On August 12, 2004 IT Times Weekly, the rumors of Huawei listed, have been fried in the past. In the species of the outside world, Huawei always keeps silence. In fact, property rights litigation, personnel storm, product hot, department split, whether it is a good news or negative news, Ren Zhengfu and his leadership is always wave. Due to the consistent low-key, people are difficult to understand the true attitude of Huawei, and it is universally questioned in the industry's transparency.
It should be said that Huawei has been brewing for many years, but until recently gradually surfaced. The rumors in the industry believe that Huawei does not lack the money, the real intention of the listing is to expand its own visibility and further explore the overseas market. However, rationally analyzes Huawei's current situation, in fact, the fact is not as simple as imagining. Under the surface of the internationalization, the mask is a real mentality that mitigate internal stock pressure.
Internal removal: the appeal before listed
Before preparing for the listing, Huawei has been split internally. Despite the expression of the outside world, Huawei's high-level responded to the incident, but in this sensitive period, the outside world is easy to divide Huawei's splitting and its future launches.
No matter whether it is for listed, spin-off is the stage where Huawei must experience. For Huawei, the splitting can not only be rtified, but also the complicated equity, but also the split modular operations can make the company's business clearer. Some insiders pointed out that "Huawei has two major relationships must be clarified, except for the equity, there is also the balance of all parties in history."
Huawei's internal person revealed that Huawei is impossible before the department is not completely solved. And the industry has also concluded that after the department is split, Huawei is at least to be officially listed in the next year. Since Huawei's income and cost expenditure does not have to obtain a transparent accounting review, it may impose unsuitable shares, which may lead to legal obstacles, and Huawei, which may lead to legal disorders, Huawei.
Huawei is divided into the re-definition of the interests of Huawei's internal complicated interests. Before spin-off, the market reflection of Huawei technology was very slow. For example, in terms of "Small Songtong", due to the market reaction ability is not fast enough, Huawei did not quickly grab the opportunity of the Chinese market, and waited until other manufacturers earned the full potion, this has to be said to be Huawei regret.
If Huawei mobile company has been established in the field of mobile communications, it is better to grasp the market opportunities of "Little Songtong" in the market. It can be seen that the splitting will enhance the market response ability of Huawei to a certain extent, prompting it to develop products that are more in line with market demand, providing customers with more competitive services, thus making Huawei gain greater development.
In fact, the problem of property rights in history has always been the biggest suspense in Huawei. According to Huawei's old employees, Huawei has opened up the market in the early days, and has built a lot of joint ventures with users, and these joint ventures have a empty shell. The joint venture company has a local operator and the government's shares, the company has no entity operation, only for sales, but their annual red ratio is 60% to 70% of investment. Local operators and government investment joint venture companies, even by Huawei first. This promotes the sales of Huawei in that year, and solves the problem of payment, and has a long-term customer relationship.
However, the wise movement of the year also buried hidden dangers for Huawei's later market. Including the reform of the incentive in 2001, Huawei has never broken down the relationship between historical property rights in recent years. This adjustment is effective, which will mean that the biggest problem that Huawei is listed has been removed.
The major adjustments currently conducted are the most critical paving before Huawei. It should be said that Huawei is quite complete, and the eight companies that are demolished are basically able to maintain an independent operation. Cutting out historical relationships, which is good for increasing the transparency in business operations. Solved this top-off front, Huawei's final market is just a problem. Reduce internal stocks: the true intent of the listing
From the current operation situation, Huawei does not seem to lack, in 2003, China's global market sales reached 31.7 billion yuan, an increase of 42% year-on-year, net profit of 3.8 billion yuan. In addition, Huawei and China's import and export bank have signed $ 600 million in export credit framework agreements in Shenzhen at the beginning of Shenzhen. This fund is mainly used in the expansion of overseas markets. Therefore, it seems that Huawei's cash flow is quite abundant.
However, the fact is not as simple as imagining. Considering Huawei's internal equity issues, Huawei has suffered from harm. The internal equity system in the period is now established, and it has now become Huawei's huge burden. In fact, in 1998-2000, in 1998-2, Huawei's internal stock incentive mechanism once made Huawei's performance, especially in 2000, company sales from 12 billion in 1999 to 220 billion, all employee shares The enthusiasm of the excitation is also the height of the Dengfeng's pole in the same year, and the dividend is as high as 70%. To a large extent, the internal stocks have systematic, China's employees, for the company's belonging and reality.
