Huawei (HUAWEI) H2 2023 earnings summary

Executive summary

• Revenue rose 9.6% YoY to CNY704.2bn; performance was in line with forecast, with ICT infrastructure solid, consumer meeting expectations, and cloud and digital power growing steadily.

• Intelligent automotive solutions entered large-scale delivery; growth and profit also reflected a stronger product portfolio, higher-quality operations, and gains from business disposals.

Financial highlights

• Revenue was CNY704.2bn, gross profit CNY325.4bn, operating profit CNY104.4bn, and net profit CNY87.0bn in 2023.

• Gross profit rose 15.4% YoY and gross margin increased to 46.2% from 43.9%; operating profit rose 147.3% and net profit rose 144.5%.

• Operating expenses increased 4.6% to CNY283.6bn; R&D spending was CNY164.7bn, or 23.4% of revenue, versus 25.1% in 2022.

• Operating cash flow increased 292.2% to CNY69.8bn; net cash used in investing activities was CNY98.8bn.

Outlook and guidance

• 2024 priorities include strategic investment, stronger capabilities, competitiveness, and steady, long-term growth; no numeric financial guidance was stated.

• 2024 is expected to mark the first year of 5.5G commercial use, with continued carrier collaboration on deployment and network evolution.

• Management expects economic growth to slow in many economies in 2024, with high interest rates, geopolitical tensions, and protectionism weighing on investment and confidence.