Chinese telecom equipment and network solution provider Huawei Technologies Co., Ltd. will not debut on the stock market within five to ten years.
The Shenzhen-based firm was brought under the limelight owning to problems regarding to successor to Ren Zhengfei and IPO of it recently. Ren, founder and president of it, said in an internal email in the afternoon on April 28 that four of his family members served it currently, but none of them would be successor to him. All of them acted as a professional manager at it and there was no exception to Meng Wanzhou, the CFO. It would do its utmost to implement an administrative reform in recent three to five years and after that, it would boost a reform on management structure and operation mode. The CEO rotation mechanism run well currently and there would be great possibility for one for chairman of the board run well in the near future.
He reiterated that the board of it never discussed IPO of it in the past two decades as debuting on the stock market would not do good to its long-term growth. It would not consider a listing within five to ten years. Of course, it would not consider a spin-off, too. In addition, it would not introduce capital through launching mergers and acquisitions. In order not to run into a capital pitfall, it would not cooperate with external capital on some projects. And through reforming, it aimed to shift itself into a modern service- and support-oriented management firm.
As the sole unlisted firm among the global top 500 firms, it overtook Ericsson to become the biggest telecom equipment provider in the world last year. According to financial results it released for the fiscal year 2012 on April 8, the aggregate operating revenue hit CNY 220.2 billion and the net profit was CNY 15.38 billion. The Sweden-based firm unveiled financial results for the fiscal year earlier this year and according to the results, the aggregate operating revenue was SEK 227.8 billion, inching up by only 0.4 percent year on year. And the profit was SEK 5.9 billion, representing a yearly fall of 53 percent.
It is the first time for Huawei to overtake Ericsson to become the biggest telecom operator around the globe and in line with industry observers, this should be mainly attributed to faster operating revenue growth of the Chinese firm. In detail, Huawei saw operating revenue rise eight percent year on year last year while Ericsson witnessed operating revenue inch up by only 0.4 percent.
