Huawei Technologies Co (華為), China’s largest maker of telecommunications equipment, said it has an “open mind” about offering shares to the public after posting sales that probably surpassed Ericsson AB’s.
A decision to hold an initial public offering (IPO) would depend on shareholders’ interests, as the company has no immediate need to raise funds, chief financial officer Cathy Meng Wanzhou (孟晚舟) said yesterday at a briefing in Beijing.
The company expects sales to rise as much as 12 percent this year following an 8 percent increase last year, she said.
An IPO may help Huawei expand overseas by boosting transparency and reducing security concerns, Sanford C. Bernstein & Co analyst Pierre Ferragu said.
The US House of Representatives Intelligence Committee in October last year recommended that local companies avoid equipment made by Huawei, citing concerns that China could install malicious hardware or software on US networks.
“Perception is a major issue here,” London-based Ferragu said.
“A listing would be a strong help, but I doubt the company is ready for this given the implications on the governance and management model, ” he added.
It may take about a decade for Huawei to be perceived as “a normal company” worldwide, he said.
The House Intelligence Committee also said US companies should steer clear of another Chinese maker of telecommunications equipment, ZTE Corp (中興).
Huawei’s sales last year rose to 220 billion yuan (US$35.4 billion), helping boost net income 33 percent to 15.4 billion yuan, Meng said.
The event was the first media briefing for the 40-year-old chief financial officer, who is the daughter of Huawei founder Ren Zhengfei (任正非).
The equipment maker had US$4.5 billion of working capital at the end of last year, on record cash flow of US$12 billion, Meng said.
It also has credit lines totaling US$33 billion, 77 percent of which comes from banks outside of China.
“As to whether or not we will go public, in Huawei we have kept an open mind toward this issue,” she said.
“No matter whether we go public or not, we will always honor our commitment to openness and transparency. We will refer to the standards of listed companies to improve ourselves,” she added.
Huawei is employee-owned, with about 65,000 staff members holding shares, Meng said. Her father controls about 1.4 percent, she said.
Ren, 68, set up Huawei in 1987 after retiring from the Chinese military in 1983.
Huawei’s sales have climbed as it adds smartphones, tablets and cloud-computing services, and benefits from investment in emerging markets, Meng said.
Ericsson, the world’s biggest maker of wireless network equipment by revenue, is predicted to report sales that are little changed from a year earlier because of its exit from a mobile phone venture with Sony Corp and the eurozone debt crisis, which has damped spending in Europe.
Huawei will probably “grow faster than Ericsson in the next couple of years,” Landesbank Baden-Wuerttemberg analyst Mirko Maier said before the Chinese company released its earnings.
“They are entering new markets next to their core competencies and they are addressing new customer segments. That is not the case with Ericsson,” he said.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS