Murayama Hiroshi: When asked which company you are paying attention to, I will answer Huawei from a few years ago. Perhaps because Huawei is a non-listed company, there are not many times when it becomes a topic in Japan. However, Huawei’s smart phones have recently been seen in Japan, and their popularity has finally improved. From the global market share of smart phones, Huawei ranks third in the world after Samsung Electronics and Apple in the United States. Can Huawei continue to grow as a non-listed company and eventually surpass Samsung?
The electronic version of the Nihon Keizai Shimbun reported on January 6th that the Las Vegas report of the International Consumer Electronics Show (CES) held the home appliance show that "China Huawei uses Amazon's AI to open up the US market." Huawei announced that it will sell the flagship smartphone "Mate 9" equipped with Amazon's Amazon Artificial Intelligence (AI) "Alexa" in the United States. Steve Rabuchin, vice president of the Amazon Alexa division, also attended the conference. I think "it is true that Huawei is going to use the power of Amazon to open up the US market."
Huawei is excluded from the US marketAccording to market research firm Gartner, from the global market share of smart phones in the third quarter of 2016, Samsung accounted for 19.2%, Apple accounted for 11.5%, and Huawei accounted for 8.7%. In an interview with the Wall Street Journal (Japanese electronic version) on September 2 last year, Yu Chengdong, CEO of Huawei's consumer business unit, said that Huawei would become the world's second-largest smartphone maker in 2018. In 4 to 5 years, it has become the world's largest smartphone manufacturer.
Huawei's "International Consumer Electronics Show (CES)" showcases related technologies for automobiles
To surpass Apple and Samsung, opening up the US market is the key, but Huawei has long been excluded from the US market. Since Ren Zhengfei, the founder of Huawei, was a soldier, Huawei was suspected of having a special relationship with the Chinese government. Because of fear of being used for espionage, the US Congress requested that Huawei's communication equipment be disabled. Huawei has always denied suspicion, but Huawei's smart phone market share in the United States is less than 1%.
The reason why I pay attention to Huawei is not from the perspective of security. Unlike many terminal manufacturers in China, Huawei is constantly upgrading its technology in the field of communication networks. It is a technology-focused enterprise. Research and development investment accounted for more than 10% of sales. From the number of international patent applications counted by the World Intellectual Property Organization (WIPO), Huawei ranked first in 2014 and 2015 for two consecutive years. In terms of enterprise scale, sales in 2015 reached 395 billion yuan and net profit reached 36.9 billion yuan.
However, compared with China's largest e-commerce company Alibaba Group, Huawei's popularity seems to be not so high, because Huawei is not listed, the media exposure is low. Some people think that Huawei does not like to disclose information because of listing, but if so, it is ok to spin off a department. Many Chinese companies have adopted a method of listing only a part of the hidden business. Ren Zhengfei has always said that if listed, it will be affected by shareholders who pursue short-term interests, and ideal business will be difficult to achieve.
Mentioned unlisted companies, Bosch in Germany, and IKEA in the furniture sector, but in the ever-changing world of electronics industry, is it feasible to insist on not listing? In the context of the evolving Internet of Things (IoT) where everything is connected to the Internet, companies will need to invest heavily in investment. Samsung invests 2 trillion yen in equipment investment and 1 trillion yen in research and development investment. Is it extremely difficult to raise funds in the absence of listing?
Huawei is at the same level as Samsung in the 2000s.Isn't Samsung already listed? After investigating with this idea, I found an unexpected fact. The work of Kumamoto University's professor Yoshioka Anmi, who studies the Korean economy, "Korea's Industrialization and Semiconductor Industry" writes that Samsung's investment in semiconductor equipment has exceeded or approached semiconductor sales since the 1980s and early 1990s. At that time, the funds had to rely on external financing such as bank loans. Taking advantage of the 1997 Asian financial crisis, Samsung changed this structure and began to reduce the debt ratio.
While repaying financial institutions, they continue to repay corporate bonds, and the source of funds has shifted to internal funds centered on net profit. At that time, equipment investment in the semiconductor business fell to about 30% of semiconductor sales, even if it relied on internal funds. In the catch-up phase, there is still little money on hand and they have to rely on external funds, but after the semiconductor business is on track, cash flow begins to increase, and dependence on capital markets and financial institutions continues to decline.
Huawei has ended the catch-up phase and has the same business scale and profit level as Samsung in the 2000s. The business structure is different from Samsung, which has semiconductors as its core. Huawei may also have the confidence to rely on internal funds to support growth. Compared with obtaining the wealth of the stock through stock listing, relying on internal funds to tirelessly hone the technology seems to be Huawei's consistent style. Perhaps we strive to rely on internal funds to achieve growth like Samsung, and surpass Samsung in the absence of a listing.
Finally, I intend to point out the shortcomings of not listing. Since the detailed financial statements and business information are not disclosed, the flow of funds will become a “black boxâ€. In this way, the suspicion of the United States, which may have a special relationship with the Chinese government, is difficult to eliminate. What impact will this have on Huawei?
Optoelectronic Information Series
Photoelectric information series laboratory related equipment
Optoelectronic Information Product,Optical Bench Experiments Physics,Optical Devices Physics,Optical Physics Properties
Yuheng Optics Co., Ltd.(Changchun) , https://www.yhencoder.com