Huawei Investment & Holding Co., Ltd.

2020 Annual Report

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Messages from Management Team

In 2021, we will continue to find ourselves in a complex and volatile global environment. Resurgence of COVID-19 and geopolitical uncertainty will present ongoing challenges for the global community. Huawei believes deeply in the power of digital technology to provide fresh solutions to the problems we all face. We want to create digital technology that makes lives better, makes businesses more intelligent, and makes society more inclusive. This will ultimately bring us closer to a fully connected, intelligent world. — Ken Hu, Rotating Chairman, Huawei

While greater challenges might still lie ahead, Huawei is committed to open collaboration and global operations, and will continue to work with our global partners to cultivate open industry ecosystems. Together, we will drive advancements in technology, promote industry development, and create greater value for our customers and the global community. — Liang Hua, Chairman of the Board, Huawei

Financial Performance

Solid operations and financial results in line with forecast
  • Revenue

    891.4

    CNY Billion

    3.8%

  • Net profit

    64.6

    CNY Billion

    3.2%

  • Cash flow from operating activities

    35.2

    CNY Billion

    61.5%

Revenue by business segment (Unit: CNY Billion)

Carrier business
302.6
0.2%
Enterprise business
100.3
23.0%
Consumer business
482.9
3.3%
data1

Revenue by region (Unit: CNY Billion)

China
584.9
15.4%
Americas
39.6
24.5%
Asia Pacific
64.4
8.7%
EMEA
180.8
12.2%
data2

Research and Innovation

Huawei has one of the largest patent portfolios in the world
  • 100,000+

    Active patents across 40,000+ families by the end of 2020

  • 30+

    Active industry alliance projects

  • 590+

    Research papers accepted and published by academic journals and conferences

Business Highlights in 2020

Digital technology and intelligence are pushing the digital economy into a new phase of development. Huawei focuses on ICT solutions and smart devices, and is committed to bringing digital to every person, home and organization for a fully connected, intelligent world.

Driving Ubiquitous Connectivity

Through our continuous innovations in future-oriented network technologies such as 5G, optical networks, intelligent IP networks, and Autonomous Driving Network (ADN), and our open collaboration with industry partners, we have created all-scenario intelligent connectivity solutions.

We have worked with carriers worldwide to build 5G networks that deliver the best possible experiences. We have also teamed up with carriers and partners to build a thriving 5GtoB ecosystem, and made breakthroughs with large-scale industry applications.

We launched our innovative RuralStar Pro solution. To date, our RuralStar series solutions have provided Internet services to 50+ million people living in remote areas in 60+ countries and regions.

In the ubiquitous IoT domain, Huawei has deepened cooperation with 600+ mainstream home appliance brands based on the HiLink platform. The platform has already covered 3,000+ products and served 50+ million users.

Enabling Pervasive Intelligence

We launched our one-stop AI development platform ModelArts 3.0 and the industry's first full-lifecycle knowledge computing solution to accelerate AI adoption in industries.

We open sourced the full Kunpeng stack and the full stack of Ascend software and hardware platforms to help our partners and developers accelerate innovation and efficiently use AI capabilities.

In the intelligent automotive solution domain, we are working with our partners to help car OEMs build better vehicles, and will soon launch 30+ intelligent components.

Delivering a Personalized Experience

Driven by HarmonyOS and the Huawei Mobile Services (HMS) ecosystem, we have further optimized our Seamless AI Life ecosystem across five key scenarios: smart office, fitness & health, smart home, easy travel, and entertainment, providing consumers with a transformative intelligent experience.

We launched HMS Core 5.0, and fully opened our software and hardware system capabilities, as well as cloud capabilities, to developers worldwide. Currently, HMS is the world's third largest mobile app ecosystem. 120,000+ apps worldwide have been integrated with HMS Core, and the number of global registered developers already exceeds 2.3 million.

