Huawei’s Profit Lifted by Asset Sales Whilst Production Cuts on the Cards for iPhone

Huawei Technologies revealed its net profit rose 76 percent in 2021 on the back of gains from asset sales, a net profit of RMB113.7 billion in 2021, its biggest-ever annual gain.

The Chinese networking and smartphone giant was turning in its first set of results under Chief Financial Officer, Meng Wanzhou since she returned to China last year after nearly three years’ detention in Canada.

Meanwhile, tech giant Apple is to cut iPhone SE production by 20 percent next quarter as the company is planning the cuts as the Russian invasion of Ukraine and inflation continues to affect consumer sentiment.

Huawei unveiled its annual results at a briefing presided over by Meng, who met media for the first time since her September release from three years of house arrest in Canada. The eldest daughter of billionaire founder Ren Zhengfei was arrested and held in Vancouver over fraud allegations.

Huawei’s profit jump came despite a 29% drop in revenue to RMB636.8 billion. It’s possible that Huawei may have included proceeds from the sale to a state-led conglomerate of its Honor arm, which could have been valued at more than US$10 billion. In 2021, it also sold its x86 server business to a Chinese consortium after the blacklisting made it difficult to secure processors from Intel.

Huawei reported RMB61 billion in additional net income in 2021 from sources it didn’t specify. Sales at its consumer arm, once China’s largest maker of smartphones, halved to just 243.4 billion yuan, while carrier revenue slid 7 percent and the enterprise solutions division eked out 2 percent growth. In the years since it came under US sanctions, the company has ramped up research and development in fields such as green power and autonomous driving.

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