Three years ago, IT bubbles have also constituted a serious blow for Huawei. After that, Huawei's growth began to slow down. At that year, Huawei sales were 25.5 billion, only 16% over the previous year. At the same time, Huawei advocated the incentive mechanism has also begun to face new tests. It is well known that sales decline, profit decline, and dividends will decrease.
In 2003, Huawei also used the internal equity of 3 billion yuan, once again gave more than 80% of employee stock purchases, which not only applied to the bank to apply for the loan quota of equity mortgages, alleviating Huawei's current funds due to 3G business delay Question, and stabilize the core staff team, to spend this difficult period, in the future through net assets, equity dividends, etc., will be distributed to employees. However, such a large and dispersed equity financing, once there is a problem in the next three years, it will be more severe.
If it is calculated according to 2.76 yuan of share price in 2002, the internal equity of 3 billion yuan is squeezed into cash, so Huawei needs to pay more than 8 billion yuan of employees. Although Huawei cash flow is very abundant, 80 billion internal equity is definitely not it can withstand. Through listing, the stocks that employees have purchased in the past are not possible to circulate on the stock market, but only the net asset growth and dividends brought by the listing.
This is not, but avoids the internal shares due to unsatisfactory performance, and this bag can be digested in the capital market. Therefore, Huawei doesn't worry, because employee leaves problems, there is too much pressure on the company's funds, and is absolutely beneficial for the company's long-term development. This may be the most realistic consideration of Huawei listed.
Improve international: After the listing
Now China is, the international strategy has already achieved a certain height. Huawei entered Hong Kong in 1996; in 1997, China entered Russia; in 1998, I entered India; in 2000, I entered the Middle East and Africa; I have expanded to more than 40 countries and regions such as Southeast Asia and Europe in 2001. In 2002, I entered the United States in 2002. In 2002, China has reached $ 2.7 billion, of which overseas market revenue reached $ 500 million. In 2003, Huawei's overseas income reached US $ 1 billion, accounting for 30% of total revenue, and overseas income has doubled in 2002.
It should be said that in China IT companies, Huawei is one of the few people who really go out. From the exploration, enter the exterior dilemma to form a benign circulation, Huawei is only used for two years. After many years of market development, representative offices or branches have been established in more than 40 countries in the United States, and the products have also entered more than 40 countries and regions. In Huawei's international strategy, from the region, it is relatively smooth in developing countries. With the advantage of the price, it can easily remove the market. Developed countries have different cases, and the European market is relatively easy, and the North American market is a difficult place in Huawei. Cisco's monopoly in the North American market is impossible for a short time, and the lawsuits that are disturbing are still not resolved.
It seems imposing in a seemingly brilliant multinational playing. In the public bidding of many countries, Huawei is a significant gap between the price advantage, and network equipment and other network equipment in technology and Cisco. Once India and European network equipment manufacturers also join competition, it is raised that the survival space of Huawei is getting smaller.
Because of this, Huawei hopes to obtain the support of the capital market, through the listing of its own reputation through the international capital market, enhance the influence of Huawei's international brand especially in North America. In the case of slow development in the domestic market, more energy after Huawei will be put on overseas markets, which includes not only the development of the market, but also build R & D and production bases overseas.
In fact, in recent years, competition between global communication equipment manufacturers has included competition for financing conditions in addition to brand, technology, quality, price, service competition. It should be said that although Huawei's international market sales is in the rise in the rise, but due to high marketing costs, its net profit level is very low, overseas business is still in a loss. Therefore, although Huawei did not disclose the exact number, it was clear that it had a certain amount of capital.
In addition, last year and 3com have established Huawei-3COM, this year and Siemens set up TD-SCDMA joint venture, which requires a lot of cash flow as a guarantee. Although Huawei is a $ 600 million export credit framework agreement with China Import and Export Bank, it is temporarily eased, but considering Huawei's possible series of acquisitions in the future, only listing is a way for one. Solved the pressure of capital, get rid of the binding of cash flow, Huawei will have a larger appreciation space in the future international market.
