Financial Results - ZTE Corporation reported its unaudited financial results for the six months ended June 30, 2023[1]. - The financial report was prepared in accordance with Chinese accounting standards and has not been audited[2]. - The board of directors guarantees the accuracy and completeness of the financial report, with no false statements or significant omissions[2]. - The company’s operating revenue for the first half of 2023 was 60,704,794 thousand, representing a year-on-year increase of 1.48%[23]. - Net profit attributable to ordinary shareholders was 5,472,153 thousand, reflecting a significant growth of 19.85% compared to the same period last year[23]. - The company reported a basic earnings per share for the first half of 2023 was 1.15, up 19.79% from 0.96 in the same period of 2022[23]. - The company’s total revenue for the first half of 2023 reached CNY 60.7 billion, representing a year-on-year growth of 1.48%[40]. - The company’s total assets amounted to RMB 186,187,171 thousand as of June 30, 2023, compared to RMB 180,953,574 thousand at the end of 2022[172]. - The company’s total liabilities as of June 30, 2023, amounted to RMB 122,091,375 thousand, a slight increase from RMB 121,410,351 thousand at the end of 2022[175]. Profit Distribution - The company will not distribute profits or convert capital reserves into share capital for the mid-year of 2023[2]. - The company did not make any adjustments to its profit distribution policy during the reporting period[111]. - No profit distribution or capital reserve transfer to increase share capital will occur in the mid-2023 period[111]. - The company distributed a cash dividend of 4 RMB per 10 shares, totaling 1,895,849,847.2 RMB (including tax) based on the total issued share capital of 4,739,624,618 shares as of the dividend record date[111]. - The cumulative cash profit distribution from 2020 to 2022 amounted to 4.36 billion RMB, representing 68.34% of the average annual net profit attributable to ordinary shareholders of 6.38 billion RMB over the last three years[111]. Research and Development - The company has focused on R&D investments to enhance key technologies and product competitiveness, particularly in the areas of 5G and digital transformation[27]. - Research and development (R&D) expenses amounted to CNY 12,791,032 thousand, a 26.00% increase year-on-year, accounting for 21.07% of total revenue[54]. - The company is focusing on AI infrastructure, investing in platforms that support large model training to enhance its competitive edge in the digital economy[48]. - The company plans to invest heavily in R&D for advanced technologies such as 5G-Advanced, 6G, and AI models, aiming to strengthen its information infrastructure[90]. Market Expansion and Product Development - The company is actively pursuing market expansion in the 5G private network sector, targeting industries that require dedicated wireless networks isolated from public networks[19]. - The company aims to enhance its Hyper-Edge Computing (HEC) capabilities by integrating computing units into existing network access devices, allowing for flexible deployment of edge computing applications[16]. - ZTE is focusing on the development of its Fiber To The Room (FTTR) technology, which provides gigabit coverage throughout homes by connecting fiber directly to various indoor access points[16]. - The company is expanding its product offerings in the area of cloud-based solutions, including the Virtualization Set Top Box (vSTB), which reduces the need for hardware upgrades by processing services in the cloud[16]. - The company launched the R6500 high-performance server, supporting up to 20 heterogeneous computing acceleration engines, catering to diverse computing scenarios such as AI and high-performance computing[32]. Financial Health and Cash Flow - Net cash flow from operating activities reached 6,425,897 thousand, marking an impressive increase of 83.62% year-on-year[23]. - Cash and cash equivalents as of June 30, 2023, amounted to CNY 54,946,298 thousand, with a net increase of 57.16% compared to the same period last year[59]. - The company’s total equity attributable to ordinary shareholders of the parent company increased to RMB 63,567,319 thousand from RMB 58,641,187 thousand at the end of 2022, reflecting a growth of 8.25%[175]. - The company’s short-term borrowings decreased to RMB 8,842,030 thousand from RMB 9,962,315 thousand at the end of 2022, a reduction of 11.25%[174]. Legal Matters - ZTE Corporation is involved in multiple legal cases, including a primary case against a Brazilian company for approximately 31.22 million Brazilian Reais (about 47.03 million RMB) in damages, with a court ruling in favor of ZTE in 2016[147]. - ZTE's legal disputes highlight the complexities of its operations in international markets, particularly in Brazil and China[147][148][149]. - The company has received legal opinions indicating that these ongoing cases are not expected to have a significant adverse impact on its financial condition or operational results[148][149][150]. Corporate Governance - The board of directors consists of nine members, including three executive directors and three independent non-executive directors, ensuring compliance with relevant regulations[112]. - The company has established long-term incentive mechanisms to support its long-term development[98]. - The company’s directors and supervisors confirmed compliance with the "Standard Code" during the reporting period[118]. - The company has not conducted any repurchase transactions among the top 10 shareholders during the reporting period[100]. Environmental and Social Responsibility - The company is committed to sustainable development and actively practices corporate social responsibility[137]. - In the first half of 2023, the total investment in environmental governance and protection by the group was approximately 32.11 million yuan, aimed at handling waste gas, wastewater, hazardous waste, and garbage, as well as installing environmental monitoring equipment[143]. - The group provided economic assistance to 1,100 underprivileged high school students across 12 schools in five provinces, including Gansu and Qinghai, through its educational support programs[145].

