Chinese Tech giant Huawei takes a giant leap of 33% in profit

By | April 1, 2015

Chinese telecommunications giant Huawei Technologies Co. said on Tuesday its net profit leaped more than 32% to 27.9 billion yuan ($4.5 billion) in 2014. This matches the company’s forecasts announced in January.


Huawei, a smartphone maker and one of the world’s largest suppliers of telecommunications equipment has increased its net profit from 21 billion yuan in 2013 to 27.9 billion yuan in 2014. Huawei’s earning have direct impact on the foreign-exchange rates, as the Shenzhen-based company generates more than 60% of its revenue outside its home country.

As the sales of their smartphone increased considerably in the overseas emerging markets last year, revenue of the company which mainly deals with handsets rose 33% to 75.1 billion yuan in 2014, accounting for 26% of the company’s overall revenue. Last year, the networking gear for telecom providers accounted for 67% of Huawei’s revenue. The expansion of the fourth-generation wireless networks in China also served to boost their revenue.

Huawei’s deputy chairman Ken Hu said, “Profit increase stems from streamlined management and improvements in overall efficiency.”

However, USA has long considered it as threat to the county’s security as it is perceived close to Chinese government, which the company allegedly denies. Many government agencies and other sensitive industries dealt with local suppliers rather than Huawei for the security reasons. It is not the case with USA alone, even Australia has banned it from getting directly involved in the broadband projects over espionage fears. But that has not hindered the progress of the company in various fields.

Huawei has always considered investing in research and development as important as any other department. Its recent increase in the investment in R&D department including in fifth-generation wireless network technology has resulted in the technique to process data faster. The R&D investment of the company valued around 40 billion yuan that is equivalent to 14% of its revenue last year, up 29% from 31.6 billion yuan in 2013.

The company operates in more than 170 countries and its boasts saying around 1/3rd of the world population uses its device in one way or other to communicate. It is the second largest network gear supplier in the world after the Swedish company Ericsson and holds a major market for its smartphone in the recent years.