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. 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 2021	HKD	USD
Revenue	137,073.67M	17,634.96M
Gross Profit	43,914.87M	5,649.78M
Operating income	8,015.48M	1,031.21M
Income before tax	10,163.80M	1,307.60M
Net income	8,211.03M	1,056.37M
EBITDA	13,455.70M	1,731.11M
Diluted EPS	1.76	0.22
Dividends Per Share	0.36	0.04
Total Assets	207,729.26M	26,644.59M
Total liabilities	142,544.30M	18,283.58M
Total equity	62,976.27M	8,077.71M
Operating cash flow	19,512.23M	2,510.30M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Revenue	124,387.12M	100,531.02M	101,832.58M	113,230.14M	137,073.67M
Gross Profit	37,590.02M	30,378.64M	34,598.94M	32,287.39M	43,914.87M
Operating income	2,696.42M	1,144.13M	6,122.36M	5,028.05M	8,015.48M
Income before tax	7,895.33M	-7,761.59M	8,886.82M	6,163.09M	10,163.80M
Net income	5,267.49M	-8,271.82M	5,837.26M	4,786.65M	8,211.03M
EBITDA	5,698.17M	4,114.00M	10,189.54M	9,490.57M	13,455.70M
Diluted EPS	1.24	-1.97	1.38	1.03	1.76
Dividends Per Share	0	0	0.21	0.24	0.36
Total Assets	173,053.33M	147,506.04M	157,948.05M	178,598.80M	207,729.26M
Total liabilities	129,766.69M	117,049.03M	122,486.42M	123,914.10M	142,544.30M
Total equity	37,894.30M	26,020.18M	32,245.60M	51,334.43M	62,976.27M
Operating cash flow	8,119.99M	-8,717.95M	8,681.99M	11,806.03M	19,512.23M

	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Revenue	15,961.76M	12,826.85M	12,996.81M	14,599.04M	17,634.96M
Gross Profit	4,823.67M	3,876.04M	4,415.83M	4,162.89M	5,649.78M
Operating income	346.01M	145.98M	781.39M	648.27M	1,031.21M
Income before tax	1,013.15M	-990.30M	1,134.21M	794.62M	1,307.60M
Net income	675.94M	-1,055.41M	745.00M	617.15M	1,056.37M
EBITDA	731.20M	524.91M	1,300.48M	1,223.64M	1,731.11M
Diluted EPS	0.15	-0.25	0.17	0.13	0.22
Dividends Per Share	0	0	0.02	0.03	0.04
Total Assets	22,137.22M	18,840.14M	20,271.06M	23,033.56M	26,644.59M
Total liabilities	16,599.93M	14,950.03M	15,719.91M	15,980.97M	18,283.58M
Total equity	4,847.49M	3,323.41M	4,138.40M	6,620.50M	8,077.71M
Operating cash flow	1,041.98M	-1,112.33M	1,108.07M	1,522.18M	2,510.30M

Valuation Measures

Dec 2021
PER	12.06
ROA	4.25%
ROE	14.36%
Operating margin	5.84%
Profit margin	5.99%

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%)
Value Partners Ltd. (2.1%)
BlackRock Fund Advisors (2.1%)
BlackRock Advisors (UK) Ltd. (1.5%)
Dimensional Fund Advisors LP (1.2%)
Da Cheng Fund Management Co., Ltd. (1.0%)
BlackRock Investment Management (UK) Ltd. (0.6%)
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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Zte Singapore Pte Ltd.
Xi'an ZTE Communication Terminal Technology Co., Ltd.
ZTE Deutschland GmbH
Shenzhen ZTE Software Corp.
ZTE Hungary Kft.
ZTE Corporation South Africa (Pty) Ltd.
ZTE Canada, Inc.
ZTE Agribusiness Co., Ltd.
ZTE Trunking Technology Corp.
ZTE (UK) Ltd.
Zhongxing Corp. SLU

Competitors

Nokia Oyj
ADTRAN Holdings, Inc.
ADTRAN Holdings, Inc.
DZS Inc.
UTStarcom Holdings Corp.
Ekinops SA
Accton Technology Corp.
Calix, Inc.
Ciena Corporation
Vantiva SA
Kinpo Electronics, Inc.
Enghouse Systems Limited
Infinera Corporation
ADVA AG Optical Networking
ClearOne, Inc.
Inseego Corp.
Avaya Holdings Corp.
NETGEAR, Inc.
AFCON Holdings Ltd
CICT Mobile Communication Technology Co. Ltd. Class A
Inseego Corp.
Grupo Carso SAB de CV Class A1
Ceragon Networks Ltd
China Techfaith Wireless Communication Technology Ltd. Sponsored ADR
KMW Inc
Jiangsu Cai Qin Technology Co. Ltd. Class A

Last Updated on 27 Jan, 2023