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Huawei boosts profits by 33% despite US cyber-espionage allegations

Huawei has revealed details about its 2012 fiscal year, announcing that it boosted its net profits by 33 per cent last year. Despite US security concerns over its products, the Chinese company raked in 15.4 billion yuan (£1.6 billion) in earnings in 2012, largely due to impressive smartphone sales and products tied to cloud computing.

The company also announced that it saw revenues of 220.2 billion yuan (£22 billion) in 2012 - an eight per cent jump from the previous year.

At a press conference, Huawei’s chief financial officer Cathy Meng also said the company, which is currently privately held, is keeping “an open mind” about going public in the future. Meng also pointed to an estimated 13 per cent growth in 2013.

"Cloud computing is a huge sector in the next five years. In the telecom industry, we are expecting a 5 percent increase in capital investments. Smartphone penetration is still way too low and there is a lot of room for growth. So these three areas will create a lot of opportunities for us,” Meng said.

Huawei is second only to Ericsson in the sale of telecom equipment and has also made strides in the enterprise business. It has also improved its standing in the smartphone market, where it is now the world's sixth-largest vendor. At CES earlier this month, Huawei announced the launch of two new high-end handsets - the Ascend D2 and the Ascend Mate - suggesting that it is gunning for a larger share of the global smartphone market.

"Huawei has a better long-term outlook (than ZTE) because it has telecom equipment, enterprise and handsets business," said Jessie Yu, a Frost & Sullivan analyst, told Reuters before the results announcement.

"Its handsets are doing quite well and it has maintained its telecom equipment share. There is also some pickup in its enterprise business, so overall, its revenue channels are wider than ZTE,” Yu added.

Meng pointed to growth in Europe, Africa and Asia, though it has had setbacks in North America, where the US has accused the company of facilitating cyber-espionage on behalf of the Chinese government - a charge the company vehemently denies. She insisted that the contention with the US government would not hamper its growth in other parts of the world.