million yuan in 2020 is excluded) is still declining.
R&D investment is 142.7 billion yuan
According to the annual report, in 2021, Huawei's R&D expenses were 142.7 billion yuan, 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, with a cumulative R&D expenditure of more than 845 billion yuan in ten years. Huawei's R&D investment ranks second among global enterprises, after Google's parent company Alphabet.
It is understood that Huawei's R&D investment in the Hongmeng system has exceeded 50 billion yuan; in the field of intelligent vehicles, Huawei's R&D investment in auto parts has reached 1 billion US dollars, with a R&D team of more than 5,000 people and more than 30 intelligent auto parts listed. At present, Huawei is one of the world's largest patent holders, ranking first in the world with 6,952 PCT international patent applications in 2021, ranking first in the world for five consecutive years.
At the same time, the annual report revealed that in 2021, Huawei will engage in research and development of about 107,000 people, accounting for about 54.8% of the company's total number. In 2020, Huawei engaged in research and development of about 105,000 people, which shows that in 2021, Huawei's R & D personnel increased by 2,000 compared with the previous year.
Huawei will continue to increase R&D investment and increase the introduction of talents. Guo Ping said: "We still have to fight for survival, but no matter how difficult it is, we must unswervingly increase investment." "This year, Huawei plans to recruit more than 10,000 fresh graduates.
Meng Wanzhou stressed: "As of now, Huawei's net cash is 241.2 billion yuan, which will be Huawei's research and development guarantee. In the future, Huawei will continue to invest heavily in R&D, mainly in the three areas of basic theory, architecture, and software. ”
Huawei Cloud disclosed its revenue for the first time
At the press conference, Huawei revealed that HUAWEI CLOUD achieved sales revenue of 20.1 billion yuan in 2021, an increase of 34% year-on-year, ranking second in China. It is worth noting that this is the first time that HUAWEI CLOUD has external revenue.
In 2021, HUAWEI CLOUD will continue to innovate, practice technology inclusion, continue to maintain rapid growth, continuously improve cloud service capabilities and market share, and continue to enable digitalization and intelligent upgrading of thousands of industries.
According to the "Market Share: IT Services, Worldwide 2020" research report released by Gartner in April 2021, HUAWEI CLOUD's global IaaS market ranking has risen to the top five in the world.
So far, HUAWEI CLOUD has launched more than 220 cloud services and more than 210 solutions, aggregated more than 30,000 partners around the world, developed 2.6 million developers, and listed more than 6,100 applications in the cloud market.
In China, HUAWEI CLOUD has served more than 600 government clouds, helped more than 35 cities upgrade their government cloud to cloud native, served china's six major banks, all 12 joint-stock commercial banks, and Top5 insurance institutions, served more than 30 smart airports, more than 30 urban rails, and 29 provincial highways, served more than 30 automotive manufacturing companies and more than 15 home appliance Top companies, and built more than 40 industrial Internet innovation centers to help 17,000 manufacturing enterprises digitally transform. At the same time, HUAWEI CLOUD also serves 80% of China's Top 50 Internet customers.
Huawei's business architecture changes in 2021
According to the 2021 annual report, Huawei listed the latest business architecture map, in which "HiSilicon" was independent of the second-level department under the "2012 Lab" and became a first-level department alongside "Huawei Cloud Computing" and "Smart Vehicle Solution BU".
Huawei's 2021 business architecture
Huawei's 2020 business architecture
According to the 2021 business architecture, HiSilicon is positioned to provide end-to-end board-level chip and module solutions such as perception, connection, computing, and display for intelligent terminals, display panels, home appliances, automotive electronics, etc., and undertake responsibilities such as R&D, Marketing, ecological development, sales and service of the chip and module industries, and be responsible for business results, risks, market competitiveness and customer satisfaction.
In addition, from the business architecture diagrams of 2021 and 2020, it can be seen that in 2021, in addition to picking out HiSilicon separately, the original consumer BG will be removed, and multiple departments such as terminal BG and Huawei cloud computing will be responsible, and a series of adjustments will be made to the functional platform.
According to the 2020 annual report, Consumer BG is the company's end-to-end business organization for end product users and ecological partners, and is responsible for business results, risks, market competitiveness and customer satisfaction.
In 2021, terminal BG is the company's end-to-end operating organization for end product users and ecological partners, and is responsible for business results, risks, market competitiveness and customer satisfaction. With users as the center, we create a full-scenario intelligent life experience, focusing on five major scenarios of smart office, smart home, smart travel, sports and health, and audio-visual entertainment, to achieve a commercial closed loop of user experience and services.
