Editor’s Note: This article is from the WeChat public account “Cheetah Global Think Tank” (ID: CheetahGlobalLab), author Xiao Haiyan, 36 氪 authorized to release.”National” enterprise Huawei issued bonds for the first time in China!On September 11, the information of the China Association of Interbank Market Dealers showed that Huawei will issue the first two bonds in China and raise a total of 6 billion yuan.Although Huawei has issued US dollar bonds overseas, the recruitment is still a bit “inconceivable”. After all, a super “cash cow” with nearly 250 billion monetary funds on the account, what reason is needed in the market?Fund raising?Cheetah global think tank consulting bond industry analysts analysis, perhaps the difference between the interest rate of corporate wealth management funds and bond borrowing rates, so that Huawei has the power to issue bonds in the country.At the same time, this prospectus has made Huawei’s operations no longer mysterious. Next, the Cheetah Global Think Tank will analyze Huawei’s R&D investment, business composition, future growth engine, organizational structure, etc., and through Microsoft.The horizontal evaluation of Chinese and American companies such as Amazon, Tencent, and Ali provides some reference for the market to interpret Huawei.Why do “rich people” borrow money?Or due to interest rate difference
Is Huawei raising funds because of “poor”?Obviously not. In fact, Huawei is a very “rich” company.According to Huawei’s financial statements, in the first half of this year, Huawei had 249.731 billion monetary funds. This data is obviously more than “foreign” compared with Twenty-two billion yuan and Ali’s 122.8 billion yuan of monetary funds.So why not raise money if you don’t have money?Huawei’s official explanation is that the company has consistently maintained a reasonable financing structure and continued to optimize its capital structure to ensure the company’s financial stability. The funds obtained from this bond issue will be used to continuously focus on ICT infrastructure construction and provide better customers.Product solutions and services.In this regard, Cheetah Global Think Tank consulted two bond industry experts, a person from the China Merchants Bank a bond department said that Huawei’s annual investment in research hundreds of billions, if you want to accelerate development, it is necessary to leverage the leverage of the capital market.Another bond underwriter in the securities industry said that there is a price difference between the interest rate of corporate wealth management funds and the borrowing rate of bonds. This may be a driving force for companies to issue bonds with sufficient funds.The data shows that in the first half of this year, Huawei used 96.9 billion yuan in cash for other financial assets such as investment funds, and the cash obtained from investment income was 1 billion yuan.In response to the follow-up of these two bonds, the two analysts said that the bonds of Huawei’s texture may be robbed in a very short period of time, and they can be raised to some large scale.The bank’s own funds.According to the information, Huawei has planned to register 20 billion yuan in medium-term notes. At present, it has applied for 2 issues, each period of 3 billion yuan, with a term of 3 years. There is no guarantee. The lead underwriters and bookkeeping managers are ICBC and CCB.At the same time, the joint credit letter will give the bond credit rating to AAA/AAA.Huawei’s R&D investment ranks in the world’s fifth decade. R&D expenses exceed 480 billion. Under the current global tight trade situation, Huawei’s R&D investment has attracted world-class attention.This prospectus disclosed this. In 2018, Huawei invested 101.475 billion yuan in research and development, accounting for 14.19% of the annual revenue, ranking fifth in the world in the “European Industrial R&D Investment Ranking of 2018”;According to the statistics of the Cheetah global think tank, Apple and China’s two major Internet giants Tencent and Ali’s R&D investment are lower than Huawei’s, while Amazon’s R&D investment is nearly double that of Huawei, and Microsoft is slightly better than Huawei.It is understood that Huawei’s R&D investment is mainly in the three areas of fully connected networks, intelligent computing, and innovative terminals. The company has more than 80,000 research and development personnel, accounting for 45% of the total number of companies.The total investment in research and development has exceeded 480 billion yuan. The company now has more than 1,000 mathematicians, physicists and chemists.High R&D investment also brings returns.According to the data, as of the end of 2018, Huawei has accumulatively obtained 87,805 patents, including 43,371 authorized patents in China and 44,434 authorized patents outside China. More than 90% of the patents are invention patents, and the technical advantages are obvious.Consumer business accounted for more than half of the revenue, and the gross profit margin dropped slightly. In addition to the research and development investment that the world is concerned about, what level is Huawei’s overall revenue in the Internet representative enterprises in China and the United States?Data show that in the past three years and the first half of 2019, Huawei’s operating income was 518.68 billion yuan, 598.48 billion yuan, 715.192 