Huawei Accelerates Fundraising with 580 Billion KRW Bond Issuance

As Part of Securing Funds for Software Business Expansion

[Asia Economy Reporter Kim Hyunjung] Huawei, China's largest telecommunications equipment company, is accelerating efforts to secure funds for business transformation.

According to the Hong Kong South China Morning Post (SCMP) on the 13th, Huawei is scheduled to issue bonds worth 3 billion yuan (approximately 578.1 billion KRW) in the Chinese financial market on the 18th. This comes just over a month after a previous bond issuance of 3 billion yuan.

As a result, Huawei's total debt is expected to surge to 17 billion yuan this year, following 9 billion yuan in 2020 and 11 billion yuan last year. Huawei explained that the bond issuance is intended for business development and the execution of key strategies.

As of September last year, Huawei held 200 billion yuan in cash. Although sales decreased by 29% last year, profits increased by 76% to 113.7 billion yuan due to one-time gains from the sale of some business units.

Despite recent U.S. sanctions, Huawei's bond issuances in the local market continue to be well received. Huawei's first domestic bond issuance was in September 2019, just a few months after it was added to the so-called "entity list," which prohibits U.S. companies from supplying parts and components to Huawei.

An analyst said, "As Huawei reinvents itself by transforming from a hardware-centric model to a combination of hardware, software, and services, its appetite for capital has also grown."

Yang Guang, an analyst at Strategy Analytics, a technology consulting firm based in Beijing, explained, "Huawei is now seeking business opportunities beyond the traditional telecom operator market, such as public cloud, industrial digitalization, and green energy solutions. All these activities require continuous investment."

The construction of a 10 billion yuan research and development (R&D) center in Qingpu District, Shanghai, is considered the largest project. The R&D center is expected to focus on chip development for semiconductor technology self-sufficiency. In December last year, Huawei announced four new business models aimed at supporting China's digital innovation and reducing energy consumption.