China-based Huawei Technologies has declared itself “back to business as usual” saying it has “pulled itself out of crisis mode” as its revenues stabilised in 2022 despite profits falling by over two-thirds in the year.

Net profit in 2022 slid 69 per cent from the year before to 35.6 billion yuan, or just over US$5.2 billion, Huawei said Friday at an annual conference in Shenzhen, China. It was the first annual profit decline in more than a decade. The company blamed the decline on pandemic lockdowns and U.S. sanctions, rising commodity prices set off by supply-chain disruptions, a ramp-up in investment in research and development, and a one-time jump in profit the year prior from the sale of its mobile phone branch Honor.

Huawei has served as a symbol for the tech competition between Washington and Beijing, becoming a bellwether for how China’s tech companies adapted to the United States’ global campaign to cut off China’s access to critical technologies.

Yet, Huawei is one of the world’s biggest spenders on research and development, devoting a record 161.5 billion yuan ($23.5 billion) in 2022, representing 25 per cent of its total revenue. Huawei’s revenue in 2022 was up 0.9 per cent from a year earlier at 642.3 billion yuan.

“The year 2022 is a year when Huawei pulled itself out of crisis mode. US restrictions are now our new normal and we are back to business as usual,” Sabrina Meng, the company’s chief financial officer who took up the rotating chairman office on April 1.

“In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei’s operations,” Eric Xu, Huawei’s rotating chairman, said, echoing Meng’s observation. “In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers. We also went to great lengths to grow the harvest – generating a steady stream of revenue to sustain our survival and lay the groundwork for future development.”

Huawei, one of China’s first global tech brands, has been caught up in China-US tensions over technology and security. American officials say the company is a security risk and might enable Chinese spying, an accusation Huawei denies.

The US has banned US companies from doing business with Huawei, cutting off its access to chips and software such as Google services for its smartphones and preventing it from selling its telecommunications gear to US customers.

“We all know the mobile phone business of Huawei has been hit the hardest under the sanctions. We used to be number two on a global basis and, according to some research, we were number one, but now we are in the category of others,” Xu outlined in reference to when Huawei sparred with Samsung for the title of the world’s biggest handset maker, just ahead of Apple’s Iphone. Huawei was the world’s largest smartphone maker in 2020, but has since seen its global market share plunge after losing its Android licence and Google services.

In 2022, revenue from its company’s consumer business, which sells smartphones, tablets and other devices, continued to decline, falling 11.9 per cent to 214.4 billion yuan. Its share of revenues also fell from 38.4 per cent in 2021 to 33.2 per cent in 2022.

“The US Commerce Department only grants licences for 4G chips so, as a result, we can only produce 4G phones, and because of our efforts, and because of the progress we have made in camera, and in user experience, still there are consumers who are willing to buy Huawei 4G phones,” Xu said, in response to queries about its desire to produce 5G handsets.

However, having been hurt by the US sanctions, Huawei has shifted its focus in 2022 to growing its corporate business by selling network equipment and services to industries such as health care, manufacturing, transportation and mining to help them become more digital.

“Looking to 2023 and beyond our strategic initiatives will rely on unlocking new growth opportunities, enhancing resilience, hone our competitive edge, succeed through quality and ensure a high level of business continuity,” Xu said. He said that will entail Huawei’s cadre or research and development personnel working to enable, digitisation, intelligence and green development of industries to unlock new growth opportunities.

“This development will open up abundant growth opportunities for Huawei. We estimate that by 2027 our addressable market will exceed US$1 trillion,” he said.

The company said as part of it sales push for 2023, it has established industry focused teams to target entities in the mining sector, government services, electric power and transportation (including airports, rails, roads, waterways and ports) as it pivots into digital industries and reduce its vulnerabilities to US sanctions.

Just over half of Huawei’s workforce of 207,000 employees work in research and development (R&D). The company’s R&D efforts have helped it replace components that it lost access to when Huawei was hit by US sanctions, Meng said. It said it will also work with entities producing electric cars to sell its software, but has no desire to create a Huawei electric vehicle.

While acknowledging the impact of the sanctions, the company was still striking a defiant tone. China’s semiconductor industry has gone through a “continuous stream of sanctions,” said Xu, adding that “China’s semiconductor industry will not sit idly by, but will take efforts around self-saving, self-strengthening and self-reliance.”

Xu said the company is also pushing ahead with ISO 9000 certification.

“Plum blossoms tend to grow sweeter from a harsh winter’s freeze. Today, Huawei is like a plum blossom. While it’s true that we have considerable pressure ahead of us, we have what it takes to come out the other end – with opportunities to grow, a resilient business portfolio, a unique competitive edge, the enduring trust of our customers and partners, and the courage to invest heavily in R&D. We are confident in our ability to rise above any challenge that comes our way, laying a solid foundation for sustainable survival and development,” Xu said.