On March 31, Huawei held its 2022 results conference in Shenzhen. In the past year, under the influence of severe external environment and non-market factors, Huawei achieved global sales revenue of 642.3 billion yuan, a year-on-year increase of 0.9%, but its net profit fell by 68.7% to 35.6 billion yuan.
At the meeting, Huawei announced for the first time the revenue of the smart car business, which has attracted much attention. The current rotating chairman Xu Zhijun responded to the 6G layout, domestic semiconductor industry and "car manufacturing" issues at the performance meeting. Regarding the expectations for 2023, he bluntly said, "2023 is a key year for Huawei's development, and we hope to increase revenue and profit compared with 2022, but there are too many uncertainties." ”
It is worth noting that a day later, Huawei CFO Meng Wanzhou will also assume the position of rotating chairman, and Meng Wanzhou also responded to this position for the first time at the meeting.
Ten years of R&D expenses of nearly one trillion yuan
At the performance meeting, Xu Zhijun, Huawei's rotating chairman, said that looking back on 2022, severe external environment and non-market factors continue to affect the company's operations. "In the midst of the storm, we continue to run, trying to ensure business continuity and ensuring support and service to our customers; We also strive to get more food so that we can both survive and lay the foundation for future development. ”
According to the 2022 financial data released by Huawei Chief Financial Officer Meng Wanzhou, Huawei achieved global sales revenue of 642.3 billion yuan last year, a year-on-year increase of 0.9%, but its net profit fell 68.7% to 35.6 billion yuan. In 2020 and 2021, Huawei achieved net profits of CNY 64.6 billion and CNY 113.7 billion, respectively. Meng Wanzhou said frankly that in 2022, the operation will still face greater pressure, but overall, the business performance is in line with expectations.
In addition, financial report data shows that Huawei's sales gross margin in 2022 has also declined, from 48.3% in 2021 to 43.9%. During the period, the expense ratio increased to 42.2% from 38.8% in 2021.
Despite the sharp decline in earnings, Huawei has not discounted its R&D investment. In 2022, Huawei's R&D investment reached 161.5 billion yuan, accounting for about 25.1% of the annual revenue, and both expenses and proportions broke records. Huawei has invested more than CNY 977.3 billion in R&D in the past decade.
In addition, as of the end of 2022, Huawei's asset-liability ratio was 58.9%, and its net cash balance was 176.3 billion yuan.
Announced smart car revenue for the first time
At the performance meeting, Huawei also announced the revenue of the three major BGs. In the carrier business, Huawei achieved sales revenue of 284 billion yuan. The sales revenue of the enterprise business reached 133.2 billion yuan; In addition, the terminal business achieved sales revenue of 214.5 billion yuan. Among the three major business segments, only the terminal business declined.
In 2021, Huawei achieved sales revenue of CNY 281.5 billion in carrier business areas and CNY 102.4 billion in enterprise business. In terms of terminal business, Huawei achieved sales revenue of 243.4 billion yuan that year.
Xu Zhijun admitted at the performance meeting that Huawei's consumer business was the most affected during the sanctions period. But he said frankly, "Now Huawei can only produce 4G mobile phones, but Huawei mobile phones through the improvement of cameras, folding screens and other aspects, there are still people willing to use 4G mobile phones." To buy a Huawei 5G mobile phone, you have to wait for permission from the US Department of Commerce. ”
It is worth noting that Huawei disclosed the revenue of multiple segments in 2022 for the first time, including the smart car business. Among them, the revenue of ICT infrastructure business was 354 billion yuan, the revenue of digital energy business was 50.8 billion yuan, and the revenue of HUAWEI CLOUD business was 45.3 billion yuan. In terms of intelligent vehicle solution BU, Huawei achieved revenue of 2.1 billion yuan.
A critical year for survival and development
For 2023, Xu Zhijun will make it "a key year for Huawei's survival and development". He introduced that the key directions of Huawei's strategy in 2023 and the next few years mainly have five aspects.
The first is to enable digitalization, intelligence and greening in all walks of life, creating growth opportunities, and it is estimated that the market space that can participate in can reach trillions of dollars in 2027;
The second is to optimize the industrial portfolio and enhance development resilience, such as both traditional advantageous industries and pioneering industries, growth and mature industries, industries that rely on advanced processes and do not rely on them, hardware-led and software-led industries, and 2021 Labs and HiSilicon are strong R&D support bases.
