Honor’s divestiture is hurting Huawei’s finances. The Chinese giant’s turnover amounted to 19.4 billion euros in the first quarter of 2021, with operator-related activities remaining stable, while the consumer activities of the Shenzhen firm saw sales decline by made the sale of its low cost brand Honor, completed last year. While the company’s turnover declined, its margin increased thanks to a royalty of 600 million dollars on patents, and to “continuous efforts to improve the quality of operations and the efficiency of management”, says the company.
Huawei is now ready to turn its back on a new year that promises to be complicated due to US sanctions. “2021 will be another difficult year for us, but it is also the year when our strategy for future development will start to take shape,” said Eric Xu, rotating president of Huawei. “Whatever challenges we face, we will continue to maintain our business resilience. Not just to survive, but to do so sustainably. “
Speaking through an interpreter at the company’s recent analyst summit, the Huawei official said many other Chinese companies might fear what happened to Huawei with regard to US sanctions. does not happen to them. He said he hopes Huawei suppliers can produce chips that are not subject to US intervention.
A cession under pressure
As a reminder, Huawei sold its sub-brand Honor to the Shenzhen Zhixin New Information Technology consortium last November, following an agreement whose financial terms were not disclosed, but which could reach $ 15.2 billion. , according to some press reports. The Shenzhen firm justified this sale by the all-out trade war that the US administration has been waging for several years now, accusing Huawei of collusion with the Chinese regime and suspecting it of constituting a threat to the security of the United States.
“The United States attacks us constantly and they have changed their laws for the third time, posing great challenges to our production and our operation”, explained on the side of Huawei to justify the transfer of Honor.
Already last September, Huawei’s rotating chairman Guo Ping explained that the company would continue to do everything possible to strengthen its supply chain, despite the “great pressure” it was under and the fact that it was continuously “Attacked”. “Huawei is in a difficult situation these days. The incessant attacks put us under great pressure, ”he conceded at the time. A situation that does not seem to have changed with the election of Democrat Joe Biden to the White House.