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Huawei Stock – Can You Invest in Huawei or Buy Stock?

Is Huawei Stock Listed?

Huawei StockHuawei is a privately held mainland Chinese company. It is not a publicly listed company, so Huawei stock is not traded on any global stock exchange.

Huawei is a Chinese multinational telecommunications equipment and services company.  The firm has headquarters in Guangdong, China. The company was established in 1987 to manufacture phone switches.  Since then, it has expanded operations and now builds telecommunications networks and manufactures communications devices. Huawei works with some of the world’s largest telecoms operators, including British Telecom (BT), Vodafone, Orange, and T-Mobile among its notable partners. This makes the company a valuable telecom infrastructure brand worldwide.  According to Statista, the brand value is estimated to be in excess of $65 billion U.S. dollars in 2020.

According to the company website, Ren Zhengfei, a former officer of the People’s Liberation Army, founded Huawei in 1987. The Shenzhen, China-based company is the world’s third-largest smartphone maker behind Apple and Samsung. The company also makes other consumer electronics and builds communication equipment and infrastructure. It is a multinational giant reporting revenue in excess of $126 billion in 2019. However, Huawei remains a private company fully owned by company employees. That means the company is not traded on any public stock exchange and that people other than the current employees cannot invest in it.

What is the Huawei stock ticker symbol?

002502.SZSE, or (002502.SZ)

What Is Shenzhen Stock Exchange (SZSE)?

The Shenzhen Stock Exchange (SZSE) is one of two main stock exchanges operating independently in mainland China. The other exchange is the Shanghai Stock Exchange (SSE). The Shenzhen Stock Exchange (SZSE) is a self-regulated legal entity under the supervision of the China Securities Regulatory Commission (CSRC). The main function of the Shenzhen Stock Exchange (SZSE) is to oversee securities trading.  To this end, the exchange provides the facilities for securities trading and enforces operational rules.

Why Can’t You Invest in Huawei Stock?

Huawei is privately held by the company’s China-based employees only.  Anyone working for the company outside of China cannot buy or own Huawei stock. The company’s shareholders admit, however, that even they don’t understand the company’s structure.  Huawei shareholders are not provided updated information on their holdings and have no voting power. Thirty-three union members elect nine candidates to attend the annual shareholder meeting. However, employee shareholders receive dividend payments, and they have the potential to earn bonuses based on performance. Their salaries also are reviewed on an annual basis.

In 2014, upper management at Huawei was asked if it would consider a stock market listing, but the idea was rejected. Huawei’s debut on the public market can’t be completely ruled out in the future, though, especially if the company is in need of additional capital in the future. It’s not likely that Huawei could list in the United States, partly because of its poor relationship with the country and the company’s growing reputation for using technology to spy on users. As far as investing in Huawei goes, right now there’s only one potential solution—but it’s far-fetched. In order to received dividends, you would have to become an employee of the company in Shenzhen, China, and you would have to make management believe you aren’t a spy. Good luck. (Source: investopedia.com)

Who Really Owns Huawei Stock?

Huawei has traditionally claimed to be a private company wholly owned by its employees. However, in the last decade, discussions about Huawei’s equity structure have appeared from time to time in the international media. The U.S. government has also shown great interest in Huawei’s equity structure and Huawei’s ties to the Chinese government.  However, the fact that the trade union committee holds 99% of Huawei’s shares as a “shareholding vehicle” does not prove that Huawei is an enterprise controlled or even owned by the state.  There is no way to prove this one way or the other.  However, conclusions can be drawn based on studying publicly available information.  This includes laws and regulations, judicial decisions, Huawei’s annual reports, media’s public reports, and academic research materials.  The main findings from these public sources are:

Huawei Stock and Shareholders

  • Huawei stock – Employee shares are different from the common shares of limited liability companies or joint-stock companies under the Company Law, and are an “extraordinary common stock.”
  • Virtual shares – The rights of the holders of “virtual shares” can be exercised through the (shareholding employee) Representatives’ Commission.
  • Legal ownership structure – Its legal basis is built up by the agreements between the employee and the company, and the internal regulations of the company.
  • Shareholding vehicle – By using the trade union committee as the “shareholding vehicle,” Huawei is free from legal restrictions on the number of shareholders.  This achieves the goals of flexible financing and motivating employees but also avoids the various costs that may arise from “going public.”
  • Greater management control – The collectivized shareholding approach eliminates the difficulties of decision-making that may result from direct employee shareholding and enhances management’s control. In this sense, it is more realistic to say that Huawei is controlled by the management rather than by the trade union.  (Source: pekingnology.substack.com)

Beyond making smartphones, Huawei builds telecommunications networks and services and provides solutions to enterprise customers. The company claims that it is 100% owned by employees.  However, U.S. officials are convinced that the Chinese government and the Communist Party might be calling the shots at Huawei. A Chinese law requiring Chinese companies to assist in national intelligence networks passed in 2017 added to those concerns.

