Huawei Releases 2020 Annual Report: US Suppression Shows an Effect

Huawei announced its annual report for 2020 on March 31st, 2021. In the last year, the US started a two-round suppression of Huawei: one round was the restriction of Huawei's 5G technology rollout, another involved forbidding other firms from providing chips to Huawei. Hence, the public is likely to be pretty curious about Huawei's performance in 2020.

 From the firm's overall profitability, even shouldering massive pressures in 2020, its sales revenues were still in an upward trend, reaching about CNY 891.37 million in 2020, an increase of 3.79% compared with the previous year. However, its operating profits decreased dramatically under the US's hit, dropping 6.85% compared with 2019. Moreover, the firm's profit margin started lower than 8.1% from 2020.

 Regarding Huawei's revenue structure, consumer business, operator business and corporate business are three main parts of its income. Although the consumer business occupied over half of its revenue in 2020, it did not show a large increasing trend compared with previous periods, as the strike on chips lowered phone-based profits. Further, as the 5G business was also targeted by the US, the operator business merely presented 0.2% YoY growth. Surprisingly, Huawei's corporate business, which includes several significant projects, such as AI and Huawei Cloud, presented enormous growth potential, rising 23% from last year.

Will Huawei's cloud and AI capacities help it overcome current difficulties? It remains to be seen.