Chinese telecom giant Huawei said Wednesday it achieved a record profit last year, but revenue growth slowed sharply amid the pandemic and tightening US pressure that has pushed the company into new business lines to survive.
Unlisted Huawei said net profit rose 3.2% to 64.6 billion yuan (US$9.9 billion) in 2020, while revenue inched 3.8% higher to 891.4 billion yuan.
The world’s leading supplier of telecom networking gear and a top smartphone brand, Huawei’s future has clouded over since the former Trump administration in 2018 launched a campaign to contain the company, which has gradually eaten into its bottom lines.
Before the US pressure began, revenue growth was routinely in the neighborhood of 30% or more, though it slowed to about 19% in 2019.
“Over the past year we’ve held strong in the face of adversity,” chairman Ken Hu said in a statement.
Smartphone sales have plateaued after the US cut Huawei off from key components and banned it from using Google’s Android operating systems in its handsets.
Huawei said its consumer products division – which makes smartphones and other personal devices and accounts for more than 50% of overall revenue – managed 3.3% sales growth in 2020.
But that masks an accelerating impact from the US sanctions. Data from independent analysts has shown that both domestic and overseas phone shipments plunged more than 40% in the fourth quarter of 2020.
In addition, a number of US allies have responded to Washington’s warnings of a Huawei security threat by banning the use of its networking equipment in national telecom systems. Revenue growth in Huawei’s carrier-network division was flat last year at just 0.2%.
The United States, locked in a worsening rivalry with China, fears that Beijing’s Communist Party government could utilize Huawei systems installed globally for espionage. China’s government and Huawei have heatedly denied the suggestion.
Any hopes of a reset under the new administration of President Joe Biden were dashed two weeks ago when US regulators included Huawei on a list of Chinese telecom companies deemed to pose a national security risk.