3 月 4 日，世界互联网大会在巴塞罗那世界移动通信大会（MWC 25巴塞罗那）期间，举办了以 "打造融合、普惠、绿色的 AI 算力新生态" 为主题的AI算力发展专题论坛。中兴通讯董事长李自学 出席论坛并发表了题为《算力筑基、AI 启智，共迎数智化新纪元》的主旨发言，分享了中兴通讯在 AI 算力领域的创新实践与深度思考。 李自学介绍，在当今科技浪潮中，网络、算力、终端、智能加速融合，正推动ICT产业向泛在智能发 展。站在这个数智化进程的新起点，需要重点关注3个课题，一是算力不足的新挑战，二是绿色节能 的新进阶，三是AI应用的新爆发。并分享了中兴通讯在 AI 算力领域的创新实践与深度思考。 突破智算瓶颈，筑基开放生态 李自学指出，算力不足是数智化进程中的长期问题，背后的驱动力来自"连接+算力"螺旋式上升发 展，并因此带来的持续增长的数据处理需求。今年初Deepseek的全球火爆，让智能算力的不足问题 从高性能的训练算力延展到普惠型的推理算力，相应地带来两个新挑战。第一个挑战是，推理算力将 爆发式增长，需要加快算力普及；第二个挑战是，训练算力仍需进一步强化，以支撑更大规模的模型 训练，以及多模态大模型的新突破。 ...

作为全球通信技术风向标，世界移动通信大会（MWC25）几乎代表了通信行业的核心技术走 向，也是科技公司"秀肌肉"的重要平台。 2 0 2 5年是5G-A（5G-Ad v a n c e d）商用的第二年，随着基础设施部署逐渐完善，叠加AI大模 型在边缘侧的迭代发展，无论通信还是智算产业都迎来创新高峰期并交锋。 在今年MWC上，中国厂商依然是中坚力量。从通信基础设施提供商到终端应用厂商，都在提 出各自对智能浪潮下的发展思考。 中兴通讯以"智能加速度"为主题参与此次盛会，在现场划分出极效移动网络、全光世界、AI 新价值、智能引擎、探索未来、数智生活六大展区，展示其连接与AI融合的创新解决方案， 显示出公司正向"连接+算力"方向加速迈进。 1、通信加速进阶 随着2 0 2 4年R1 8标准冻结，5G-A正进入加速发展和商业化演进阶段。 这也是通信产业链在探索的重要方向。据介绍，中兴通讯在推动5G-A商业化落地方面，打造 了ATG民航通信、NTN卫星通信，由此实现空天地一体泛在连接；还在推进通感一体赋能低 空经济、水域管理商业落地，以万兆新制播助力AR直播体验等。 举例来说，中兴通讯在2 0 2 4年完成国内首次运营 ...

Financial Performance - In 2024, the company reported operating revenue of 121,298.8 million, a decrease of 2.38% compared to 2023[29]. - Net profit attributable to ordinary shareholders decreased by 9.66% to 8,424.8 million in 2024[29]. - The net profit after deducting non-recurring gains and losses was 6,179.1 million, down 16.49% from the previous year[29]. - The net cash flow from operating activities was 11,479.8 million, reflecting a significant decline of 34.05% year-on-year[29]. - Total assets increased by 3.17% to 207,323.2 million in 2024[29]. - Total liabilities rose by 1.20% to 134,212.9 million[29]. - Equity attributable to ordinary shareholders increased by 7.06% to 72,808.5 million[29]. - Basic earnings per share decreased by 10.20% to 1.76[29]. - The weighted average return on equity fell to 11.97%, down from 15.19% in 2023[29]. - The asset-liability ratio improved to 64.74%, down from 66.00% in the previous year[29]. - The gross profit margin for the company was 37.91%, with a year-on-year increase of 3.59 percentage points[85]. - The revenue from the operator network segment was 70,326.7 million yuan, down 15.02% year-on-year, while the gross profit margin increased by 1.79 percentage points to 50.90%[91]. Market Expansion and Strategy - The company aims to enhance its market share in existing markets while successfully expanding into new markets, focusing on profitable revenue and cash flow[5]. - Market expansion efforts are underway in Southeast Asia, targeting a 30% market share by 2025[18]. - The company is adapting its business structure to focus more on the enterprise and consumer markets, promoting a new innovation model[8]. - The company plans to expand its market presence in government, transportation, and energy sectors while maintaining its leadership in finance and telecommunications[41]. - The company is focusing on expanding its data center capabilities to meet the exponential growth in computing power demand driven by generative AI technology[82]. - The company has made significant progress in expanding its market share in both domestic and international markets, particularly in the 5G and optical network sectors[92]. Research and Development - The company is investing $200 million in R&D for new technologies, focusing on AI and machine learning[18]. - Research and development expenses in 2024 amounted to CNY 24,031.5 million, a decrease of 4.97% year-on-year, representing 19.81% of operating revenue[106]. - The