Huawei's sales last year "fell by 30% year on year"? To raise money in the financial market. Sorry!

　Huawei Investment Holdings Co., Ltd. (Huawei Holdings) raised funds in the market for the first time in 2022, the China Interface News reported.

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Used as "working capital" medium-term bond issuance size of 76 billion yen

　Huawei recently announced that with the approval of the Association of Interbank Market Dealers, it will publicly issue the company's first issue of 2022 medium-term bonds in the national interbank bond market.

　The announcement shows that the redemption period is 3 years, the issue size is 4 billion yuan (about 76 billion yuan), the interest rate is 2.7% Mel 3.3%, and the refund date is January 10, 2025.

　Huawei said that the purpose of the fund-raising is the working capital of the company's main body and subsidiaries, and will not be used for long-term investment, real estate investment, financial securities investment and so on.

Full-year sales of "down 28.88% year on year" against the background?

　According to the prospectus, from 2018 to 2020, Huawei Unicom achieved annual operating income of 715.192 billion yuan (19.50% year-on-year growth), 849.646 billion yuan (18.80% year-on-year growth) and 882.877 billion yuan (3.91% year-on-year growth), with R & D spending of 101.475 billion yuan, 131.466 billion yuan and 141.951 billion yuan, respectively.

　But Huawei's sales seem to have fallen sharply in 2021. Guo Ping, chairman of Huawei, admitted in an article posted on the social networking site Huawei's official account on January 4, 2022 that sales are expected to be 634 billion yuan in 2021.

　According to the financial report, Huawei's annual sales in 2020 were 891.4 billion yuan. In other words, there was a decrease of 28.88% in 2021 over the previous year.

　In addition, according to the 2021 annual report, operating income in the first quarter of 2021 was 152.2 billion yuan (down 16.5% from the same period last year), 168.2 billion yuan in the second quarter (down 38.1% from the same period last year), and 135.4 billion yuan in the third quarter (down 37.7% from the same period last year).

Huawei is rated "AAA"

　Although there has been a decline in operating income for three consecutive quarters, at the time of this medium-term bond issue, MediaTek has a high rating of AAA in its comprehensive evaluation.

　Joint Credit said that in recent years, Huawei's central business has been stable, and consumer and inter-enterprise business has also developed rapidly, thus it can be seen that it has a very strong profitability, cash and reinvestment capacity, and the asset scale continues to grow. Cash assets are also abundant, and the debt burden is relatively light.

　According to the registration information, Huawei was established on March 14, 2003, and the former firm was Shenzhen Huawei Investment Holdings Co., Ltd. When it was founded, the capital was 3.268 billion yuan, the shareholding rate of the trade union was 98.93%, and Ren Zhengfei held 1.07%. After several capital increases, the current capital is 38.863 billion yuan, the trade union 99.25%, and Ren Zhengfei 0.75%.

And a low debt ratio.

　The financial report shows that at the end of the third quarter of 2021, the total assets were 908.233 billion yuan, the total liabilities were 558.916 billion yuan, and the debt ratio was 61.54%.

　Interface News reporters are concerned that Huawei has been raising money from financial markets since 2019. There are 9 bonds with a total balance of 23 billion yuan. Among them, two medium-term bonds issued in 2019 raised a total of 6 billion yuan. In 2020, four medium-term bonds will be issued, raising a total of 9 billion yuan. In 2021, 2 medium-term bonds, 8 billion yuan.

　Compared with ordinary private companies, Huawei has a clear advantage in the cost of raising funds in the bond market, which also reflects the market's trust in Huawei, brokerages said. The decline in Huawei's revenue is partly due to uncertainties caused by the global coronal disaster.

Summary (summary)

　Because Huawei is not an adult situation but a "big country situation", mobile phones no longer appear, sales fell by about 30% last year, and production is expected to be greatly reduced.

　However, the debt ratio is the textbook view, "up to 300% of the ability to repay", "below 100% is extremely sound", there are still 60%, so business is not what the situation.