Financial Performance - The net profit attributable to ordinary shareholders for Q1 2023 was RMB 2,454,518,000, representing a 25.71% increase compared to RMB 1,952,471,000 in Q1 2022[3] - The net profit for Q1 2023 was RMB 2,642,269,000, which is a 19.20% increase from RMB 2,216,659,000 in the same quarter last year[4] - Net profit for Q1 2023 was RMB 2,613,789 thousand, representing a 28.5% increase from RMB 2,034,655 thousand in Q1 2022[21] - Basic earnings per share for Q1 2023 were RMB 0.56, up 19.15% from RMB 0.47 in Q1 2022[4] - Basic and diluted earnings per share for Q1 2023 were both RMB 0.56, up from RMB 0.47 in Q1 2022, indicating strong earnings growth[21] Revenue and Cash Flow - Revenue for Q1 2023 was RMB 29,142,882,000, up 4.34% from RMB 27,930,271,000 in Q1 2022[4] - The company's operating revenue for Q1 2023 reached RMB 29,142,882 thousand, a 7.5% increase compared to RMB 27,930,271 thousand in Q1 2022[20] - The operating cash flow for the period was RMB 2,325,584,000, a significant increase of 95.89% from RMB 1,187,207,000 in the same period last year[3] - Cash flow from operating activities generated RMB 2,325,584 thousand in Q1 2023, compared to RMB 1,187,207 thousand in Q1 2022, showing a significant improvement[22] Assets and Liabilities - Total assets as of March 31, 2023, were RMB 183,993,400,000, reflecting a 1.68% increase from RMB 180,953,574,000 at the end of 2022[3] - The total assets as of March 31, 2023, amounted to RMB 183,993,400 thousand, an increase from RMB 180,953,574 thousand as of December 31, 2022[18] - The total liabilities as of March 31, 2023, were RMB 122,069,942 thousand, compared to RMB 121,410,351 thousand at the end of 2022[19] - The company's cash and cash equivalents increased to RMB 63,435,639 thousand as of March 31, 2023, from RMB 56,346,367 thousand as of December 31, 2022[18] - Cash and cash equivalents at the end of Q1 2023 totaled RMB 49,744,372 thousand, compared to RMB 44,477,507 thousand at the end of Q1 2022, reflecting a healthy liquidity position[23] Shareholder Information - The number of shareholders as of March 31, 2023, was 354,503, with 354,195 holding A-shares and 308 holding H-shares[15] - The largest shareholder, ZTE Corporation, held 20.29% of the shares, amounting to 958,940,400 A-shares[14] Expenses and Financial Management - The company reported a significant increase in financial expenses, totaling RMB (181,535,000), a 442.03% rise due to increased net interest income and foreign exchange gains[12] - The company reported a significant foreign exchange loss of RMB (85,359) thousand in Q1 2023, compared to a gain of RMB 148,851 thousand in Q1 2022, reflecting increased currency volatility[13] - The net cash flow from financing activities decreased by 32.46% to RMB 5,516,541 thousand in Q1 2023 from RMB 8,167,826 thousand in Q1 2022, mainly due to a reduction in net borrowings[13] - The company’s financing activities generated a net cash inflow of RMB 5,516,541 thousand in Q1 2023, compared to RMB 8,167,826 thousand in Q1 2022, indicating a strategic approach to capital management[23] Research and Development - Research and development expenses increased to RMB 5,933,282 thousand in Q1 2023, up 26.2% from RMB 4,698,227 thousand in Q1 2022, reflecting a strong focus on innovation[20] - The company plans to expand its market presence and invest in new technologies, as indicated by the increase in R&D spending[20] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[2] Inventory and Cost Management - The company’s inventory as of March 31, 2023, was RMB 45,934,056 thousand, slightly up from RMB 45,234,990 thousand at the end of 2022[18] - The company reported a gross profit margin of approximately 44.5% in Q1 2023, compared to 38.0% in Q1 2022, indicating improved cost management[20]

Financial Performance - The net profit attributable to ordinary shareholders of the listed company for 2022 was 8,080.3 million, representing an increase of 18.60% compared to 6,812.9 million in 2021[21]. - The net profit excluding non-recurring gains and losses was 6,166.9 million, up 86.54% from 3,305.9 million in the previous year[21]. - Total assets increased by 7.22% to 180,953.6 million from 168,763.4 million in 2021[21]. - The basic earnings per share rose to 1.71, a 16.33% increase from 1.47 in 2021[21]. - Operating revenue for 2022 was 122,954.4 million, reflecting a 7.36% increase from 114,521.6 million in 2021[23]. - The net cash flow from operating activities decreased by 51.81% to 7,577.7 million from 15,723.5 million in 2021[23]. - The total liabilities amounted to 121,410.4 million, a 5.14% increase from 115,475.8 million in 2021[23]. - The company achieved a revenue of CNY 122.95 billion in 2022, representing a year-on-year growth of 7.36%[43]. - Net profit attributable to ordinary shareholders was CNY 8.08 billion, an increase of 18.60% year-on-year, while the net profit excluding non-recurring gains and losses rose by 86.54% to CNY 6.17 billion[43]. - The operating revenue from the domestic market was 85,246.3 million, with a year-on-year increase of 9.20%[54]. Dividend and Shareholder Information - The company plans to distribute a cash dividend of RMB 4 per 10 shares to all shareholders, subject to approval at the shareholders' meeting[2]. - The board proposed a cash dividend of 4 yuan per 10 shares for the 2022 fiscal year, subject to shareholder approval[87]. - The company distributed a total of 4.36 billion CNY in cash dividends from 2020 to 2022, representing 68.34% of the average annual net profit attributable to shareholders of 6.38 billion CNY over the last three years, exceeding the 30% requirement[130]. - The company will complete the dividend distribution for the 2022 fiscal year by August 31, 2023, based on the timing of the shareholders' meeting[130]. Corporate Governance - The report indicates a commitment to corporate governance and social responsibility, ensuring transparency and accountability[3]. - The company adheres to corporate governance regulations and has established a governance structure that ensures equal rights for all shareholders[120]. - The board consists of nine members, including three executive directors, two non-executive directors, and three independent non-executive directors, ensuring compliance with listing rules[137]. - The company ensures that directors avoid conflicts of interest during decision-making processes[146]. - The company has a multi-layered cultural system aimed at fostering a harmonious and responsible corporate atmosphere[121]. - The company has implemented a comprehensive compliance management system to mitigate risks associated with international operations[115]. Risk Management - The company emphasizes the importance of risk management, detailing potential operational risks in the report[2]. - The company has strengthened its foreign exchange risk management through business strategy guidance, internal settlement management, financing structure design, and foreign exchange