Huawei reports 28% drop in net profit last year... "20% of sales invested in R&D"

Chinese telecommunications equipment and smartphone manufacturer Huawei, which is under U.S. sanctions, announced on the 31st (local time) that its net profit last year sharply declined by 28% to 62.6 billion yuan (12.7 trillion won) compared to the previous year.

Last year's revenue was 862.1 billion yuan (175 trillion won), a 22% increase from the previous year. Huawei's revenue has been rising for three consecutive years after a sharp drop during the COVID-19 pandemic in 2021. It is the second-largest and highest revenue since 890 billion yuan (181 trillion won) recorded in 2020.

Huawei attributed the decline in net profit to large-scale research and development (R&D) investments. A company official stated, "Investing 179.7 billion yuan (36.5 trillion won), which accounts for about 20% of revenue, in R&D had an impact."

The profitability also worsened as the profit-boosting effect from the sale of the mid-to-low-end smartphone brand 'Honor' disappeared. Huawei sold Honor to a consortium led by the Shenzhen government in China the following year after U.S. sanctions, which began in 2019, blocked access to semiconductor supply chains.

AFP Yonhap News

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