About car building, chips, talents... The amount of information is huge
Talking about car building: Huawei reiterated that it will not build cars
Guo Ping said at the performance conference that Huawei reiterated that it does not build cars, and Huawei should use 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. Huawei has built seven smart car solutions and has listed more than 30 smart car parts.
"We have carried out in-depth cooperation with many car companies at home and abroad to help customers build good cars and achieve commercial success." Guo Ping said that under the new cooperation model of industrial division of labor, Huawei adheres to the development strategy of platform plus ecology, and Huawei will further increase investment in ecology and work with partners to accelerate the progress of intelligent automotive industry.
Although Huawei has always insisted that it will not build cars, in the field of car building, Huawei's figure has appeared frequently.
In 2021, Huawei has reached cooperation with dozens of new energy car manufacturing forces, whether it is with second- and third-tier car companies such as BAIC and Xiaokang, or with first-line leading Mercedes-Benz and Volvo. On December 23, 2021, at huawei's winter flagship new product launch, the M5 finale of the Q&I M5 appeared. This is the first time that the car has appeared at Huawei's new product launch conference, and it has appeared as a finale product.
Huawei predicts in its annual report that in the next decade, the tide of electrification + intelligence is unstoppable, and ICT technology and the automotive industry tend to integrate. It is estimated that by 2030, the penetration rate of new autonomous driving cars in China will exceed 20%; the overall on-board computing power will exceed 5,000 TOPS; the on-board single-link transmission capacity will exceed 100 Gbps.
Talk about the chip problem: it is a complex and long process
For the chip supply problem that the outside world is concerned about, Guo Ping said: "The US sanctions for many years have caused huawei great difficulties, especially in the mobile phone business, because the mobile phone baseband chip has strong computing power, low power consumption, and small size, and we have difficulties in obtaining it." He said frankly: "Solving the chip problem is a complex and long process, you need to be patient, in the future our chip solution may use a multi-core structure to improve chip performance." ”
As for whether it will build a chip factory to solve the problem of chip supply, Guo Ping said that chip supply cuts have a great impact on Huawei's mobile phone business, but the continuity of ToB business is still guaranteed.
Talk about talent: it will increase the attraction of top talents
Guo Ping said that talent, scientific research and innovation spirit are the three elements on which Huawei depends for its survival and development, and Huawei will increase its attraction to talents, especially top talents, at any time.
In two years, Huawei has recruited about 26,000 fresh graduates, of which more than 300 are "genius teenagers" defined by Huawei, and 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.
Huawei's official website shows: "We are looking for such a talented teenager, dreaming of making the world a better place with the power of science and technology, willing to explore the unknown, eager to engage in the most cutting-edge scientific and technological research, interested in becoming a technology leader, daring to innovate, dare to be the first in the world." ”
Public data shows that since the launch of Huawei's "Genius Youth" project, a total of 17 people have been selected. Huawei currently has at least 700 mathematicians, more than 800 physicists, more than 120 chemists, 15,000 people engaged in basic research, and more than 60,000 product developers.
2022: Continue to survive
For Huawei's outlook for 2022, Guo Ping said that he still had to "continue to survive."
Guo Ping said that in the past three years, severe external environment and non-market factors have brought trouble to the company's operation. But Huawei's problem is not to be solved by cutting back on food and clothing, but to solve the problems of technology and technology and build a highly reliable supply chain.
Nowadays, Huawei is facing the dilemma that advanced technology is not available, and Guo Ping proposed that if Huawei wants to survive, it must increase strategic investment and actively seek system breakthroughs when it encounters difficulties in single-point technology leadership.
Huawei proposes to promote reconstruction in three directions - theoretical breakthrough, architecture reconstruction, and software reconstruction.
In terms of basic theory, it explores the theoretical essence of computing and communication, breaks through the bottleneck of industrial evolution; in terms of architecture design, it does not rely on single point optimization to promote the construction of the overall competitiveness of the system; software, rooted in software core capabilities, reconstruct the core basic software stack.
"Of course, we are still in a difficult period, and the three refactorings we envision have not yet been implemented and are still in the process of being made. We still have to fight for survival, and there are many, many difficulties to overcome. However, no matter how difficult it is, we must also unswervingly increase investment so that we can have a future. Guo Ping finally said.
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