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75Финансовое положение компании HUAWEI на рынке высокотехнологичных продуктов
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Синьхонг Гао
аспирант, Институт бизнеса БГУ, [email protected] Ткалич Татьяна Алексеева
доктор экономических наук, профессор, заведующий кафедрой цифровых систем и технологий, Институт бизнеса БГУ, [email protected]
Анализ финансового профиля Huawei показывает, что общий размер активов Huawei неуклонно растет и имеет тенденцию к все более быстрому росту. Различные предприятия Huawei разбросаны по всему миру и очень уязвимы к глобальным торговым трениям и торговым барьерам. Но даже в этом случае общие активы Huawei почти удвоились за пять лет, и у компании есть хорошие возможности для агрессивного расширения. Для будущего развития Huawei следует сосредоточиться на технологическом уровне, следует учесть рекомендации: придерживаться стратегии интернационализации и дифференцироваться для развития зарубежных рынков. Huawei уже давно придерживается своей стратегии интернационализации, придавая большое значение обучению новаторских талантов, постоянно разрабатывая новые продукты и осваивая новые области, постепенно завоевывая позиции на международном рынке. В настоящее время компания Huawei стала основным поставщиком оборудования для телекоммуникационной отрасли Беларуси, активно участвует в крупных проектах в сфере ИКТ в Беларуси и помогла Беларуси подготовить большое количество отличных специалистов в области ИКТ. Поскольку страны во всем мире с осторожностью относятся к технологии 5G, Huawei должна продолжать интегрировать свои ресурсы, уделять особое внимание инвестициям в исследования и разработки, искать дифференцированные стратегии на рынке каждой страны и продолжать целенаправленно развивать международные рынки.
Ключевые слова: 5G, Huawei, ИКТ, финансовое положение, рынок высокотехнологичных продуктов
Introduction
Huawei is a Chinese multinational company based in Shenzhen and a leading contender for leadership in the smartphone market. The company was founded in 1988 by a former official and is a major global manufacturer of telecommunications equipment. The company's main activities are the creation of telecommunications networks, the provision of operational and consulting services and the production of equipment both domestically and abroad. Thanks to innovative customer-oriented development and a well-developed partner network, Huawei has achieved a high level of success in the development of telecoms networks, terminal solutions and cloud computing systems. More than 180,000 Huawei employees worldwide work hard to create the most favourable conditions for operators, enterprises and end users to provide competitive solutions and services. One-third of the world's population uses Huawei's innovative products, solutions and services in more than 170 countries worldwide[1].The importance and role of finance is to reduce business risks, reduce operating costs, improve business profitability and, through the preparation of relevant statements, reflect the financial performance of the enterprise, providing reliable business information for investors and external personnel, and providing strong data support for business management.
1. Huawei's financials
In terms of financial management, Huawei has established a comprehensive financial strategy system based on finance to maximise and enhance Huawei's competitiveness and growth momentum. Firstly, recognising the importance of being strategic and that meeting the needs of the market is the key to success, Huawei focuses on investing in technological innovation and market expansion, providing the latest and strongest products and services, and implementing a diversified management model to meet the customised needs of different customers. Secondly, Huawei actively implements a financial risk management system, from overall control of risk, accurate prediction of risk, effective control of risk to investment and financing management, to comprehensively control the flow of financial capital in order to reduce the impact of financial instability on development and enhance the enterprise's ability to resist risk. Finally, Huawei uses its sound financial position as a basis to actively invest in research and development and strategic layout to improve its competitiveness in order to achieve sustainable development. Huawei also continues to improve the transparency of its financial reporting in order to enhance the company's credit rating and global reach.
The table 1 shows that...Huawei's sales revenue is increasing year on year from 2017 to 2020, but decreasing in 2021; however, operating revenue in 2021 is RMB 48,911 million higher than operating revenue in 2020, and the operating margin is also increasing from 8.1% to 19.1%, indicating Huawei's increasing ability to earn profits through its operations. Net profit has been steadily increasing year on year, with net profit in 2021 being more than double that of 2017. Huawei's increasing cash flow from operating activities from 2017 to 2021 illustrates the increasing accounts receivable and higher proportion of credit sales; rising working capital indicates the less risk that Huawei will not be able
to repay; and increasing total assets, while total borrowings increase as the total assets of the enterprise increase, representing the faster the expansion of Huawei's assets and operations in these five years. The lower gearing ratio in the past five years indicates, on the one hand, that the enterprise has sufficient funds and does not need to borrow to operate, which to a certain extent reflects the enterprise's relatively strong operating ability and can ensure the safety of creditors in granting loans; on the other hand, it indicates that the enterprise's ability to raise debt to operate is insufficient. In general, the lower the gearing ratio (below 50%), the stronger the solvency of the enterprise. If the gearing ratio reaches 100% or exceeds 100% it means that the company has no net assets or is insolvent. However, it is not true that the lower the debt ratio of a company is, the better. With a certain capital margin, it is better to operate with debt when the interest rate on debt is lower than the profit margin.
