Key points: 1. Meng Wanzhou, who returned home for half a year, made her first public appearance. She said frankly that she needs to keep learning in order to keep up with the pace of society. In the four years since she left, Huawei has also undergone earth shaking changes. 2. In 2021, Huawei ended several years of revenue growth and experienced annual revenue decline for the first time; To the surprise of the outside world, Huawei's net profit increased by 75.9% year-on-year in 2021. Meng Wanzhou summarizes three key words here. 3. In 2022, Huawei still needs to survive. Guo Ping, Huawei's rotating chairman, gave several key points: whole house intelligence, cloud computing, smart cars and so on. These are not without continuous talent absorption and R & D investment. Half a year after returning home, Meng Wanzhou, vice chairman and CFO of Huawei, made a public appearance at the Huawei annual report press conference for the first time. "It has been a thousand years in the world for one day." In the face of many media, she was filled with emotion and said that in the months after returning home, "I need to keep learning in order to keep up with the pace of society". In the days when she left, Huawei also changed. Before 2019, Huawei's revenue has maintained double-digit year-on-year growth for several consecutive years, but the growth stopped abruptly in 2020. Under the sanctions of the United States, Huawei's revenue and profit increased slightly year-on-year in 2020, and its revenue even fell sharply by 28.6% in 2021. To the surprise of the outside world, Huawei's profit increased significantly by 75.9% year-on-year in 2021. What is the reason behind it? Under the continuous US sanctions, how can Huawei save itself in the future? With the decline of income, consumer business is the hardest hit area According to the financial report, Huawei's revenue in 2021 was 636.8 billion yuan, a year-on-year decrease of 28.6%. This is also the first time in nearly a decade that Huawei's annual revenue has decreased. From 2014 to 2019, Huawei's annual revenue has increased by double digits year-on-year. Due to US sanctions, Huawei has ushered in difficult times in 2020 and 2021. Specifically, in 2021, Huawei's operator business was 281.5 billion yuan, accounting for 44.2% of the total revenue, and overseas revenue accounted for more than 50%; Enterprise business was RMB 10.4 billion, accounting for 16.1% of the total revenue, and the revenue of emerging business increased by 30%; Consumer business was 243.4 billion yuan, accounting for 38.2% of the total revenue, and the revenue of smart wear and smart screen increased by 30%. In response to the decline in revenue, Meng Wanzhou gave three reasons: first, the supply continuity has been under pressure in the past three years, and several rounds of US sanctions have affected Huawei's mobile phone and PC businesses; Second, China's 5g deployment has been basically completed, and the market demand is not so large; Third, Huawei has also been affected by the pressure of the epidemic. Indeed, among Huawei's three main businesses, only the enterprise business revenue increased slightly by 2.1% year-on-year, while the consumer business and operator business decreased significantly year-on-year. The most serious is the consumer business. In 2021, the revenue decreased by 49.6% year-on-year, and the scale is close to halving. In 2020, Huawei's consumer business revenue was 482.9 billion yuan, a year-on-year increase of 3.3%, and the growth rate reached a new low. At that time, Hu houkun, the rotating chairman of Huawei, said that the growth rate of consumer business in 2020 did not meet expectations. Huawei's terminal business has been advancing rapidly before, but in 2020, due to the problem of supply, the sales of mobile phones were affected, and the sales fell. Terminals other than mobile phones increased by 65%, partially offsetting the impact of mobile phones. However, in 2021, Huawei's mobile phone business was further hit. Due to the disconnection of 5g chips, Huawei can only launch 4G mobile phones to maintain the continuity of mobile phone business. IDC data show that in the second quarter of 2020, Huawei surpassed Samsung for the first time to become the world's smartphone manufacturer's shipment champion; In the following third and fourth quarters, Huawei's shipments fell 22% and 42.4% respectively, falling to the fifth place; In 2021, with the decline of shipments, Huawei was classified into the "others" camp of the minority. Under the persistent difficulties faced by the mobile phone business, Huawei has been constantly trying to expand more diversified revenue. In the consumer business, Guo Ping said that Huawei is focusing on expanding new fields such as wearable and whole house intelligence. According to the data disclosed in Huawei's financial report, Huawei's watch and bracelet shipments ranked first in the world in the third quarter of 2021. By the end of 2021, the cumulative global shipments of Huawei's smart wearable devices had exceeded 100 million; In terms of whole house intelligence, Huawei recently released a new generation of whole house intelligent solutions. Yu Chengdong, CEO of Huawei consumer business, also announced that 500 whole house intelligent stores will be opened this year. In terms of mobile phone business, the outside world has been expecting Huawei to return as the king. However, in the face of the question of whether to build its own chip factory, Guo Ping stressed that Huawei will invest in three reconfigurations in the future. Specifically, Huawei will continue to promote theoretical breakthrough, architecture reconstruction and software reconstruction. In terms of basic theory, explore the theoretical essence of computing and communication, and break through the bottleneck of industrial evolution; In terms of architecture design, it does not rely on single point optimization to promote the construction of the overall competitiveness of the system; In terms of software, take root in the core competence of software and reconstruct the core basic software stack. "Using stacking and area for performance, and using less advanced technology can also make Huawei's products competitive." Guo Ping said. A big increase in profits? The proceeds from the sale of glory exceeded 50 billion In contrast to the decline in revenue, Huawei's net profit in 2021 was 113.7 billion yuan, a year-on-year increase of 75.9%. In 2019 and 2020, Huawei's net profit maintained a single digit growth. Meng Wanzhou expressed three key words here: smaller, stronger and improved. "Our scale has become smaller, but our profitability and cash flow acquisition ability are increasing, and the company's ability to deal with uncertainty is improving," she said Data show that Huawei's operating cash flow increased significantly in 2021, reaching 59.7 billion