Swung by international turbulence, Huawei's financials in the first half-year of 2020 nevertheless showed its solid business foundation in China. However, it remains vague if the growth will continue in the approaching periods.
Will Huawei continue to lead the smartphone sales against the US ban? Image credit: Shutterstock
On August 28, Huawei disclosed its unaudited interim financial results on Shanghai Clearing House. From January to June 2020, the company's total revenue climbed to CNY 450.66 billion, presenting a 13.65% year-over-year growth. The net profit also increased by 23.49% year-over-year, amounting to CNY 43.10 billion. Though affected by the pandemic in China during the first quarter and the net profit in that period declined by 7.57% year-over-year, the second quarter along with the Chinese economic rebound drove the profit over the last year's level to CNY 29.75 billion.
Accounting for 56% of the total, Huawei's consumer business remains competitive even faces international challenges and oversea sales decline. Enjoying China's vast market, Huawei in the second quarter of 2020 outsold Samsung (005930:KR), topping the world's smartphone shipment list. In the 5G smartphone realm, Huawei's In China, the company's leadership in consumer electronics is more apparent with around 40% of the smartphone shipments and over 17% of the PC market.
However, even with the home advantage in China, Huawei's situation is not that positive after its flagships do not have Kirin chipsets anymore. Originally compromised to making orders from MediaTek's standard chipsets, Huawei currently encountered another dilemma where the US government might ban the sales of MediaTek as well. With the SoC supplier uncertain, Huawei's smartphone segment remains worrisome for the next period. The sales of its consumer segment will likely be driven by the ecosystem products around smartphones such as smartwatches, tablets and home appliances.