HarmonyOS 2.0 brought comprehensive improvements to the existing capabilities, and has been opened to devices with 128 KB to 128 MB RAM, providing smartphone app developers and app vendors with an extensive innovation platform.

Building a Digital Platform

HUAWEI CLOUD is the world's fastest growing major cloud service provider, launching 220+ cloud services and 210+ solutions. It works with 19,000+ partners and 1.6 million developers, while 4,000+ applications have been launched on the HUAWEI CLOUD Marketplace. We joined the global fight against COVID-19, working with partners and research institutes to provide AI-assisted diagnosis and other services across many regions.

Intelligent Twins, our open technological reference architecture, will accelerate the intelligent upgrade of governments and enterprises, with cloud as its foundation and AI at its core. We have worked with partners to apply Intelligent Twins in 600+ scenarios.

700+ cities and 253 Fortune Global 500 companies worldwide have chosen Huawei as their partner for digital transformation, while 30,000+ partners are working with us to serve the enterprise market.

Creating Social Value

The social value of an enterprise is the total value and contribution it makes in the course of fulfilling stakeholder requirements through its business activities. At Huawei, we believe that businesses should not solely pursue business value, as such a model is simply not sustainable. Social value should be a key consideration when companies take their business decisions. As businesses contribute social value, they are likely to encounter new business opportunities, which means that they can strike the right balance between business value and social value.

In addition to creating business value for its customers, Huawei recognizes the importance of the requirements of all stakeholders, including governments, regulators, industry partners, and academic associations. As part of our commitment to sustainable development, we work with these stakeholders to ensure that our business operations align with broader economic, social, and environmental goals.

Boosting economy and employment

Committed to its "Glocalization" strategy, Huawei works tirelessly to boost employment and the economies of the countries and regions where we operate. This includes efforts such as local hiring, local investment, local procurement, and establishing local research facilities.

  • An Oxford Economics report, The Economic Impact of Huawei in Europe (November 2020), found that, in 2019 alone, Huawei contributed EUR16.4 billion to Europe's GDP, sustained 224,300 jobs, and drove EUR6.6 billion in tax revenue
  • In early 2020, Huawei announced a EUR200 million investment in a new plant for wireless products in France, which is expected to directly create 500 jobs

Delivering both economic and social benefits

ICT technologies directly create value, and also drive immense indirect value by transforming other industries. As they are widely adopted in the industrial, agricultural, financial, and transportation sectors, among others, new ICT technologies can help to improve organizational and social productivity, which leads to even greater social benefits.

  • In coal mines, 5G means safer operations, better working environments, and higher productivity. With 5G, mine workers will be able to "wear suits and ties" at work
  • In steel plants, 5G-powered remote control systems allow workers to operate from the comfort of air-conditioned rooms, reducing their exposure to noisy and hot working environments and improving productivity

Supporting local industry ecosystems and SMEs

Huawei is committed to open collaboration and innovation for a thriving industry ecosystem. We provide open platforms for local partners, SMEs, and individual developers, which helps to incubate local ICT industries and digital economies.

Promoting open innovation, industry upgrade, and ecosystem growth

Huawei is an active player in industry and academic associations, where we work with stakeholders to advance basic research, develop standards, encourage industry-wide collaboration, and explore solutions to challenges facing industries. In addition, we are stepping up our commitment to open source for innovation in basic software. We are a heavyweight and consistent contributor to major open source communities.

  • We go open source with OpenHarmony, openEuler, openGauss, openLookeng, MindSpore, and more
  • Huawei is an active member of 600+ industry organizations, including standards organizations, industry alliances, open source communities, and academic associations. Within these organizations, we hold 400+ key positions and have submitted 65,000+ standards contributions

Driving sustainability

Huawei supports the UN's Sustainable Development Goals through ongoing efforts in areas such as digital upskilling, environmental protection, and the fight against COVID-19.