derivatives hedging[94]. - The company has established a risk control and information disclosure system for derivative investments to effectively regulate derivative trading behavior and control associated risks[97]. - The company aims to reduce the impact of exchange rate and interest rate fluctuations on its assets, liabilities, and profitability through hedging transactions[98]. Research and Development - The company has maintained a strong focus on R&D, particularly in core technologies, to enhance product competitiveness and align with global digitalization and low-carbon development trends[28]. - The company is investing in advanced technologies such as heterogeneous computing and distributed databases to optimize performance and reduce costs[5]. - The company is investing 500 million in research and development for new technologies in telecommunications[175]. - Research and development (R&D) expenditure amounted to 21,602.3 million, a 14.88% increase, representing 17.57% of operating revenue, up by 1.15 percentage points[59]. Market Expansion and Strategy - The company is focusing on new product development, particularly in 5G technology and AI solutions, to enhance its market position[5]. - The company aims to enhance market share in the domestic market and improve customer service capabilities in 2023[16]. - The company is focusing on high-value industries such as internet, finance, and transportation for future growth[16]. - The company is actively expanding its market presence in Europe and Southeast Asia by collaborating with major operators to establish 5G demonstration networks[48]. - The company plans to expand its market presence in Southeast Asia, targeting a 20% market share by 2025[175]. Technological Innovation - The company is focusing on innovation in its consumer business, particularly in mobile imaging and display experiences, while expanding smart home applications[113]. - The company launched the new UniSite NEO solution, which includes the OmniUBR product and the new generation 5 series AAU, significantly reducing equipment size, weight, and power consumption while supporting multi-band and high bandwidth[31]. - The company achieved a global shipment of over 240,000 servers in 2022, supporting digital transformation across various industries[33]. - The company’s Common Core solution reduces network complexity and construction costs by over 40%, while improving delivery speed by 30%[31]. Employee and Workforce Information - The company reported a total employee count of 74,811 as of December 31, 2022, with total employee compensation amounting to approximately 27.7 billion[106]. - The group has 36,300 R&D personnel, representing 48.5% of the total workforce[197]. - Female employees account for approximately 24.0% of the total workforce, with 17,936 women employed[200]. - The number of employees with a master's degree is 28,839, making up 38.5% of the total[200]. International Operations - The company operates in over 100 countries, facing various country-specific risks including legal compliance, taxation, and political stability[115]. - The company is exposed to foreign exchange risks due to sales and procurement in currencies other than RMB, and is enhancing its foreign exchange risk management strategies[117]. Awards and Recognition - The company won the "Most Innovative Network Slicing Case" award at the 2022 Network X conference for its 5G slicing solution, which supports flexible slicing granularity from 5 Gbps to 10 Mbps[32].

Financial Performance - Net profit attributable to ordinary shareholders increased by 27.05% to RMB 2,254,165 thousand for Q3 2022[6] - Operating revenue for Q3 2022 was RMB 32,740,713 thousand, reflecting a year-on-year increase of 6.46%[6] - Basic earnings per share rose by 26.32% to RMB 0.48 for Q3 2022[6] - The company reported a net profit of RMB 6,819,991 thousand for the first three quarters of 2022, up 16.52% year-on-year[6] - The company's total revenue for 2022 reached RMB 92,559,013 thousand, an increase from RMB 83,825,169 thousand in 2021, representing a growth of approximately 10.4%[25] - Net profit attributable to ordinary shareholders of the parent company for 2022 was RMB 6,819,991 thousand, up from RMB 5,852,907 thousand in 2021, reflecting an increase of approximately 16.5%[26] - Total comprehensive income for 2022 was RMB 6,652,457 thousand, compared to RMB 6,402,121 thousand in 2021, representing an increase of about 3.9%[26] - The company's total revenue for Q3 2022 was RMB 32,740,713 thousand, a 6.0% decrease from RMB 34,661,675 thousand in Q3 2021[27] - Operating profit for Q3 2022 was RMB 2,287,915 thousand, compared to RMB 3,381,524 thousand in Q3 2021, reflecting a decline of 32.4%[27] - Net profit attributable to shareholders of the parent company for Q3 2022 was RMB 2,254,165 thousand, down from RMB 3,184,662 thousand in Q3 2021, a decrease of 29.1%[27] Assets and Liabilities - Total assets increased by 7.35% to RMB 181,163,386 thousand compared to the end of the previous year[4] - The company's total liabilities as of September 30, 2022, amounted to RMB 122,694,387 thousand, compared to RMB 115,475,765 thousand in 2021, showing an increase of about 6.5%[24] - The total equity attributable to shareholders reached RMB 58,468,999 thousand as of September 30, 2022, compared to RMB 53,287,660 thousand in 2021, marking an increase of approximately 9.5%[24] - The company’s total equity attributable to ordinary shareholders increased by 11.32% to RMB 57,310,985 thousand[4] - The total share capital increased slightly by 0.11% to 4,736,113 thousand shares[4] Cash Flow - Cash flow from operating activities decreased by 94.61% to RMB 223,381 thousand for Q3 2022[6] - Operating cash flow decreased by 66.67% to 3,723,015 from 11,171,178, mainly due to increased cash payments for goods and services[12] - The company reported a net cash flow from operating activities of RMB 3,723,015 thousand for the first nine months of 2022, compared to RMB 11,171,178 thousand for the same period in 2021, a decrease of 66.7%[29] - Cash inflow from financing activities totaled RMB 102,234,232, a significant increase from RMB 44,234,729 in the previous year[30] - The net cash flow from financing activities was RMB 119,102, indicating a substantial increase from RMB 10,600,787 in the previous year[30] - The company reported a net decrease in cash and cash equivalents of RMB 2,771,272, contrasting with an increase of RMB 10,064,295 in the previous year[30] - The ending balance of cash and cash equivalents was RMB 36,299,311, down from RMB 41,467,351 in the previous year[30] Investments - Total financial assets decreased by 64.84% to 478,481 from 1,360,697 due to the disposal of equity holdings by subsidiaries[10] - Investment income increased by 45.15% to 1,121,609 compared to 772,712, primarily from equity disposals by subsidiaries[11] - The total investment in securities amounts to 16,090.17 million RMB, with a year-end value of 142,970.07 million