2019 Annual Report (^85)
In addition, the company increased investment in building its brand and sales channels for the consumer
and enterprise businesses; however, the higher operating efficiency made possible by ongoing management
transformation resulted in a decline of 1.3 percentage points in selling and administrative expenses as a percentage
of revenue. Total operating expenses as a percentage of revenue increased slightly by 0.1 percentage points.
Net finance income
(CNY Million) 2019 2018 YoY
Net foreign exchange loss (1,340) (2,031) (34.0)%
Other net finance gains 1,518 2,284 (33.5)%
Total net finance income 178 253 (29.6)%
Net finance income in 2019 amounted to CNY178 million, a decrease of CNY75 million compared with 2018. Due
to enhanced controls over illiquid currencies and decreased currency fluctuations in emerging markets, net foreign
exchange losses decreased by CNY691 million in 2019. However, increased financing caused an increase in interest
expenses. As a result, other net finance gains declined by CNY766 million, offsetting the gains from decreased net
foreign exchange losses.
Financial Position
(CNY Million)
December 31,
2019
December 31,
2018
YoY
Non-current assets 154,768 135,678 14.1%
Current assets 703,893 530,114 32.8%
Total assets 858,661 665,792 29.0%
Among which: Cash and short-term investments 371,040 265,857 39.6%
Trade receivables 85,294 91,052 (6.3)%
Contract assets 53,012 48,276 9.8%
Inventories and other contract costs 167,390 96,545 73.4%
Non-current liabilities 116,869 73,477 59.1%
Among which: Long-term borrowings 104,531 66,170 58.0%
Current liabilities 446,255 359,250 24.2%
Among which: Short-term borrowings 7,631 3,771 102.4%
Trade payables 135,654 94,320 43.8%
Contract liabilities 69,327 58,278 19.0%
Equity 295,537 233,065 26.8%
Total liabilities and equity 858,661 665,792 29.0%
As of December 31, 2019, the balance of cash and short-term investments reached CNY371,040 million, up 39.6%
year-on-year.
In 2019, Huawei’s DSO was 58 days, 12 days shorter than that in 2018; ITO increased by 34 days to 111 days; and
DPO reached 91 days, 14 days longer than that in 2018.
As of December 31, 2019, total short-term and long-term borrowings amounted to CNY112,162 million, an
increase of 60.4% year-on-year. The primary purpose of these borrowings was to continue with our already heavy
investment in key business and research and innovation for the future, and to invest in other key areas such as
branding, sales channel development, and business continuity.
coco
(coco)
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