ZTE Corp.

Company Background

ZTE is a major Chinese telecommunications equipment maker based in Shenzhen, Guangdong Province. It is often compared with its larger rival, Huawei Technologies. The company's three core businesses are telecommunications equipment, smartphones and other mobile terminals, as well as system services, similar to Huawei's. It has also tapped into foreign markets, with overseas sales accounting for about 50% of the company's total.

Founded in 1985, ZTE was originally a state-owned company, under the Shenzhen municipal government. It listed on the Shenzhen Stock Exchange in 1997 and on the Hong Kong Exchanges and Clearing in 2004. As of the end of March 2015, Zhongxingxin, a state-owned entity, is the company's largest shareholder, owning some 30% of the company.

Founder and Chairman Hou Weigui handed over control of ZTE to Executive Director, Shi Lirong who has been President since 2010. The spread of 4G, or fourth-generation, mobile phone services has boosted large-scale investment for telecommunications facilities, providing a tailwind for the company. Meanwhile, ZTE's presence has declined in the smartphone market because of fierce competition.

Business Summary

ZTE Corp. engages in the design, development, manufacture, and sale of information and telecommunication technology products. It operates through the following segments: Carriers’ Network, Consumer Business, and Government and Corporate Business. The Carriers’ Network segment focuses on meeting carries’ requirements in network evolution with the provision of wireless access, wireline access, bearer systems, core networks, telecommunication software systems and services, and other innovative technologies and product solutions. The Consumer Business segment is involved in the production and sale of products such as smart phones, mobile data terminals, family terminals, innovative fusion terminals, related software application, and value-added services. The Government and Corporate Business segment offers informatization solutions for the government and corporations through the application of products such as communications networks, IOT, Big Data, and cloud computing. The company was founded by Wei Gui Hou on February 7, 1985 and is headquartered in Shenzhen, China.

Financial Highlights

Dec 2022	HKD	USD
Revenue	141,875.38M	18,118.33M
Gross Profit	48,229.63M	6,159.21M
Operating income	10,336.89M	1,320.08M
Income before tax	10,068.12M	1,285.75M
Net income	9,396.39M	1,199.97M
EBITDA	15,397.03M	1,966.29M
Diluted EPS	1.98	0.25
Dividends Per Share	0.45	0.05
Total Assets	203,673.52M	26,095.42M
Total liabilities	136,821.97M	17,530.15M
Total equity	65,838.79M	8,435.51M
Operating cash flow	10,099.21M	1,289.72M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Revenue	100,531.02M	101,832.58M	113,230.14M	137,073.67M	141,875.38M
Gross Profit	30,378.64M	34,598.94M	32,287.39M	43,914.87M	48,229.63M
Operating income	1,144.13M	6,122.36M	5,028.05M	8,015.48M	10,336.89M
Income before tax	-7,761.59M	8,886.82M	6,163.09M	10,163.80M	10,068.12M
Net income	-8,271.82M	5,837.26M	4,786.65M	8,211.03M	9,396.39M
EBITDA	4,114.00M	10,189.54M	9,490.57M	13,455.70M	15,397.03M
Diluted EPS	-1.97	1.38	1.03	1.76	1.98
Dividends Per Share	0	0.21	0.24	0.36	0.45
Total Assets	147,506.04M	157,948.05M	178,598.80M	207,729.26M	203,673.52M
Total liabilities	117,049.03M	122,486.42M	123,914.10M	142,544.30M	136,821.97M
Total equity	26,020.18M	32,245.60M	51,334.43M	62,976.27M	65,838.79M
Operating cash flow	-8,717.95M	8,681.99M	11,806.03M	19,512.23M	10,099.21M

	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Revenue	12,826.85M	12,996.81M	14,599.04M	17,634.96M	18,118.33M
Gross Profit	3,876.04M	4,415.83M	4,162.89M	5,649.78M	6,159.21M
Operating income	145.98M	781.39M	648.27M	1,031.21M	1,320.08M
Income before tax	-990.30M	1,134.21M	794.62M	1,307.60M	1,285.75M
Net income	-1,055.41M	745.00M	617.15M	1,056.37M	1,199.97M
EBITDA	524.91M	1,300.48M	1,223.64M	1,731.11M	1,966.29M
Diluted EPS	-0.25	0.17	0.13	0.22	0.25
Dividends Per Share	0	0.02	0.03	0.04	0.05
Total Assets	18,840.14M	20,271.06M	23,033.56M	26,644.59M	26,095.42M
Total liabilities	14,950.03M	15,719.91M	15,980.97M	18,283.58M	17,530.15M
Total equity	3,323.41M	4,138.40M	6,620.50M	8,077.71M	8,435.51M
Operating cash flow	-1,112.33M	1,108.07M	1,522.18M	2,510.30M	1,289.72M

Valuation Measures

Dec 2022
PER	8.66
ROA	4.56%
ROE	14.58%
Operating margin	7.28%
Profit margin	6.62%

Key executives

President, CEO & Executive Director: Zi Yang Xu
Chief Operating Officer & Executive Vice President: Jun Shi Xie
Chief Financial Officer & Executive Vice President: Ying Li
EVP-Chief Technology Officer & CIO: Xi Yu Wang
Executive Vice President: Sheng Qing Pang

Shareholders

Capital Research & Management Co. (World Investors) (5.0%)
The Vanguard Group, Inc. (3.2%)
Aegon-Industrial Fund Management Co., Ltd. (2.4%)
BlackRock Fund Advisors (2.2%)
Value Partners Ltd. (2.1%)
BlackRock Advisors (UK) Ltd. (1.6%)
Dimensional Fund Advisors LP (1.2%)
BlackRock Investment Management (UK) Ltd. (1.0%)
Da Cheng Fund Management Co., Ltd. (1.0%)
Fullgoal Fund Management Co., Ltd. (0.6%)

Contact Details

Website:http://www.zte.com.cn
Address: Hi-Tech Industrial Park, ZTE Building, Keji South Road, Shenzhen, 518057, China
Phone: +86.755.26770000

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Last Updated on 20 Mar, 2023