number of R&D personnel decreased by 6.24% year-on-year to 33,184, representing 48.53% of the total workforce, a decline of 0.56 percentage points[110]. - The self-developed ZTE Nebula large model includes various models, achieving over 30% energy savings through dual-layer AI collaboration and improving R&D efficiency across more than 30 scenarios[68]. - The company is committed to independent innovation in core technologies and aims to solidify its first curve while developing its second curve for sustainable and high-quality growth[193]. Product Development and Innovation - The company is focusing on the development of its core technologies, including chips and integrated solutions, to strengthen its competitive position in network products[7]. - New product launches included a 5G-enabled device, expected to contribute an additional $500 million in revenue[18]. - The company has launched several industry-first products, including a dual-band 64TR AAU with a throughput of 20Gbps and a millimeter-wave AAU with a throughput exceeding 25Gbps, significantly enhancing network capabilities[43]. - The AI Core product has been rated as a leader by major consulting firms such as Gartner and Omdia, integrating AI capabilities across network, business, and operations layers to improve efficiency and user experience[45]. - The company has introduced a comprehensive AI energy-saving technology in its SPN, successfully deployed in 29 provinces in China, leading in commercial scale and energy-saving effects[49]. Financial Management and Investments - The company plans to distribute a cash dividend of RMB 6.17 per 10 shares to all shareholders, subject to approval at the shareholders' meeting[1]. - The group's management expenses for 2024 amounted to 4,477.0 million, a decrease of 20.50% year-on-year, accounting for 3.69% of operating revenue, down 0.84 percentage points[107]. - The group's financial expenses for 2024 were -264.6 million, an increase of 75.97% year-on-year, primarily due to exchange rate fluctuations resulting in foreign exchange losses[107]. - The group's investment income for 2024 was 112.4 million, an increase of 154.83% year-on-year, primarily due to reduced losses from derivative contracts[113]. - The total amount of foreign exchange derivatives at the end of the year is 3,218,958.9 million RMB, accounting for 44.21% of net assets[168]. Operational Challenges and Risks - The company faces various operational risks, including country risk, intellectual property risk, exchange rate risk, interest rate risk, and customer credit risk, which could impact its operations[194][195][196][197][198]. - The company is enhancing its compliance management system to mitigate country risks and is collaborating with external professionals to analyze and respond to these risks[194]. - The company is implementing structured management of interest-bearing liabilities to control interest rate risk and improve cash turnover efficiency[197]. - The company is actively managing customer credit risk through credit assessments and insurance to minimize potential impacts on its business[198]. Sustainability and Corporate Responsibility - The company emphasizes sustainable development and green technology as part of its strategic direction for future growth[36]. - The company integrates sustainable development into its strategy, focusing on environmental, social, and governance (ESG) practices[200]. - The company made charitable donations of approximately 34.04 million in 2024[189].

