AnnualReport2005ToenrichlifethroughcommunicationHUAWEITECHNOLOGIESCO.,LTD.HuaweiIndustrialBaseBantianLonggangShenzhen518129,P.R.China:quicklybecomingaworldleadingsupplierFixedNetwork:leadingnetworktransformationOpticalNetwork:aleadingglobalsupplierDataCommunications:leadingincarrier-classIPnetworkApplication&Software:exploringnewmodelsforthefutureWirelessTerminals:buildinganend-to-endsolution24LookingForward29CorporateCitizenshipContentsHuaweiTechnologiesisaleaderinprovidingnextgenerationtelecommunicationsnetworksolutionsforoperatorsaroundtheworld.Thecompanyisdedicatedtoprovidinginnovativeandcustomizedproducts,servicesandsolutionstocreatelong-termvalueandpotentialgrowthforitscustomers.Huawei’sproductsandsolutionsaredeployedinover100countriesandserve28oftheworld’stop50operators,aswellasoveronebillionusersworldwide.AboutHuaweiTechnologies2FinancialHighlights3TheYear5MessagefromtheCompany8Vision,MissionandStrategy92005DrivingForces17PerformanceinBusinessWirelessNetwork:quicklybecomingaworldleadingsupplierFixedNetwork:leadingnetworktransformationOpticalNetwork:aleadingglobalsupplierDataCommunications:leadingincarrier-classIPnetworkApplication&Software:exploringnewmodelsforthefutureWirelessTerminals:buildinganend-to-endsolution24LookingForward29CorporateCitizenship30FinancialReportContentsHuaweiTechnologiesisaleaderinprovidingnextgenerationtelecommunicationsnetworksolutionsforoperatorsaroundtheworld.Thecompanyisdedicatedtoprovidinginnovativeandcustomizedproducts,servicesandsolutionstocreatelong-termvalueandpotentialgrowthforitscustomers.Huawei’sproductsandsolutionsaredeployedinover100countriesandserve28oftheworld’stop50operators,aswellasoveronebillionusersworldwide.AboutHuaweiTechnologiesFinancialHighlightsHuaweiTechnologiesCorporationandSubsidiaryCompaniesREVENUE(USDinmillions)Unit:USD’000,000NETINCOME(USDinmillions)CASHFLOWFROMOPERATIONS(USDinmillions)USDinmillionsYearEndedDecember31RevenueNetIncomeCashFlowFromOperationsOperatingProfitMarginReturnonNetAssetsNote:(*)Excludingdiscontinuingoperations.20055,98268170814%30%3,82762439618%31%2,69438438519%23%2,12810831110%7%2,29025820417%20%2004200320022001(*)7,0006,0005,0004,0003,0002,0001,0000200120022003200420052,2902,1282,6943,8275,982CAGR:27%700800600500400300200100020012002200320042005258108384624681CAGR:28%800700600500400300200100020012002200320042005204311385396708CAGR:36%Unit:USD’000,000Unit:USD’000,000FinancialHighlightsTheYearMessagefromtheCompanyVision,MissionandStrategy2005DrivingForcesPerformanceinBusinessLookingForwardCorporateCitizenshipFinancialReportHuaweiTechnologiesAnnualReport20051HuaweiTechnologiesAnnualReport20052FinancialHighlightsHuaweiTechnologiesCorporationandSubsidiaryCompaniesREVENUE(USDinmillions)Unit:USD’000,000NETINCOME(USDinmillions)CASHFLOWFROMOPERATIONS(USDinmillions)USDinmillionsYearEndedDecember31RevenueNetIncomeCashFlowFromOperationsOperatingProfitMarginReturnonNetAssetsNote:(*)Excludingdiscontinuingoperations.20055,98268170814%30%3,82762439618%31%2,69438438519%23%2,12810831110%7%2,29025820417%20%2004200320022001(*)7,0006,0005,0004,0003,0002,0001,0000200120022003200420052,2902,1282,6943,8275,982CAGR:27%700800600500400300200100020012002200320042005258108384624681CAGR:28%800700600500400300200100020012002200320042005204311385396708CAGR:36%Unit:USD’000,000Unit:USD’000,000FinancialHighlightsTheYearMessagefromtheCompanyVision,MissionandStrategy2005DrivingForcesPerformanceinBusinessLookingForwardCorporateCitizenshipFinancialReportHuaweiTechnologiesAnnualReport20051HuaweiTechnologiesAnnualReport20052TheYearJanOnJanuary27,CATTelecomPublicCompanyLimited,oneofthetwolargeststate-ownedtelecomcarriersinThailand,awardedHuaweiacontractworthUS$187milliontoexpanditsnationwideCDMA20003Gnetwork.FebOnFebruary9,theeveofChina’sSpringFestival,thesoftswitchnetworkthatHuaweiconstructedforChinaMobilesuccessfullyhandledpeaktrafficofmorethanthreetimesitsusualtrafficanddeliveredcommunicationsfor200millionusers,provingitsstability,quality,andreliability.AprOnApril19,HuaweiTechnologiesandIntelannouncedthattheywouldcooperateinbuildingcarrier-classwirelessbroadbandnetworkssupportingthenewWiMAX/IEEE802.16standardsandspecifications.OnApril29,MTNandHuaweisignedanequipmentpurchasingandserviceprovisioningframeworkcontract.MTNwillpurchaseHuawei’smobilecommunicationsequipment,SDHproductsandservicesfortheentiresouthernAfricanregion.MayOnMay16,HuaweiestablisheditsUKtrainingcentertoprovideoveralltrainingservicesacrossEurope,togetherwithitsexistingtrainingcentersinFrance,RomaniaandGermany.Huaweinowhastrainingcentersinallofitsglobalregions.Atthe24th3GPPGERANconferenceheldinIrelandinMay,fourproposalssubmittedbyHuaweiandthreeothermembers(Siemens,Sagem,andtheStandardInstituteofMII)relatedtoGSMtrunkingwereacceptedwithoutobjection.JunOnJune9,HuaweiUniversitywasformallyregisteredtofocusontechnica