ZTE Announces 1H 2011 Preliminary Earnings Report
Revenue up 21.6 percent year-on-year
August 10, 2011, 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 and network solutions, today announced a 21.6 percent increase in operating revenue to RMB 37.35 billion in the six months ending June 30, 2011.
In the first half of 2011, the company‘s net profit was RMB 768.52 million, a decrease of 12.4 percent compared with to same period last year. The fall in profit is due to ZTE’s market share expansion strategy, a change in product structure and pending software VAT refund subsidies.
ZTE’s revenue from international markets increased by 36.4 percent year-on-year to RMB 20.81 million, accounting for 55.7 percent of the company’s operating revenue.
ZTE’s wireless products contract revenue increased substantially in the interim period. The company also achieved a leading position in key wireline product fields such as PTN, FTTX, MASN and DSLAM.
ZTE adopted an aggressive approach as part of a critical stage of gaining access to the key smart terminal market. The company shipped 60 million terminal products, including 35 million smartphones in the first six months of the year. This is a 400 percent increase year-on-year in smart terminal sales. Consequently, operating revenue for the company’s handset products as a percentage of total operating revenue increased to 30 percent from 25.4 percent in the same period last year. Overall gross profit margin for handset products declined to 19.6 percent from 22.7 percent. In addition, the company also has invested strategically in telecommunications services, such as cloud computing and the Internet of Things. ZTE also set up an internal venture capital fund to seek market growth opportunities.
Looking ahead, ZTE will leverage the opportunity brought by domestic investment, global broadband network construction and wireless network upgrades, and will seek to maintain a positive balance between scale and profit. This will be accomplished with the fundamental aim of sustaining stable growth in business scale. The company will also improve its operating efficiency and strive to contain costs.
About ZTE
ZTE is a publicly-listed global provider of telecommunications equipment and network solutions with the most comprehensive product range covering virtually every sector of the wireline, wireless, service and terminals markets. The company delivers innovative, custom-made products and services to over 500 operators in more than 140 countries, helping them to meet the changing needs of their customers while achieving continued revenue growth. ZTE’s 2010 revenue led the industry with a 21% increase to USD10.609 billion. ZTE commits 10 percent of its revenue to research and development and takes a leading role in a wide range of international bodies developing emerging telecoms standards. A company with sound corporate social responsibility (CSR) initiatives, ZTE is a member of the UN Global Compact. ZTE is China’s only listed telecom manufacturer, publicly traded on both the Hong Kong and Shenzhen Stock Exchanges (H share stock code: 0763.HK / A share stock code: 000063.SZ). For more information, please visit www.zte.com.cn.