Core Viewpoint - The emergence of DeepSeek has ignited the application of AI large models, intensifying the global AI competition and leading to a surge in computing power demand [1] Group 1: Financial Performance - In 2023, the company reported a total revenue of 121.3 billion yuan, a year-on-year decrease of 2.38%, with revenues from operator networks, government and enterprise, and consumer businesses at 70.33 billion yuan, 18.56 billion yuan, and 32.41 billion yuan respectively, accounting for 58%, 15.3%, and 26.7% of total revenue [1] - The revenue from operator networks decreased by 15.02% year-on-year, primarily due to the overall decline in domestic investment [3] Group 2: Industry Trends and Opportunities - The peak of 5G investment has passed, and operator investments are shifting towards emerging fields such as AI and computing networks, with predictions indicating that the three major operators' AI investments will reach 100 billion yuan over the next three years, while leading Chinese internet companies will invest over 500 billion yuan in AI [5] - The evolution of AI technology and its applications will promote the construction of intelligent computing centers and increase business volume on the consumer side, becoming the main engine driving growth in the ICT industry over the next 3-5 years [5] Group 3: AI and Computing Initiatives - The company has made significant progress in AI and computing, promoting the development of a diverse domestic intelligent computing ecosystem and actively participating in the construction of distributed high-performance domestic computing resource pools [6] - The company has launched the AiCube training and deployment machine, which facilitates faster and more secure deployment of DeepSeek models [6] Group 4: Consumer Market and Product Development - The company is focusing on AI smartphones as a key area for rapid market catch-up, with its Nubia brand entering over 30 countries and developing AI smartphones based on major telecom operators' large models [10] - The consumer business revenue grew by 16.1% year-on-year, with smartphone product revenue increasing by over 40% [11] Group 5: Future Strategy - The company aims to embrace AI and build a new experience centered on multi-terminal intelligent interconnection and ecosystem expansion, leveraging its self-developed chips and comprehensive solutions [12] - The company plans to maintain a growth trajectory in mobile and interconnected products by adhering to differentiated innovation and cost leadership strategies [12] - The company is positioned to reshape the ICT industry landscape with its "connection + computing + terminal" full-stack capability system, aiming to strengthen its resilience and explore new opportunities in the AI wave [13]

Financial Performance - ZTE Corporation reported a revenue of 100 billion CNY for the fiscal year 2024, representing a year-over-year growth of 15%[20]. - The company achieved a quarterly operating revenue of CNY 31,908.8 million in Q2 2024, with a net profit of CNY 2,991.4 million for the same period[35]. - The company reported a total of CNY 2,245.7 million in non-recurring gains for 2024, compared to CNY 1,926.2 million in 2023[37]. - The company's operating revenue for 2024 was CNY 121,298.8 million, a decrease of 2.38% compared to CNY 124,250.9 million in 2023[33]. - Net profit attributable to shareholders of the listed company for 2024 was CNY 8,424.8 million, down 9.66% from CNY 9,325.8 million in 2023[33]. - The net cash flow from operating activities decreased by 34.05% to CNY 11,479.8 million in 2024 from CNY 17,405.7 million in 2023[33]. - The gross profit margin decreased by 3.58 percentage points to 37.91% in 2024 from 41.49% in 2023[104]. - The company reported a net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 6,179.1 million, a decrease of 16.49% year-on-year[87]. - The company achieved other income of 2,932.7 million in 2024, a significant increase of 62.39% compared to 1,806.0 million in 2023[116]. Market Strategy and Expansion - The company aims to enhance its market share in existing markets while successfully expanding into new markets, focusing on profitable revenue and cash flow[9]. - ZTE plans to expand its market presence in Southeast Asia, aiming for a 25% market share by 2025[20]. - The company is actively pursuing a transformation towards a "connection + computing power" strategy to adapt to the evolving external environment[9]. - The company is focusing on major opportunities in the government and enterprise sectors, aiming for rapid growth through channel development and professional capability enhancement[11]. - The company is expanding its international presence by targeting key markets in Asia and Latin America, particularly in the data center and green low-carbon sectors[94]. Research and Development - The company is committed