Tabe 1
2021 2020 1 2019 1 2018 | 2017
US$ million RMB million RMB million
Sales revenue 99887 636807 891368 858833 721202 603621
Operating profit 19044 121412 72501 77835 73287 56384
Operating profit margin 19.1% 19.1% 8.1% 9.1% 10.2% 9.3%
Net profit 17837 113718 64649 62656 59345 47455
Cash flow from operating activities 9360 59670 35218 91384 74659 96336
Cash and short-term investments 65304 416334 357366 371040 265857 199943
Working capital 59122 376923 299062 257638 170864 118503
Total assets 154184 982971 876854 858661 665792 505225
Total borrowings 27465 175100 141811 112162 69941 39925
Owner's equity 65040 414652 330408 295537 233065 175616
Gearing ratio 57.8% 57.8% 62.3% 65.6% 65% 65.2%
2021 2020 2019 2018 2017
Consumer 243431 482916 467304 348852 240372
Business
Enterprise 102444 100319 81554 74409 60091
Business
Carrier 281469 302621 301965 294012 297838
Business
Others 9463 5492 8010 3929 5320
million from 2019 to 2020 to only RMB 5,492 million, but does increase the most from 2020 to 2021, increasing by RMB 3,971 million to RMB 9,463 million.
Table 3
2021 2020 2019 2018 2017
Asia Pacific 53675 64369 70553 81918 71199
Europe 131467 180849 206007 204536 164603
Middle East
Africa
Americas 29225 39638 52478 47885 39470
China 413299 584910 506733 372162 312532
Others 9141 21602 23082 14701 15817
The US dollar amount was translated using the 2021 period-end exchange rate of US$1 to RMB6.3753. (All data from Huawei's website.)
According to Huawei's official website, in the first half of 2022, Huawei achieved a total sales revenue of RMB 301.6 billion and a net profit margin of 5%. Among them, revenue from the operator business was RMB 142.7 billion, revenue from the enterprise business was RMB 54.7 billion and revenue from the terminal business was RMB 101.3 billion.
Table 2
(All data from Huawei's website.)
The table 2 shows that...The consumer business increased year-on-year from 2017 to 2020 and decreased significantly in 2021 ; the enterprise business increased year-on-year from 2017 to 2021, especially between 2019 and 2020, by almost RMB 18,765 million; the operator business decreased the most in 2021, by RMB 21,152 million; the other business decreased the least in 2020, by RMB 2,518 million from 2019 to 2020, to only RMB 5,492 million. Other business is the smallest in 2020, decreasing by RMB 2,518
(All data from Huawei's website.)
Asia Pacific 2021: The operator business benefited from accelerated progress in 5G network construction and industry applications, maintaining solid operations; the enterprise business benefited from the deepening and accelerating digital and intelligent transformation of enterprises and grew healthily; the consumer business, HMS eco-innovation, developed rapidly and grew effectively in the smart all-scene. Overall sales revenue of RMB53,675 million was achieved.
EMEA 2021: The operator business benefited from the construction of 5G network infrastructure and maintained solid operations; the enterprise business leveraged the momentum of accelerated digitalisation and smart transformation in the industry and grew rapidly; the consumer business actively expanded its HMS ecosystem and converged products. Overall sales revenue was RMB131,467 million.
In the Americas region in 2021, the carrier business grew steadily, benefiting from new 5G network construction and increased customer investment; the enterprise business grew steadily by leading the digitalisation and intelligence development of the industry; and the consumer business achieved healthy development of the HMS ecosystem and effective growth in the smart all-round scenario. Overall sales revenue was RMB 29,225 million.
In China in 2021, the operator business will benefit from the continued development of 5G in the country and grow steadily; the enterprise business will grow healthily as the digital and intelligent transformation of the industry accelerates; and the consumer business will adhere to high quality and develop towards scenario-based and ecological development to provide consumers with an excellent experience. Overall, the Group achieved sales revenue of RMB413,299 million.
2. How
Huawei uses tools to promote high-tech products in B2B and B2C markets.
1. How Huawei uses the promotion of high-tech products in B2B markets.
First, the values of the company must be understood and supported within the company.
