2011-4-19
Huawei Technologies Co., China’s largest maker of phone equipment, said profit gained 30 percent last year, led by increased international sales.
Net income rose to 23.8 billion yuan ($3.64 billion) from 18.3 billion yuan a year earlier, according to the 2010 annual report released by the Shenzhen, China-based company today. Sales increased 24 percent to 185.2 billion yuan, it said.
Chief Executive Officer Ren Zhengfei initially expanded the company he founded in 1987 into the international market by taking his China strategy of serving less-developed rural areas into Asia and Africa. Now, Ren has Huawei increasingly focused on winning sales in Europe and the U.S. Huawei got 65 percent of its revenue from international markets last year, up from 60 percent in 2009, according to data in the report.
Ren retired from China’s army in 1983 as a deputy director of the military’s Engineering Corps, the annual report said. He established Huawei with 21,000 yuan of capital, according to the report.
Huawei, which didn’t win its first contract outside China until 1997, achieved international sales of more than $100 million by 2000. Overseas business exceeded contracts in China for the first time in 2005, according to the company’s website.
Huawei’s international sales jumped 34 percent to 120.4 billion yuan last year, the annual report said. Its sales in China gained 9.7 percent to 64.8 billion yuan. The China market declined to 35 percent of Huawei’s sales last year, from 40 percent in 2009.
Failed Bids
The company increased international revenue even as its effort to expand in the U.S. for the past three years has run into opposition from U.S. lawmakers. In February, Huawei had to drop its purchase of patents from Santa Clara, California-based 3Leaf Systems to comply with a recommendation by the Committee on Foreign Investment in the United States. Prior to 3Leaf, Huawei failed in bids to acquire companies including 3Com Corp. in 2008 and 2Wire Inc. last year.
Huawei’s website says the company is employee-owned, with Ren holding 1.4 percent of its shares and other employees owning 98.6 percent. The Chinese government holds no shares, according to the website.
The company has 110,000 employees, the annual report said.
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