RMB, reflecting a loss of 88,771.61 million RMB during the reporting period[18] - The company has a 31.79% stake in Jiaxing Equity Investment Partnership, which includes investments in companies like Zhongjing Electronics and Huaheng Biotechnology[18] - The company holds a 25.83% stake in Suzhou Zhonghe Chunsheng No. 3 Investment Center, which includes investments in Anji Technology and Xinqi Microelectronics[19] Research and Development - Research and development expenses for 2022 were RMB 16,107,980 thousand, indicating a significant investment in innovation and technology[25] - Research and development expenses increased to RMB 5,956,480 thousand in Q3 2022, up from RMB 5,309,773 thousand in Q3 2021, representing a rise of 12.2%[27] Shareholder Information - The number of shareholders reached 455,767, with 455,457 being A-share shareholders[13] - The largest shareholder, ZTE Corporation, holds 21.28% of shares, totaling 1,005,840,400 shares[14] - The company holds 1,005,840,400 A shares and 2,038,000 H shares, with significant shareholders including ZTE Corporation and Hong Kong Central Clearing Limited[16] Risk Management - The company has established a risk control system for derivative investments to mitigate market, liquidity, credit, operational, and legal risks[21] - The company’s derivative investment approval board meeting was disclosed on March 16, 2021, with no related party transactions involved[21]

Financial Reporting - The company reported a half-year financial report for the period ending June 30, 2022, prepared in accordance with Chinese accounting standards and unaudited[3]. - No profit distribution or capital reserve fund conversion to share capital will be conducted for the mid-year report[3]. - The company emphasizes the importance of accurate and complete financial reporting, with key executives guaranteeing the report's integrity[3]. - The board of directors has approved the report, with specific members delegating voting rights due to work commitments[3]. - The company has not made any substantial commitments regarding future plans, urging investors to be aware of investment risks[3]. Revenue and Profitability - ZTE Corporation reported a significant increase in revenue, achieving a total of 75.3 billion CNY for the first half of 2022, representing a year-on-year growth of 12.5%[19]. - Operating revenue for the first half of 2022 was RMB 59,818,300 thousand, representing a growth of 12.71% year-on-year[24]. - Net profit attributable to shareholders for the first half of 2022 was RMB 4,565,826 thousand, an increase of 11.95% compared to the same period in 2021[24]. - Basic earnings per share for the first half of 2022 was RMB 0.96, up 9.09% from RMB 0.88 in the previous year[24]. - The company reported a total profit for the first half of 2022 was RMB 5,211,709 thousand, a decrease of 5.7% from RMB 5,526,976 thousand in the first half of 2021[180]. Market Expansion and Product Development - The company is focusing on the development of new products, including the UBR series that supports multi-band operations for various mobile network standards[8]. - The introduction of the PowerPilot solution aims to enhance energy efficiency in 5G applications[8]. - The company is expanding its market presence through the integration of cloud and network resources, promoting a new type of information infrastructure[8]. - ZTE is focusing on market expansion, particularly in the Asia-Pacific region, aiming to increase its market share by 15% in this area by the end of 2022[19]. - The company has launched a new series of products in the optical transmission network segment, which is anticipated to generate 8 billion CNY in sales by the end of 2022[19]. Research and Development - The company is investing heavily in R&D, with an allocation of 12 billion CNY for new product development and technological advancements in 2022[19]. - The company has over 26 years of R&D experience in the chip sector, enhancing its full-process design capabilities, which supports sustained product competitiveness[31]. - R&D investment for the first half of 2022 reached 10,151,500 thousand RMB, an increase of 14.56% compared to 8,861,406 thousand RMB in the same period of 2021[49]. - The proportion of R&D investment to operating revenue rose to 16.97%, up 0.27 percentage points from 16.70% in the previous year[49]. Financial Position and Assets - Total assets as of June 30, 2022, reached RMB 179,724,762 thousand, an increase of 6.50% compared to the end of 2021[24]. - The company’s total equity attributable to shareholders increased to RMB 54,954,923 thousand, a rise of 6.75% from the end of 2021[24]. - The company’s asset-liability ratio was 68.44%, slightly up by 0.02 percentage points compared to the end of 2021[24]. - Cash and cash equivalents at the end of the reporting period were 44,081,165 thousand RMB, up 9.15% from 40,384,110 thousand RMB in the previous year[54]. Operational Efficiency and Cost Management - The company is implementing a new strategy focused on enhancing customer experience through intelligent automation, which is expected to reduce operational costs by 15%[19]. - The overall gross margin for the first half of 2022 was 37.04%, an increase of 0.90 percentage points from the previous year[48]. - The gross margin for the operator network segment was 45.31%, up 2.48 percentage points year-on-year, attributed to changes in revenue structure and cost optimization[48]. Legal and Compliance Matters - The company is engaged in a legal dispute with China Twenty Metallurgical Group, claiming overdue payments and interest totaling 12.31 million RMB, with counterclaims increasing to 72.55 million RMB due to project delays and quality issues[120]. - The company’s independent non-executive directors provided a special statement regarding related party transactions and external guarantees, confirming compliance with regulations[140]. - The company has implemented a comprehensive compliance management system to mitigate risks associated with international operations[85]. Environmental and Social Responsibility - The company has taken effective measures to ensure compliance with environmental protection laws and regulations[111]. - ZTE has committed to continuous environmental monitoring through qualified third-party organizations[115]. - The company actively engages in public welfare projects, providing financial support to 50 economically disadvantaged high school students in Guizhou[116]. Shareholder and Governance Matters - The company distributed a total of RMB 1,420,213,433.4 in cash dividends to shareholders, amounting to RMB 3 per 10 shares, based on a total issued share capital of 4,734,044,778 shares[94]. - The company held its first extraordinary general meeting on March 30, 2022, with shareholders representing 32.21% of the voting shares present[91]. - The company’s board and supervisory board confirmed that there were no significant accounting errors requiring restatement during the reporting period[144].

