You recognize a good trend in a growing industry, you find a key company in the field doing really well and on track to become a real behemoth and you decide to invest in it. But you can’t. And not only can you not, no one else can. That is my story with Huawei, the telecommunications and networking equipment company from China.
Huawei manufactures networking and telecom equipment, smartphones and cloud technology for Internet of Things connectivity. They’ve been growing rapidly, having gone from $45bn revenue and $5bn net income in 2014 to $60bn and $7bn respectively last year and on track to top that growth this year. They have over 30,000 patents, with around 15% of their revenue and 45% of their workforce dedicated to research and development.
And given that IoT is approaching tipping point (see Softbank’s $30bn acquisition of ARM Tech) I wanted to find a way to start investing in Huawei’s expected future growth. Except, I can’t.
You see, Huawei is owned privately by its employees BUT only those employed on the Chinese mainland. If you’re a Huawei employee outside China, you can’t buy into the company. And if you’re an outside investor, it’s not happening. People have suggested a stock listing but the company rejected that outright. The company apparently has strong ties to the Chinese government and is suspected to be a tool for espionage so there is a strong aversion to outside capital. At all. No private placement, no IPO, no buy in.
So we have one of the most important companies in one of the most influential sectors of the future and there is no way for you or me to get into it.
Anyway, I just thought it would be an interesting thing to share.
As you were.