Huawei returns to growth

Chinese tech giant Huawei has announced its revenues for the first three quarters of the year, which indicate a return to growth.

Huawei generated CNY445.8 billion in revenue during the first three quarters of 2022, it announced today. Its main business made a profit margin of 6.1%  – though it’s not clear what it classifies as its main business as other than the following quote, that was the entirety of the announcement.

“Overall performance was in line with forecast,” said Eric Xu, Huawei’s Rotating Chairman. “The decline in our device business continued to slow down, and our ICT infrastructure business maintained steady growth. Going forward, we will keep bringing in top-notch talent and investing in R&D to take the competitiveness of our products to a new level. We will keep creating value for our customers and society.”

In August it announced its H1 figures which clocked CNY301.6 billion in revenue, down from CNY320.4 billion in H1 2021, representing a decline of nearly 6% but one that looked as though it was slowing. Its net profit margin stood at 5% in the first half of this year, which was down from 9.8% in the same period in 2021.

Extrapolating from that it seems Huawei made CNY144.2 billion in revenue during Q3 alone – which is a lot of money whichever way you slice it, especially while operating under less that hospitable global trading conditions. It also marks an improvement on year-ago Q3 numbers of CNY135.4 billion. Compared to the first three quarters in 2021, which clocked in at CNY455.8 billion with a profit margin of 10.2%, the numbers are still down, But this quarter could mark an inflection point.

The one sentence announcement is a different kind of financial report to what we usually receive from the big US tech firms, where multiple pages detail every conceivable data point describing how much wedge the firm has raked in that year and how, so it’s a little hard to say where the revenue is coming from but in a macro sense its of course good news for a company that’s been in the shadow of American sanctions for a long time. To ascertain whether this indicates a turning point or a blip, we shall have to wait to see what is announced next quarter.

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