"One day in the middle of the cave, the world has been a thousand years." After four years, Meng Wanzhou once again appeared at Huawei's performance conference to describe his feelings after returning to China.
In addition to the great changes in the external environment, Huawei itself has also experienced vicissitudes, and under multiple pressures, it has constantly sought change and survival. However, judging from the latest financial report data, Huawei still inevitably encountered difficulties.
For the whole year of 2021, Huawei's operating income was 636.807 billion yuan, down 28% year-on-year, almost back to the level of 2017, and the net profit was 113.718 billion yuan, an increase of 75.9% year-on-year.
However, the financial reporter noted that the growth of Huawei's net profit is largely due to the income brought by the sale of subsidiaries and businesses.
According to the financial report, in 2021, the assets and liabilities related to Huawei's Honor business were completed. According to the terms of the relevant agreement, Shenzhen Zhixin will pay the acquisition consideration in installments. In addition, Huawei also sold all the interests of its wholly-owned subsidiary, Super Fusion, to a third party, and the relevant assets and liabilities were completed in the same year, bringing Huawei a total of 57.431 billion yuan in revenue.
If you put aside this part, Huawei's net profit last year was 56.287 billion yuan, and in 2020 it was 646 yuan, down about 13% year-on-year.
For the decline in Huawei's overall revenue scale, Meng Wanzhou said that it is mainly affected by three aspects: Huawei's continuous pressure on the global supply chain in the past three years, the pressure on Huawei's mobile phones and PCs in multiple rounds of US sanctions; China's 5G construction has been basically completed in 2020, and there is no longer so much customer demand in the Chinese market; and it is under pressure due to the impact of the epidemic.
Consumer revenue is cut off
There is no doubt that the consumer business, especially the mobile phone segment, has been the most affected. In 2021, Huawei's consumer business revenue was 243.431 billion yuan, the first year-on-year decline, a decline of 49.6%, and the proportion of total revenue also fell from 54.18% in the previous year to 38.23%.
From the perspective of product shipments, it is even more obvious, market research agency Omdia data show that in 2021, Huawei's smartphone shipments will be about 35 million units, a year-on-year decrease of 81.6%, the global market share is only 3%, honor shipments are 39.8 million units, and in 2020, when Huawei has not yet sold Glory, the two have a total shipment of 190 million units, with a global market share of 15%.
Global smartphone shipments by brand in 2021
Mobile phones can't sell, huawei has also begun to turn to other smart hardware, and try to connect through the Hongmeng ecosystem. For example, the business of wearable devices, large screens and other categories has grown significantly, with a growth rate of more than 30%, but compared with high-profit mobile phones, other products are still difficult to replace.
By the end of 2021, the number of Huawei devices equipped with HarmonyOS will exceed 220 million; HarmonyOS Connect has more than 1,900 ecological partners, with more than 4,500 certified product categories, and the number of new product shipments in 2021 will exceed 115 million units.
However, for now, the terminal of the Hongmeng system is mainly based on Huawei's own products, and mainstream mobile phones or other terminal manufacturers have not joined, and huawei has recently said that there is currently no mobile phone launching the Hongmeng system overseas, which also means that the Hongmeng system will not go abroad for the time being. Therefore, in order to truly realize the concept of the Internet of Everything, Huawei may need more partners.
In addition, Huawei's traditional strong carrier business also recorded negative growth, decreasing by 7% year-on-year to 281.469 billion yuan, and only the enterprise business achieved a slight growth.
Huawei revenue composition
What Huawei will rely on in the future, cloud computing or cars
While various businesses are struggling to carry out, Huawei is also seeking a breakthrough.
When asked which business will become the locomotive of Huawei's growth in the future, Meng Wanzhou revealed that the sales revenue of HUAWEI CLOUD in 2021 will be 20.1 billion yuan, a year-on-year growth rate of more than 30%, and the current proportion is 3.2%.
According to Canalys data, in 2021, the top four in China's cloud service market are Alibaba Cloud, HUAWEI CLOUD, Tencent Cloud and Baidu Cloud, with market shares of 37%, 18%, 16% and 9% respectively, and it is expected that by 2026, the Chinese mainland cloud infrastructure market will reach 85 billion US dollars, with a five-year compound annual growth rate of 25%.
Canalys analysis pointed out that in 2021, HUAWEI CLOUD's market share will reach 18%, and the annual growth will reach 67%. It has opened up the gap between it and Tencent Cloud and ranked second in the market. Thanks to its professional industry experience in government affairs, HUAWEI CLOUD has always maintained a leading position in this field.
Another high-profile business is automotive.
"Huawei doesn't build cars." Guo Ping, Huawei's rotating chairman, reiterated again, "But we want to help car companies build and sell good cars, and provide solutions for car companies through Huawei Inside and smart selection mode." In the earnings report, Huawei also said that the smart auto parts business is the company's long-term strategic opportunity point. In 2021, investment in smart car solutions will reach $1 billion, and the R&D team will reach the size of 5,000 people.
In 2021, Huawei has cooperated with Xiaokang Xilis, BAIC, Changan and other car companies to release a number of models, and the new HI version of BAIC Jihu Alpha S (Huawei Inside), Changan Avita 11 (Huawei Inside) and AITO Q&I M5 (Smart Selection) will be mass-produced and delivered in 2022.
However, judging from the sales performance of related models, it is not easy for Huawei to succeed in the "automotive industry". Taking the Xilis SF5 as an example, the sales volume of the whole year last year was about 8,000 units, and it was also caught in false publicity and disguised production suspension.
For the various uncertainties of the business, Huawei's choice is also very "Huawei", and it continues to increase investment in research and development. Meng Wanzhou mentioned that Huawei's R&D investment is not constrained by profits, and the company's current net cash is 241.2 billion yuan, which is the guarantee for our R&D investment in the future. In 2021, Huawei's R&D expenses reached 142.7 billion yuan, accounting for 22.4% of revenue. Approximately 107,000 people are engaged in research and development, accounting for about 54.8% of the company's total workforce.
As for Huawei, which has enough food and blood, whether it can break through the siege still needs time to be verified.