Huawei’s released semi-annual financial report shows a significant increase in research and development costs, as well as rising costs in storage chips, leading to a nearly 40% decrease in net profits for the first half of the year. Concurrently, the prices of Huawei phones have begun to rise.
As per the financial report released by Huawei on August 31st, the company achieved an operating income of 467.819 billion yuan (RMB) in the period from January to June this year, representing a 9.55% year-on-year increase. The net profit attributable to the parent company’s owner was 23.428 billion yuan, down by 36.77% compared to the same period last year.
Data from the profit statement, balance sheet, and cash flow statement in the financial report indicate a 25% increase in research and development expenditure to 121.38 billion yuan in the first half of this year, equivalent to 25.9% of revenue, exceeding the net profit for the same period more than five times.
In terms of cash flow, the company registered a negative net cash flow from operating activities of -39.885 billion yuan in the first half of 2026, compared to a positive cash flow of 31.183 billion yuan in the same period last year.
Among the details, cash received from selling goods and providing services amounted to 526.488 billion yuan, an 8.08% increase year-on-year; while cash paid for purchasing goods and receiving services was 425.226 billion yuan, higher than 314.315 billion yuan in the same period last year.
The balance sheet also saw an increase in inventory size. By the end of June, the company’s inventory stood at 277.494 billion yuan, a 42.28% growth from 195.043 billion yuan at the end of 2025.
There was a slight increase in cash flow from investment activities. In the first half of the year, the net cash flow from investment activities for the company was 48.272 billion yuan, higher than 21.706 billion yuan in the same period last year. The net cash flow from financing activities was -0.969 billion yuan, compared to -50.673 billion yuan in the same period last year.
The financial data shows that in the first half of 2026, Huawei continued to grow its operating income, but the growth rate of operating costs and some expenses exceeded the income growth rate; in terms of cash flow, the net cash flow from operating activities switched from positive to negative; and in the balance sheet aspect, the company’s total assets continued to grow, while the liability size increased from the beginning of the year.
Industry insiders believe that in order to maintain income growth and advance in areas like chips, computing power, and HarmonyOS, Huawei is bearing higher research and development costs, supply chain costs, and capital expenditures. On the other hand, the soaring prices of memory chips are continuously eroding the profits of Huawei’s consumer electronics business. In response to the rising costs, the company extensively procured raw materials in the first half of the year, further dragging down profits.
Due to supply shortages and the continuous rise in chip prices, Huawei and other mobile phone brands have adjusted the prices of some models upwards. According to a report by “First Financial” on September 1st, Huawei adjusted the official prices on its commerce platforms, covering entry-level, mid-range, and high-end flagship models. Unlike many manufacturers who publicly announced price increases at the beginning of the year, this round of price adjustments was not uniformly announced.
Among the models with adjusted prices, the Huawei Mate 80 series saw the most significant increase. The Huawei commerce page shows that all versions of the Mate 80 series saw an increase of 800 yuan, with the top-end version of 12GB+256GB being adjusted from 4699 yuan to 5499 yuan. Additionally, various versions of the Mate 80 Pro and Mate 80 Pro Max saw a price increase of 1000 yuan, with the top-end version of Mate 80 Pro priced at 8999 yuan and the Mate 80 Pro Max 16GB+512GB version priced at 8999 yuan, while the top-end 16GB+1TB version reached 9999 yuan.
Simultaneously, the Huawei mid-range model Enjoy 90 Pro Max saw a price increase of 200 yuan across all versions, with the 128GB version priced at 1899 yuan after the adjustment, and the 256GB and 512GB versions priced at 2199 yuan and 2599 yuan respectively.
Two versions of the Honor brand, a subsidiary of Huawei, saw increases of 500 yuan and 600 yuan, respectively, while the flagship model Magic8 saw price increases ranging from 300 yuan to 500 yuan.
A mobile phone channel manager confirmed that price adjustments are currently being made online first, with offline adjustments to follow. However, major mobile phone brand officials have not responded to this round of price adjustments.