TMTPost --  Huawei Technologies Ltd posted robust growth of both the top and bottom line in 2023, a year the Chinese tech giant waged its long-anticipated counterattack.

Credit：China Central Television

Huawei said at its annual report that revenue for 2023 rose year-over-year (YoY) 9.64%to RMB704.2 billion (US$99.18 billion). The yearly sales were still 21% below Huawei’s 2020 peak of RMB891 billion, but delivered the highest growth rate since the Trump administration blacklisted the company in 2019, compared with a merely 0.9% YoY growth during 2022. Huawei’s revenue in the fourth quarter surged 26% YoY to RMB 247.6 billion based on its annual figure. That suggested a significant acceleration from the previous quarter. The company said last October revenue rose 2.4% YoY to RMB456.6 billion in the first three quarters of 2023,  representing a 1.5% YoY increase in the third quarter alone.

The annual report also showed net income soared more than 144% YoY to RMB87.0 billion. That is the largest rise in profit for Huawei since it started reporting comparable figures in 2006, a great improvement from the year 2022, when  the company recorded a 68.7% decrease in profit. The operating margin stood at 14.8%, the highest in five years.

Huawei attributed the high profitability to high quality operations and  sales of some businesses. Huawei said its bread-and-butter information and communication technologies (ICT)  infrastructure remains stable, bringing RMB362.0 billion with a 2.3% YoY growth. The consumer business met Huawei’s expectation, the businesses of cloud services and digital power achieve excellent growth, and the intelligent automotive solutions started scale delivery. Huawei meanwhile continued to strengthen investment in research and development (R&D). It spent RMB164.7 billion in R&D, accounting for 23.4% of the annual revenue, and brought the total spending on R&D in the past decade to more than RMB1.11 trillion.

The overall performance last year was in line with the company’s own estimates, said Huawei rotating chairman Ken Hu, or Hu Houkun, at the report. Hu expressed gratitude to Huawei’s client, partners and the society for their trust and support, which played a role in Huawei’s survival and development. Hu stressed his company will insist on opening and innovation, seeking prosperity of its ecosystem, winning the competition with high quality, so as to offer more value to all of customers and the whole society.

According to the annual report, consumers business, which includes smartphones and electric vehicles (EVs), generated RMB251.5 billion with a 17.3% YoY growth, and the cloud services and digital power also posted double-digit growth of 12.91% with yearly sales of RMB55.3 billion. Revenue from the intelligent automotive solutions had a more stellar 128.1% YoY growth, gaining to RMB4.7 billion.

The annuall performance, especially, the consumers business, was partially driven by booming smartphone sales after Huawei surprisingly launched a presale for its flagship smartphone Mate 60 Pro in August without official release. While the company didn’t provide details about technical specifications or whether the phone supports the 5G network, multiple Chinese media outlets said online tests proved Mate 60 Pro can deliver the internet speed of 5G. The smartphone sales maintained momentum in 2024.

Smartphone sales in China dropped 3% YoY in the third quarter, but Huawei became the big winner, growing 37% YoY on the back of its newly launched Mate 60 series, which is powered by its SoC Kirin 9000S, Counterpoint Research, the global market research firm in the TMT industry, estimated  in October. Its senior analyst Ivan Lam commented that although the Mate 60’s sales are under the Pioneer Program and mostly carried out through the brand’s offline and online channels, the product has quickly garnered massive attention. “Huawei is striving to ramp up production to catch up with the demand,” Lam said.

Counterpoint also estimated Huawei has sold 1.6 million Mate 60 Pro handsets in six weeks, and more than 400,000 units out of the sales were sold in the two weeks when Apple launched its latest mobile iPhone 15 on mainland China. In the week ended October 8, or the 40th week of the year, Huawei took the first place with a 19.4% of market share by sales in China, according to BCI, a Chinese consulting firm focusing on research in the communications industry.

During the first six weeks of 2024, China’s overall smartphone unit sales declined 7% YoY, while Huawei, as only bright spots to the start of the year, continued to attract and satisfy strong demand for its Mate 60 series and recorded a sales jump of 64%, Counterpoint Research estimated in March. Other key vendors like Apple, OPPO and vivo delivered double-digit declines in China. Apple underperformed with a 24% YoY decrease in iPhone sales, and OPPO and vivo’s sales plunged 29% and 15% YoY in the six weeks, respectively. Apple was ranked the fourth in these weeks with a 15.7% share of the Chinese market, down from the second place a year ago when it had 19% share. Huawei’s market share rose to 16.5%, putting it in the second, up from 9.4% a year earlier.