Chinese vendor ZTE reports 2005 revenues and profits up slightly over 2004

April 7, 2006

3 Min Read

HONG KONG -- ZTE Corporation ("ZTE" or the "Group") (Stock code: 0763.HK 000063.SZ) today announced its annual results for the year ended 31 December 2005.

Based on financial statements prepared in accordance with Hong Kong accounting standards, ZTE recorded a turnover of approximately RMB 21,576 million in 2005, representing an increase of 1.7% over that of 2004. Profit attributable to shareholders amounted to approximately RMB 1,288 million, representing an increase of 1.2% from the previous year. Basic earnings per share were RMB 1.34.

Based on financial statements prepared in accordance with PRC GAAP, during the year under review, the Group´s revenue from principal operations was approximately RMB 21,575 million. Net profit was RMB 1,194 million. Earnings per share amounted to RMB 1.24.

The Board of Directors recommended the payment of a final dividend of RMB 0.25 (including tax) per share for the year ended 2005.

During the year, the Group further consolidated its leading position in the industry in the PRC. With profound understanding of the telecommunications industry and telecommunications service providers, the Group effectively mitigated the adverse impacts of the substantial decline in CDMA and PHS investments and achieved strong sales for NGN, fixed line intelligent networks, IPTV and GoTa associated products and maintained its leading position amid keen market competition.

Mr. Hou Weigui, Chairman of ZTE, said, "Wireless communications business remains as our main income source. We made progress with our TD-SCDMA, CDMA2000 and WCDMA systems during the year to attain leading industry standards. With products capable of satisfying massive 3G commercial applications, we have laid solid foundations and are fully prepared for the launch of the 3G network in China. We also recorded growth in delivery of our GSM products. In addition to selling to traditional markets such as Africa and South Asia, we accomplished breakthroughs in the scale of operations in Eastern Europe and Central America and progress was made in establishing a presence in South America."

The Group´s international business maintained rapid growth in 2005 with sales revenue rising 68.3% to RMB7,701.6 million from RMB4,575.6 million in 2004. Significant progress was achieved in the Group´s efforts to build regional platforms around the globe with coverage of all major markets. As a result of outstanding market development efforts, the Group made inroads in the mainstream and multinational carrier market, forging business partnerships with carriers including France Telecom and Hutchison Telecom in relation to strategic products of the Group such as corporate systems and handsets. While such partnerships have strong development potential in their own right, they also opened up opportunities for the introduction of other products of the Group to markets in developed countries.

Mr. Hou concluded, "Looking ahead, the steady growth of the global telecommunications industry is expected to represent development opportunities to the Group. To thrive amid intense competition worldwide, in addition to consolidating our presence in emerging markets, we will seek to explore markets in developed countries as well as opportunities in the market for multinational carriers. As for the local market, we will capitalize fully on the strategic opportunities presented by 3G to achieve a balanced geographical business presence. Moreover, the Group will strengthen and expedite research and development and actively recruit high-caliber people from around the world. Driven by 3G developments in the domestic market and our international business expansion, we will assure sound returns for our shareholders as well as the society in the year ahead."

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

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