REN ZHENGFEI Founder and CEO of Huawei Guangdong Province

Huawei does not allow capital to come in easily because the greedy nature of capital will destroy the realization of our ideal. We are a company that strives for our ideal, instead of money. Imagine if we were a listed company and were unreasonably sanctioned by certain countries, our stock price might plummet, and the company might collapse.

Huawei has always adopted an incentive mechanism within itself, which helps employees truly integrate with the company, stick together and strive to realize our ideal, instead of selling their shares and walk away after the company goes public.

We continuously focus on investing in the future. Listed companies may produce appealing financial statements in the early stages of listing and make high short-term profits, but one of Huawei’s characteristics is that it turns its potential profits into current research investment and invests in the technology such as 5G. Although today we are not a listed company and may encounter some financial difficulties, we will not cut research funding. For a company or even a country, without investment in early basic scientific research, there will be no core competitiveness in the future.

Enterprises with abundant funds, stable cash flow and healthy budget can stay as they are, and there is no need to go public.

In today’s market, any business strategy that could make a firm survive and grow is a good strategy because each firm’s situation is different. Now, many enterprises are eager to go public and raise money, rather than creating a good product.

In particular, some listed companies deposit the funds raised in the bank, or take the money to engage in real estate investment, which is a waste of limited market resources and against investors’ expectations. What’s more disturbing is the fact that the performance before listing is great, but immediately after listing, the performance changes and profits plummet.

Listing is not the only criterion for measuring a company.

After an enterprise goes public, its financial reporting needs to be transparent for the regulators and investors, which means more energy and cost need to be devoted to information disclosure.

As a listed company, it is necessary to be responsible to investors, and bring continuous returns on investment. Once there is a problem with the company’s financial statements, suspected fraud in issuance of shares, or violation of the law, listed companies may face heavy penalties or even the risk of delisting, leading to huge investor claims. CA