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ZTE Raises Forecast as Strong 4G Sales Lift Earnings

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7/14/2014
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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 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.

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

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