Huawei's Strong H1 Performance: Revenue Surges, Profitability Improves

Huawei's Strong Performance in the First Half of 2024

In the first half of 2024, Huawei achieved impressive financial results, with sales revenue reaching approximately $573.7 billion USD, representing a 34.3% year-over-year increase. The company reported a net profit margin of 13.2%, slightly lower than the previous year, but for the first time, Huawei's net profit for the first half of the year surpassed $68.8 billion USD. Rotating Chairman Xu Zhijun highlighted the company’s ongoing efforts to optimize its business portfolio, enhance resilience, and deliver more competitive products and solutions to its customers. Huawei's consumer business, particularly in smartphones and automobiles, showed significant growth, indicating strong momentum in these areas. Additionally, the company has reduced the price of its basic intelligent driving system to target the mainstream market, while its automotive business unit (Car BU) turned profitable in the first half of the year.

Key Highlights

• Revenue: $573.7 billion USD in H1 2024, a 34.3% increase year-over-year.
• Net Profit Margin: 13.2%, with net profits exceeding $68.8 billion USD for the first time in the first half.
• Strategic Focus: Continued optimization of the business portfolio and enhanced resilience.
• Sector Performance: Strong performance in smartphones and automotive sectors.
• Market Strategy: Price reduction in intelligent driving systems to penetrate the mainstream market.

Analysis

Huawei's strong performance is likely driven by innovation and market expansion in its consumer business, particularly in smartphones and automotive sectors. Although the net profit margin decreased slightly, the overall profit growth demonstrates improved economies of scale and increased market influence. This development could impact competitors such as Xiaomi, Apple, and automakers like Tesla. In the short term, Huawei's pricing strategy may intensify competition, while in the long term, it could solidify its leadership in intelligent driving technology. Furthermore, Huawei's enhanced profitability may attract more investor interest, potentially boosting its stock price and market valuation.

Additional Insights

• Rotating Chairman: Huawei's leadership structure includes rotating chairmen, with Xu Zhijun currently serving in this role, ensuring balanced leadership and distributed responsibilities.
• Intelligent Driving System: The price reduction of Huawei's basic intelligent driving system is aimed at making autonomous driving technology more accessible, potentially accelerating its market adoption.
• Car BU Business: Huawei's automotive business unit achieved profitability in the first half of 2024, reflecting successful integration and growth in the automotive sector.