It looks like the U.S. ban on Huawei Technologies is having an effect on the Chinese telecommunications giant's 2019 annual report. Although Huawei revealed that its net profit for the year was CNY62.7 billion ($12.5 billion), Reuters noted it was the company's lowest increase in three years at 5.6%.
In the report, Huawei warned that 2020 would be its most difficult year yet due to American trade restrictions that impacted its overseas sales in 2019. (The current COVID-19 coronavirus pandemic will have an impact as well.)
Huawei's carrier business, including its 5G mobile network equipment, saw sales rise just 3.8%.
Liang Hua, chairman of the board, said the company would have to adapt to the U.S. restrictions as well as the coronavirus pandemic.
Overall revenue including smartphones rose 19% to CNY858.8 billion, boosted by a 34% consumer business unit increase in sales mainly driven by China. In contrast to China 36.2% surge to CNY506.7 billion, Huawei's Asia-Pacific region revenue excluding China fell 13.9%. In Europe and the Middle East sales grew only 0.7%.
Moving forward, it remains to be seen how Huawei's smartphone sales outside China will be impacted in 2020 with all of Huawei's phones this year stripped of Google Mobile Services due to the U.S. ban.
Research firm Canalys reported Huawei led in smartphone sales in China, with a 38.5% market share in 2019 compared with 27% a year earlier - in part due to a nationalist sentiment boost after the company came under increasing pressure from the U.S.
Huawei spent 15.3% of its revenue, CNY131.7 billion, in research and development last year. Cash flow from operating activities jumped by more than one fifth to CNY91.4 billion thanks to a strong home market performance.
($1 = 5.02 Chinese yuan)