In the first three quarters, he made a net profit of 200 million yuan per day, why did Renzhengfei worry about Huawei’s profits rising too much?

On October 30th Canalys, a market research firm, released a copy of the data on the technology scene. Data show that the smartphone market in mainland China improved month-on-month in the third quarter of 2019, with shipments rising slightly to 97.8 million units from 97.6 million units in the second quarter. Huawei shipped 41.5 million smartphones, again a record 42% market share and an annual growth rate of 66%, marking the company’s sixth consecutive quarter of double-digit growth. This means that four out of every 10 people in the mainland market buy a new machine to choose Huawei.

前三季度每天净赚2亿 任正非为何担心华为利润增得太多?

Huawei shipments surge 66% as Apple’s 8 times

What is even more surprising in this data is that shipments from other major manufacturers, with the exception of Huawei, fell year-on-year in the mainland market.

Oppo, Vivo, Xiaomi and Apple shipped further, with their combined shares accounting for only 50 percent of the market, down from 54 percent in the second quarter of 2019 and 64 percent in the third quarter of 2018.

前三季度每天净赚2亿 任正非为何担心华为利润增得太多?

On October 23, He Gang, president of Huawei’s consumer business mobile phone product line, announced that as of October 22, Huawei had sold more than 200 million handsets in 2019, 64 days ahead of 2018. The fourth quarter was another peak in mobile phone sales, and Huawei’s shipments were the second-highest in the world without major surprises.

“Huawei and other manufacturers have opened a huge gap in market share. “Huawei is already 25 percent more market share than the second-place Vivo in the quarter, ” commented Peng Luping, global vice president of Canalys Mobile. Its dominant position in the market gives Huawei a considerable say in negotiating with the supply chain and increasing its wallet share in distribution channels. ”

Mr Peng said Huawei’s market position would be further consolidated in the 5G era, given its close relationship with operators in 5G network deployments and its control over key components such as 5G chipsets that are compatible with local networks. This puts enormous pressure on Oppo, Vivo and Xiaomi.

“Despite the continued introduction of new products to the market, shipments from Vivo, Oppo and Xiaomi have fallen significantly year-on-year,” said Siwei Liu, a research analyst at Canalys. In the third quarter, Vivo finished second over Oppo, while Xiaomi followed Oppo in fourth place.

Apple remained in fifth place, thanks to the launch of the iPhone 11 in mid-September, which accounted for nearly 40 percent of Apple’s third-quarter shipments.

Liu Siwei analysis said:

The iPhone 11 model focuses on improvements in camera functionality, which has proved important to Chinese consumers. At the same time, setting a lower iPhone 11 release price (compared to the previous generation) and providing a more flexible channel profit structure for domestic distribution channels for new products are important market operations for Apple to stimulate shipments this year. Apple’s challenges in China remain imminent, and manufacturers and operators will do a lot of marketing and promotions around 5G over the next two quarters. This will be a big hit.

However, Huawei’s market share and shipments in mainland China are already eight times that of Apple.

Net profit in the first three quarters was 1.76 times that of Maotai

The steady increase in mobile phone shipments provides important support for Huawei’s performance.

On the evening of October 30, the Shanghai Clearing House announced the consolidated results of Huawei Investment Holdings Co., Ltd. for the third quarter of 2019 and the results of the parent company’s earnings. The report showed that Huawei Investment Holdings Co., Ltd. achieved a net profit of 53.5 billion yuan (nearly 200 million yuan per day) in the first three quarters of this year, up 21.59 percent from 44 billion yuan in the same period last year, and revenue of 603.3 billion yuan, up 24 percent from 486.5 billion yuan in the same period last year.

前三季度每天净赚2亿 任正非为何担心华为利润增得太多?

It is understood that Huawei Investment Holdings is the parent company of Huawei Technologies Co., Ltd.

As of 10 p.m. on October 30, according to The China Securities News, 3,700 listed companies in Shanghai and Shenzhen reported third-quarter reports. In the first three quarters, there were 43 companies with net profits of more than 10 billion yuan, and only nine listed companies surpassed Huawei’s net profit of 53.523 billion yuan.

Guizhou Maotai’s net profit for the first three quarters of 2019 was RMB30,455 million. In other words, Huawei’s net profit for the first three quarters was about 1.76 times that of Guizhou Maotai. Just two days ago, Mr. Yan said Huawei’s market capitalisation should be the world’s largest, reaching $1.3 trillion!

前三季度每天净赚2亿 任正非为何担心华为利润增得太多?

What if Ren Zhengfei thanks Jobs for his profits?

In addition, on the afternoon of October 29, Huawei Voice Community released a minute of huawei founder Ren Zhengfei’s October 22 interview with Euronews.

Asked by a reporter whether the U.S. crackdown on Huawei would pose a financial risk to Huawei.

In response, Mr. Ren said that Huawei would not be at risk and that growth rates would be good.

Ren Zhengfei said that Huawei is currently facing the situation, so that employees have an existential crisis and pressure, “a big stick in the United States down, we feel the crisis, the spirit of struggle more developed, the concrete embodiment of our sales revenue should have declined, but the results increased.” But my concern is, after everyone’s hard work, so that the company’s profits increasetoo, how to solve? This is a real problem. We are not shrinking now, but profitgrowth is growing too fast, and we still have to solve the problem of increased strategic investment in the future. ”

For external reasons, he explains, Huawei has many unique advantages that are the reason why customers continue to buy.

‘The practice has proved that Huawei is a world leader in 5G technology, so there are plenty of opportunities not to worry about customers not using Huawei’s equipment, but to worry about too many customers to buy, supply can not be done?’ “We also ask Chinese customers not to buy so much to make sure that foreign customers use our equipment first, because we have a lot more difficulty abroad.” ”

Ren Zhengfei concluded: First of all, we will not have financial difficulties, second customer trust will improve, customers to look at our base station, or buy back to install after a look, our base station is very good, no U.S. parts.

In addition, Ren Zhengfei said: “In fact, Huawei in previous years also near decline, because the market tends to saturate, thanks to Jobs invented the iPhone, opened the mobile Internet, a telecommunications equipment network opened up, we buy more equipment, we make more money, on the survival of today.” “

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