Huawei has maintained a stalwart financial position in the first half of the year, despite mounting pressure from the U.S. government on its business interests in not only the U.S. but also Europe. The company posted an impressive revenue of CNY 401.3 billion ($58.3 billion) for H1 2019, with a net profit margin of 8.7%.
What may be more impressive than the raw numbers, is the fact that the company's year-on-year increase in revenue of 23.2% is actually higher than the 15% growth it posted last year, unencumbered by the weight of the U.S. sanctions machine.
Huawei Chairman Liang Hua credited the company's vigorous performance to its solid work in the first quarter of the year:
"Revenue grew fast up through May. Given the foundation we laid in the first half of the year, we continue to see growth even after we were added to the entity list. That's not to say we don't have difficulties ahead. We do, and they may affect the pace of our growth in the short term.
But we will stay the course. We are fully confident in what the future holds, and we will continue investing as planned – including a total of CNY120 billion in R&D this year. We'll get through these challenges, and we're confident that Huawei will enter a new stage of growth after the worst of this is behind us.
A large part of the company's healthy performance in the first half of 2019 can be credited to its smartphone business, which did quite well in China. Smartphone shipments for H1 2019 reached 118 million, up 24% year-on-year and have allowed Huawei to further increase its dominance of the Chinese market, as shown by a recent report by Canalys. It was the only smartphone maker to show positive growth in China for the second quarter of 2019.
Huawei's carrier business accounted for CNY 146.5 billion ($21.23 billion), while the enterprise wing raked in CNY 31.6 billion ($4.59 billion). Huawei also boasted about its 50 commercial contracts for 5G equipment, as well as its sale of over 150,000 base stations worldwide. Though, how well Huawei's 5G business does in the long run remains to be seen, as some countries, like Australia and the UK, have either banned it from contributing to their 5G rollouts or are deliberating the matter following allegations by the U.S. government of the Chinese giant posing a national security threat.
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