In the long winter night, Huawei has not yet seen the dawn of spring, but Huawei has become accustomed to the current situation, find a balance between survival and development, and more importantly, find room for growth.
On March 28, Huawei announced its 2021 annual report, which showed that Huawei achieved global sales revenue of 636.8 billion yuan during the period, down 28.6% year-on-year, and net profit of 113.7 billion yuan, an increase of 75.9% year-on-year.
From the perspective of revenue data, Huawei's revenue decline for the second time in its history, the last time was in 2002, sales revenue from 22.5 billion yuan in 2001, slightly down to 22.1 billion yuan in 2002, during which Huawei expanded overseas markets to resume growth.
Nowadays, the test encountered by Huawei is much more severe, external factors are more complex and unpredictable, internal pressure is suddenly released, since May 2019, Huawei has suffered for more than two years, or inevitably ushered in a decline in revenue.
Meng Wanzhou, vice chairman of Huawei and CFO, made his debut after returning to China, attracting a lot of attention, pointing out: "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." ”
In the view of Titanium Media App, profitability and cash flow are a passive strain under the pressure of Huawei, although good results have been achieved, Huawei's top priority is still to find future growth anchors, and the value and positioning of HUAWEI CLOUD in huawei systems have been further strengthened.
Revenue and profit fell and increased, or reached a turning point
Huawei's financial data for the past five years
Through Huawei's annual report, it is not difficult to find that the revenue of 636.8 billion yuan in 2021 is only one line higher than the 603.6 billion yuan in 2017. Huawei pointed out in its earnings report that the decline in sales revenue was mainly due to the impact of the decline in consumer business revenue.
Meng Wanzhou pointed out that there are three main reasons for the decline in Huawei's overall revenue scale, one is that Huawei has continued to be under pressure in terms of supply continuity in the past three years, the second is that the operator's business is closely related to the global 5G construction cycle, China has slowed down by 2021 after the peak of 5G construction in 2020, and the third is that Huawei, like all enterprises in the world, has borne certain pressure under the epidemic.
In fact, Huawei's performance fluctuations in recent years are largely due to the consumer business, some insiders told the titanium media App that if it were not for the success of the consumer business, perhaps Huawei would have already encountered a growth bottleneck, affected by sanctions, Huawei's growth problems have been exposed in advance.
Huawei's three major business revenues accounted for in the past five years
According to Huawei's financial report, titanium media App statistics in the past five years of its three major business proportions, from the proportion point of view, the enterprise business to maintain growth, operator business to explore and then rebound, consumer business is the opposite, once supported half of Huawei's revenue, the current growth is limited.
The increase in net profit was mainly due to the proceeds from the sale of some of the business, the improvement of operating quality and the optimization of the product structure, which referred to the Honor mobile phone and super fusion (x86 server), which brought Huawei a net income of 57.4 billion yuan, and the profit of this part was unsustainable.
Removing this part of the profit, Huawei's net profit in 2021 is 56.3 billion yuan, with a net profit margin of 8.8%, which is less than a percentage point improvement over the past four years, which is also in line with Meng Wanzhou's assertion that profitability has increased.
In terms of cash flow data from operating activities. Huawei's operating cash flow in 2021 increased by 69.4%, but this is largely due to the poor data in 2020, only 35.2 billion yuan, although it has grown a lot in 2021, it is still significantly weaker than the situation before the sanctions, considering the actual situation, it is not easy.
After being sanctioned, Huawei's business growth inertia can still be maintained for a period of time, but the rise and fall in revenue and profit may indicate that Huawei has reached a turning point, that is, Huawei has been unable to maintain revenue growth, but instead balances investment and profits, selling the future of the glory of mobile phones, and the micro-profit superconvestion, in a sense, is also for this reason.
The three business situations are different
Guo Ping, rotating chairman of Huawei, pointed out: "The company's overall operating situation is in line with expectations, the performance of operator business is stable, the enterprise business is growing steadily, the terminal business is developing rapidly in new industries, and the ecological construction has entered the fast lane. ”
In fact, this is also a problem for Huawei.
Operator business is too stable, five consecutive years of revenue fluctuations are not large, revenue remains near 280-300 billion yuan, the development of the communication industry in most overseas markets is slower than the Chinese market, in the past it was Huawei's opportunity point, but the current geopolitical risk is unclear, but also affected the expansion of Huawei's operator business in the world.
Operator business has typical cyclical characteristics, a generation of communication technology to drive a round of operator capital expenditure, the past two years of mainland 5G base station construction is at a high level, but the pull for Huawei has not been obvious. In the operator collection, the winning share of a single manufacturer will not be too high, so as to avoid the risk of supplier lock-in, generally 40% is already a higher share.
Meng Wanzhou, Vice Chairman of Huawei and CFO
Meng Wanzhou also mentioned: "We believe that the market share of the operator's business is in line with expectations, and the revenue scale is also in line with expectations. "In this observation, the operator's business is basically stable, and it is difficult to have a big growth."
