China’s Huawei says market rout won’t hamstring its profit growth, targeted IT revamp
The latest wave of financial market turbulence in China is unlikely to prove a handicap for telecoms giant Huawei Technology as it continues to build momentum in terms of profit, according to a senior executive at the company.
Excluding Chinese banks, most of the remaining two-thirds of Huawei’s clients hail from overseas in sectors that have maintained steady growth, David He, president of marketing and solution sales for Huawei’s enterprise business group, told the South China Morning Post.
He was speaking at last week’s third annual Global Financial Services Industry Summit in Beijing.
The company generated sales revenue of 175.9 billion yuan (US$28.3 billion) in the first half of 2015, up 30 per cent year-on-year, according to its recent financial report.
Strong profit channels include cloud computing and storage, “smart” city solutions, finance, education and ISP markets inside and outside China, said Meng Wanzhou, Huawei’s chief financial officer.
Huawei provides information and communications technology (ICT) solutions to major Chinese lenders like the Agricultural Bank of China, but He said its diverse customer base helps insulate it against market jitters.
For a Chinese bank such as the Industrial and Commercial Bank of China (ICBC), it offers more efficient communication methods to support centralised loan approval services and improve the bank's risk and compliance rules, among other solutions, it said.
China’s financial sectors are currently being tested as Beijing reponded to the recent market crash with a slew of damage-control measures that set some global investors on edge.
The country's Securities Finance Corporation set up credit lines in excess of US$40 billion two weeks ago so that big Chinese brokerages could buy domestic stocks to stop prices from plunging in the future.
The financial turbulence will not disrupt Huawei’s long-term strategy of helping to reshape IT industry architecture and assisting its clients with the speedy transformation of their businesses, He said.
“Our financial clients and banks continue to demand business transformation,” he said.
“That is why Huawei will increase investment in R&D and provide more innovative solutions, including in cloud computing and big data.”