Huawei first-half revenue surges 30% despite slowing Chinese economy

Chinese telecoms giant Huawei reported on Monday its best revenue growth in more than five years, helped by solid smartphone sales and unaffected by sluggish economic growth at home.

The privately held company said that unaudited first-half revenue jumped by an annualized 30% to CNY 175.9 billion ($28.3 billion). It did not disclose its net profit for the period, but added that operating margin was 18%, compared with 18.3% a year earlier.

“In the first half of 2015, Huawei achieved stable and healthy growth in all of its three business segments,” said Chief Financial Officer Meng Wanzhou.

The reported expansion was the highest the company has seen since it began reporting half-year performance in 2011. This compares to a 19% jump in sales in the first six months of 2014, and a 21% full-year growth with an operating margin of 11.9%. Huawei had set a global growth target of 20% this year and seeks to hit $70 billion in sales by 2018, which translates as approximately 10% annual growth.

Mondays results received a boost by the smartphone business, with Ms. Meng saying that the companys mid-range and high-end smartphones, Mate7 and P8 in particular, as well as Honor-branded phones, have made solid progress and have been well received by consumers.

Huawei is Chinas third-biggest smartphone seller, trailing only to Apple and Xiaomi. Although the company missed an 80-million sales target last year, falling short by 5 million, the smartphone business was still Huaweis fastest growing one. The Financial Times reported, citing an internal memo, that Huawei expects in 2015 to easily meet its handset delivery target of 100 million units.

Meanwhile, the Chinese company also said that its main revenue driver, the carrier business, which competes with Swedens Ericsson for the top spot in the global market for communications towers and other infrastructure, also enjoyed “steady growth” and that the company continuously strengthened its leadership advantages in the segment.

“Investment continued to pour into 4G network construction in China. In addition, the growth in global data traffic drives investment in network capacity expansion, while carriers digital transformation pushes up investment in the ICT industry,” Ms. Meng said.

As for Huaweis third business group, Ms. Meng added that the enterprise business, which handles corporation-sized networks, has started to experience accelerated growth thanks to the companys innovative, competitive and broadly recognized products and solutions.

“With Huaweis well-balanced, worldwide presence, we are confident that we will maintain effective growth and steady and healthy development in all business segments in 2015”, she said.