Financial Performance - The company's operating revenue for Q1 2022 was RMB 27,930,271 thousand, representing a 6.43% increase compared to RMB 26,241,647 thousand in Q1 2021[4] - Net profit attributable to shareholders was RMB 2,216,659 thousand, a 1.60% increase from RMB 2,181,649 thousand in the same period last year[4] - The net profit after deducting non-recurring gains and losses surged by 117.13% to RMB 1,952,471 thousand from RMB 899,213 thousand year-on-year[4] - The company's total comprehensive income for 2022 was RMB 1,889,930 thousand, down from RMB 1,932,408 thousand in 2021, reflecting a decrease of approximately 2.2%[38] - The net cash flow from operating activities for 2022 was RMB 1,187,207 thousand, a decrease from RMB 2,388,242 thousand in 2021[39] Cash Flow - The net cash flow from operating activities decreased by 50.29% to RMB 1,187,207 thousand compared to RMB 2,388,242 thousand in the previous year[4] - Cash inflow from operating activities for Q1 2022 was RMB 33,652,649 thousand, reflecting a growth of 26.3% compared to RMB 26,646,101 thousand in Q1 2021[39] - Cash inflow from financing activities for 2022 was RMB 27,656,796 thousand, a substantial increase from RMB 9,769,301 thousand in 2021[40] - The net cash flow from financing activities for Q1 2022 was RMB 9,422,883 thousand, compared to RMB 503,073 thousand in Q1 2021, showing a remarkable increase[40] Assets and Liabilities - Total assets as of March 31, 2022, were RMB 179,243,960 thousand, reflecting a 6.21% increase from RMB 168,763,425 thousand at the end of 2021[4] - The total liabilities as of March 31, 2022, amounted to RMB 123,928,190 thousand, up from RMB 115,475,765 thousand at the end of 2021, reflecting an increase of approximately 7.5%[36] - The company's total equity increased to RMB 55,315,770 thousand in 2022 from RMB 47,605,571 thousand in 2021, marking a growth of about 16.2%[36] Shareholder Information - The number of shareholders reached 547,014 as of March 31, 2022, with 546,709 being A-share shareholders[10] - The largest shareholder, ZTE Corporation, holds 21.29% of the shares, totaling 1,005,840,400 A-shares[11] Stock Options and Incentives - The 2017 stock option incentive plan granted 149.6012 million stock options to 1,996 individuals, with an adjusted exercise price of RMB 16.66 per share[16] - As of March 31, 2022, a total of 35,053,516 stock options were exercised from the 2017 stock option incentive plan, with 2,235,540 options remaining unexercised[17] - The company’s stock options incentive plan saw 3,020,362 options exercised during the reporting period, leaving 2,067,730 options unexercised as of the report disclosure date[18] Investments - The total investment in securities amounted to 136,660,000 RMB, with a fair value of 114,765,110 RMB, reflecting a loss of 21,718,550 RMB during the period[26] - The company holds 957,300 shares of Zhongjing Electronics, accounting for 0.16% of its total share capital[29] - The company holds 6,011,600 shares of Huaheng Biological, representing 5.55% of its total share capital[30] Financial Management - Financial expenses decreased by 85.98% to 53,076 due to exchange rate fluctuations[8] - The company has established risk control measures for derivative investments, including strict adherence to risk management systems and clear contract terms with trading banks[33] - The company has not made significant changes to its accounting policies for derivatives compared to the previous reporting period[34] Management Changes - The company appointed a new board of directors and senior management on March 30, 2022, with terms lasting until March 29, 2025[14] Legal Matters - The company has not experienced any significant litigation or arbitration matters during the reporting period[24] - The company’s litigation case from 2018 was resolved in its favor, with the court dismissing the claims against it[25]

Financial Performance - In 2021, the company achieved operating revenue of RMB 114.52 billion, a year-on-year increase of 12.9%, with domestic revenue of RMB 78.07 billion and international revenue of RMB 36.45 billion[19]. - The net profit attributable to shareholders of the listed company was RMB 6.81 billion, representing a year-on-year growth of 59.9%, with basic earnings per share of RMB 1.47[19]. - Total assets at the end of 2021 were RMB 168.76 billion, an increase of 12.03% compared to the end of 2020[23]. - Total liabilities at the end of 2021 were RMB 115.48 billion, up 10.49% from the end of 2020[23]. - The equity attributable to shareholders of the listed company increased by 18.91% to RMB 51.48 billion at the end of 2021[23]. - Operating revenue for 2021 reached RMB 114,521.6 million, an increase of 12.88% compared to 2020[24]. - Net profit attributable to shareholders was RMB 6,812.9 million, reflecting a growth of 59.93% year-over-year[24]. - The basic earnings per share (EPS) rose to RMB 1.47, a 59.78% increase from the previous year[24]. - The net cash flow from operating activities amounted to RMB 15,723.5 million, up 53.66% from 2020[24]. - The weighted average return on equity increased to 14.49%, up 4.56 percentage points from 2020[24]. Dividend Distribution - The company plans to distribute a cash dividend of 3 RMB per 10 shares to all shareholders, based on the total share capital as of the dividend record date[2]. - The proposed dividend distribution for 2021 is RMB 3 per 10 shares, amounting to a total cash dividend of no more than RMB 1.44 billion, subject to shareholder approval[140]. - The company distributed a total cash dividend of RMB 928 million for the 2020 fiscal year, with a total share capital of 4,637,709,675 shares at the time of distribution[144]. - Cumulative cash distributions from 2019 to 2021 accounted for 62.6% of the average distributable profit over the last three years, exceeding the 30% requirement set in the company's articles of association[144]. - The company will complete the dividend distribution for the 2021 fiscal year by August 31, 2022, at the latest[141]. Corporate Governance - The company emphasizes the importance of reading the risk factors outlined in the business outlook for 2022[2]. - The report highlights the company's governance and corporate responsibility practices[4]. - The company has established a compensation arrangement for its directors and senior management to cover potential economic losses incurred while performing their duties[21]. - The company respects the rights of stakeholders, including banks, employees, consumers, suppliers, and the community, and actively collaborates with them for sustainable development[23]. - The company adheres to governance regulations and has established a governance structure that ensures equal rights for all shareholders, particularly minority shareholders[130]. - The board of directors is responsible for the company's operational plans and investment strategies, with various committees established to enhance governance[132]. - The company has implemented a long-term incentive mechanism linked to performance, ensuring that senior management's compensation aligns with the company's strategic goals[132]. - The company has established independent financial management systems and operates separate bank accounts to maintain financial independence[135]. - The company actively reviews and updates its governance practices to align with best practices and regulatory standards[156]. Risk Management - The company has established a risk control system for derivative investments, addressing market, liquidity, credit, operational, and legal risks[94]. - The company utilized financial products for hedging derivative investments to enhance financial stability against exchange rate fluctuations[95]. - The company’s derivative investments are primarily based on foreign exchange income and expenditure budgets, ensuring sufficient funds for settlement[94]. - The company’s derivative investment transactions are conducted with reputable banks, minimizing counterparty credit risk[94]. - The group manages interest