If the employees of their own company do not understand the values of their own company, how will the market understand? So all departments of the company's staff on the company's value concept (vision, mission, values) must be a comprehensive understanding and support, remember to say here is a comprehensive and must, including all the logistics department, many B2B business owners and executives believe that the company's mission, vision is very false, there is no need for internal staff to bear in mind, in fact, these reflect the essence of B2B enterprises. Internet companies popular saying, 100 people-level enterprises rely on the pie to manage, 1,000 people-level
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enterprises rely on the system management, 10,000 people-level enterprises rely on values management. Huawei connects internal staff and customers with the vision of "open road to a fully connected world"; Hainanda's "making the world safer" conveys the mission of security; NetBase's mission is "an industry-wide procurement platform for small and medium-sized enterprises "The vision of "Building the No.1 brand of single product supply chain service" has united the dreams of the enterprise organization.
Second, adopt the company brand strategy and plan a clear brand structure.
TO B enterprises rely heavily on branding, and due to the breadth and complexity of their product or service portfolio, B2B enterprises need to emphasise their company brand. Typically, B2B companies establish sub-brands directly with an introductory product modifier and connect it to the company brand name, such as Huawei GSM-R solutions, Huawei eLTE solutions; if the product line is very specific, then more differentiated sub-brands need to be established additionally, such as Intel's mobile technology
Third, high value perception is an extremely important brand asset, design value perception.
Due to the highly competitive nature of B2B markets, marketing must ensure that customers can fully perceive the brand's differentiation, and when a brand is to make a good impression, it must be designed for its value perception. Designing the value perception is as simple as ensuring that the customer perceives all the benefits of the brand through marketing, or intervening proactively in different ways to change the perceived economy of purchase, use, mind and disposal of the product by the customer. Of course, building a high value perception is as effective as Huawei registering a patent with an international authority, capturing industry standards and acquiring a high value IP. another is to find a differentiated position: differentiated value is roughly in two directions: either creating an identity or creating a category. Specifically, to create a feature means to monopolise the user's mind. When there is no leading brand in the industry, finding a feature can lead to a brilliant market. To create a new category is to make something completely new and avoid falling into homogenous competition in the industry. In addition, creating a high-value sense of explosive single product is definitely a powerful tool for brand building, especially in B2B transactions, where the transaction volume of a single product is huge. For start-up companies, it is often through a single product that customers get to know themselves, and the creation of such explosive products can be a major force in pulling the brand.
Fourth, let the company personality, build an invisible personality association.
In B2B markets, differences may be formed in terms of factors other than product functionality, such as good customer service or making customers highly respected, the personal charisma of the sales representative and other factors. In the process of B2B brand perception, a brand image with personality has an important value transfer role for customers, such as Huawei's "value innovation" and Ren Zhengfei's craftsmanship is regarded as legendary in the industry.
Fifth, to find the brand-related emotional associations, to give humanistic care.
As B2B companies always consider their products as rational factors, it is easy to ignore the role of emotions in the process of creating a brand, not knowing that the emotional associations associated with a sense of security, social identity and self-esteem are not only relevant to the brand, but also an important source of brand equity. In other words, by improving customers' sense of security, thereby reducing risk, is an important influencing factor in consumers' purchasing decisions, and thus becomes an important source of brand equity, Huawei is not afraid of hardship and danger
to solve problems for customers, and give customers core care to become a trustworthy enterprise.
Sixth, from industry communication to mass communication, the road to B-end brands.
According to the coverage of brand influence, brands can be divided into five stages of development: no brand, product brand, category brand, industry brand and mass brand. Of these, the first four stages all belong to the industry level. Considering the low conversion rate of B2B products from users to customers, in order to maximize the effectiveness of the limited communication and promotion resources, all the more ideal B2B brands should be mainly industry communication in the early stages, until the brand influence to reach the industry brand stage, communication and promotion resources are more abundant, and then to promote the mass communication.
Seventh, play "self media".
Self-media here, including not only the company's official website, WeChat public number, microblogging and other new media, but also includes VI system, file format, business cards, packaging, manuals, warranty cards, software CDs, handbags, product manuals, flyers, posters, banners, honorary certificates, advertising, promotional videos, terminal image and other communication and promotion media, from design to production, release, must strive to refine. Because the B side of more business single transaction is larger, many dealers pay close attention to packaging, product manuals, website publicity and online shops and other details, want to understand from them whether the manufacturer is formal, how strong.
Eighth, good at conference marketing, event marketing.
The industry and product limitations, B2B enterprises to send soft documents, advertising is difficult to cause people's desire to click, even the lottery to send products are not interested, then you must take a roundabout tactics, with the help of media resources cleverly implanted in people's eyeballs. B2B products are usually high technical content, non-a soft text or an ad in a few words can be said, and too much soft text or advertising will make customers bored, which It is necessary to use conference marketing, event means, offline face-to-face marketing customers. In many B2B enterprises, new product launches, brand presentations, investment conferences, dealer conferences, industry forums and even corporate anniversaries, annual conferences, etc., are the highlight of the annual brand building work.
Ninth, create a sample case.