Sustainable Development

Making active contributions to a sustainable, fully connected, and intelligent world
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Respecting Human Rights

Huawei adheres to all applicable international and national laws and policies and develops products and services in compliance with international standards and certifications. Huawei respects all basic human rights as promoted by the Universal Declaration of Human Rights. We strive to ensure that our business activities will not adversely impact human rights. Huawei has been a member of the United Nations Global Compact (UNGC) since 2004, and is also a member of the Responsible Business Alliance (RBA). In addition, Huawei is committed to the United Nations Guiding Principles on Business and Human Rights and standards released by the International Labor Organization (ILO), among others.

Huawei believes that connectivity is a basic right for every human being. We are committed to building better network connectivity and providing convenient and affordable information and communications services to billions of people around the world using our innovative technologies. Ubiquitous broadband and connectivity will create new jobs, promote development, decrease poverty, and improve quality of life. In addition, connectivity will help us respond to global challenges, reduce the human impact on the environment, and provide essential communications services to support rescue and relief efforts during natural disasters.

Key Areas

Building on its existing corporate sustainable development organization, Huawei has strengthened its management of key areas that may have an impact on human rights. This team is responsible for managing and overseeing any adverse impact on human rights that may exist within our business activities and supply chain.

  • Ensure that technology is used to benefit humanity: Technology should be used to enhance human, social, and environmental well-being. Huawei opposes the misuse of technology that may have an adverse impact on human rights. We carefully evaluate the long-term and potential impact of our new technologies on society in the design, development, and use of our products, and work hard to ensure that our products and services are used in accordance with their commercial purpose. To address the unknown risks that may arise from the widespread use of new technologies, Huawei has expanded its existing processes and governance programs, and we are committed to working with our suppliers, partners, and customers to manage any potential negative impact of technology development.
  • Protecting privacy: Huawei attaches great importance to privacy protection, and we take our responsibilities seriously. We comply with all applicable privacy laws worldwide, including the EU General Data Protection Regulation (GDPR). Huawei has embedded privacy protection requirements into our corporate governance and every phase of our personal data processing lifecycle. We follow the principles of privacy and security by design and by default and conduct privacy impact assessments before the release of any product or service, especially when they involve sensitive personal data or sensitive usage. Huawei also requires our suppliers to comply with requirements for personal data protection. A total of 473 Huawei privacy professionals have been certified by the International Association of Privacy Experts (IAPP), placing Huawei among the top companies globally.
  • Safeguarding labor rights: Huawei supports and protects the rights of its employees through detailed, equitable regulations that cover all stages of an employee's relationship with the company, including recruitment, employment, and exit. We are committed to providing equal opportunities for all employees. When it comes to employee recruitment, promotion, and compensation, we do not discriminate against anyone on the basis of race, religion, gender, sexual orientation, nationality, age, or disability. We prohibit the use of forced labor, whether overt or covert, and all use of child labor.
  • Maintaining a responsible supply chain: Huawei works closely with our suppliers. We comply with our customers' sustainability requirements and any audit requests. In turn, we require that our suppliers respect the rights of their employees, build sustainability systems that conform to industry standards, and comply with legal requirements with regards to environmental protection, health and safety, privacy, and anti-bribery compliance. Huawei has a comprehensive qualification process for all new suppliers, and carries out annual audits on current suppliers. All suppliers are evaluated based on their sustainability performance, the results of onsite audits, and the completion of any corrective actions.

Respecting human rights has been a long-standing focus for Huawei. In compliance with all applicable laws, regulations, and standards, we actively communicate with international organizations, governments, and industry institutions to develop human rights standards and guidelines in the use of new technologies, especially those technologies that are likely to be widely adopted. At the same time, we will redouble efforts to raise awareness of human rights among all of our employees and will optimize management mechanisms to promptly identify, manage, and mitigate any related vulnerabilities or impact within our organization.

Huawei Investment & Holding Co., Ltd.
2020 Annual Report

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