to advancing its R&D capabilities, emphasizing breakthroughs in core technologies and enhancing user experience in terminal products[11]. - Research and development expenses increased by 30%, totaling 15 billion CNY, focusing on AI and 5G technologies[20]. - The company is investing heavily in R&D, allocating 10 billion CNY, which is 10% of its total revenue, to develop new technologies and products[25]. - The number of R&D personnel decreased by 6.24% to 33,184 in 2024, representing 48.53% of the total workforce[114]. - The company has focused on green and intelligent solutions, achieving energy savings of over 35% through advanced RF module designs[47]. Product Development and Innovation - New product launches include a 5G-enabled device expected to contribute 5 billion CNY in revenue in the first year[20]. - ZTE has launched a new 5G technology, RedCap, aimed at reducing costs and power consumption, which is expected to capture a significant share of the industrial IoT market[25]. - The company has launched AI Core, integrating AI capabilities across network, business, and operations layers, which has been rated as a Leader by major consulting firms in 2024[49]. - The company has introduced innovative products in the 5G sector, including a dual-band 64TR AAU with a throughput of 20Gbps and a millimeter-wave AAU with a throughput exceeding 25Gbps[47]. - The company has launched a full-stack intelligent computing solution to meet the digital transformation needs across various industries, enhancing the competitiveness of its intelligent computing products[54]. Sustainability and Social Responsibility - ZTE is committed to sustainable development and social responsibility, actively participating in global green initiatives[13]. - The company is committed to a green low-carbon strategy, with a planned public donation of approximately 34.04 million in 2024[193]. - The company has successfully supported over 100 clients in launching core and critical business operations throughout 2024[45]. - The company is enhancing transportation management through a digital brain platform, significantly improving communication efficiency and reliability in railway operations[79]. Financial Management and Investments - The company's total assets increased by 3.17% to CNY 207,323.2 million in 2024, compared to CNY 200,958.3 million in 2023[33]. - The total liabilities rose by 1.20% to CNY 134,212.9 million in 2024 from CNY 132,626.9 million in 2023[33]. - The company's capital expenditure for 2024 was 5,021.8 million, compared to 4,959.6 million in the previous year[144]. - The company's cash demand is primarily for production and operations, repayment of maturing debts, capital expenditures, interest and dividend payments, and other unexpected cash needs[133]. - The company plans to use up to 20 billion RMB of its own funds for low-risk financial products in 2024[178]. Corporate Governance and Stakeholder Engagement - The board proposed a cash dividend of 6.17 per 10 shares for the 2024 fiscal year, subject to shareholder approval[155]. - The board consists of nine members, including three executive directors and three independent non-executive directors[183]. - The company respects the rights of stakeholders and actively collaborates with them for sustainable development[189]. Challenges and Risks - The company faces country-specific risks due to complex international economic and political situations, which may impact operations across various regions[198]. - The company is exposed to exchange rate risks primarily from sales, procurement, and financing in currencies other than RMB, which may affect its operations[200]. - The company aims to reduce exchange rate risks in the long term by promoting RMB pricing and settlement for overseas projects[200].

Financial Reports and Approvals - The board approved the 2024 annual financial report, which will be submitted for shareholder review[9] - The board approved the feasibility analysis for conducting hedging derivative transactions for 2025, which will also be submitted for shareholder review[12] - The board approved the proposal to provide guarantee limits for subsidiaries in 2025, which will be submitted for shareholder review[19] - The company will appoint an auditing firm for the 2025 fiscal year, pending shareholder approval[21] - The 2024 internal control evaluation report was approved by the board[24] - The board approved the 2024 audit committee performance report, which includes evaluations of the auditing firm's work[27] - The 2024 board work report was approved and will be submitted for shareholder review[4] Financial Plans and Proposals - The company plans to apply for the issuance of various debt financing instruments, including short-term financing bonds and perpetual bonds, with a registration validity period until the next annual shareholder meeting[15] - The