Chinese telecoms equipment giant Huawei Technologies expects full-year revenue for 2021 to decline nearly 30% as it remains battered by Washington’s sanctions.
Total 2021 revenue is expected to be 634 billion yuan ($99.48 billion), rotating chairman Guo Ping said in a New Year letter to employees on Friday, warning that 2022 would be another year of challenges.
That represents a fall of 28.9% from 2020 revenues of 891.4 billion yuan.
Guo said next year “will come with its fair share of challenges” but that he was satisfied with Huawei’s 2021 business performance.
“An unpredictable business environment, the politicisation of technology, and a growing ‘de-globalisation’ movement all present serious challenges,” the letter, published on the company’s website, read. “We need to stick to our strategy and respond rationally to external forces that are beyond our control.”
‘Enhanced Quality, Efficiency’
Huawei will continue focusing on information and communications technology infrastructure and smart devices, the letter said.
Third-quarter revenue fell 38% compared with a year earlier, Huawei’s latest earnings report shows. The first three quarters’ revenue was down by almost a third year-on-year.
“In 2021, despite all the trials and tribulations, we worked hard to create tangible value for our customers and local communities,” Guo said.
“We enhanced the quality and efficiency of our operations, and expect to round off the year with a total revenue of 634 billion yuan.”
US Trade Ban on Huawei
In 2019, the US administration under then-president Donald Trump imposed a trade ban on Huawei, citing national security concerns, which barred the company from using Alphabet’s Android for its new smartphones and other tech developed in the US.
Earlier this year, tensions between the US government and the Chinese company eased when its chief financial officer Meng Wanzhou – wanted by the US for breaking sanctions on Iran – was released from Canada in exchange for two Canadians seized by Beijing.
“We do not see [that] a US-China deal on Meng would change any US sanctions against Huawei, particularly on access to chipsets that would allow Huawei to produce 5G-related equipment,” Jefferies researchers led by Edison Lee, equity analyst in Hong Kong, said in a note.
Lee said Joe Biden’s apparent deal with Beijing over Meng received some Republican’s criticism as a “capitulation” to China. “Therefore, we do not believe Biden would loosen any sanctions against Huawei,” he added.
- Reuters and AFP with additional editing by George Russell
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