Resurgence road ZTE three quarter net profit revenue "double down"


Resurgence road ZTE three quarter net profit revenue

On the evening of Oct. 25, ZTE (SZ. 000063) released its third quarter financial report as of Sept. 30, 2018. During the reporting period, ZTE's revenue fell 14.34% to 19.3 billion yuan, compared with the same period last year; ZTE's net profit in the third quarter was 564 million yuan, down 65%.

In the first three quarters of this year, ZTE's total operating income was 58.766 billion yuan, down 23.26 percent from the previous year, and its loss reached 7.26 billion yuan, down 285.92 percent from the previous year.

For the reasons for the decline in performance, the company said on the one hand, the United States to the company's $1 billion fines and suspended additional $400 million fines caused by the United States, on the other hand, the Department of Commerce issued a ban before the company for a period of time the main business activities can not be carried out, resulting in operating losses and anticipated losses.

Because of the huge impact of prohibitions and fines, the resurgence of ZTE is long. According to ZTE's forecast for fiscal year 2018, it is expected to lose 6.2 billion yuan to 7.2 billion yuan in the whole year, and make a profit of 4.568 billion yuan in the same period last year, down 235.72% - 257.61% from the same period last year.

As of September 30, 2018, ZTE's currency holdings had fallen from 33.4 billion yuan at the end of last year to 15.5 billion yuan.

In terms of R & D, ZTE's R & D cost in the third quarter was 3 billion 465 million yuan, up 37.47% from the same period last year. These costs are mainly invested in 5G wireless, core network, bearer, access, chip and other core technology areas.

After the sanctions, technology such as 5G is seen as an important basis for ZTE's subsequent business revival.

Xu Ziyang, the new CEO, said at a previous interim shareholder meeting that ZTE's production has returned to normal, research and development progress has now caught up with the target set at the beginning of the year, 5G testing progress fully catch up with the national testing progress, after-sales service capacity fully restored.

"The domestic business is recovering well, the international business has been affected by the rejection order resulting in the loss of orders, most of the current international operators still maintain confidence and patience in ZTE, ZTE is gradually conducting point-to-point negotiations with key operators around the world, feedback is good." Xu Ziyang said that ZTE plans to return to normal growth track in 2019 on the basis of business recovery in 2018, grasp the 5G large-scale commercial opportunities and achieve rapid development in 2020.

But according to Dell'Oro Group, the industry research firm, Ericsson's mobile network market share was rising in the second quarter among global device makers, while Samsung Electronics jumped to fourth place. Ericsson and Samsung, the second-largest maker of wireless access network (RAN) equipment, benefited from growing U.S. demand, and ZTE fell to fifth place after a blow in April.

Dell 'Oro network device data is generally recognized as the benchmark for market share in the industry. But it refused to disclose the actual income figures.

But as domestic 5G spectrum resources are about to be determined, the 5G commercial market will be further opened.

Reporters noted that in mid-August, ZTE announced the completion of the IMT-2020 (5G) propulsion group phase III NSA 3.5GHz field test, the peak cell throughput nearly 10 Gbps, all test cases passed one time. So far, ZTE has completed the NSA 3.5GHz laboratory and field test cases, the next step will be to carry out the NSA 4.9GHz and SA test validation.

ZTE, a landing partner, has provided 5G end-to-end solutions for China Telecom's Xiong'an New Area, enabling the country's first 5G autopilot docking test, the first 5G water coverage test and panoramic live broadcast. At the same time, the first NB-IoT-based shared air-conditioning standard in the Internet of Things era was issued jointly with Haier Air-conditioning and other members of the Shared Appliances Ecological Alliance.

25, ZTE closed at 17.44 yuan per share, up 0.87%. At present, ZTE has a market value of 73 billion 120 million yuan.


Waonews is a news media from China, with hundreds of translations, rolling updates China News, hoping to get the likes of foreign netizens