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Chinese Huawei says sales fell 16.5% following US sanctions

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BEIJING: Chinese tech giant Huawei said Wednesday, April 28, that first-quarter revenue fell after selling its low-priced Honor smartphone brand, but profitability improved.

Sales fell 16.5% from a year ago to 152.2 billion yuan ($ 23.5 billion), in part due to lower revenues at its consumer unit , the company said. It gave no profit, but said its profit margin improved 3.8 percentage points to 11.1%.

Huawei Technologies, China’s leading global tech brand, is struggling to maintain its global market share following US sanctions that have devastated its once-among the highest smartphone sales in the world. The company is also the largest manufacturer of network equipment used by telephone and Internet operators.

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Washington says the company poses a security risk and could facilitate Chinese espionage, a charge Huawei denied.

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The sanctions ban access to US processor chips and services, including Google Music and other popular apps. Huawei designs its own chips, but manufacturers are prohibited from using the American technology needed to produce them.

Honor was sold in November in hopes of boosting sales by separating it from sanctions against the parent company. Wednesday’s announcement did not give any details on sales by network equipment, consumer and other lines of business.

“2021 will be another difficult year for us, but it is also the year when our future development strategy will start to take shape,” said Eric Xu, one of the three leaders in turn in the presidency of Huawei. , in a press release.

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Huawei has responded by focusing on its sales in China and for electric and self-driving cars, industrial grids and other technologies less vulnerable to American pressure. Huawei has a stock of US chips for high-end smartphones, but executives have said those have run out.

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Wednesday’s announcement gave no details on sales of its networking equipment or other trades.

Huawei, headquartered in the southern city of Shenzhen, claims to be owned by Chinese employees who make up half of its 197,000 employees in 170 countries. The company began reporting financial results ten years ago in an attempt to defuse Western security concerns.

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Huawei founder Ren Zhengfei suggested in a letter to employees that the company may consider listing one of its business units on a stock exchange for the first time, Hong Kong’s South China Morning Post reported on Wednesday.

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Ren warned employees not to falsify accounting figures, saying it could be a legal problem “if any of our companies gradually enter the capital market in the future,” the Post reported. He said Ren had given no indication that the company had such a plan. The company did not immediately respond to a request for comment.

In the past, Ren has ruled out selling shares to third parties. He said it would distract management from serving customers and making long-term plans.

Huawei earlier announced that its sales of phones, network equipment and other technologies increased 3.8% in 2020 from a year earlier to reach 891.4 billion yuan (135.8 billion yuan). U.S. dollars), but this growth was down from 19.1% in 2019.

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