Huawei, one of the world’s leading telecoms equipment makers, expects continued rapid growth this year while most of its rivals are shrinking. This neat trick will be achieved, partly by offering customers Chinese state bank loans to fund purchases.
Huawei executives said yesterday that multi-billion- dollar credit lines from China’s state banks, long believed to be one of the secrets behind the company’s success, were not for itself but for its customers.
The Financial Times reported the executives as saying Huawei was ‘acting as a bridge’ between telecoms operators and Chinese lenders.
This gives the company an advantage over many rivals as it can offer cash-strapped customers funds as a bridge over troubled waters to buy its products but keep the lending risk off its own books.
Huawei said its revenue grew by 42.7% to $18.33 billion in 2008, and net profit rose 20% to $1.15 billion.
Huawei’s revenue from overseas markets climbed to 75 per cent in 2008, though many markets slowed last year and China was seen as a rare bright spot. ‘That means they are continuing to win converts and customers in markets such as Europe,’ said Duncan Clark, chairman of BDA China, a telecoms consultancy.