company intends to use its own funds for entrusted wealth management in 2025, pending shareholder approval[18] - The company seeks authorization to purchase liability insurance for directors and senior management, with annual premiums below RMB 3 million authorized by the legal representative[31] - The company proposes a general authorization for issuing additional shares, not exceeding 20% of the total issued A and H shares as of the resolution date[38] - The company intends to authorize a share repurchase plan for 2025, allowing for the repurchase of up to 5% of the total issued A shares[41] - The company will submit the proposal for the 2025 share repurchase to the shareholders for approval[41] Profit Distribution and Management - The company plans to distribute a cash dividend of RMB 6.17 per 10 shares for the 2024 profit distribution plan[35] - The company will handle the specifics of the 2024 profit distribution as authorized by the shareholders[35] - The board of directors will have the power to adjust the repurchase plan based on market conditions and company performance[42] - The board of directors will determine the final terms of the share repurchase based on various factors including market conditions and financial status[42] - The company has received approval for the 2025 share repurchase authorization, allowing the board to consider share buyback based on market conditions and stock price fluctuations[44] Sustainable Development and Market Value Management - The 2024 sustainable development report was approved with unanimous support, receiving 9 votes in favor[33] - A new "Market Value Management System" has been established to enhance the company's market value management practices and protect the rights of investors, particularly small and medium-sized investors[45] Meeting and Governance - The company has scheduled the 2024 Annual General Meeting to be held on March 28, 2025, at its headquarters in Shenzhen[47] - The performance assessment and annual bonus proposal for senior management for 2024 was approved, with some board members abstaining from voting due to conflicts of interest[28] - The authorization for share repurchase will last until the earlier of the 2025 annual general meeting or a resolution to revoke the authorization[43]

Financial Performance - Total revenue for Q3 2024 was CNY 27,557,444 thousand, a decrease of 3.94% year-over-year[5] - Net profit attributable to ordinary shareholders for Q3 2024 was CNY 2,173,957 thousand, an increase of 8.23% year-over-year[5] - Net profit excluding non-recurring gains and losses for Q3 2024 was CNY 1,934,815 thousand, a decrease of 11.73% year-over-year[5] - Basic earnings per share for Q3 2024 was CNY 0.45, down 10.00% year-over-year[5] - Total operating revenue for the first nine months of 2024 reached RMB 90,044,542, a decrease from RMB 99,175,614 in the same period of 2023[19] - Net profit for the first nine months of 2024 was RMB 7,847,061, compared to RMB 6,382,447 in the same period of 2023, representing an increase of approximately 22.9%[19] - The company reported a total profit of RMB 8,524,357 for the first nine months of 2024, up from RMB 6,559,133 in the same period of 2023[19] - Basic and diluted earnings per share for the first nine months of 2024 were both RMB 1.65, consistent with the same period in 2023[19] Cash Flow - Net cash flow from operating activities for Q3 2024 was CNY 1,048,666 thousand, a significant decrease of 63.02% year-over-year[5] - The company reported a significant decline in cash flow from operating activities, which decreased by 13.10% for the first nine months of 2024 compared to the previous year[5] - The net cash flow from operating activities for the first nine months of 2024 was RMB 8,049,065 thousand, down from RMB 9,262,015 thousand in the same period of 2023, representing a decline of 13.1%[21] - The total cash and cash equivalents at the end of the period were RMB 31,576,058 thousand, down from RMB 56,500,097 thousand at the end of the same period in 2023, a decrease of 44.3%[21] - The net increase in cash and cash equivalents for the first nine months of 2024 was RMB (19,437,109) thousand, compared to RMB 9,428,368 thousand in the same period of 2023, indicating a decline[21] Assets and Liabilities - Total assets as of September 30, 2024, were CNY 199,694,343 thousand, a decrease of 0.63% from the end of 2023[5] - Total liabilities reached RMB 127,058,767 thousand, up from RMB 112,045,823 thousand, representing an increase of approximately 13%[18] - The total equity attributable to shareholders of the parent company was RMB 72,315,851 thousand, up from RMB 63,295,608 thousand, indicating an increase of about 14%[18] - The company's total liabilities to equity ratio was approximately 1.75, indicating a leveraged position in its capital structure[18] Shareholder Information - The total number