The third is to strengthen the collaboration of core, software, hard, device, network, and cloud to build differentiated advantages; Fourth, Huawei continues to make Huawei synonymous with high quality in the ICT industry, such as extending quality requirements and quality management to suppliers and subcontractors, promoting the progress of the industry chain, and building customer-oriented high quality through joint quality improvement. The fifth is pressure-based investment to ensure high-quality business continuity and enhance product competitiveness, such as increasing R&D investment in device substitution and product development tools.
At the same time, Xu Zhijun also pointed out that there is still a big gap from advanced and sustainable, and increasing investment can ensure high-quality continuity. At the meeting, Xu Zhijun mentioned the "localization of EDA tools". He said that solving the localization of EDA tools above 14nm is a joint progress between Huawei and partners, which means that domestic chip design can use domestic tools. "For Huawei, we support all self-reliance and self-improvement behaviors of domestic semiconductors, and also believe that the domestic semiconductor industry can truly achieve self-reliance and self-improvement in sanctions."
For the 2023 forecast, Xu Zhijun believes that "it is still extremely challenging". He said that there is currently uncertainty and more non-market factors. "We expect revenue and profit growth in 2023 compared to 2022, but there is too much uncertainty."
Responding to "car building" and 6G
In addition, Xu Zhijun also responded to the market's concern about "car manufacturing" and 6G layout.
On the morning of the 31st, in order to avoid the outside world being misunderstood as "Huawei made cars", Huawei issued the "Resolution on Huawei Not Building Cars" internally. The resolution was signed by Ren Zhengfei, founder and CEO of Huawei, once again emphasizing that "Huawei does not build cars" and "is valid for 5 years". In addition, Ren Zhengfei also put forward strict requirements for the exposure of Huawei's logo in car design. "Emphasize that Huawei/HUAWEI cannot be used in vehicle publicity and appearance.
The document emphasizes that the three modes of cooperation between Huawei and automotive companies remain unchanged: Qianjie is Huawei's smart car ecological brand, Huawei provides core software and hardware technologies such as electrification and intelligent components, and the business model and cooperation strategy of Qingjie ecological vehicle will not change. Xu Zhijun also reiterated at the meeting that Huawei's strategy has not changed, not to build cars but to help car companies build good cars.
At the same time, he pointed out that some departments, individuals or partners are abusing the Huawei brand, and this matter is in the process of investigation. "The brand that Huawei has built for more than 30 years will not be abused by anyone, Huawei does not build cars, and there is no brand of car and the Huawei brand is strictly prohibited as a car brand. Internal promotional materials such as flagship stores will be rectified and returned to strategy. ”
In addition, in terms of 6G deployment, Xu Zhijun also responded this time. He said, "6G is just a concept, a goal for the industry. I said the same thing at the time of 5G. ”
According to him, Huawei is working with the industry to define the concept of 6G, around the possible technology of 6G to discuss and verify, according to the law of mobile communications, 6G will come in 2030. But he also said, "If there is no big demand for consumer application scenarios, 6G may not be needed." No one wants to invest without demand, and the possibility that we will live in 5.5G for a long time also exists. As for 5.5G products, Xu Zhijun said that he hopes to deploy them globally in 2025.
In July 2022, Huawei released its concept of "fully moving towards the 5.5G era", which includes 5.5G, 5.5G Core, F5.5G, and Net5.5G, which Huawei said is the only way to move towards a smart world 2030.
First response as rotating chairman
It should be mentioned that the day after the performance meeting, Meng Wanzhou will officially assume the position of rotating chairman of Huawei. She also responded to this for the first time at the results meeting.
Meng Wanzhou said that according to the company's "Governance Charter", the change of rotating chairman is the succession of the system and the system, and it is never an individual succession, but a collective leader. She bluntly said that Huawei does not tie the fate of the company to individuals, but "a blueprint is drawn to the end." And, she said, "With the judge's approval of the prosecution's withdrawal application, my personal case (Canada's extradition case) has come to an end."
She bluntly said at the meeting, "The main task of the past year is learning, and if you use one word to describe it, this year's theme is confidence." ”
On March 28, Huawei elected the board of directors and confirmed Vice Chairmen Xu Zhijun, Ken Hu, and Meng Wanzhou as rotating chairmen. Meng Wanzhou's rotation period is from April 1 to September 30, 2023. It is understood that the rotating chairman is Huawei's top leader during his duty, leading the company's board of directors and executive board. The rotating chairman is on duty for six months.
This article is from China Fund News