billion yuan and 396.538 billion yuan, of which operating income in 2018 increased by 19.50% over the previous year.According to the statistics of the Cheetah Global Think Tank, Microsoft, Apple, and Amazon all had more revenues than Huawei in the first half of this year, which were 13945.13, 8752.69, and 437.656 billion yuan, while Chinese Internet companies represented Ali and Tencent were lower than Huawei.According to the prospectus, Huawei is divided into three major businesses: carrier business, enterprise business, and consumer business represented by mobile phones. Operators are the core business areas of the company, providing a series of products, services and business solutions for telecom operators.Solution; corporate business focuses on ICT products and industry solutions; consumer business products cover mobile phones, personal computers and tablets, smart wear, mobile broadband terminals, home smart terminals and consumer clouds.Huawei is known for its carrier business. However, with the rise of consumer business, its consumer business has accounted for half of total revenue. It is no wonder that market participants joked that Huawei is a “mobile phone company.”The data shows that in 2016 and 2017, the carrier business accounted for 55.99 and 49.73% of the company’s total revenue, respectively. However, with the sales of mobile phones and other products, Huawei’s consumer business gradually increased. In 2018, the business relied on 48.39%.It became the main business of the company, and by the first half of this year, the proportion reached 55.09%.At the same time, as the proportion of consumer business increased, the overall gross profit margin trend of the company declined. The overall gross profit margins of 2016, 2017 and 2018 were 40.13%, 39.53% and 38.54%. The main reason for this trend is phase.Compared with Huawei’s carrier business and enterprise business, the gross profit margin of consumer business is much lower.5G, cloud computing is expected to become a new growth engine.
As a pioneer in leading 5G, cloud computing, 5G and artificial intelligence related services are also a top priority for Huawei.From Huawei’s organizational chart, we can also see that Cloud&AI is separately listed as an organization. We judge that with the advent of 5G and artificial intelligence era, Cloud&AI is likely to become a consumer business after Huawei.Growth engine.It is understood that in the field of cloud computing, the company has released Huawei Cloud Stack full-stack hybrid cloud solution, which provides support for digital transformation of enterprises from various aspects such as chip, hardware, software, solutions and industry ecology.At the same time, based on Huawei’s Kunpeng processor, Huawei Cloud launched the Peng Peng cloud service and solution to open a new multi-layer architecture on the cloud.At present, Huawei Cloud and its partners continue to build a multi-computing cloud service based on X86+鲲鹏+升腾; in the field of intelligent computing, the company has released the Kunpeng processor and the rising AI chip, and built a platform for general-purpose computing andThe AI calculation of the rising computing platform.In addition, like some artificial intelligence companies, Huawei has also proposed core-end-cloud collaboration to create a full-scenario intelligence.It is understood that in the field of smart phones, the HUAWEI Mate 20 series of smart phones based on AI chips is released, and at the same time, Huawei has layouts in the PC, in the tablet field, and in the smart wear field.Those who are not heavy but very “fun”
Huawei has no actual controller. Ren Zhengfei has not held more than 2% of its shares from beginning to end. In order to tie up personal contributions and company development, Huawei has taken the lead in implementing an equity incentive plan, which implements employee stock ownership plans through trade unions.It reached 98.99%, and Ren Zhengfei’s personal holdings were only 1.01%.In addition, the rule of this equity incentive is that the participants must be employees of the company, and no government departments or institutions hold the company’s equity. The capital contribution of any of the shareholding employees does not exceed 5% of the company’s total share capital.The employee representative consists of 115 shareholding employee representatives who also exercise the rights on behalf of all shareholding employees.The data shows that as of the end of 2018, the number of participants in the employee stock ownership plan was 96,768.Different from the high holdings of some company leaders, the history of Huawei can be found. Since the establishment of Huawei in 2003, Ren Zhengfei’s shareholding has never exceeded 2%. Therefore, Huawei does not have actual controllers!Ren Zhengfei’s entrepreneurship in this prospectus is also very interesting because of his unsuccessful work – Ren Zhengfei’s reason for starting a business.According to the fundraising statement, Ren Zhengfei’s personal resume is very grounded. Ren Zhengfei was founded by Huawei because of the unsuccessful work.In this regard, some netizens joked that this reason is not the same as our dream of starting a business because of great ideals.Only no one would have thought that Ren Zhengfei, who had been in business for 16 years, would lead Huawei to become a world giant with total assets of more than 700 billion.