November 1, 2004
Chinese telecom equipment maker ZTE Corp. (Shenzhen: 000063) has surpassed its 2003 revenues in the first nine months of 2004 and passed another milestone on its way to listing its shares on the Hong Kong exchange, according to statements released by the company over the weekend.
The company says its revenues for the first three quarters of the year were 16.3 billion yuan renminbi (US$1.97 billion), more than the company's revenues for the whole of 2003, when it generated just more than CNY16 billion (see ZTE Reports 2003 Earnings).
Its 2004 revenues up to September 30 increased nearly 67 percent compared with the first nine months of 2003, when it generated revenues of CNY9.8 billion ($1.2 billion).
The vendor's profits also shot up. ZTE says it generated net income of CNY726.4 million ($87.7 million) in the first nine months of 2004, compared with CNY295.5 million ($25.7 million) in the same period in 2003.
Despite the increases, ZTE's share price fell by 5 percent on the Shenzhen stock exchange today to CNY25.61 ($3.1).
The vendor also announced its latest step towards listing its shares on a stock exchange outside of mainland China. Having earlier this year gained the backing of its current shareholders for an international listing (see ZTE HK IPO OK'd), the vendor has now received the green light from the China Securities Regulatory Commission to float its stock on the Kong Kong exchange, according to a report from Dow Jones. ZTE still needs approval from Hong Kong's financial regulator, however.
ZTE plans to use the money it will raise from an IPO to further expand its international operations, which are driving its revenue and profit growth (see Overseas Sales Boost ZTE, ZTE to Open Plant in Algeria, and ZTE Doubles International Revenues).
ZTE isn't the only Chinese vendor looking to raise capital from the international markets, as its rival Huawei Technologies Co. Ltd. has similar plans, though it still does not have a set timetable for its flotation (see Is Huawei Edging Closer to IPO?).
ZTE couldn't be reached for further comment as this article was published.
— Ray Le Maistre, International News Editor, Light Reading
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