Huawei's First-Half Revenue Rises 9.6% but Net Profit Falls 36%, R&D Spending Reaches 121.38 Billion Yuan

English title: Huawei's First-Half Revenue Rises 9.6% but Net Profit Falls 36%, R&D Spending Reaches 121.38 Billion Yuan

English introduction: Huawei's revenue for the first half of 2026 grew 9.6% year-over-year to 467.82 billion yuan, but its net profit fell 36% to 23.81 billion yuan. The company's research and development (R&D) spending increased to 121.38 billion yuan, accounting for about a quarter of its revenue during the same period.

English article: Huawei's operating data for the first half of 2026, disclosed on August 31, presents a stark contrast: revenue continues to grow, but profit declines at a faster pace.

According to a report by Reuters based on Huawei's disclosed data, the company's revenue for the first half of the year reached 467.82 billion yuan, up 9.6% year-over-year, while its net profit was 23.81 billion yuan, down 36% year-over-year. R&D spending, however, increased 25.2% year-over-year to 121.38 billion yuan, equivalent to about 25.9% of its revenue during the same period.

The Cost Behind the Growth

All of Huawei's business segments achieved year-over-year revenue growth, but the growth in sales costs and management expenses exceeded that of revenue. Meanwhile, the company continues to invest heavily in technologies related to artificial intelligence, chips, smart terminals, and smart cars.

This investment has a clear external background. The US restrictions on the export of advanced chips and related technologies continue to affect Huawei's access to some overseas technologies and supply chain resources, prompting the company to accelerate the development of domestically made chips and software and hardware systems.

Decline in Profit Cannot be Simply Attributed to Business Downturn

The decrease in profit may be due to multiple factors, including R&D, raw materials, inventory, and business expansion. Reuters' report also shows that Huawei's operating activities used up net cash in the first half of the year, and its inventory increased significantly compared to the end of 2025.

Therefore, it is not possible to judge Huawei's operating conditions by simply looking at revenue growth or profit decline. More importantly, it is necessary to observe whether the company's R&D investment can ultimately generate sustainable product revenue and whether high inventory and capital investment will continue to occupy cash.

The editorial department of "Focus on China" believes that Huawei's financial report provides a window into the cost of China's technological self-reliance strategy. Beijing's push for domestic substitution of key technologies can bring policy, market, and financing support, but the true business test is still whether technological investment can be converted into long-term profitability, product competitiveness, and transparent capital returns.