ZTE Reports 2008

HONG KONG -- ZTE Corporation (“ZTE” or the “Group”) (H share stock code: 0763.HK / A share stock code: 000063.SZ) today announced its annual results for the year ended 31 December 2008.

Based on HKAS, ZTE recorded a revenue of approximately RMB 44,293 million in 2008, representing an increase of 27.37% against 2007. Net profit was RMB 1,660 million. Basic earnings per share were RMB1.24.

Applying PRC GAAP, during the year under review, the Group’s revenue from principal operations was approximately RMB 44,293 million and net profit was RMB 1,660 million. Earnings per share amounted to RMB1.24.

The Board of Directors recommended payment of a final dividend for the year ended 2008: Based on the total number of issued shares of 1,340 million as at 31 December 2008, by way of capitalization of capital reserves, every 10 shares will increase by 3 new shares. And for every 10 shares, RMB 3 in cash (with tax) will be distributed. In sum, the total new issued capital will be amounted to RMB 403 million and RMB 403 million will be distributed in cash.

During the year, the Group’s revenue from domestic operations amounted to RMB 17,466 million, representing a year-on-year growth of 18.93%. The Group continued to make significant gain in share in the infrastructure products market, riding on opportunities presented by 3G construction and broadband development in the PRC and thereby secured reasonable profit. It was also actively involved in network refinement, business integration and new business development, seizing the opportunities presented by telecommunications carriers transforming into integrated information service suppliers through network integration, business centralization and competition via differentiation.

As for revenue from the international operations, it grew to RMB 26,827 million, 33.53% more year-on-year, and accounted for 60.6% of the total revenue of the Group, 2.83 percentage points higher compared with the previous year. The Group maintained market shares in developing countries and steadily increased the proportion of income from sales in Europe and America in its effort to grow the two markets into an important income source.

Mr. Hou Weigui, Chairman of ZTE, said, “In 2008, the Group made major breakthroughs and strong growth in the main product areas of GSM, WCDMA, FTTX and optical transmission. In China, we submitted bids for 3G projects of the three major carriers to prepare for undertaking the projects. Outside China, we have made major advances in strategic overseas markets and the multinational carrier market, paving the way for the Group to reach new heights in 2009.”

Mr. Hou concluded, “In the coming year, as carriers continue to push forward with works in relation to 3G operations, full-fledged servicing, VAS business, network transformation and optimization, the Group expects to see growth opportunities in the domestic market. In the international market, the impact of the financial crisis will continue to be felt and how to achieve major breakthroughs in developed countries and steady growth of business in developing countries will be the Group’s priority.”

ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763)