Huawei 2021 Annual Report: Digital Transformation, Technological Innovation, and Sustainable Development

In 2021, facing a severe external environment and non-market factors, all Huawei employees worked hard and overcame numerous difficulties to achieve business development goals, with overall operating performance in line with expectations. The company achieved sales revenue of RMB 636.8 billion and a net profit of RMB 113.7 billion, with a net profit margin of 17.9%. Operating cash flow increased by 69.4%, cash reserves were ample, and the asset-liability ratio further decreased to 57.8%, improving the capital structure. Huawei continued to improve internal operational efficiency, with sales, general, and administrative expenses reduced by RMB 9.3 billion year-on-year. The company increased R&D investment, with R&D expenses reaching RMB 142.7 billion, accounting for 22.4% of sales revenue, the highest in nearly a decade. Huawei is moving forward in the direction of digitalization, intelligence, and low-carbonization, striving to reconstruct the technological foundation through talent, scientific research, and innovation, and assisting various industries in digital transformation to create value for customers and society.

Huawei Cloud is committed to providing customers with stable, reliable, secure, trustworthy, and continuously innovative cloud services, transforming ICT technology accumulation into various cloud services with the concept of 'Everything as a Service'. Huawei Cloud provides Infrastructure as a Service, Technology as a Service, and Experience as a Service, making AI computing power as accessible as water and electricity. The company continues to increase its global data center and acceleration network layout, connecting people, things, and applications through cloud-network synergy, providing a globally consistent network experience. Huawei Cloud has launched over 220 cloud services and 210 solutions, aggregating over 30,000 partners and 2.6 million developers, with over 6,100 applications available on the cloud marketplace. Through the Kai Tian aPaaS platform, Huawei Cloud empowers industry scenario-based innovation and accelerates industry digital transformation.

The terminal business adheres to a consumer-centric approach, building a global ecosystem of intelligent connectivity for all things and billions of connections. Huawei devices equipped with HarmonyOS have exceeded 220 million units, with over 1,900 HarmonyOS Connect ecosystem partners and more than 4,500 types of certified products. The company is upgrading its brand marketing, channel retail, and service capabilities around the 1+8+N full-scenario strategy, supporting full-scenario accelerated transformation and expanding into new tracks. Smart wearables, smart screens, TWS, and consumer cloud services have all achieved continuous growth, creating an ultimate full-scenario smart living experience for consumers.

Huawei will continue to increase R&D investment, strengthen system engineering innovation, and promote three reconfigurations of basic theory, architecture, and software to achieve first-class product competitiveness. In terms of theoretical reconfiguration, the company continues to explore new generation MIMO and wireless AI technologies, and researches new theories such as semantic communication. In terms of architectural reconfiguration, Huawei is committed to solving the contradictions of computing architecture and designing 'symmetric' architectures to improve the performance of computing centers. In terms of software reconfiguration, Huawei is reconfiguring its entire software stack with AI as the center, enhancing computing power potential and development efficiency through HarmonyOS, Euler, and MindSpore frameworks. With an open mindset, Huawei is deploying its technological capabilities globally, cooperating with universities worldwide, establishing joint laboratories, and attracting top talent to tackle world-class challenges.

Good corporate governance is an important cornerstone of Huawei's stable development. The company continuously optimizes its governance structure, organization, processes, and assessment mechanisms, focusing on customers and striving employees. Huawei adheres to the certainty of legal compliance to cope with the uncertainty of international politics, upholds integrity in business operations, adheres to commercial ethics, and requires all subsidiaries and departments worldwide to comply with applicable laws and regulations. The company values and continuously fosters a culture of integrity, requiring every employee to abide by the code of business conduct. Huawei actively communicates openly with the outside world, further opening up and becoming more transparent, welcoming people from all walks of life to understand the real Huawei.