US-China Trade War: Huawei's half-year revenue up 23.2% despite US ban

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Recent sales figures by Chinese telecom giant Huawei seem to belie their blacklist status on the US's entity list. The question is - can their business keep thriving? On Tuesday, Huawei released its half-year business results report at its Shenzhen headquarters. CGTN's Ge Yunfei takes us there.

Maintaining strong growth momentum, Chinese telecom giant Huawei recorded a 401 billion yuan revenue, about 58.3 billion US dollars, in the first half of 2019. An increase of 23.2 percent from 325.7 billion yuan. Its net profit margin sits at 8.7%.

LIANG HUA CHAIRMAN, HUAWEI "We're still climbing up, step by step towards the pinnacle of the ICT market. We have chosen the toughest path, but we have no regrets."

Huawei's consumer business revenue hit 220 billion yuan, roughly 32 billion US dollars. Its smartphone shipments reached 118 million units, a 24% year-on-year increase.

GE YUNFEI HUAWEI HEADQUARTERS, SHENZHEN "When Huawei was put on America's entity list, lots of people thought that it would be a death sentence for the company. Now at least based on its half-year financial report, Huawei is still living quite well. But it doesn't mean it's safe."

LIANG HUA CHAIRMAN, HUAWEI "The supply of a small amount of less important components has resumed. But the supply of some crucial parts is still being cut off. So there will be some challenges in the overseas market in the latter half of this year."

To date, Huawei has secured 50 commercial 5G contracts and has shipped more than 150,000 base stations to markets around the world.

LIANG HUA CHAIRMAN, HUAWEI "Our 5G deployment has not been affected by the US ban because we've long been prepared for this. Even after the ban imposed on us on May 16th, we still got 11 new 5G contracts."

CGTN asked Liang Hua about whether Huawei has enough cash flow to sustain its development if the ban continues for a long time.

LIANG HUA CHAIRMAN, HUAWEI "Our profitable business supported us with enough cash flow in the first half of this year. I believe by the end of this year, we'll still have a very sound and positive cash flow. And that will support our long-term development."

The company will invest 120 billion yuan or 17.4 billion US dollars in research & development. That's an 18 percent increase from last year.

However, the real driver of growth was Huawei's consumer business. And that relies on the results of the US-China trade talks. Ge Yunfei, CGTN, Shenzhen.