Huawei reports 18% higher H1 earnings as sales surge

Huawei has reported another strong result on the back of surging revenue. On Thursday, the privately held firm reported first-half revenue of 417.5 billion Chinese yuan (US$58.8 billion), up 34.3%.

The company did not disclose net profit but reported a net margin of 13.2%, implying earnings of RMB55.1 billion (US$7.8 billion), an 18.3% increase over last year. Q2 sales were RMB239.1 billion ($33.7 billion), up 33.7%, with earnings down 18.5% to RMB35.5 billion ($5 billion), largely due to the one-off gain recorded last year on the sale of its Honor mobile phone unit.

In a departure from past practice, the company did not disclose any numbers from its business segments.

But almost certainly its topline growth came from its flourishing handset division and its cloud and automotive businesses. Huawei's smartphone sales took off last year after it brought its first 5G device to market. It grew device shipments in China by 50% in Q2, ranking second with an 18% share, according to IDC.

The company has also become China's No. 2 cloud provider behind Ali Cloud, with a 19% market share in Q1, worth around $1.7 billion.

No.2 in cloud

Its heavy investment in smart auto technologies is also starting to pay off. Its Yinwang subsidiary last week received investments from two local car makers in transactions that value the business at $16 billion.

However, with operator capex in retreat worldwide, Huawei's legacy carrier equipment business is likely to have recorded zero or negative growth. Local rival ZTE reported a 9% decline in first half operator sales.

The company said in an emailed statement: "We grew our revenue in the first half of 2024 by making the most of digitalization, intelligence, and decarbonization."

"During this period, our consumer and intelligent automotive solution (IAS) businesses grew rapidly. Our ICT infrastructure, cloud, and digital power businesses remained steady. These results are in line with our forecasts."

Huawei's current chairman Xu Zhijun said "overall operating conditions" were in line with expectations.

He said the company would continue to optimize its industry portfolio and enhance resilience.