ZTE Raises Forecast for 6-Month Profit as Strong 4G Sales Lift Earnings

Net profit to rise 223% to 271% to between RMB 1 billion and RMB 1.15 billion

SHENZHEN, China--()--ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code: 000063.SZ), a publicly-listed global provider of telecommunications equipment, network solutions and mobile devices, today raised its forecast for first-half profit as the company maintained the strong momentum in its 4G infrastructure operations.

Net profit attributable to shareholders of the listed company will be between RMB 1 billion and RMB 1.15 billion in the first six months, an increase of between 223% and 271% from a year earlier, according to the revised guidance published by ZTE today. This compared with earlier guidance of between RMB 800 million to RMB 1 billion.

In the first six months, ZTE continued to strengthen cost control and operational management, achieving improved profitability in international contracts. 4G infrastructure accounted for an increased proportion of revenue.

In the Operators division, ZTE’s business is strengthening among mainstream customers in major markets. The company retained its position as the leading vendor of 4G infrastructure to China Mobile, achieving increased market share in the tender this year. ZTE consolidated its position as the leading vendor of 4G infrastructure to China Telecom and China Unicom.

Following the launch of new LTE multiband smartphones this year, the company forecasts that 4G devices will account for 40% of total terminals shipments in 2014. ZTE achieved strong performance in the United States, especially in the prepay handset market, benefiting from the availability of new innovative products and cooperation with partners.

In the Enterprise Business division, ZTE is maintaining fast growth. ZTE’s Smart City solutions are deployed in 108 cities in China, while the company’s information technology applications and solutions are used by customers including Tencent, Bank of China, China FAW, PetroChina, and China Eastern Airlines to deliver improved operational agility and efficiency.

ZTE expects its business will benefit from the award of FDD-LTE licenses in China, and the investment in 4G networks in markets such as Japan and India. The consolidation in the telecommunications market in Europe will also offer new opportunities for ZTE. In the Mobile Devices division, ZTE expects to benefit from the strong overseas operations.

Revised estimated results:

Item  

Current period
(Six months ended
30 June 2014)

 

Same period last year
(Six months ended
30 June 2013)

 

Increase /
decrease

Net profit attributable to shareholders of the listed company  

RMB 1 billion - 1.15 billion

  RMB 310 million   Increase: 222.57% - 270.96%
Basic earnings per share   RMB 0.29 - 0.33   RMB 0.09   Increase: 222.22% - 266.67%
     

Previous preliminary results announcement (published on 17 April 2014):

Item  

Current period
(Six months ended
30 June 2014)

 

Same period last year
(Six months ended
30 June 2013)

 

Increase /
decrease

Net profit attributable to shareholders of the listed company  

RMB 800 million - 1 billion

  RMB 310 million   Increase: 158.06% - 222.57%
Basic earnings per share   RMB 0.23 - 0.29   RMB 0.09   Increase: 155.56% - 222.22%
     

About ZTE

ZTE is a publicly-listed global provider of telecommunications equipment and network solutions with the most comprehensive product range covering virtually every telecommunications sector, including wireless, access & bearer, VAS, terminals and professional services. The company delivers innovative, custom-made products and services to over 500 operators in more than 160 countries, helping them to meet the changing needs of their customers while growing revenue. ZTE commits 10 per cent of its annual revenue to research and development and has leadership roles in several international bodies devoted to developing telecommunications industry standards. ZTE is committed to corporate social responsibility and is a member of the UN Global Compact. The company is China’s only listed telecom manufacturer that is publicly traded on both the Hong Kong and Shenzhen Stock Exchanges (H share stock code: 0763.HK / A share stock code: 000063.SZ). For more information, please visit www.zte.com.cn.

Contacts

ZTE Corporation
Margrete Ma, +86 755 26775207
ma.gaili@zte.com.cn
or
Edelman PR
Mark Lee, +852 2837 4756
mark.lee@edelman.com
Andres Vejarano, +852 2837 4735
andres.vejarano@edelman.com

Release Summary

ZTE Corporation today raised its forecast for first-half profit as the company maintained the strong momentum in its 4G infrastructure operations.

Contacts

ZTE Corporation
Margrete Ma, +86 755 26775207
ma.gaili@zte.com.cn
or
Edelman PR
Mark Lee, +852 2837 4756
mark.lee@edelman.com
Andres Vejarano, +852 2837 4735
andres.vejarano@edelman.com