Huawei Technologies, the mainland's largest telecom equipment maker, said it was on track to increase contract sales 30 per cent to US$10.7 billion this year, but competition was squeezing margins and crimping profit growth.

Contract sales or orders that are booked reached US$5.2 billion in the first half of 2006, of which 65 per cent came from exports, up from 58 per cent at the end of last year, Huawei Vice President Hu Yong said yesterday.

Unlisted Huawei aims to grow contract sales by another 30 per cent next year, of which 70 per cent would come from exports if the Chinese government does not issue licences for the country's phone companies to build third-generation cellular networks. Revenue will exceed US$8. billion this year, up from US$5.98 billion last year, he said.

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