Huawei: a slight increase in sales and an as yet uncertain future

Huawei has already warned investors: The US embargo de facto forbids the manufacture of Kirin chips for its next smartphone generations. The latest Mate 40 and Mate 40 Pro are available in limited quantities, and stocks of Kirin chips will be depleted by 2021. To secure the launch of the Mate 40s, Huawei had ordered a large number of the latest Kirin chips. Generation, but nothing could therefore be expected beyond this original stock.

The American embargo and the impossibility of delivering smartphones with Google services have already significantly reduced the group’s growth. Huawei’s revenue rose just under 3.7%, or 217.3 billion yuan ($ 27.4 billion) last quarter. That slowdown has also had an impact on year-to-date sales. From January to September, Huawei’s sales rose 9.9% (84 billion euros in sales over 9 months), far from the growth percentages of 2019. The group’s profit margin also declined over the same period (8% in 2020 versus 8.7% in 2019).

Another observation is that the geographic distribution of sales has changed dramatically since the embargo. Sales in China have literally skyrocketed while sales in the rest of the world have plummeted. Ultimately, the lack of Google services has indeed turned European customers off.