In the consumer business, in the three restricted business areas of mobile phones, tablets, and PCs, Huawei's revenue has declined, so Huawei has turned to new products such as wearable devices and large screens, and has achieved some growth, but under the influence of sanctions factors, it is difficult for consumer businesses to recover, let alone grow.
Enterprise business has maintained a growth momentum, but the growth rate has been less than expected, since the establishment of enterprise BG in 2011, Huawei has many expectations for enterprise business, regard it as the pillar of future revenue, the current enterprise business scale exceeded 100 billion yuan, Huawei to do is how to accelerate the development of this part of the business.
Guo Ping, huawei's rotating chairman, said at the earnings conference that for enterprise customers, they are concerned about the value that Huawei can bring to them in the end, so Huawei has set up several legions to combine Huawei's 5G, computing, cloud, and scenario-based applications, closer to customers, and create scenario-based solutions for customers, which is also a reason for Huawei to carry out legion-based pilots.
HUAWEI CLOUD will become the "locomotive" of Huawei's business growth in the future
Huawei's means to solve the growth problem is nothing more than two, space and time, in 2002 Huawei chose "space" to open up the global market, the current does not have realistic conditions, accelerate the maturity of new business has become a matter of course, cloud computing is Placed high hopes by Huawei, digital energy also has more than 30% growth.
Huawei revealed at the earnings conference that HUAWEI CLOUD, as one of the new businesses, has developed rapidly, with a revenue growth rate of more than 30%, which is expected to become one of the important new growth points of Huawei's business in the future, demonstrating Huawei's determination to continue to increase cloud services.
From the global observation, cloud computing is enough to support the revenue of a large enterprise, cloud computing or will become the main business of Huawei in the future, the current focus of HUAWEI CLOUD is not to grow, but to build a future 100 billion scale industry foundation, Huawei also has a consensus on this.
"We announced our entry into the public cloud market a few years ago and want to commit to being one of the five clouds in the world, and it should be said that in 2021 we achieved the fifth in the world. But there is still a long way to go from the global top, so it is necessary to further develop and reduce the gap. But bridging the gap is only one aspect, and more importantly, delivering value to customers as you grow cloud services. In 2022, growth is one aspect, but we emphasize the core competitiveness of HUAWEI CLOUD. Guo Ping said.
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 second place in China and the top five in the world.
At the same time, titanium media App also noted that the cloud service market is in a relatively gentle stage of development, and the growth rate of many Internet cloud service providers has greatly slowed down, or the growth rate of cloud service revenue has not been announced, relatively speaking, the advantages of HUAWEI CLOUD in the government and enterprise market have been released.
It is understood that in China, HUAWEI CLOUD has served more than 600 government cloud clouds, served China's six major banks, all 12 joint-stock commercial banks, and TOP5 insurance institutions in the financial field, and HUAWEI CLOUD has also served more than 70 TOP50 Internet companies. In the Asia-Pacific region, HUAWEI CLOUD is also one of the fastest growing providers of public cloud. In Latin America, HUAWEI CLOUD is already the provider of cloud services with the largest number of nodes.
HUAWEI CLOUD will become the "locomotive" of Huawei's business growth in the future, the logic of which is not difficult to understand, Huawei is undergoing a new round of industrial restructuring, adapting to the current trend of digitalization, intelligence and carbon neutrality, better serving the enterprise customer base, to deliver value, cloud computing is the window of Huawei's digital capability output.
In the past few years, the organizational structure of HUAWEI CLOUD has been adjusted several times in order to establish a combat force in line with the digital era, with cloud computing as the vanguard, and then export the ICT capabilities accumulated by Huawei for more than 30 years and more than 100,000 engineers, and open up to enterprises through HUAWEI CLOUD, and the business logic is logical.
At present, HUAWEI CLOUD's strategy is "everything is service".
Infrastructure as a Service to make your business globally accessible. At present, HUAWEI CLOUD has deployed 65 availability zones in 27 geographic regions around the world.
"Technology as a Service" provides leading technology to customers, partners and developers in a variety of industries in the form of cloud services, so that customers and developers do not have to make wheels repeatedly, and focus on customers' own business to innovate.
"Experience as a Service", HUAWEI CLOUD released Kaitian aPaaS, which precipitates Huawei's valuable experience in cooperation and innovation with various industries around the world over the years and digital transformation on the HUAWEI CLOUD platform, coordinates HUAWEI CLOUD's infrastructure with process IT, HUAWEI terminals, and various clouds, and classifies and aggregates the capabilities required by the industry into callable interface services, opens them to industry developers, and enables scenario-based innovation in the industry.
"What is taken away in winter will be returned in spring." With cloud computing as a platform, Huawei will externalize its capabilities and grow into the future.
(This article was first published by Titanium Media App author |.) Shuai Zhang, Editor | Gaieunda)