rate risk primarily from interest-bearing liabilities, utilizing total debt control and structured management to mitigate risks[128]. - The group employs internal credit management measures, including customer credit investigations and credit insurance, to manage customer credit risk effectively[129]. Research and Development - The company has over 26 years of R&D experience in the chip field, establishing industry-leading full-process design capabilities[37]. - The total R&D investment amounted to RMB 18,804 million, representing a 27.08% increase compared to RMB 14,797 million in 2020[72]. - The proportion of R&D investment to operating revenue rose to 16.42% in 2021, up by 1.83 percentage points from 14.59% in 2020[72]. - The number of R&D personnel increased to 33,422 in 2021, a growth of 5.28% from 31,747 in 2020, accounting for 46.0% of the total workforce[71]. Market Expansion and Product Development - The company plans to expand its market presence by investing in new infrastructure projects, including the establishment of data centers in western regions to balance digital resource distribution[8]. - A new product, PowerPilot, aimed at improving energy efficiency in 5G networks, is set to launch in Q2 2024, with anticipated cost savings of 20% for clients[9]. - The company is exploring strategic acquisitions to enhance its capabilities in mobile edge computing, with a budget allocation of $500 million for potential targets[9]. - The company aims to achieve carbon neutrality by 2030, aligning with global sustainability goals and enhancing its market competitiveness[8]. - The company is focusing on the development of 5G cloud-based PLC solutions to enhance computing power and scalability, addressing traditional PLC limitations[11]. Compliance and Legal Matters - The company is committed to compliance with relevant laws and regulations affecting its business operations, including those related to product safety and data protection[25]. - The compliance management committee oversees compliance matters, including export control and anti-bribery regulations[120]. - The company has implemented a comprehensive compliance management system to mitigate country-specific risks and ensure adherence to trade and tax regulations[125]. Investor Relations - The company held multiple investor meetings throughout 2021, including a conference call in May with 100 investors[44]. - The company plans to enhance communication with investors in the upcoming year to increase understanding and support from investors[139]. - The company maintains multiple formal communication channels with shareholders, including annual and quarterly reports, to ensure transparency[137]. Technology and Innovation - The company reported a significant increase in data throughput capabilities with 5G technology, achieving up to 1,000 times higher data rates compared to current standards[8]. - The integration of AI solutions is expected to enhance operational efficiency and customer engagement, contributing to a projected revenue growth of 15% in the next fiscal year[9]. - The introduction of the FlexE technology is projected to improve bandwidth efficiency by 40%, supporting the growing demands of 5G applications[9]. - The company is expanding its XR (Extended Reality) offerings, integrating AR, VR, and MR technologies to create immersive environments for users[11]. - The company’s AI-driven network energy-saving solution PowerPilot has been commercially deployed in over 900,000 sites globally, achieving double the energy-saving effect compared to traditional solutions[39].

Financial Performance - The company reported a half-year financial performance for the period ending June 30, 2021, with unaudited financial statements[2]. - ZTE Corporation reported a significant increase in revenue, achieving a total of CNY 75.3 billion for the first half of 2021, representing a year-on-year growth of 12.5%[11]. - The company’s net profit attributable to shareholders reached CNY 5.1 billion, marking a 15.8% increase compared to the same period last year[11]. - The company aims to achieve a revenue target of CNY 160 billion for the full year 2021, with a net profit margin goal of 7%[11]. - The company reported a net profit attributable to ordinary shareholders of RMB 2,112,429 thousand, representing a 134.16% increase compared to the same period last year[179]. - EBITDA for the reporting period was RMB 8,407,967 thousand, an increase of 48.29% year-on-year[179]. - The total revenue for the first half of 2021 reached RMB 63.33 billion, an increase from RMB 56.59 billion in the same period of 2020, representing a growth of approximately 11.5%[188]. - The company reported a total comprehensive income for the first half of 2021 was RMB 4,563,074 thousand, compared to RMB 2,207,876 thousand in the same period of 2020, marking an increase of 106.1%[184]. Research and Development - ZTE's R&D expenditure for the first half of 2021 was CNY 10.2 billion, accounting for 13.5% of total revenue, emphasizing its commitment to innovation and technology development[11]. - R&D investment for the first half of 2021 reached 8,861,406 thousand RMB, a year-on-year increase of 33.51% compared to 6,637,376 thousand RMB in the same period of 2020[34]. - The proportion of R&D investment to operating revenue increased to 16.70%, up 2.64 percentage points from 14.06% in the previous year[34]. - The company has applied for over 200 core patents related to its innovative research and development projects, enhancing its competitive edge in the market[17]. Market Expansion and Strategy - ZTE plans to expand its market presence in Europe and Asia, targeting a 20% increase in international sales by the end of 2022[11]. - The company is focusing on the development of AI and cloud computing solutions, with a projected investment of CNY 3 billion in these areas over the next two years[11]. - The company is exploring strategic partnerships and potential acquisitions to enhance its technology portfolio and market competitiveness[11]. - The company aims to enhance its market share in both domestic and international markets by investing in core technologies such as chips, algorithms, and network architecture[68]. Financial Stability and Risks - The company emphasizes the importance of accurate and complete financial reporting, with assurances from the chairman and financial director[2]. - The board of directors has outlined potential operational risks in the business outlook for the second half of 2021[2]. - The asset-liability ratio increased by 0.38 percentage points to 69.76% as of June 30, 2021, compared to 69.38% at the end of 2020[12]. - The company has implemented a comprehensive compliance management system to mitigate risks associated with international operations, including trade and tax policies[69]. Corporate Governance - The report includes a comprehensive overview of the company's governance and social responsibility initiatives[4]. - The company has complied with the Corporate Governance Code as per the Hong Kong Stock Exchange Listing Rules during the reporting period[77]. - The audit committee reviewed the financial statements for the six months ending June 30, 2021, in conjunction with management[77]. - The company has established a strict internal evaluation and regulatory mechanism for its derivative investments to enhance financial stability[54]. Environmental and Social Responsibility - The company is committed to green development and has implemented an ISO14001 environmental management system[97]. - ZTE Corporation's charity foundation signed a five-year agreement to donate 15 million RMB for educational assistance projects[103]. - The company has established an energy-saving and emission-reduction committee to manage and promote energy-saving initiatives[97]. - The company has implemented pollution control facilities including bag filters and paint mist purification systems, ensuring that exhaust emissions meet standards[100]. Shareholder and Stock Options - The company distributed a cash dividend of RMB 2 per 10 shares, totaling approximately RMB 927.54 million based on a total share capital of 4,637,709,675 shares[78]. - The stock option incentive plan from 2017 involved granting a total of 149.6 million stock options to 1,996 participants, with an initial exercise price of RMB 17.06 per share[79]. - The company confirmed that the exercise conditions for the third exercise period of the 2017 stock option incentive plan had been met[84]. - The management shareholding plan has been approved with a total fund of RMB 114,765,557, corresponding to 11,476,600 shares[95]. Legal Matters - The company faced a lawsuit requesting compensation of RMB 200 million, which was dismissed by the Guangdong High People's Court[105]. - The company is actively responding to legal challenges, including a counterclaim amounting to RMB 72.55 million related to construction delays and quality issues[106]. - The company has engaged legal counsel to address ongoing litigation, ensuring no significant adverse impact on its financial status[105]. - The company is committed to transparency regarding its legal and financial matters, as evidenced by its detailed disclosures in regulatory announcements[108].

