Attendees visit the Huawei pavilion at VivaTech technology startups and innovation fair during its opening day in Paris, France, June 15, 2022. The 2022 VivaTech technology startups and innovation fair kicked off here on Wednesday, and will last until Saturday. More than 2,000 exhibitors participated in the event. VivaTech is the world's rendezvous for startups and leaders to celebrate innovation and the power of technology in transforming business and society. (Xinhua/Gao Jing)

Huawei announced that it plans to issue the fourth tranche of medium-term notes in 2022 with an issue amount of 4 billion yuan ($591.6 million), meaning the company's current financing is already double that of 2021 and in a sign that the Shenzhen-based tech giant is accelerating domestic financing amid US sanctions.

The issue date runs from July 20 to 21. 

The company said the issuance aims to support business development and "implementation of critical strategies," and the funds will also be used to replenish the working capital of Huawei and its subsidiaries.

Adds to this issuance, Huawei has issued 15 billion yuan of medium-term notes and 6 billion yuan of 180-day ultra-short-term financing bills this year, with a total financing of 21 billion yuan, far exceeding the 8 billion yuan issued in 2021, according to a calculation from domestic news site Caixin.com.

Huawei's notes and bonds, which are not guaranteed, have proved popular among Chinese banks, reflecting creditor confidence in the company despite US sanctions. The company's first bond issuance at home took place in September 2019, a few months after it was added to the so-called "Entity List" that bans it from buying parts and components from US companies.

In 2021, Huawei reported revenue of 636.8 billion yuan, down 28.6 percent from 2020, but profits rose to 113.7 billion yuan. 

Although still facing headwinds, analysts noted that the company has a healthy fiscal revenue, but may need more financing to feed some cash-burning new businesses amid a major setback in traditional business such as smartphones.

Company executive Richard Yu Chengdong said during an industry forum in early July that Huawei has invested a significant amount into the cash-burning auto sector, costing billions of US dollars a year, while further noting that it was Huawei's only loss-making business so far this year. 

Self-rescue is also ongoing over the past several years. The telecom giant is set to launch an updated version of its self-developed operating system (OS), the HarmonyOS 3.0, on July 27, putting the firm on a path to end its reliance on Google's Android system, while also paving the way for it to recover from a hobbled handset business amid years of ruthless US sanctions.

"The US ban is casting shadows on the firm, and it is still in a difficult period and is constantly looking for opportunities in more new fields," Xiang Ligang, director-general of the Information Consumption Alliance, an industry association, told the Global Times.


Global Times