Reduced Sphere of Influence

Many companies throughout the world have already stopped using Huawei products. In Jan. 2018, large U.S. mobile companies like AT&T and Verizon stopped using Huawei’s products in their networks.  Seven months later, Australia decided not to use the company’s technology as it builds out its country-wide 5G mobile networks.   In November 2018, New Zealand prevented Spark, one of the country’s biggest telecom companies, from using Huawei products in its 5G network. Despite these governmental speedbumps, Huawei can still conduct business with private companies in each of these countries.

  • In December 2018, Canadian officials arrested Meng Wanzhou, the chief financial officer of Huawei and the daughter of the company’s founder, at the request of the U.S. government.
  • On Jan. 28, 2019, the U.S. government officially filed a formal request for her extradition, alleging that she violated U.S. sanctions against Iran.
  • The U.S. banned Huawei from doing business with U.S. companies due to the sanctions violations.
  • In June 2019, Trump lifted the restrictions on Huawei as part of ongoing U.S.-China trade war negotiations.
  • Huawei announced plans to cut 600 jobs in Santa Clara, Calif., and, by Dec. 2019, had made the decision to move the center to Canada. (Source: investopedia.com)

How Does Huawei Make Money?

Huawei operates in the carrier, enterprise, and consumer segments of the market. Because the company is not public, it is not traded on any stock market.  As a result, it is not required to submit filings to the Securities Exchange Commission (SEC). However, the company still reports its numbers on a regular basis. In its 2018 annual report, the company reported the following business activities:

  • Revenue – total revenue was $107 billion, up 19.5% from a year earlier.
  • Profits – jumped 25%. The company said it sold more than 200 million smartphones in 2018.  This represents an impressive increase from the 3 million sold in 2010.
  • China region – Huawei reported that business in China—by far its largest market—rose 19% in 2018.
  • Asia Pacific region – Business in the Asia Pacific region grew 15%, it rose 24.2% in EMEA,
  • North America – while its business in the Americas—the smallest market—fell 7% and showed a decline for a second consecutive year. (Source: ibid)

As of 2019, Huawei had more than 190,000 employees in more than 170 countries. It conducts the majority of its business in China, Europe, the Middle East, Africa, and the Asia-Pacific region. While it’s helpful to know where Huawei does business, it’s far more telling to know where it doesn’t. Global skepticism about Huawei has grown in recent years, following a 2012 congressional report that highlighted the security risks of using the company’s equipment.

Up Next: What Is a Troy Ounce?

Troy OunceA Troy ounce is a unit of weight based on the troy system of weights and measures.  It is most commonly used for weighing precious metals. It is different from metric or Imperial weights and dates back to the middle ages.  According to the Royal Mint, one troy ounce is equal to 31.1034768 grams. The troy ounce is the only measure of the troy weighting system that is still used in modern times. It is used in the international pricing of precious metals such as gold, silver, and platinum.  The Troy system was adopted by the U.S. Mint for the regulation of coinage in 1828.

When buying or selling precious metals such as gold, silver, or platinum, they are usually quoted and purchased by their weight.  In the UK, before adopting the metric system, they used a system called the avoirdupois system. It is still used today to some extent.  The name comes from Anglo-Norman French and means ‘goods of weight’. It is based on pounds and ounces with 16 ounces to a pound. However, in medieval times when traders were bartering for goods, all precious metals were weighed using the troy system, not the avoirdupois system. The troy system uses pounds and ounces, so it is similar, but there is one big difference.  An avoirdupois ounce equals 28.35 grams, whereas a troy ounce weighs 31.10 grams. This means one troy ounce is equivalent to approximately 1.09714 avoirdupois ounces. The troy system is still used today, especially when weighing precious metals. (Source: royalmint.com)

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