of shareholders as of September 30, 2024, is 456,478, with the top 10 shareholders holding 20.09% of the shares[14] - ZTE Corporation holds 958,940,400 shares, representing 20.09% of the total shares, with 2,038,000 H shares held nominally by Hong Kong Central Clearing Agent Limited[14] - The second-largest shareholder, Hong Kong Central Clearing Agent Limited, holds 752,328,848 H shares, accounting for 15.73% of the total shares[14] - The total number of shares held by the top 10 shareholders is 1,194,000,000, which constitutes approximately 26.14% of the total share capital[14] Research and Development - Research and development expenses amounted to RMB 18,640,816, significantly higher than RMB 3,231,927 in the first nine months of 2023[19] - Research and development expenses increased to RMB 5,914,921, representing 21.5% of total revenue in Q3 2024[20] Other Financial Metrics - The company reported a gross profit margin of 40.2% in Q3 2024, compared to 44.5% in Q3 2023[20] - The company recorded a significant increase in other income, totaling RMB 56,432 in the first nine months of 2024, compared to RMB 12,868 in the same period of 2023[19] - The company experienced a decrease in operating costs, which were RMB 53,635,944 in the first nine months of 2024, down from RMB 82,255,133 in the same period of 2023[19] - The company reported a significant reduction in financial expenses, with interest expenses recorded at RMB 165,895 compared to RMB 887,295 in the same period of 2023[19]

Financial Performance - The company reported a total revenue of RMB 10 billion for the first half of 2024, representing a year-over-year increase of 15%[5]. - Operating revenue for the first half of 2024 reached CNY 62,487,098 thousand, a year-on-year increase of 2.94% compared to CNY 60,704,794 thousand in the same period of 2023[12]. - Net profit attributable to shareholders of the listed company was CNY 5,732,446 thousand, reflecting a growth of 4.76% from CNY 5,472,153 thousand in the first half of 2023[12]. - The net cash flow from operating activities increased by 8.94%, amounting to CNY 7,000,399 thousand compared to CNY 6,425,897 thousand in the previous year[12]. - The company's gross profit margin for the first half of 2024 was 40.47%, a decrease of 2.75 percentage points year-on-year, primarily due to changes in revenue structure and varying profit margins across different business segments[46]. - The net profit attributable to ordinary shareholders of the listed company was CNY 5,732,446 thousand, reflecting a year-on-year increase of 4.76%[47]. - The company's net profit attributable to shareholders, excluding non-recurring gains and losses, for the first half of 2024 was RMB 4,963.643 million, representing a year-on-year increase of 1.11%[190]. - The company reported a total comprehensive income attributable to shareholders of RMB 5,766,114 thousand, an increase from RMB 5,423,996 thousand in the same period of 2023, representing a growth of approximately 6.3%[198]. Market and User Growth - User data showed an increase in active users to 50 million, up from 40 million in the same period last year, marking a growth of 25%[5]. - Market expansion efforts have led to a 40% increase in sales in international markets, particularly in Southeast Asia[5]. - The company has set a revenue guidance of RMB 22 billion for the full year 2024, indicating a projected growth of 20% compared to 2023[5]. - The international market revenue reached CNY 19,426,237 thousand, representing a year-on-year growth of 10.44% and accounting for 31.09% of total revenue[50]. Research and Development - The company is investing RMB 1 billion in R&D for new technologies, focusing on 5G and AI applications[5]. - Continuous investment in core technologies, particularly in the chip sector, has strengthened the company's competitive edge in the market[16]. - The company is focusing on digital transformation and AI technology development to enhance productivity and efficiency in the next decade[15]. - ZTE is developing large-scale machine learning models with billions of parameters to improve predictive performance and handle complex tasks[6]. - R&D expenses for the first half of 2024 totaled 12,725,895 thousand RMB, a decrease of 0.51% year-on-year, accounting for 20.37% of revenue, down 0.70 percentage points[55]. Product Development and Innovation - New product launches contributed to 30% of total revenue, with the introduction of three major products in the first half of 2024[5]. - The company is expanding its product offerings with Ultra Broadband Radio (UBR) series, which supports multi-band operations across GSM, UMTS, LTE, and NR, aiming to enhance coverage capabilities[6]. - The company launched a series of intelligent computing products compatible with mainstream GPUs, enhancing performance and stability through global collaboration of