Huawei H1, Q2 2023 earnings report

  • Huawei on Friday reported a 2.2% year-over-year growth in its consumer business revenue in the first half of the year.
  • That was slower than the company’s overall revenue rose 3.1% to 310.9 billion yuan in the period.
  • The moderate growth comes with China’s slower-than-expected economic recovery this year and U.S. sanctions on the company that began in 2019.

Huawei’s manufacturing complex is pictured in Dongguan, near Shenzhen, China on April 25, 2019.

Kevin Frayer | Getty Images News | Good pictures

BEIJING – Chinese tech giant Huawei reported a 2.2% year-on-year growth in its consumer business revenue in the first half of the year.

The modest growth comes amid China’s slower-than-expected economic recovery this year and US sanctions on the company that began in 2019.

At 103.5 billion yuan ($14.27 billion) in the first six months of 2023, Huawei’s consumer revenue was less than half of what the segment generated in the same period in 2019 and 2020.

The 2.2% growth pace was slower than the company’s overall revenue rose 3.1% to 310.9 billion yuan in the first half of the year.

Huawei’s ICT infrastructure business, which includes carrier and enterprise services revenue, contributed the most to overall revenue with 167.2 billion yuan in the first half of the year.

Cloud services brought in 24.1 billion yuan in revenue, while intelligent vehicle solutions — products that incorporate technology for new energy vehicles — had revenue of 1 billion yuan in the first six months of 2023.

Huawei has its own electric car brand, Aito, which it says has produced 100,000 vehicles in 15 months through the partnership. Those sales are generally counted as part of the consumer business.

Because Huawei didn’t report a revenue breakdown of cloud and other businesses until late last year, only the consumer segment has comparable year-over-year figures.

Huawei reported a significant increase in its net profit margin of 15% in the first half of the year, up from 5% in the previous year. The company attributed the improvement to better management systems and gains from the sale of certain businesses.

The company advanced its efforts to monetize artificial intelligence by introducing an AI model in July to improve safety and efficiency in mining operations.

Cumulative revenue for the second quarter rose 4.8% year-on-year to 178.8 billion yuan — the fastest pace since the fourth quarter of 2022, according to CNBC calculations.

Overall revenue growth in the first half of 2023 is coming off a low base. Huawei said its revenue barely grew in 2022 after posting its first annual revenue decline in 2021.

In 2019, the U.S. under President Donald Trump blacklisted Huawei, which restricts the ability of U.S. companies to sell to the Chinese telecom giant. It also includes licensed access to the latest versions of Google’s Android operating system.

Huawei has released its own system called Harmony OS instead. Earlier this month, the company announced the latest version of that operating system — and it says it’s been downloaded a million times in three days.

This year, Huawei expects its flagship consumer product launches to return to a “normal” schedule amid a slump in the smartphone market. The company did not share the extent of the delay. In 2019, CNBC reported that Huawei pushed back the launch of a foldable phone.

Read more about China from CNBC Pro

In March, Huawei unveiled its P60 smartphone, Mate X3 foldable and Watch Ultimate wearables, whose sales contributed to first-half growth in consumer business revenue, the company said.

“The industry and global markets remain uncertain throughout 2023,” a Huawei spokesperson said in a statement.

“However, we continue to develop our methodology for global business continuity management and our agile operations management system,” the spokesperson said.

“We are confident that we will be able to meet our annual business goals and continue to create value for customers and the community.”

— CNBC’s Arjun Karpal contributed to this report.

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