yuan; The asset liability ratio decreased to 57.8%. In the financial report, Huawei explained that the increase in net profit was mainly due to the income from the sale of some businesses, the improvement of operation quality and the optimization of product structure. Guo Ping, the rotating chairman of Huawei, said in his speech in the annual report that the company continued to improve internal operation efficiency by simplifying management and making full use of digital technology, and the sales and management expenses decreased by 9.3 billion yuan year-on-year. However, behind the sharp increase in net profit, it is not just the decline in sales and management expenses. Sina Technology found that among other net income and expenditure, the net income from the disposal of subsidiaries and businesses was as high as 57.431 billion yuan. One is to sell rongguangyao business, and the other is to sell hyperfusion Digital Technology Co., Ltd. Huawei disclosed in its 2020 annual report that 100% of the equity of its subsidiary glory terminal was changed to Shenzhen Zhixin on November 17, 2020. However, due to the impact of the epidemic, the delivery of relevant assets shall be completed no later than June 30, 2021. In 2020, Huawei received a sales deposit of 10 billion yuan. In 2021, the delivery of assets and liabilities related to glory business was completed. According to the terms of relevant agreements, Shenzhen Zhixin will pay the acquisition consideration in installments, and the final consideration available to Huawei is uncertain. Another hyperfusion Digital Technology Co., Ltd. is engaged in the manufacturing and sales of server products. Huawei sold all the interests of hyperfusion to a third party in 2021, and the relevant assets and liabilities were settled in the same year. Huawei said that in addition to cash and cash equivalents, the related assets and liabilities disposed of were mainly inventories, machinery and equipment, accounts payable and other payables, which were not significant to the company. In 2021, there was a rumor that Huawei would package and sell its x86 server product line due to the interruption of chip supply. At that time, Huawei insiders denied that Huawei would not give up the server business. At the Huawei full connection conference in September, Xu Zhijun, Huawei's rotating chairman, said that Huawei's x86 server business has indeed encountered difficulties and is trying to find various ways to actively solve them, including contacting potential investors. Now, Huawei officially confirmed the sale of X86 server business. However, from the business volume of glory and x86 server, the net income from the disposal of subsidiaries and businesses of 57.431 billion yuan should be based on glory. From Huawei's perspective, although it was a pity to sell glory at the beginning, it not only brought huge benefits to Huawei, but also allowed glory to survive independently. According to the data released by IDC, in the domestic smartphone market in the fourth quarter of 2021, glory's shipment volume was 14.2 million units, with a market share of about 17.0%, ranking second after apple. At present, glory is still impacting the high-end market to recover Huawei's lost land. Where will Huawei go in the future? In addition to open source in consumer business, the enterprise business that is still growing has also become the focus of Huawei. In 2021, Huawei established five legions: coal, data center energy, smart photovoltaic, customs and ports, and smart highway. Within Huawei, the Legion belongs to the same level as the three BGS. According to Ren Zhengfei, through Legion operations, break the existing organizational boundaries, quickly assemble resources, intersperse operations, improve efficiency, deepen and penetrate a field, be responsible for commercial success and produce more food for the company. Recently, Huawei has been exposed again and has established ten Reserve Corps at the end of 2021. The 10 preparatory Corps include interactive media, sports health, display core, park network, data center network, data center base, station and module power supply, airport track, power digital service and government all in one Netcom. It can be seen that most of the five legions and 10 reserve legions belong to the field of enterprise business. When talking about the reasons for the establishment of the Corps, Guo Ping said that Huawei's product line is relatively long and its technology is relatively complex. The organizational structure of the Corps can shorten the management chain and quickly meet the needs of customers. "The Legion can represent customers and industries and find appropriate technologies in the company. Such an organization can make it easier for customers to do business with Huawei." He said. In addition, Huawei's cloud and smart car business is also an important direction for Huawei to seek growth. Meng Wanzhou revealed that in 2021, China's cloud revenue was 20.1 billion yuan, a year-on-year increase of 34%. According to Huawei's annual report, Huawei cloud's global IAAs market ranking rose to the top five in the world. Huawei's goal is undoubtedly to continue to march into the top three in the market. In terms of smart car business, Huawei said in its financial report that the smart car parts business is Huawei's long-term strategic opportunity, and it should unswervingly and continuously increase investment. In 2021, the investment in intelligent vehicle solutions will reach US $1 billion, and the R & D team will reach the scale of 5000 people. Guo Ping revealed that Huawei has listed more than 30 intelligent auto parts, and has developed more than 300 upstream and downstream partners in the industrial chain in the past year. Yu Chengdong is more ambitious in the smart car business. In January this year, Yu Chengdong said that Huawei would challenge 300000 new car sales this year, and the annual sales of car enterprises cooperating with Huawei reached 100 billion yuan. However, on the whole, R & D investment is an important support for Huawei to continue to make efforts in these new businesses. According to the financial report, Huawei's R & D expenditure in 2021 was 142.7 billion yuan, accounting for about 22.4% of the annual revenue. Over the past decade, the accumulated R & D expenditure has exceeded 845 billion yuan. In 2021, Huawei has about 107000 research and development personnel, accounting for 54.8% of the total number of the company. "Huawei's greatest wealth is not in statements, but in people." Meng Wanzhou said. Guo Ping also said that Huawei will continue to increase the absorption of talents, especially top talents. He revealed that Huawei recruited 26000 fresh students last year and the year before last, of which more than 300 were talented teenagers; It is planned to recruit more than 10000 fresh students in 2022. "Only