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[Introduction] Huawei has taken action! It has issued 4 billion yuan of ultra-short-term financing bonds

China Fund News reporter Wu Jun

Recently, technology giant Huawei completed the issuance of a new round of ultra-short-term financing bonds.

China Fund News reporter learned from the official website of Shanghai Clearing House (hereinafter referred to as SHCH) that Huawei Investment Holding Co., Ltd. (hereinafter referred to as Huawei Holding) disclosed the issuance results of the fourth ultra-short-term financing bill in 2024 on August 12. The bond is referred to as "24 Huawei SCP004", with an actual total issuance amount of 4 billion yuan, an interest rate of 1.60%, and a term of 130 days. In fact, Huawei Holding has issued 13 billion yuan of ultra-short-term financing bills this year.

Huawei issued another 4 billion yuan of ultra-short-term financing bonds

The total issuance amount this year reached 13 billion yuan

On August 12, information disclosed on the official website of the Shanghai Clearing House showed that Huawei Holdings completed the issuance of the fourth tranche of ultra-short-term financing bonds in 2024 from August 7 to August 8 this year. The bond is abbreviated as "24 Huawei SCP004". The actual total issuance amount is 4 billion yuan, the issuance rate is 1.60%, the term is 130 days, the interest accrual date is August 9, 2024, and the redemption date is December 17, 2024.

It is understood that the lead underwriter/book-running manager of the bonds issued by Huawei Holdings this time is Pudong Development Bank, and the co-lead underwriters are Agricultural Bank of China and Industrial Bank.

Judging from the subscription situation, there were 30 companies that subscribed in compliance with regulations, and the amount of compliant subscriptions reached 16.12 billion yuan, among which the highest subscription price was 2.10% and the lowest subscription price was 1.55%; among them, there were 11 companies that subscribed effectively, and the effective subscription amount was 5.4 billion yuan.

Regarding the listing and circulation arrangements, the current ultra-short-term financing bonds issued by Huawei Holdings can be circulated and transferred in the national interbank bond market on the next working day after the debt registration date (August 12, 2024).

Lianhe Credit Rating Co., Ltd. has determined that Huawei Holdings' long-term credit rating is AAA, with a stable outlook. The above rating indicates that the company has a strong ability to repay debts, is basically unaffected by adverse economic conditions, and has a very low probability of default.

Regarding the use of the funds raised this time, Huawei Holdings stated in the fundraising prospectus that it is mainly to support the development of various businesses and the implementation of key strategies, and will be used to supplement the operating capital of the company's headquarters and its subsidiaries.

In fact, Huawei Holdings has issued bonds for financing several times this year, including ultra-short-term financing bills and medium-term notes. Previously, in February, March and April of this year, it issued three ultra-short-term financing bills, with interest rates of 2.12%, 2.08% and 1.84% respectively, and the issuance amount was 3 billion yuan each. If the latest one is included, Huawei Holdings has issued a total of 13 billion yuan in ultra-short-term financing bills this year.

Regarding the current outstanding debt of Huawei Holdings, the prospectus also disclosed that the issuer has 13 outstanding domestic medium-term notes totaling RMB 38 billion; 3 outstanding ultra-short-term financing bills totaling RMB 9 billion; and the issuer's subsidiaries have 3 outstanding overseas US dollar bonds totaling US$3.5 billion.

Huawei discloses its financial status in recent years

More than 10% of sales revenue is invested in R&D every year

According to the data, Huawei Holdings is the parent company of Huawei Technologies Co., Ltd. (hereinafter referred to as Huawei Technologies), holding 100% of Huawei Technologies' shares. From the perspective of equity structure, Huawei Holdings is held by the Labor Union Committee of Huawei Investment Holding Co., Ltd. with 99.35% of the shares, and Ren Zhengfei holds 0.65% of the shares.

The prospectus disclosed the consolidated financial statements of Huawei Holdings. The company's consolidated operating income in 2021, 2022 and 2023 was RMB 630.698 billion, RMB 636.816 billion and RMB 697.547 billion, respectively. The operating income in 2023 increased by 9.54% compared with 2022, and the operating conditions were in line with expectations. Among them, the ICT (information and communication technology) infrastructure business maintained steady growth, the terminal business was better than expected, the digital energy and Huawei cloud businesses achieved good growth, and the competitiveness of smart car components and user experience were significantly improved.

At the same time, the company's consolidated operating profits in 2021, 2022 and 2023 were RMB 121.418 billion, RMB 43.324 billion and RMB 99.228 billion, respectively.

On April 30 this year, Huawei Holdings disclosed its first quarter report of 2024, which showed that during the period, the company achieved operating income of approximately 178.45 billion yuan, a year-on-year increase of 36.66%; net profit attributable to shareholders of the parent was approximately 19.65 billion yuan, a year-on-year increase of approximately 564%.

The prospectus also mentioned that Huawei is one of the world's largest patent holders. As of the end of 2023, Huawei holds more than 140,000 valid authorized patents worldwide. Huawei insists on investing more than 10% of its sales revenue in research and development every year. In 2023, R&D expenditures were 164.7 billion yuan, accounting for 23.4% of annual revenue. The cumulative R&D expenditures in the past 10 years have exceeded 1.11 trillion yuan. As of the end of 2023, there were approximately 114,000 R&D employees, accounting for 55% of the total number of employees.

In the first quarter of this year, Huawei's R&D expenses reached 41.587 billion yuan, an increase of 13.8% over the same period last year.

Huawei itself holds a lot of cash. Its financial report shows that as of the end of 2023, the company's cash and cash equivalents balance was 192.903 billion yuan, and as of the end of the first quarter of this year, it was 206.254 billion yuan.

Editor: Captain

Review: Chen Mo

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