With B2B products, the risk of customer decision making increases with larger single purchases. When customers lack in-depth knowledge of a brand and product, a sample case is the secret weapon to convince them. At the same time, customers want to be sure of their choice of brand, but if they are the only ones to buy, they will lose confidence in the brand.
Tenth, the core partner growth plan.
Marketing is inseparable from the momentum, communication and promotion of limited resources of B2B brands to promote themselves with the help of strong brands. The "core partner growth plan" is particularly important, here the "core partner growth plan" methodology, that is, for the industry chain upstream and downstream well-known enterprises and large customers, giving them priority resource input and policy support, joint research and development of new technologies, new products We will also jointly organise exhibitions, new product launches and brand presentations, as well as jointly publish advertisements and softwares and exchange traffic to create a win-win ecosystem for partners to share resources and benefits.
2. How Huawei uses the promotion of high-tech products in B2Cmarkets.
Most companies spend a lot of time actually doing marketing, and very few of them actually make it to the brand level. What Huawei has come up with is to differentiate the two first, so as to consciously develop two different competencies and shape an image of a great brand with innovation and technology. In the Chinese market, the Huawei brand has largely solved the problem of awareness; what needs to be improved is influence. Overseas, Huawei still needs to be clear about "who I am", and consumers there are more rational, so the marketing approach of selling the phone itself, emphasising how powerful its configuration is, is not effective. It's a better approach to switch to brand-driven sales, and although it means more effort and time, it's an effective way to really influence and sensitise consumers. Huawei has used the P series, Mate series and nova series to present different aspects of the main brand, with the P series being defined as "fashionable technology", the Mate series as "high-end business" and the nova series, released in the second half of 2016, being used to cater to the mainstream younger consumer group. The nova series, released in the second half of 2016, is designed to cater to the mainstream young consumer group. In addition to the "Huawei" brand, "Honor", an Internet mobile phone brand, has formed a so-called dual-brand strategy with it. According to Huawei's external statements, the former is focused on the "new middle-class lifestyle", while the latter's users are positioned as "new youth" who are feverish and polite.
Financial position of HUAWEI in the market of high-tech products Xinhong Gao, Tkalich T.A.
School of Business BSU
JEL classification: H87, F02, F15, F29, F40, F42, F49
An analysis of Huawei's financial profile shows that Huawei's total assets have been steadily growing and are trending towards an ever faster growth. Huawei's various businesses are scattered around the world and are highly vulnerable to global trade frictions and trade barriers. But even so, Huawei's total assets have nearly doubled in five years, and the company is well positioned to expand aggressively. For future development, Huawei should focus on the technology level, should take into account the recommendations: adhere to the internationalization strategy and differentiate to develop overseas markets. Huawei has long adhered to its internationalization strategy, attaching great importance to the training of innovative talents, constantly developing new products and expanding into new areas, gradually gaining ground in the international market. At present, Huawei has become the main supplier of equipment for the telecommunications industry in Belarus, actively participates in large-scale ICT projects in Belarus, and has helped Belarus develop a large number of excellent ICT specialists. As countries around the world are wary of 5G technology, Huawei should continue to integrate its resources, focus on R&D investment, seek differentiated strategies in each country's market, and continue to develop international markets purposefully.
Keywords: 5G, Huawei, ICT, financial position, high-tech product market
References
1.Dissecting Huawei's B2B strategy/ Mode of access: https://developer.aliyun.com/article/151953 - Date of access: 20.01.2023
2. Mode of access: https://www.huawei.com/cn/annual-report - Date of access:
20.01.2023
Conclusions
An analysis of Huawei's financial profile, sales revenue from its three main businesses and regional sales revenue from 2017 to 2022 shows that Huawei's total asset size is steadily increasing and has a tendency to grow progressively faster. The slight slowdown in growth in 2019 may be due to the US government sanctions and the epidemic. The global economy is under downward pressure due to the epidemic. Huawei's various businesses are spread across the globe and are highly vulnerable to global trade frictions and trade barriers. For Huawei in particular, although the US crackdown is gradually easing, there is still a steady stream of pressure. But even so, Huawei's total assets have nearly doubled in five years, and the company is in a good position to expand aggressively. For the future development of Huawei, I believe that Huawei should focus on the technology layer, and thus put forward the following recommendations: adhere to the internationalization strategy and differentiate to develop overseas markets. Huawei has long adhered to its internationalisation strategy, attaching importance to the training of innovative talents, constantly developing new products and expanding into new areas, and gradually gaining a foothold in the international market. At present, Huawei has become a mainstream equipment supplier to the H
Belarusian telecommunications industry, and is actively involved in q
major projects in the ICT sector in Belarus, and has helped Belarus CD
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train a large number of excellent ICT professionals. With countries around the world wary of 5G technology, Huawei should continue to integrate its resources, emphasise research and development investment, seek differentiated strategies in each country's market,
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