Wed, Jul 31, 2019 - Page 10 News List

Huawei sales growth accelerates

BLACKLISTED:Despite US sanctions, the Chinese telecom producer’s first-half revenue grew 23.2 percent, aided by domestic smartphone sales and new 5G carrier contracts


Huawei Technologies Co (華為) yesterday said that first-half revenue grew 23.2 percent from a year ago, despite an intense US campaign against it that ultimately became a trade ban from the middle of May.

That compares with annual growth of 15 percent in the same period last year.

Unlisted Huawei, which only started disclosing quarterly results this year, said revenue rose to 401.3 billion yuan (US$58.3 billion) from 325.7 billion yuan a year ago, with smartphone shipments reaching 118 million units, up 24 percent.

Huawei’s supply chain was significantly disrupted when it was put on a trade blacklist by Washington in May.

The US government alleges it is a national security risk as its equipment could be used by Beijing to spy, which Huawei has repeatedly denied.

It has since been given a three-month reprieve till Aug. 19, and US President Trump signaled Washington would be relaxing the sanctions on Huawei, but his administration has done little to clarify what sales would be permitted.

The lack of clarity on what US firms can supply to the world’s top producer of telecommunications equipment as long as it is on a so-called “entity list” is likely to cast a shadow over this week’s US-China trade negotiations in Shanghai.

“Revenue grew fast up through May,” Huawei chairman Howard Liang (梁華) told reporters at an earnings briefing.

“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,” Liang said.

Huawei founder and chief executive Ren Zhengfei (任正非) told reporters last month that the impact of the blacklisting was worse than expected.

It could cost the company US$30 billion in revenue, and its revenue this year and next year could stay roughly the same as last year at about US$100 billion, he said.

Analysts say strong domestic smartphone sales and new 5G carrier contracts helped offset the impact from the export ban that threatens to cut Huawei’s access to advanced US components and software, such as Google Android apps.

According to data from Canalys, Huawei expanded its lead in China’s smartphone market in the second quarter, while overseas smartphones sales dropped slightly year-on-year.

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