Huawei shows topline growth for first time in three years

After years of shrinking sales, Huawei appears to have turned the corner, reporting 3.1% revenue growth in the first half.

It posted sales of 310.9 billion Chinese yuan (US$43 billion), the first topline growth since 2020, although it is not clear where the additional revenue has come from. It also reported a 15% net profit margin, an advance on last year's 5% margin, largely the result of gains on asset sales.

As a privately held company, Huawei is not obliged to disclose its results, but it regularly does so in order to provide some transparency into its otherwise-opaque business.

However, because of the way it has changed its segment reporting, the first-half numbers tell us very little.

The big vendor used to break down its results into carrier equipment, enterprise and consumer. Now the core unit is ICT infrastructure. Huawei won't disclose just exactly what that comprises, but describes it as "basically" a combination of the old carrier and enterprise businesses. "Basically," however, that is not the case. In its full-year results earlier this year, which reported both the old and the new segmentization, the ICT segment was 18% smaller than the combined units. We can only guess what is excluded.

Carrier sales obscured

The advantage for Huawei is that this obscures the keenly watched stat of global carrier sales. We no longer have any idea how much the world's biggest telecom equipment vendor is selling to operators.

Huawei has new numbers it wants to disclose, however. Specifically, the revenue for the cloud, digital power and smart auto businesses, which came in at RMB24.1 billion ($3.3 billion), RMB24.2 billion ($3.4 billion) and RMB1 billion respectively ($140 million).

It doesn't explain why those specific segments are significant, but suggests that disclosing them is an "industry-centric approach" that mirrors the way its management views the company.

One thing we can say is that the new reporting segments have maintained roughly the same share of total revenue as they did over the 2022 full year.

The sole unchanged reporting segment, consumer device business, which includes handsets, tablets and wearables, grew 2% in the first half, also reversing three years of declining sales.

According to recent numbers from the China market, Huawei's smartphone business is on a roll. Counterpoint Research ranked it sixth with an 11% share in Q2, with sales up 58% year-on-year, while IDC placed it fifth with a 13% share, riding a 76% growth in sales.

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— Robert Clark, contributing editor, special to Light Reading