Huawei reports 28% drop in net profit last year... "20% of sales invested in R&D"

Chinese telecommunications equipment and smartphone manufacturer Huawei, which is under U.S. sanctions, announced on the 31st (local time) that its net profit last year sharply declined by 28% to 62.6 billion yuan (12.7 trillion won) compared to the previous year.

Last year's revenue was 862.1 billion yuan (175 trillion won), a 22% increase from the previous year. Huawei's revenue has been rising for three consecutive years after a sharp drop during the COVID-19 pandemic in 2021. It is the second-largest and highest revenue since 890 billion yuan (181 trillion won) recorded in 2020.

Huawei attributed the decline in net profit to large-scale research and development (R&D) investments. A company official stated, "Investing 179.7 billion yuan (36.5 trillion won), which accounts for about 20% of revenue, in R&D had an impact."

The profitability also worsened as the profit-boosting effect from the sale of the mid-to-low-end smartphone brand 'Honor' disappeared. Huawei sold Honor to a consortium led by the Shenzhen government in China the following year after U.S. sanctions, which began in 2019, blocked access to semiconductor supply chains.

AFP Yonhap News