Dividend Distribution - The company plans to distribute a cash dividend of RMB 2 per 10 shares to all shareholders, based on the total share capital as of the dividend record date[3]. - The cash dividend for 2020 is set at RMB 92,268.70 thousand, which accounts for 21.66% of the net profit attributable to ordinary shareholders[147]. - The cumulative cash distribution over the past three years is 242.59% of the average annual distributable profit, exceeding the requirement of at least 30%[145]. - The company has not made any adjustments or changes to its profit distribution policy during the year[145]. - The cash dividend distribution for 2019 was also RMB 2 per 10 shares, approved by the shareholders' meeting[146]. - The company plans to complete the dividend distribution by August 31, 2021, at the latest[144]. Financial Performance - The company achieved operating revenue of RMB 101.45 billion in 2020, representing a year-on-year growth of 11.81%[23]. - Net profit attributable to shareholders was RMB 4.26 billion, a decrease of 17.25% compared to the previous year[23]. - The company reported a net cash flow from operating activities of RMB 10.23 billion, an increase of 37.41% year-on-year[23]. - Total assets at the end of 2020 were RMB 150.63 billion, reflecting a growth of 6.68% from the previous year[24]. - The total liabilities amounted to RMB 104.51 billion, a slight increase of 1.22% year-on-year[24]. - Shareholder equity attributable to the parent company increased by 50.20% to RMB 43.30 billion[24]. - Basic earnings per share for 2020 were CNY 0.92, a decrease of 24.59% compared to 2019[26]. - The weighted average return on equity dropped to 10.18% in 2020 from 19.96% in 2019, a decline of 9.78 percentage points[26]. - The gross profit for 2020 was CNY 31,561.8 million, slightly down from CNY 31,858.6 million in 2019[29]. - The gross profit margin for 2020 was 31.61%, a decrease of 5.56 percentage points compared to the previous year[55]. Market Outlook and Strategy - The report outlines the company's business outlook for 2021 and the risks it may face[3]. - The company provided a positive outlook for the next quarter, projecting revenue growth of BB% driven by new product launches and market expansion[14]. - The company plans to enhance its digital economy strategy in 2021, focusing on innovation and core technology investments[21]. - The company aims to strengthen its global market presence while expanding its government and enterprise business segments[21]. - The overall market trend indicates a growing demand for high-speed internet and advanced communication technologies, positioning the company favorably for future growth[14]. - The company anticipates a comprehensive acceleration in global 5G deployment over the next five years, leading to a new phase of prosperity in the telecommunications industry[132]. Research and Development - New product development includes advancements in 5G technology, with plans to invest $CC million in R&D over the next fiscal year[14]. - Research and development costs rose to CNY 14,797.0 million in 2020, compared to CNY 12,547.9 million in 2019[29]. - The number of R&D personnel increased by 12.18% to 31,747, accounting for 43.07% of the total workforce[59]. - The company has invested in 5G as a core strategic development area, with capabilities for complete end-to-end 5G solutions, accelerating global commercial deployment[36]. Internal Controls and Compliance - The company reported no significant deficiencies in internal controls over financial reporting during the year[3]. - The company emphasizes the importance of accurate and complete financial reporting, with key executives affirming the report's integrity[3]. - The company will continue to promote digital transformation and improve its internal control governance[21]. - The company has established a compliance management committee to oversee adherence to laws and regulations impacting its operations[130]. Legal Matters - The arbitration case with UTE was closed in February 2020, with the court ruling in favor of the company, stating that the case would not have a significant adverse impact on the financial condition and operating results of the group[149]. - InterDigital's lawsuits against the company regarding 3G and 4G patent infringements were resolved, with the courts ruling that the company did not infringe on the patents, thus not affecting the financial results significantly[150]. - The company is actively defending against claims of fraud and negligence in a separate lawsuit in Brazil, where the opposing party is seeking damages totaling approximately 82.97 million Brazilian Reais (about 104 million RMB)[152]. - The company has engaged external legal counsel to address ongoing litigation matters, ensuring that potential impacts on financial performance are minimized[151]. Investment and Acquisitions - The company completed the acquisition of a 24% stake in ZTE Microelectronics for a total consideration of approximately ¥3.315 billion[158]. - The company plans to acquire an 18.8219% stake in ZTE Microelectronics for a transaction price of RMB 261,082.70 million, while raising up to RMB 261,000.00 million through a private placement to specific investors[159]. - The raised funds will be allocated to key 5G chip research and development projects, with a maximum of 50% used for working capital[159]. Operational Efficiency - The company has implemented new strategies to improve operational efficiency, targeting a reduction in costs by DD% over the next year[14]. - The company maintains strong partnerships with major telecom operators, ensuring a stable revenue base and collaborative opportunities for future projects[14]. Risk Management - The group operates in over 100 countries, facing various macroeconomic, regulatory, and political risks that may impact operations[134]. - The group has implemented strict intellectual property protection measures, including patent applications, to mitigate potential disputes with other telecom equipment manufacturers[135]. - The group is enhancing foreign exchange risk management through business strategy guidance and internal settlement management to reduce currency exposure[136]. - Interest rate risk is managed through controlling the total amount of interest-bearing debt and diversifying financing channels to mitigate fluctuations in interest expenses[137]. Related Party Transactions - The company has reported significant related party transactions, with a total transaction amount of 136,589.42 RMB[199]. - The company plans to procure raw materials from related party ZTE and its subsidiaries with a maximum cumulative transaction amount of RMB 800 million for 2020[200]. - The company approved a maximum cumulative transaction amount of RMB 86.19 million for software outsourcing services from related party Huatuo in 2020[200].

