Huawei and Alibaba are both China's top technology companies. As far as the current situation is concerned, Huawei will be better than Alibaba, but Alibaba cannot be underestimated.

From the perspective of revenue and profit

According to Huawei’s annual report: in 2018, Huawei’s overall operating income reached 721.2 billion yuan, equivalent to 107.5 billion U.S. dollars, exceeding 100 billion for the first time in history US dollars, a year-on-year increase of 19.5%, and net profit was 59.3 billion yuan, a year-on-year increase of 25.1%.

According to data released by Alibaba, Alibaba Group’s total operating income in fiscal year 2019 reached 376.844 billion yuan (approximately US$56.152 billion), a year-on-year increase of 51%, and net profit was 93.407 billion yuan (approximately US$56.152 billion). 13.918 billion U.S. dollars), an increase of 12% over the same period last year.

Note: Alibaba’s annual report statistics are different from our traditional understanding. Fiscal year 2019 refers to the period from April 1, 2018 to March 1, 2019.

So from an absolute perspective, in terms of sales revenue, Huawei is only twice that of Alibaba, but in terms of profit, Alibaba is even better, 1.575 times that of Huawei. From the perspective of sales growth rate, Alibaba's sales growth rate is higher than Huawei's, but its net profit growth rate is lower than Huawei's.

Judging from the amount of tax paid

According to Huawei’s financial report, Huawei’s total tax payment for 2018 reached 71 billion yuan (110 billion yuan in 2017). It is estimated that the government will reduce Huawei’s tax payment. Taxes should be paid to support the development of high-tech enterprises, otherwise the amount of tax payments would not have dropped so significantly when sales increased).

According to data released by Alibaba, in 2018, Alibaba Group and Ant Financial Group paid a total of 51.6 billion yuan in taxes to the state, a year-on-year increase of more than 40%.

Therefore, in terms of the absolute amount of tax paid, Huawei currently has the advantage, but Alibaba is growing rapidly. If it maintains this pace, it may surpass Huawei in no more than three years.

R&D investment

According to Huawei’s annual report, Huawei’s R&D expenses in 2018 reached 101.5 billion yuan, accounting for 14.1% of sales revenue. According to data released by the World Intellectual Property Organization, a subsidiary of the United Nations, Huawei submitted 5,405 patent applications to the organization in 2018, ranking first among all companies in the world.

According to the "2018 EU Industrial R&D Investment Scoreboard" released by the European Commission (EU), Alibaba's R&D investment in 2018 was 2.914 billion euros (equivalent to 22.438 billion yuan), ranking second only to Huawei. China is second. Based on sales revenue in fiscal year 2019, R&D investment accounted for approximately 6% of sales revenue.

So in terms of R&D investment and technological strength, Huawei currently has the advantage.

Summary

As can be seen from the above comparison, Huawei currently has certain advantages over Alibaba (Huawei’s net profit is low, partly because of its high R&D investment) , but Alibaba is growing very fast. Both companies are very important. One involves basic chips and communications; the other involves mobile payments and e-commerce. Both are good companies, developing and growing together, and working hard to make China bigger and stronger.