BANGKOK — Huawei, a leading Chinese telecommunications equipment manufacturer, announced on Monday a significant decrease in its net profit for 2024, experiencing a 28% decline. Despite this downturn, the company saw an increase in its revenue, largely driven by substantial investments in cutting-edge technologies.
The financial statement revealed that Huawei Technologies recorded a net profit of 62.6 billion yuan ($8.6 billion) last year, down from 87 billion yuan in the previous year. On a positive note, the company’s revenue rose by 22% to $118.2 billion, with notable growth in its consumer goods and automotive-related sectors.
Headquartered in Shenzhen in southern China, Huawei attributed the decline in profit to a couple of key reasons. The company increased its investment towards future developments significantly and did not benefit from gains related to the sale of business entities.
Being one of the pioneering global tech brands from China, Huawei revealed that its investment in research and development (R&D) was substantial, accounting for over a fifth of its total revenue. More than half of its workforce, approximately 113,000 employees, are engaged in R&D activities, with overall R&D expenditure reaching 179.7 billion yuan (almost $25 billion).
In the face of escalating trade tensions, Huawei, along with other Chinese technology firms, is striving to compensate for the reduced access to advanced foreign technology, particularly from the U.S. American companies are restricted from conducting business with Huawei due to U.S. national security concerns. Consequently, Huawei’s access to advanced computer chips and essential software, such as Google services for its smartphones, remains curtailed. Furthermore, Huawei cannot sell its telecommunications equipment to U.S. entities.
The U.S. has also encouraged its European allies, including the United Kingdom and Sweden, to either ban or place restrictions on Huawei equipment within their telecommunication networks due to fears that the Chinese government could use it for cyber espionage or compromising critical communication infrastructures, allegations that Huawei has consistently refuted. Similarly, nations like Japan, Australia, New Zealand, and Canada have implemented parallel measures.
Despite these challenges, Huawei continues to deny claims that its products threaten the national security of its clients. Last year, the company’s consumer unit, which includes the sale of smartphones and other devices, reported a remarkable 38.3% increase in revenue. Additionally, sales in the automotive services sector more than quadrupled, contributing to the company’s revenue. Huawei’s cloud computing division experienced an 8.5% growth in revenue, while its digital power unit saw a 24.4% increase in sales.