Huawei Technologies’ 2023 net profit more than doubled, as rising sales of its mainstay telecoms equipment and a comeback in consumer products – funded by a record R&D budget – helped the privately held company overcome restrictive U.S. sanctions. The Shenzhen-based firm’s 2023 revenue grew 9.6% to CNY704.2 billion, according to Huawei's annual report. Sales of information and communications (ICT) technology infrastructure grew by 2.3% to CNY362 billion, making up half of the company's revenue. Net profit for the year soared to CNY87 billion, up 144.5% from 2022, partly due to recurring gains from the sales of budget smartphone unit Honor and other assets. The profit margin was 12.4% in 2023, compared to a historical low of 5.5% in 2022.
One of the strongest growth sectors was Huawei’s cloud computing business, which expanded 21.9% last year to CNY55.29 billion. Huawei’s consumer business, including its flagship Mate 60 smartphones and its co-developed Aito electric cars, recorded a 17.3% increase to CNY251.5 billion in 2023. It was the first growth posted for the consumer business since 2021, after the U.S. government restricted Huawei’s access to advanced semiconductors developed or produced using U.S. technology, effectively crippling its smartphone business. Last August, Huawei staged a surprise comeback with the Mate 60 Pro smartphone, powered by a home-grown advanced processor, the Kirin 9000s. This was Huawei’s first 5G smartphone since tightened U.S. trade sanctions in 2020, and its release fueled a wave of patriotic fervor among Chinese consumers that boosted domestic sales.
While Huawei is private, it has voluntarily disclosed key financial data since 2000. However, company executives skipped this year’s annual results press conference, breaking from a tradition that started as far back as 2013. “The company’s performance in 2023 was in line with forecasts,” Ken Hu, Huawei’s rotating Chairman, said in a statement. “We’ve been through a lot over the past few years. But through one challenge after another, we’ve managed to grow.” This year, Huawei will keep investing in technology and open innovation to help different industries modernize, the company said. Its research and development (R&D) expenses in 2023 reached a record high of CNY164.7 billion, compared with CNY161.5 billion the previous year.
The U.S. Bureau of Industry and Security said in September that it is probing the “purported” 7-nanometer Kirin chip that powers the Mate 60 5G smartphones, indicating that the U.S. might impose further restrictions. However, Huawei is not backing away from further advances in the smartphone industry. The company said it will resume its pace of launching flagship smartphones, which include the Mate and P series.
Huawei’s recovery also came amid efforts to diversify its revenue sources by venturing into new areas such as smart cars. Revenue for its intelligent automotive solutions business, in which the company works with carmakers and supplies its own components and software, grew 128% to CNY4.7 billion in 2023. Huawei has been making a deeper push into the automotive sector, and last year announced a joint venture with Changan Automobile, a major state-owned carmaker, while also extending its invitation to other domestic carmakers to take an equity stake. Huawei said it plans to transfer its smart-car system business to the new unit with investment from Changan, the South China Morning Post reports.
