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Huawei Technologies experienced a 32% decline in net profit during the first half of the year compared to the previous year. The decline was driven by unprecedented spending on research and development and losses from asset revaluations, which overshadowed the company’s second-highest revenue ever.
For the six months ending June 30, the company’s net profit stood at approximately CNY37.2 billion (around USD5.2 billion). Meanwhile, revenue increased by 4%, reaching CNY427 billion (about USD59.9 billion).
Research and development expenditures grew by 9%, totaling CNY96.7 billion, representing nearly 23% of total revenue. Operating costs also rose by 9%, reaching CNY224.3 billion. Additionally, the company recorded asset fair value changes amounting to CNY5.8 billion (USD813.4 million), a significant jump from CNY35.3 million (USD5 million) a year earlier.
As a privately owned enterprise, Huawei continues to focus on developing proprietary technologies following its separation from the Android ecosystem. The head of the consumer business division mentioned recently that the company employs more than 10,000 staff in its tech division and invests billions of yuan annually into its Harmony operating system alone.
The company’s consumer segment showed promising signs of recovery. Domestic smartphone shipments reached 12.5 million units, capturing an 18.1% market share and overtaking competitors to regain its top spot in China for the first time in four years. The latest Harmony 5 OS has been adopted by over 12 million users.
Huawei has also expanded its influence in the automotive and data center markets. Its smart driving software has been installed in more than 900,000 vehicles, although fierce price competition within the electric vehicle sector and a fragmented ecosystem among various partners have limited growth opportunities.
In cloud computing, Huawei increased investments in artificial intelligence and computational infrastructure, securing an 18% share of the Chinese mainland cloud market, making it the second-largest provider in the region.
Looking forward, Huawei plans to accelerate investments in key technological areas over the next three years, emphasizing Harmony OS, Kunpeng processors, and Ascend AI chips. The company aims to leverage its strong technological foundation to explore new opportunities in artificial intelligence, according to the rotating chairwoman.
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