(Yicai) Sept. 1 -- Huawei Technologies reported a 32 percent slump in first-half profit from a year earlier, as record spending on research and development and asset valuation losses offset the Chinese tech giant’s second-highest revenue haul.

Net profit was CNY37.2 billion (USD5.2 billion) in the six months ended June 30, according to the Shenzhen-based company’s earnings report released on Aug. 29. Revenue rose 4 percent to CNY427 billion (USD59.9 billion).

R&D outlays climbed 9 percent to CNY96.7 billion, equal to nearly 23 percent of revenue, while operating costs climbed by the same to CNY224.3 billion. Huawei also booked CNY5.8 billion (USD813.4 million) in asset fair value changes, versus CNY35.3 million (USD5 million) a year ago.

The privately held company continues to prioritize self-developed technologies following its split from the Android ecosystem. Richard Yu, chairman of Huawei’s consumer business group, said recently that the firm employs more than 10,000 workers and invests tens of billions of yuan annually in its Harmony operating system alone.

Huawei's consumer business showed signs of recovery in the quarter. Domestic smartphone shipments reached 12.5 million units, giving the company an 18.1 percent market share and returning it to the top spot in China for the first time in four years. Users of its latest Harmony 5 OS have exceeded 12 million.

Huawei also strengthened its presence in the auto and data center sectors . Its smart driving software has been deployed in more than 900,000 vehicles so far, although intense price competition in the electric vehicle market and fragmented cooperation among partner brands constrains growth.

In cloud services, Huawei boosted investments in artificial intelligence and computing capacity, capturing an 18 percent market share in China’s mainland, the second-highest among providers.

Looking ahead, Huawei plans to step up investment in core technologies over the next three years, focusing on Harmony OS, Kunpeng processors, and Ascend AI chips. The company will also pursue opportunities in AI, relying on its solid technical layout, Sabrina Meng, rotating chairwoman, said earlier.

Editor: Emmi Laine