A few days ago, Huawei's 2021 annual report successfully brushed the screen, not only because Huawei's vice chairman and CFO Meng Wanzhou made his first public appearance since returning to China last year, but also because according to the data shown in the report, in the case of revenue decline, Huawei actually achieved a profit surge of 76%. This also makes Huawei successfully attract attention again. For the decline in revenue, Meng Wanzhou responded to three reasons, for the surge in profits, industry insiders also analyzed three reasons.
According to a report released by Huawei, Huawei achieved global sales revenue of 636.8 billion yuan in 2021, down 28.6% year-on-year. According to the performance figures released by Huawei, in fact, it is expected that in the past year, Huawei's revenue, under the influence of various external factors, the decline in revenue of more than 250 billion yuan should have been doomed. In this regard, Meng Wanzhou explained that first, it has encountered multiple rounds of sanctions from the United States, and Huawei's mobile phone, PC and other businesses have been under great pressure; Second, China's 5G construction has been basically completed in 2020, so the customer demand for 5G services has decreased; Third, the impact of the epidemic, Huawei also has pressure under the epidemic.
Interestingly, according to the data, although the revenue has declined, Huawei's profit has not decreased, and the net profit has reached 113.718 billion yuan, an increase of 49.069 billion yuan compared with 2020 (64.649 billion), a sharp increase of 76% year-on-year. On this basis, Huawei's R&D investment reached 142.7 billion yuan, accounting for 22.4% of the annual revenue, and the cumulative R&D expenditure invested in the past decade exceeded 845 billion yuan. So the question is, revenue fell by 254.5 billion, but profits increased by 49 billion, how did Huawei do it?
In this regard, 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 design, and software. In Meng Wanzhou's view, Huawei may have passed through the "black barrier area", "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." ”
Why is the gross margin on sales growing so much in 2021? This also means that the profit margin of Huawei's products sold in 2021 will be much higher than in 2020. According to industry analysts, there are three reasons:
First, sell glory, here got more than 57.4 billion.
Second, the product profit margin in 2021 has improved, and the gross profit margin of sales has increased from 36.7% in the previous year to 48.3%.
Third, sales and management expenses are about 9.27 billion less.
In addition, according to the annual report, Huawei's R&D investment ranks second among global enterprises, second only to Google's parent company Alphabet. 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 this regard, Meng Wanzhou said: "The real value of Huawei is that the R&D capabilities, R&D teams, and R&D platforms accumulated and accumulated by long-term investment in R&D are the core of Huawei's long-term and sustainable competitiveness. ”
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