* Net profit up 33 pct, revenues up 8 pct in 2012
* Huawei CFO sees 2013 revenues rising 10-12 pct
* Company to keep open mind on possible listing
(Adds CFO quotes, details)
By Lee Chyen Yee
BEIJING, Jan 21 Huawei Technologies Co Ltd
, the world's No.2 telecom equipment maker, bounced back
from a disappointing 2011 with a 33 percent rise in net profit
for 2012, and forecast stronger revenue growth, buoyed by
smartphone sales and cloud computing.
Huawei Chief Financial Officer Cathy Meng, the daughter of
company founder Ren Zhengfei, also denied U.S. security concerns
would hamper the privately held company's growth and said it
would keep "an open mind" about a possible sharemarket listing.
"Cloud computing is a huge sector in the next five years. In
the telecom industry, we are expecting a 5 percent increase in
capital investments. Smartphone penetration is still way too low
and there is a lot of room for growth," Meng told a results
"So these three areas will create a lot of opportunities for
Huawei, which ranks only behind Sweden's Ericsson
in telecom equipment, reported an unaudited net profit of 15.4
billion yuan ($2.5 billion), up from 11.6 billion yuan in 2011,
as new telecom projects and smartphones boosted sales.
Revenue for the year rose 8 percent to 220.2 billion yuan.
The results were in line with company guidance at the start
of the year and came a day after rival ZTE Corp
, China's second-largest telecom equipment maker,
warned of a net loss of up to 2.9 billion yuan ($467 million)
"Huawei has a better long-term outlook (than ZTE) because it
has telecom equipment, enterprise and handsets business,"
said Jessie Yu, an analyst with Frost & Sullivan, ahead of the
"Its handsets are doing quite well and it has maintained its
telecom equipment share. There is also some pickup in its
enterprise business, so overall, its revenue channels are wider
Huawei is making gains in the enterprise business, which
sells networking equipment such as routers and switches, and has
up to now been dominated by Cisco Systems Inc.
Huawei, founded in 1987 by Ren, a former Chinese military
officer, is known for aggressively gaining sales in the telecom
equipment sector by edging out rivals such as Alcatel-Lucent SA
, Nokia Siemens Networks and ZTE.
While Huawei has boosted sales and gained market share in
Europe, Africa and Asia, it has also run into obstacles in
countries including the United States and Australia due to
national security and cyber espionage concerns.
The company has been barred from bidding for the rollout of
a national broadband network in Australia, faces exclusion from
Canada's government network and is not allowed to sell telecom
equipment to U.S. carriers.
Huawei, which has repeatedly said it has no links with the
Chinese government, said on Monday it did not believe U.S.
security concerns would have an impact on decisions by other
countries to use its technology.
"We feel that security concerns in the United States are
restricted within the country and that won't have an impact on
strategic decisions made by other countries," said Meng, who is
also an executive director on Huawei's Board.
"Over the past 20 years, we have not had any incidents based
on security issues," she added.
Huawei has also diversified into the mobile devices area
selling dongles, mobile phones and tablet PCs, aiming to tap the
fast-growing sector and build its global brand name. The firm is
the world's sixth largest mobile phone vendor.
Asked about a potential sharemarket listing, Meng said:
"We've always kept an open mind when it comes to the listing
Analysts, however, believe an early listing would be
difficult because of changes that would be required to the
company's ownership structure, which includes more 64,000
Shares in ZTE fell sharply at the start of trade in Hong
Kong, but later retraced most of their losses to be down just 1
percent as investors focused on a strong outlook for 2013.
($1 = 6.2154 Chinese yuan)
(Additional reporting by Donny Kwok in Hong Kong; Editing by