ZTE Corp.

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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. The company has the most complete telecommunications product line, covering every vertical sector of wireless networks, core networks, access & bearer networks, services and terminals markets. Its business segments include Carrier Network, Government, Corporate and Consumer Businesses. Its Carrier Network division offers wireless and wired access, bearer networks, core networks, and telecommunication software systems and services. Its Government and Corporate division provides information solutions such as communication networks, internet of things, large data, and cloud computing products. Its Consumer division develops, produces, and sells smart phones, mobile data terminals, and home information terminals. ZTE was founded by Wei Gui Hou on February 7, 1985 and is headquartered in Shenzhen, China.

Financial Highlights

Dec 2018	HKD	USD
Revenue	85,513.15M	10,910.70M
Gross Profit	28,784.32M	3,672.62M
Operating income	2,306.08M	294.23M
Income before tax	-6,552.88M	-836.08M
Net income	-6,983.66M	-891.05M
EBITDA	4,759.73M	607.29M
Diluted EPS	-1.66	-0.21
Dividends Per Share	0	0
Total Assets	129,350.74M	16,521.26M
Total liabilities	101,950.83M	13,021.62M
Total equity	22,897.57M	2,924.58M
Operating cash flow	-10,186.62M	-1,299.72M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	81,471.27M	100,186.38M	101,233.18M	108,815.27M	85,513.15M
Gross Profit	24,236.19M	30,418.94M	31,312.13M	33,357.00M	28,784.32M
Operating income	3,995.33M	3,378.25M	1,975.89M	4,110.82M	2,306.08M
Income before tax	3,591.26M	4,240.25M	-812.91M	6,847.12M	-6,552.88M
Net income	2,633.57M	3,207.88M	-2,357.41M	4,568.17M	-6,983.66M
EBITDA	5,798.08M	5,465.53M	4,410.33M	6,686.05M	4,759.73M
Diluted EPS	0.63	0.76	-0.56	1.08	-1.66
Dividends Per Share	0.21	0.29	0	0	0
Total Assets	110,254.60M	124,587.96M	141,408.18M	143,962.21M	129,350.74M
Total liabilities	83,962.10M	89,801.29M	109,054.19M	106,678.41M	101,950.83M
Total equity	24,878.57M	29,660.09M	26,401.15M	31,646.87M	22,897.57M
Operating cash flow	1,107.45M	5,666.30M	3,136.36M	4,524.71M	-10,186.62M

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	10,506.07M	12,922.98M	13,041.38M	13,963.53M	10,910.70M
Gross Profit	3,125.36M	3,923.72M	4,033.79M	4,280.48M	3,672.62M
Operating income	515.21M	435.75M	254.54M	527.51M	294.23M
Income before tax	463.10M	546.94M	-104.72M	878.64M	-836.08M
Net income	339.61M	413.78M	-303.69M	586.20M	-891.05M
EBITDA	747.68M	704.99M	568.16M	857.97M	607.29M
Diluted EPS	0.08	0.09	-0.07	0.13	-0.21
Dividends Per Share	0.02	0.03	0	0	0
Total Assets	14,217.50M	16,075.55M	18,238.80M	18,415.84M	16,521.26M
Total liabilities	10,827.04M	11,587.03M	14,065.79M	13,646.45M	13,021.62M
Total equity	3,208.13M	3,827.03M	3,405.21M	4,048.31M	2,924.58M
Operating cash flow	142.81M	730.89M	404.04M	580.62M	-1,299.72M

Valuation Measures

Dec 2018
PER	--
ROA	-5.11%
ROE	-25.60%
Operating margin	2.69%
Profit margin	-8.16%

Key executives

President, CEO & Executive Director: Ziyang Xu
Chief Financial Officer & Executive Vice President: Li Ying
Chief Technology Officer & Executive VP: Hui Jun Xu
Executive Vice President: Sheng Qing Pang
Executive Director & Executive Vice President: Jun Ying Gu

Shareholders

Jericho Capital Asset Management LP (3.7%)
The Vanguard Group, Inc. (3.5%)
UBS AG (Investment Management) (2.7%)
Baillie Gifford & Co. (2.1%)
BlackRock Fund Advisors (2.0%)
Merian Global Investors (UK) Ltd. (1.8%)
Zhong Ou Asset Management Co., Ltd (1.0%)
China Southern Asset Management Co., Ltd. (0.6%)
BlackRock Advisors (UK) Ltd. (0.5%)
BlackRock Investment Management (UK) Ltd. (0.5%)

Contact Details

Website:http://www.zte.com.cn
Address: No. 55 Siciene & Tech South Road, Nanshan District, Shenzhen, 518057, China
Phone: +86.755.26770282

Related Companies

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ZTE Xi'an Co., Ltd.
Xi'An ZTE IOT Terminal Co., Ltd.
Zte Kela Technology (Suzhou) Co., Ltd.
Shenzhen ZTE Cloud Service Co., Ltd.
Zte Singapore Pte Ltd.
Whale Cloud Singapore Pte Ltd.
Xi'an ZTE Communication Terminal Technology Co., Ltd.
ZTE Deutschland GmbH
Shenzhen ZTE Software Corp.
ZTE Canada, Inc.
ZTE Agribusiness Co., Ltd.
ZTE Trunking Technology Corp.
ZTE (UK) Ltd.
Zhongxing Corp. SLU
ZTE Austria GmbH
ZTE Energy (Tianjin) Co., Ltd.
ZTE Utility Co., Ltd.
GCI Science & Technology (M) Sdh. Bhd.
Zhuhai Guangtong Automobile Co., Ltd.
ZTE Corp. (Hong Kong)
ZTE Corp. (United Arab Emirates)
ZTE Software Technology (Nanchang) Co., Ltd.
ZTE ITS Ltd.
ZTE Norway AS

Competitors

Nokia Oyj
Telefonaktiebolaget LM Ericsson Class B
ADTRAN, Inc.
NETGEAR, Inc.
DASAN Zhone Solutions Inc.
UTStarcom Holdings Corp.
CommScope Holding Co., Inc.
Technicolor SA
Ekinops SA
Plantronics, Inc.
Ciena Corporation
Infinera Corporation
Calix, Inc.
BlackBerry Limited
China Techfaith Wireless Communication Technology Ltd. Sponsored ADR
Heliocentris Energy Solutions AG
ClearOne, Inc.
Inseego Corp.
Avaya Holdings Corp.
AFCON Holdings Ltd
Telrad Networks Ltd.
Foxconn Industrial Internet Co., Ltd. Class A
Inseego Corp.
KMW Inc
Doosan Corporation
Ceragon Networks Ltd

Last Updated on 14 Oct, 2019