Huawei is valued at 1.2 trillion, why is it only ranked third on the Hurun Report?

The latest issue of "Lexus Hurun Rich List" gave Huawei a valuation of RMB 1.2 trillion, ranking third, which should be the highest among Chinese unlisted companies; at the same time , Huawei founder and president Ren Zhengfei ranks 162nd on the entrepreneur list with a wealth of 21 billion yuan.

But what’s interesting is that this valuation is less than twice Huawei’s revenue of 721.2 billion yuan in 2018 (its revenue exceeded 400 billion yuan in the first half of this year), and it is also far lower than the revenue plus It is even lower than Alibaba (market value 3.26 trillion) and Tencent (market value 3 trillion). It may be related to the fact that it has always been regarded as a hardware company. Unlike Internet companies that have extremely high price-to-earnings ratios and price-to-sales ratios, Huawei's true value is obviously underestimated.

Another thing worth paying attention to is that Huawei is a private enterprise 100% owned by employees, and Ren Zhengfei himself holds only 1.14% of the shares. In contrast, the Jack Ma family and Ma Huateng, who rank first and second on the list, have wealth of 275 billion yuan and 260 billion yuan respectively. Including Sun Zhengyi, the owner of ARM, who impatiently announced that he would cut off supply as soon as the United States included Huawei in the "Entity List". In 2016 alone, he cashed out tens of billions of dollars from Alibaba.

Unlike many people who think of Huawei as a mobile phone manufacturer, Huawei, which was founded in 1987, has made a name for itself in the field of telecommunications infrastructure very early. In 2013, it surpassed Ericsson to become the world's largest telecommunications equipment supplier, and its 2C terminal business did not surpass the 2B operator business until 2018 to become the highest revenue segment.

In the latest Fortune Global 500 ranking, Huawei ranked 61st with operating revenue of US$109.0304 billion, an increase of 11 places from 72nd the previous year. Income comes second, and more importantly, its own competitiveness. Why doesn’t the United States suppress Alibaba and Tencent, but why does it go all out to suppress Huawei, even declaring a “national emergency” because of such a company?

There was once a joke that the leaders of China and the United States played cards with their own technology companies. Huawei is the "two kings and four twos" in China's hands. Cisco, Apple...the United States can control everything. There are very few companies in the country that can achieve what they are today without engaging in real estate or cutting leeks. Xiaomi and Meituan will only listen to them when they say they won’t go public, and most people will believe Huawei when they say they won’t go public.

Ren Zhengfei once discussed this. He said, "Huawei does not allow capital to come in easily, because the greedy nature of capital will destroy the realization of our ideals. We only strive for our ideals, not money." ". Huawei itself is not short of money. In 2018, its cash flow from operating activities was 74.659 billion yuan, and its asset-liability ratio has also dropped to 65% year by year. Other media reports stated that in the first half of 2019, its monetary funds reached 249.731 billion yuan, and its investment in financial products totaled more than 70 billion yuan. Xu Zhijun, vice chairman of Huawei, also said in an interview with C114 that the reason why Huawei can always be ahead of others is because it has no shortage of money and its decision-making is simple as a non-listed company.

In 2018, Huawei’s R&D expenses reached 101.5 billion yuan, accounting for 14.1% of sales revenue, ranking fifth in the 2018 industry R&D investment rankings released by the European Union; in the past ten years, Huawei’s R&D A total of more than 480 billion yuan has been invested in the country. Despite facing various pressures from the United States, Huawei plans to invest 120 billion yuan in research and development this year.

Data released by the World Intellectual Property Organization (WIPO), an affiliate of the United Nations, shows that in 2018, Huawei submitted 5,405 patent applications to the organization, ranking first in the world. In addition, according to data from the State Intellectual Property Office, Huawei ranked first in domestic invention patent authorizations with 2,314 in the first half of this year.