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November 26, 2021

Is Huawei a digitalisation champion? An analysis of company filings suggests that’s the case

By Verdict Staff

New research names Huawei as the company that mentions digitalisation the most in its company filings. However, that doesn’t necessarily mean that it’s successfully implementing new technology.

Mentions of digitalisation within the filings of companies in the tech sector were 55% higher between July 2020 and June 2021 than in 2016, according to the latest analysis of data from GlobalData.

When tech companies publish annual and quarterly reports, ESG reports and other filings, GlobalData analyses the text and identifies individual sentences that relate to disruptive forces facing companies in the coming years. Companies that excel and invest in these areas are thought to be better prepared for the future business landscape and better equipped to survive unforeseen challenges. Digitalisation is one of these topics.

To assess whether digitalisation is featuring more in the summaries and strategies of tech companies, two measures were calculated. Firstly, we looked at the percentage of companies which have mentioned digitalisation at least once in filings during the past 12 months – this was 91% compared to 77% in 2016. Secondly, we calculated the percentage of total analysed sentences that referred to digitalization.

Of the 50 biggest employers in the tech sector, Huawei Investment & Holding Co Ltd was the company which referred to digitalisation the most between July 2020 and June 2021. GlobalData identified 272 digitalisation-related sentences in the China-based company's filings – 7.3% of all sentences.

Atos SE mentioned digitalisation the second most – the issue was referred to in 6.2% of sentences in the company's filings. Other top employers with high digitalisation mentions included China Communications Services Corp Ltd, BT Group Plc and Infosys Ltd.

Across all tech companies the filing published in the second quarter of 2021 which exhibited the greatest focus on digitalisation came from Axiata Group Bhd. Of the document's 1,304 sentences, 202 (15.5%) referred to digitalisation.

This analysis provides an approximate indication of which companies are focusing on digitalisation and how important the issue is considered within the tech sector, but it also has limitations and should be interpreted carefully.

For example, a company mentioning digitalisation more regularly is not necessarily proof that they are utilising new techniques or prioritising the issue, nor does it indicate whether the company's ventures into digitalisation have been successes or failures.

In the last quarter, tech companies based in Eastern Europe were most likely to mention digitalization with 1.65% of sentences in company filings referring to the issue. In contrast, companies with their headquarters in the United States mentioned digitalisation in just 0.44% of sentences.