Huawei's Revenue Rebounds Last Year... Emphasizing Overcoming US Regulations with Wordplay on 'Maehwa'

Investing Over 25% of Sales in R&D
Meng Wanzhou: "There Is Pressure, But More Confidence"
"2022 Emphasized as a Year of Normalization"

China's largest telecommunications equipment manufacturer, Huawei, saw its sales rebound last year despite U.S. technology sanctions. However, net profit sharply declined due to the impact of the sanctions and large-scale research and development (R&D) expenditures. Meng Wanzhou, Chief Financial Officer (CFO) and daughter of company founder Ren Zhengfei, drew attention by likening Huawei to a "maehwa" (plum blossom) that has endured winter, emphasizing the difficulties and determination to overcome the U.S.-imposed sanctions.

On the 31st of last month, Meng Wanzhou announced at a performance briefing held at Huawei's headquarters in Shenzhen, Guangdong Province, China, that Huawei's 2022 revenue reached 642.3 billion yuan (approximately 121.825 trillion won), a 0.9% increase compared to the previous year. This marked a rebound just one year after sales plummeted 28.6% in 2021 due to U.S. regulatory pressure on China.

Meng Wanzhou, Chief Financial Officer (CFO) of Huawei, is explaining last year's sales and other performance at the 2022 earnings presentation held at the company's headquarters in Shenzhen, Guangdong Province, China. Throughout CFO Meng's presentation, the background was filled with a full-screen photo of "maehwa" (plum blossoms). (Photo by Hyunjung Kim)

However, net profit fell sharply by 68.7% year-on-year to 35.6 billion yuan, down from an all-time high. This was largely due to internal responses to U.S. sanctions and Huawei's expanded R&D efforts. Last year, Huawei invested 161.5 billion yuan in R&D, accounting for 25.1% of total sales. By sector, sales in the ICT infrastructure field showed steady growth, reaching 354 billion yuan, while the terminal device sector recorded sales of 214.5 billion yuan. Sales in the digital energy and cloud sectors were 50.8 billion yuan and 45.3 billion yuan, respectively.

Starting from the 1st of this month, Meng Wanzhou took on the role of rotating chairperson of Huawei and stepped to the forefront of management. At the briefing, she personally explained last year's performance in her capacity as CFO. She repeatedly likened the company to a "maehwa," indirectly expressing the difficulties caused by U.S. regulatory pressure. Meng was arrested in Canada in December 2018 at the request of the U.S. government on charges of violating Iran sanctions and was released after nearly two years and ten months of detention, making her a symbol of hardship amid U.S.-China tensions in China. At the event, she said, "After the snow, the sparse plum blossoms are pressed on the branches, but when spring comes, the sunlight shines brightly (雪後疏梅正壓枝, 春來朝日已暉暉)," adding, "There is pressure, but even more confidence (有壓力, 更有信心)."

[Image source=Yonhap News]

Meng CFO reflected, "2022 was a year of normalization of U.S. sanctions for Huawei and a year aiming for a transition to normal operations," and added, "Without the support of consumers, customers, and partner collaborators, today's Huawei would not exist." She also elaborated, "Last year's management faced great pressure, but a sound financial situation continues."

Xu Zhijun, Huawei's rotating chairperson, also said at the same event, "I want to liken today's Huawei to a maehwa," emphasizing, "The maehwa endures the severe cold of winter and then emits fragrance." He continued, "The current challenges are enormous, but growth opportunities remain, there is confidence in industry recovery, and there is the boldness to make daring investments." At a nearby banquet hall decorated with splendid maehwa motifs, a calligrapher performed by writing the phrase "The fragrance of maehwa comes from bitter cold (梅花香自苦寒來)."

Shenzhen ? Correspondent Kim Hyun-jung alphag@

This content was produced with the assistance of AI translation services.