ZTE 6-month profit rises 29.8% on higher mobile network and devices sales

Issued by Blain Communications for ZTE Corporation South Africa
Johannesburg, 08 Sep 2017

Liu Haishi, Chairman and CEO ZTE South Africa.

ZTE South Africa has announced that the ZTE (0763.HK / 000063.SZ), a major international provider of telecommunications, enterprise and consumer technology solutions for the mobile internet, reports a 29.8% surge in first-half net profit, powered by growth in the company's mobile network and smartphone businesses.

Net profit attributable to holders of ordinary shares of the listed company jumped to RMB 2.29 billion in the first six months, according to ZTE's results announcement today. Basic earnings per share increased to RMB 0.55. First-half revenue increased 13.1% to RMB 54.01 billion.

ZTE's R&D spending increased to RMB 6.68 billion in the first half, or 12.4% of revenue. This takes the company's R&D spending past RMB 10 billion in the past 12 months, as ZTE focuses on innovations in 5G, IOT and cloud computing to sharpen its overall competitiveness. In March 2017, the company was ranked No. 1 in the World Intellectual Property Organisation (WIPO)'s latest annual list for patent applications, reflecting the company's increased focus on research and development of next-generation technologies.

In the Carrier Networks division, accounting for 59.9% of revenue, ZTE is further strengthening its investment in key 5G technologies including wireless and 5G bearer networks. Underpinned by its leadership in 5G technologies, the company is committed to helping carriers deploy the latest network innovations and smoothly evolve from 4.5G networks, supporting the ongoing digital transformation of operators globally.

In Wireless Networks, ZTE's LTE portfolio has been named the only 'Leader' in the latest report issued by Global Data. By virtue of its sustained innovations and leadership in 4G and 5G technologies, the company has made steady achievements in global markets, and has deployed over 60 Pre5G networks as well as 240 SDN and NFV networks globally.

In Wireline Networks, ZTE achieved breakthroughs in network virtualisation, 100G optical transmission, and next-generation optical access fields. ZTE has forged extensive partnerships with telecoms operators from Germany, Spain, Japan, Russia, Thailand and China in the field of fixed and bearer networks, thereby helping global operators, government and enterprises to realise the network transformation and value enhancement.

ZTE achieved a year-on-year growth of 41.7% in self-developed chip shipments in the first half of 2017. In the first half, ZTE's Pre5G multi-mode software baseband chips were shipped to top international operators, and the company's IOT chips have been put into interoperability tests with different vendors. ZTE takes the lead in applying VR broadcasting in large-scale social activities, and is the first to launch MaaP-based solutions in the industry. It completes the RCS interoperability tests with the three major telecoms operators in China, thereby speeding up the RCS commercial deployments in China. Also, the company launches uSmartAI, an intelligence robot solution.

In the Consumer division, ZTE posted growth in both operating revenue and gross profit. The company's handset sales channels cover over 160 countries and regions. ZTE is ranked fourth in the US smartphone market and ranks among the top five in countries including Australia, Germany, Canada and Spain. ZTE's terminal STB shipment gained a year-on-year increase of 15% in first-half, exceeding the annual shipments in 2016.

ZTE established its domestic Enterprise Business operations in 2017, which will focus on rail transit deployment, financing and government businesses. It will keep the first place in the domestic rail transit integrated communication market.

The company will keep on strengthening its investment in key technologies and important markets while strengthening in compliance management, in-house control and benefit of employees and shareholders. In April, the company issued stock options to more than 2,000 employees to boost incentives.

Liu Haishi, Chairman and CEO ZTE South Africa, says that "Looking forward, the company will be committed to becoming a pioneer in 5G technologies, taking the lead in standardisation, technical perspective and commercialisation. In future, the company will unswervingly strengthen its investment in two aspects - key technologies like 5G wireless and 5G bearer networks, and will focus on key markets and customers."

ZTE South Africa

ZTE South Africa is a subsidiary of ZTE Corporation, a leading global provider of telecommunications equipment and network solutions. ZTE South Africa is dedicated to making quality communications technology accessible to all. The company draws on more than 25 years of experience and research investment to deliver smart, affordable, quality choices for infrastructure and mobile data device customers nationwide.

For more information, visit www.zte.com.cn.

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.

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