In 2017, Huawei's three major businesses achieved sales revenue of 603.6 billion yuan, an increase of 16% year-on-year, and net profit increased by 28.1% year-on-year to 47.5 billion yuan.
At the announcement of Huawei's 2017 annual report on March 30th, Huawei's rotating chairman Hu Houkun and Huawei's vice chairman and CFO Meng Yuezhou were interviewed by the media including the 21st Century Business Herald. This is also the first time that Huawei's board of directors has re-elected the board of directors. Members made their debut in a new capacity.
'The growth in the next few years is still very confident, regardless of the regional dimension or the business dimension.' Hu Houkun said in a fresh start, Huawei believes that human society will face the biggest change in the next 30 years is everyone Every family and every organization will be exposed to the irresistible transformation process of digitization and intelligence. In the future, ICT will change from a vertical industry to a shared platform, and it will become a digital, intelligent enabler for each industry. Huawei will Focus on two areas of ICT infrastructure and smart terminals - focus on connectivity, enhance cloud service capabilities and experience, develop broadband applications to bring a better experience, and leverage synergies to create the ultimate terminal experience.
Domestic mobile phone business continues to grow rapidly
According to the financial report, in 2017, Huawei’s operator revenue increased by 3% year-on-year, its contribution to overall revenue fell below 50% for the first time, and consumer business grew by 32% year-on-year, accounting for nearly 40% of revenue.
With regard to the relatively low growth of operators, Hu Houkun said that the telecommunications industry business is not in the peak period of investment, and it does not show peak characteristics in terms of volume. Under a flat industry, it is not easy for a substantial amount of operator business to achieve 2.5% growth.
For the terminal business that was considered to have 'hurried the group's profit' in 2016, Hu Houkun’s assessment was that 'there have been significant improvements in terms of shipments, revenue, profitability, brand awareness, and the development of a global distribution channel system'. .
In 2017, Huawei (including Glory) smartphones shipped 153 million units throughout the year. Its global share exceeded 10%, and the gap with the second-placed Apple is also shrinking.
According to Meng Wanzao's analysis, in an explicit sense, three reasons supported the significant increase in consumer business in 2017: The first is the efforts made in the management of refinement, mainly reflected in cost management and agile operations. Followed by the brand The increase in recognition, taking the high-end machine at US$600 as an example, Huawei’s market share at the end of 2016 was about 3.4%, and it climbed to 8.4% at the end of 2017. Furthermore, it is the component procurement plan management. In 2017, it focused on strengthening the future supply of components. Pre-judgment and plan management, and even with the component suppliers to carry out the cycle of strategic cooperation and negotiations, to avoid the impact of global price increases on component purchases in 2016 on the profitability.
In terms of non-explicit factors, consumer business has continued to invest in branding, marketing, channels, and retail in the past few years. In 2017, these early-phase inputs gradually produced synergies, and the future synergy will become better and better.
In addition to the three major services, Huawei newly established Cloud BU in 2017 to strongly build public clouds, but its performance was not separately disclosed in its financial reports. Hu Houkun introduced that the number of cloud service users and resource usage increased by three in the past year. Times. Future Huawei will firmly implement 'full cloud strategy'.
From a regional point of view, the proportion of Huawei’s business in China has increased significantly year by year. In 2017, the Chinese market’s revenue exceeded 50% for the first time, which was equal to that of overseas markets. The figures for 2016 and 2015 were 45.3% and 42%, respectively. 2017 The annual income in China has grown by 29%. Huawei explained in its annual report that 'mainly due to China's 4G construction and shipment of smart phones'.
The financial report shows that in 2017, the group's profit rate increased by 0.8% compared to the previous year. Meng Wanzhou said that 'first of all from the business, mainly the consumer business' performance was very strong last year, which also brought about economies of scale. In terms of management, the company's internal continuous change, improve operational efficiency, contributed 1.1 percentage points to the profit margin. Overall, profits increased by 0.8 percentage points.
One hundred billion US dollars a new starting point
Unsurprisingly, Huawei will realize 100 billion U.S. dollars in revenue in 2018. In 2016, Huawei founder Ren Zhengfei mentioned at the National Science and Technology Innovation Conference that Huawei's sales revenue in 2020 should exceed 150 billion U.S. dollars.
In January of this year, a photograph circulated from the Huawei's Market Awards Ceremony showed that Huawei’s sales revenue target for 2018 was US$1022 billion, carrier business, corporate business and consumer business goals were US$45 billion, US$10.60 billion and 441 respectively. Billion U.S. dollars, the newly established cloud BU sales target is 2.5 billion U.S. dollars, and the four major business revenue targets exceed 100 billion U.S. dollars. Based on the average interim price of the renminbi against the U.S. dollar of 6.7547 in 2017, Huawei achieved sales revenue of US$89.36 billion in 2017. Based on this, the sales revenue target in 2018 was equivalent to a year-on-year increase of 14.4%. However, Huawei officials did not confirm the accuracy of this information.
It must also be pointed out that 2018 is still a low investment period before the advent of 5G. Compared to its huge business volume, the current scale of enterprise business and cloud business is still small, and the competition in the consumer business market is stagnant. In the US market, Huawei’s The business plan was repeatedly blocked.
Hu Houkun believes that although the telecommunications industry business is not at the peak of investment, qualitative changes in the business structure have seen some positive changes. This change will be reflected in volume in the coming years. It will exceed 10 billion U.S. dollars, and the growth of the terminal business is also worth looking forward to. In the beginning of last year, the cloud business completed a clear positioning, upgrading capabilities, completing the layout, and developing ecological efforts. Difficulties in the U.S. market will make Huawei global Other places are working harder. Huawei will further focus on strategy, increase investment in innovation, actively open cooperation, and will also persist in the world.
In 2017, Huawei's R&D investment reached 89.7 billion yuan, accounting for 14.9% of sales revenue. 'We will maintain this investment intensity in the next decade, further strengthen open cooperation, and attract top talents to strengthen our capabilities in technological innovation. This will enable us to better face the future. It is expected that we will invest at a strength of not less than US$10 billion per year and will strengthen research innovation. ' Hu Houkun said.
In addition, for a 30-year-old company, it is crucial to improve the operational efficiency in order to survive the changes. It can be seen that Huawei is also continuing to promote internal management changes and efficiency enhancements. Recently, Huawei released the “On the Public Solicitation The "Notice of Opinions" began to change in response to the problems existing in human resources and stimulated the vitality of the organization. In Huawei's internal community, "Sounds of Communion," this is called 'may change Huawei's next decade'.