Financial Performance - The company reported a total revenue of 50 billion CNY for the first half of 2020, representing a year-on-year increase of 5%[1]. - The net profit attributable to shareholders for the same period was 3 billion CNY, a decrease of 10% compared to the previous year[1]. - The company has set a performance guidance for the second half of 2020, targeting a revenue growth of 8%[1]. - The company reported a significant increase in revenue, achieving a total of 50 billion CNY for the first half of 2020, representing a year-on-year growth of 15%[167]. - The company reported a net profit of RMB 2,323,381 thousand, representing a growth of 27.4% from RMB 1,824,563 thousand in the first half of 2019[174]. - The company reported a total revenue of RMB 46,987,381 thousand from sales of goods and services, an increase from RMB 44,767,563 thousand in the first half of 2019[186]. User Engagement - User data showed an increase in active users to 200 million, up 15% from the previous year[1]. - The user base expanded to 50 million active users, an increase of 10% compared to the previous period[192]. Research and Development - The company plans to invest 1 billion CNY in R&D for new technologies and products in the second half of 2020[1]. - ZTE's investment in R&D reached 12 billion CNY, accounting for 16% of total revenue, focusing on 5G and AI technologies[11]. - Research and development (R&D) investment reached RMB 6,637,376 thousand, representing 14.06% of operating revenue, a slight decrease of 0.45 percentage points from 14.51% in the first half of 2019[37]. - Research and development expenses for the first half of 2020 were RMB 6,637,376 thousand, slightly higher than RMB 6,471,866 thousand in the same period of 2019[174]. - The company is investing in R&D, with a budget increase of 25% to enhance technology development[192]. Market Expansion - Market expansion efforts include entering three new international markets, aiming for a 20% increase in overseas revenue[1]. - The company plans to expand its market presence in Europe and Asia, targeting a 20% increase in market share by 2022[10]. - The company aims to expand its market share in international markets, targeting a 25% increase in overseas sales by the end of 2020[167]. - The company is considering strategic acquisitions to bolster its product offerings and market presence[192]. Financial Position - Total assets increased by 17.16% to CNY 165,432,364,000 as of June 30, 2020, compared to CNY 141,202,135,000 at the end of 2019[14]. - The company's total liabilities increased to RMB 121,155,569 thousand, up 17.3% from RMB 103,247,837 thousand at the end of 2019[172]. - The company's cash and cash equivalents increased to RMB 45,867,997 thousand as of June 30, 2020, up from RMB 33,309,347 thousand at the end of 2019, reflecting a growth of 37.7%[171]. - The company's inventory rose to RMB 37,179,092 thousand as of June 30, 2020, compared to RMB 27,688,508 thousand at the end of 2019, indicating a growth of 34.3%[171]. Operational Risks - The board highlighted operational risks including supply chain disruptions and regulatory challenges in international markets[1]. - The company operates in over 100 countries, facing various country-specific risks including legal compliance, taxation, and political stability[84]. Strategic Initiatives - The company is exploring potential mergers and acquisitions to enhance its market position, with a budget of 500 million CNY allocated for this purpose[1]. - The company plans to enhance its supply chain efficiency, aiming for a 15% reduction in operational costs by the end of the fiscal year[167]. - The management team emphasized the importance of sustainability initiatives, committing to reduce carbon emissions by 30% over the next five years[167]. Profit Distribution - No profit distribution or capital reserve conversion to share capital will be conducted for the current fiscal year[1]. - The company distributed a cash dividend of RMB 2 per 10 shares, totaling approximately RMB 922.69 million based on a total share capital of 4,613,434,898 shares[94]. Legal Matters - The company successfully defended against a lawsuit from Universal Telephone Exchange, Inc. seeking $20 million in actual damages and $20 million in punitive damages, with the case ultimately closed[96]. - The company was involved in a patent infringement case with InterDigital, which resulted in a ruling that the company did not infringe on certain patents, with the case also closed[97]. Shareholder Information - The total number of shares increased from 4,227,529,869 to 4,613,434,832, reflecting an increase of 385,904,963 shares during the reporting period[145]. - The largest shareholder, ZTE Corporation, holds 1,077,531,700 A shares, accounting for 23.40% of the total share capital[150]. - The company has a diverse shareholder base, including state-owned enterprises and private companies[156][158].