Huawei's unique capital operation mode

Huawei's unique capital operation mode

Introduction: As the only Fortune 500 company that is not listed, what is the reason why Huawei is not listed? What kind of capital operation mode does it have? The following is the unique capital operation mode of Huawei that I brought to you. I hope it helps you.

In the Fortune 500 companies published in 20 12, Huawei ranked 35 1. Entering Huawei official website, you can see several striking Chinese characters: "Huawei is not only the top 500 in the world". Here, the author gives a new explanation for this sentence-Huawei is not only a Fortune 500 company, but also the only one among Fortune 500 companies that is not listed. As we all know, when enterprises become stronger and bigger and need sufficient capital to expand their scale, most enterprises will choose ipo to raise funds in the capital market. And if Huawei is not listed, can it use its unique capital operation mode to provide enough capital for its development and growth? Below, the author will analyze Huawei's unique capital operation mode in detail and the subjective and objective reasons for not going public.

1 Huawei's capital operation mode

1. 1 "raised" its assets and then sold them.

Among the three financing methods, relying on technology to "raise" products is undoubtedly Huawei's main source of funds. According to Huawei's 20 12 annual report, Huawei's R&D expenditure is RMB 30.09 billion, accounting for 13.7% of its revenue. As of 20 12, 12 and 3 1 day, Huawei has applied for 465,438 patents in China, 65,438 patents in international pct and 65,438 patents abroad. A total of 30,240 patents were granted. Attaching importance to R&D and strong technical strength provide a guarantee for Huawei's financing methods.

200 1, Huawei sold power supply and computer room monitoring business to Emerson for $780 million; In 2005, Huawei sold h3c enterprise network and data communication services to 3com for $800 million. This series of examples shows that relying on patents and technology in exchange for capital has become an indispensable financing means for Huawei.

1.2 state ownership

It was difficult to raise funds in the early days of Huawei's establishment. Therefore, Huawei adopted the method of internal employee stock ownership financing. At the end of 1990s, Huawei launched the employee stock ownership plan with a share price of 1 yuan. Starting from 200 1, Huawei implemented the option reform. After the reform is completed, the shares acquired by employees are converted into virtual restricted shares, which are called "options". The company implemented the employee stock ownership plan through trade unions, and the number of participants in the employee stock ownership plan was 74,253 (as of 20 12, 12, 3 1), all of which were composed of employees of the company. All employees holding shares on the job elect representatives of employees holding shares, and exercise relevant rights through the representatives of employees holding shares. The employee stock ownership plan organically combines the long-term development of the company with the personal contribution of employees, forming a long-term struggle and sharing mechanism.

As of 20 12, 12 and 3 1, he is an individual shareholder of the company, and his contribution ratio in the company is 1. 18%. At the same time, the employee stock ownership plan accounts for 0.2 1% of the company's total share capital. The above-mentioned accumulated capital contribution accounts for nearly 65,438+0.4% of the company's total share capital. National shareholding diluted the equity of ceo. Once listed, the holding situation may get out of control. Here, the author believes that this may also be one of the reasons why Huawei is not listed.

1.3 assignment of accounts receivable

The transfer of accounts receivable means that banks provide financing facilities to customers in time to solve the cash flow shortage caused by the increase of accounts receivable. On the transferee

During this period, the bank entrusts the transferor (seller) to collect the transferred accounts receivable from the buyer. If the bank fails to fully recover the accounts receivable within the prescribed time limit, the transferor will unconditionally repurchase the uncollected part.

It is understood that in recent years, Huawei has been carrying out accounts receivable transfer business, transferring huge accounts receivable to banks and other financial institutions, thus achieving the purpose of curve financing. According to public information, Huawei signed an agreement with China Development Bank in 2004. According to the agreement, CDB will provide Huawei with financing totaling 654.38+0 billion US dollars in the next five years. It is also an important financing method for Huawei to convert accounts receivable into real cash flow in advance and solve the capital problem of enterprises.

2 Analysis of the subjective and objective reasons for Huawei's non-listing

2. 1 Subjective reasons

As a Fortune 500 company, I believe that almost all professionals believe that Huawei is qualified to go public, and it can also go public successfully through approval or registration. However, Huawei has not been listed for more than 20 years, and it can develop so fast because it is subjectively unwilling to go public. Through analysis, the author believes that the main reasons are as follows: First, enough funds can be raised to support the development and growth of enterprises without listing. The last section focuses on three unique capital operation modes of Huawei, which can completely guarantee the stability of Huawei's current capital chain.

Secondly, Huawei's reluctance to go public may also be due to its unique shareholding structure. The last section also introduced that Huawei is a wholly-owned enterprise, and its president only accounts for about 65,438+0.4% of the total shares. Listing will inevitably lead to great changes in the ownership structure, and the controlling position of the president is likely to be shaken. No one knows whether Huawei he founded will take off or decline without Ren's leadership.

Furthermore, the market has strict requirements for the disclosure of financial information of listed companies. Once listed, it means that enterprises will be exposed to the capital market and restricted by laws and regulations, which will have a great adverse impact on the development of enterprises to a certain extent. For example, in the initial stage of its expansion in Brazil, Huawei suffered losses for eight consecutive years, and it was not until the ninth year that it began to make large-scale profits. Imagine that if Huawei is a listed company, it may be forced to withdraw its losses in the third year. Therefore, not listing is also beneficial to the formulation and implementation of the long-term strategy of enterprises to a certain extent. Finally, there is a saying that "an eagle tied with gold can still fly in the blue sky", which is used on Huawei. "If Huawei goes public, most of Huawei's employees will become billionaires, which will weaken their motivation to some extent." Hu Yongsheng, a former Huawei executive, said, "A famous overseas industry analyst once discussed with me why Nortel declined so quickly. He said: Many billionaires discuss the survival of the company. They have no sense of urgency, so they have missed many opportunities for transformation. This statement is tantamount to "the children of the poor are in charge early." Different people have different opinions, so I won't discuss it too much here.

2.2 objective reasons

In addition to the above four subjective reasons, the objective reason why Huawei is not listed is also very obvious. This paper mainly discusses the following aspects:

First of all, an important condition of China ipo is that internal employees are not allowed to hold shares. However, Huawei holds all the shares, and the shareholding ratio is opaque. This unique shareholding structure makes it ineligible for listing in China under the current situation.

Secondly, the transfer of accounts receivable is an important financing method for Huawei, but it belongs to off-balance sheet financing and is not reflected in the financial statements of the enterprise, so many people may not accept it.

Finally, it was reported that Huawei tried to go public in the United States and Australia several times, but all of them were terminated by the local government, because it provided China's intelligence agencies with an opportunity to intervene in the US communication network, considering the possible threats. Therefore, it is questioned that the financial information of non-listed companies is opaque, which also hinders their listing.

3 Conclusion

Through the above analysis, Huawei's unique three capital operation modes provide sufficient sources of funds for its development, regardless of the reasons behind its non-listing. Why? We are still impressed by Huawei's success. References:

[1], Wu,. Discussion on the financing mode of start-up enterprises —— Taking Shenzhen Huawei Technology Co., Ltd. as an example [j]. National Business Situation (Economic Theory Research), 2009, (20): 24-25, 32.

[2] Song Can. From the perspective of financial management, this paper discusses the reasons why Huawei is not listed [j]. Modern commercial trade industry, 20 1 1, (13): 16 1.

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