According to Huawei's latest earnings report for the first half of 2023, the US-sanctioned telecom equipment giant reported sales of CNY310.9 billion, up 3.1% from a year ago, with net income reaching CNY46.63, a 209% growth year-on-year.
The revenue run rate of about CNY600 billion is much lower than the CNY900 billion during Huawei's peak, reflecting the negative impacts of US sanctions and the slowdown in Huawei's advanced technology development, as lower sales often lead to lower R&D expenses.
Still, Huawei's performance in the year's first half is remarkable, particularly its net income rebounding from its trough. Additionally, achieving revenue growth amid the uncertain global economic outlook for 2023 is noteworthy. Huawei's performance signals that the company has gradually found ways to survive despite US sanctions. Rumors from research institutions and industry sources about the prospect of Huawei returning to the 5G smartphone market in the latter half of 2023 are therefore feasible.
ICT infrastructure, Huawei's primary revenue source, saw revenue reach CNY167.2 billion. Huawei generated CNY103.5 billion and CNY24.1 billion from consumer and cloud computing businesses, respectively. Smart automobile solutions accounted for CNY1 billion of Huawei's sales for the year's first half.
Huawei's ICT infrastructure performance is expected to remain flat in the second half of the year. It is noted that Huawei's consumer business has increased by 2.17% year-on-year, reversing the trend of continuous decline. IDC's data shows that Huawei's smartphone shipments grew by 76.1% year-on-year in the second half of 2023.
Given that ICT infrastructure and consumer business have been Huawei's two primary revenue sources, Huawei's future growth lies in the consumer business as its ICT infrastructure business faces challenges amid sanctions and multiple countries banning its equipment.
