Many people may be surprised to see the news that Huawei borrowed 14 billion from five banks at once. In our impression, Huawei is a very wealthy company. The annual sales revenue reaches 600 to 700 billion yuan, and the net profit is 40 to 50 billion yuan. Why do you need to borrow so much money at once?

Let us first popularize common sense. Nowadays, companies are operating with debt. This is true even for military-industrial enterprises. If an enterprise wants to obtain operating funds, there are two markets where it can be obtained, one is the money market, and the other is the capital market. The money market involves borrowing money from banks, and the capital market involves issuing stocks or bonds.

Since Huawei has never been listed on the market, it is impossible to raise funds by issuing stocks, so there are only two methods left, one is to issue corporate bonds, and the other is to raise funds from banks.

At the end of 2017, Huawei’s total assets were 505.225 billion yuan, total liabilities were 329.609 billion yuan, and the asset-liability ratio was 65.24. Looking at the asset-liability ratio level in the past 10 years, it has always remained in the 60-70 range, and the 10-year weighted average asset-liability ratio is 66.24.

The asset-liability ratio of 65 is considered to be on the high side. Generally speaking, the asset-liability warning line for industrial companies is 70. In other words, Huawei's asset-liability ratio is approaching the warning line, but it is within a controllable range.

Judging from the absolute value of Huawei’s debt scale, 330 billion yuan is a quite large number. If the annual interest rate of this debt is 3, then the annual interest expense will be nearly 10 billion yuan. This means that Huawei’s daily interest expenses are as high as more than 20 million yuan. 20 million per day! What a terrifying statistic. Many listed companies may not be able to make that much profit in a year. And Huawei has to repay so much every day when it opens its eyes.

Huawei, as the most famous private enterprise in China, is not listed on the market and its specific financial statements cannot be released like listed companies. Therefore, its financial status can only be briefly viewed based on its published annual report.

Huawei's total assets at the end of 2017 reached 505.225 billion yuan, of which owner's equity accounted for 175.616 billion yuan, and liabilities accounted for 329.609 billion yuan. The proportion of owner's equity to assets was 34.76, and the asset-liability ratio is 65.24.

First of all, the income generated by Huawei's operations is very high, but its demand for funds is certainly not low. Huawei has also accelerated its market expansion in recent years, and expanding the market also requires a lot of funds. . As can be seen from the 2017 operating income chart, Huawei's operating income in 2017 increased by 15.7% year-on-year compared to 2016. Huawei can maintain such a high growth rate despite its large size, and its investment in market expansion must be Quite a few.

Among states in the world and China, except for the Americas, which experienced negative growth in operating income, other regions have experienced positive growth. At the same time, in terms of Huawei’s operating income, domestic revenue accounts for half of its total revenue, and foreign revenue With revenue accounting for half of its total revenue, Huawei is truly a company going global.

In addition, Huawei’s investment in innovative research is the highest in China, and it also requires a lot of funds. Huawei's R&D investment in 2017 reached 89.69 billion yuan, far exceeding Alibaba, Tencent, and Baidu. Investment in R&D also requires a large amount of funds. In 2019, more money will definitely be needed, and this 14 billion yuan is probably only enough for Huawei's R&D investment for more than one month. Therefore, if this money is placed in Huawei, in fact Not too much, not too little.

Huawei does not seem to be short of money. It does not need capital flow to support the company's normal operations at any time, but this does not mean that it will not need funds to solve problems in the future. Although Huawei sold 200 million mobile phones last year, There are more than 30 5G orders and revenue has exceeded US$100 billion. However, in order to upgrade 6G in the future, the research and development of various 7G communication technologies will also require a lot of financial support.

After all, Huawei is not yet listed on the market. Unlike other listed companies, which can solve funding problems through debt issuance, it can only solve the problem through loans. Loans are the first step to make Huawei bigger.

Regarding Huawei’s current debt problem, at the end of 2017, Huawei’s total assets were 505.225 billion, total liabilities were 329.609 billion, and the asset-liability ratio was 65.24. Looking at the asset-liability ratio over the past 10 years, it has always remained at 60- is the range, the 10-year average debt ratio is 66.24. With the addition of 14 billion loans, the total assets in 2017 reached 505.225 billion. For Huawei, the asset-liability ratio has only increased by 2.7. This asset-liability ratio is still within a controllable range.

Huawei’s journey has just begun, and the days ahead are still long. But no matter what, Huawei is the pride of our country!

Loans are one of the most common means of financing for enterprise development. A loan of 14 billion is normal. Huawei must have borrowed from banks many times along the way. However, in the past, Huawei itself was relatively famous and the loan amount was not that large, so it would not be like this now. Now Huawei is in the spotlight. Not only China, but the whole world is always paying attention to any movement, so this problem is not actually a problem, but do people think that Huawei is very rich, or that it will not be short of money if it does not go public? These are two concepts. From a financial perspective, they both generate maximum benefits at the lowest cost.

The rhythm of seeking death! Don't forget that Zhejiang businessman Zhou Jiancan went from 30,300 in 1989 to a market value of 9.3 billion. Under the pressure of many creditors, he failed and died. How dare he borrow such a large loan? Putting the fate of the whole country on the line? What does my country's banking regulatory agency do?

Apple has 150 billion US dollars in cash on its books, but it still borrows a lot of money. Let’s find out. Very large companies often borrow money at ultra-low or even negative interest rates. If you don’t borrow, you won’t borrow.

Operations and management are all about loans. The balance sheet of a company that is bigger and better cannot be all positive. Borrow and repay, it's just financing. Normal behavior!

It is just a capital market and will eventually be passed on to consumers. If you know why the valuations in those stock markets are dozens or hundreds of times, how do they come about? There will be no doubts

The loan can only show that Huawei will increase its investment in R&D. The loan will be supplemented later to cope with various cash flow problems! And banks also need such high-quality customers, a win-win situation, no problem, just routine operations

Making money with debt is the key. Banks scrambled to lend.