Huawei reports a mildly positive first half of the year

In the shadow of US sanctions ratcheting up on the Chinese tech sector, Huawei has reported its sales were up marginally for the first half of 2023.

Huawei generated CNY310.9 billion in revenue during the period, representing a YoY increase of 3.1%, which was in line with its forecasts, we’re told. The barebones (but still slightly more detailed than usual) financial announcement opted to report a net profit margin of 15% as opposed to the specific figure – but a quick calculation would put that at around CNY46 billion.

In terms of which divisions raked in the money, Huawei’s ICT infrastructure business contributed CNY167.2 billion, its consumer business CNY103.5 billion, its cloud business CNY24.1 billion, its digital power business CNY24.2 billion, and its intelligent automotive solution (IAS) business CNY1 billion.

“I’d like to thank our customers and partners for their ongoing support,” said Sabrina Meng, Huawei’s Rotating Chairwoman. “I’d also like to thank the entire Huawei team for its solidarity and dedication. Huawei has been investing heavily in foundational technologies to harness trends in digitalization, intelligence, and decarbonization, focusing on creating value for our customers and partners.

“In the first half of 2023, our ICT infrastructure business remained solid and our consumer business achieved growth. Our digital power and cloud businesses both experienced strong growth, and our new components for intelligent connected vehicles continue to gain competitiveness.”

Sanctions which began back in former US president Trump’s day have battered Huawei from multiple directions, such as cutting it off from certain microchip technology, rendering its international phone business crippled due to Android Play Store being removed, and its telecoms infrastructure business extinct from US and allied markets.

And the pressure has certainly not eased up since – as exemplified by the Disruptive Technology Strike Force deployed earlier this year. The effects of all this have of course been financially dramatic since 2020.

More recently however, revenue for FY 2022 was up slightly on 2021, though it simultaneously revealed a 69% fall in profit for the year. However this figure is warped by the fact in 2021 It executed a number of one-off disposals, including a server and a smartphone business, which meant it doubled its profits that year despite clocking a 29% drop in revenue.

Looking at the trajectory then, growth and profit of any factor for the first half of the year casts a positive picture for the embattled firm. Details are light on the ground in this segment’s reporting so its hard to say more other than notice the divisions it points to which are making the cash.

There were also reports last month that it was planning to produce new 5G smartphones by the end of the year thanks to a newly developed domestic supply of chips, thanks to some advances in semiconductor design tools and the facilities of Chinese chip firm Semiconductor Manufacturing International Co (SMIC).

While it would be premature to say Huawei is out of the woods amid the looming backdrop of a tech trade war between the US and China which shows no signs of cooling, alongside the general economic gloom, the direction of travel could certainly be seen as a mild win for the Chinese tech giant.

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