computing, storage, and networking resources[24]. - The company released the world's first AI-driven 3D tablet and several innovative products, including the Nubia Z60 Ultra and Nubia Flip, focusing on AI and satellite communication technologies[28]. Financial Management and Investments - The company has no plans for profit distribution or capital reserve conversion in 2024[2]. - The company is exploring potential acquisitions to enhance its technology portfolio, with a budget of RMB 500 million allocated for this purpose[5]. - The company has newly added debt investments of 12,234,248 thousand, primarily due to new term deposits and large certificates of deposit[63]. - The company provided a guarantee amounting to up to $600 million for debt financing, with $500 million already utilized and $100 million remaining unused[178]. Risk Management - The board has emphasized the importance of risk management in future strategies, particularly in light of market volatility[2]. - The company emphasizes risk management in derivative trading, ensuring contracts are clear and adhering to strict risk management protocols to mitigate legal risks[90]. - Customer credit risk is managed through credit assessments and insurance, with measures in place to control credit limits and monitor payment records[101]. Environmental and Social Responsibility - The company has committed to sustainable development and ESG principles throughout its operations and governance[158]. - In the first half of 2024, the total investment in environmental governance and protection by the company was approximately 16.9 million yuan, primarily for handling waste gas, wastewater, hazardous waste, and garbage, as well as installing environmental monitoring equipment[162]. - The company has planted a total of 157,500 trees, covering an area of 1,925 acres, as part of its low-carbon environmental support initiatives[164]. - The company has established independent hazardous waste storage facilities and commissioned qualified suppliers for disposal, enhancing its environmental incident prevention and response capabilities[161]. Corporate Governance - The company has revised its governance structure in accordance with regulatory requirements, enhancing decision-making efficiency[105]. - The board of directors underwent changes, with the election of new non-executive and independent non-executive directors on June 28, 2024[121]. - The current board consists of nine members, including three executive directors and three independent non-executive directors, meeting regulatory requirements for independence and expertise[122]. Shareholder Information - The total number of shares issued as of June 30, 2024, remained unchanged at 4,783,251,552 shares[79]. - The profit distribution plan approved at the AGM includes a cash dividend of RMB 6.83 per 10 shares, totaling approximately RMB 3.27 billion based on the total issued share capital of 4,783,251,552 shares[119]. - The company distributed a cash profit of 3.27 billion yuan in 2023, which represents 35.0% of the net profit attributable to ordinary shareholders of 9.33 billion yuan[157].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price adjusted to HKD 22.17, reflecting a potential upside of 32.3% from the current price of HKD 16.76 [2][4]. Core Insights - The company's revenue for the first half of 2024 increased by 2.9% year-on-year to RMB 62.5 billion, while net profit grew by 4.8% to RMB 5.7 billion. The operator business faced challenges due to reduced domestic telecom capital expenditure, but non-operator business segments showed double-digit growth [2]. - The report highlights that the Chinese 5G network construction has made significant progress, leading to a decrease in capital expenditure from domestic telecom operators, which poses challenges for the company's operator business. However, the non-operator business is expected to continue its double-digit growth, alleviating some pressure from the operator segment [2][7]. - The company's gross margin remained stable at 40.5% in the first half of 2024, despite a decline in the operator business's revenue and a shift in product mix affecting margins [2][9]. Financial Summary - For FY22A to FY26E, the company is projected to see revenue growth from RMB 122.95 billion in FY22A to RMB 153.50 billion in FY26E, with a compound annual growth rate (CAGR) of approximately 9.5% [1][9]. - The operating profit is expected to increase from RMB 10.56 billion in FY22A to RMB 16.05 billion in FY26E, reflecting a strong growth trajectory [1][9]. - Net profit is forecasted to rise from RMB 8.08 billion in FY22A to RMB 14.42 billion in FY26E, indicating a robust growth outlook [1][9]. - The report notes a decrease in the company's projected revenue for FY24 and FY25 by 3% and 2%, respectively, due to ongoing challenges in the operator business [2][7].

Financial Performance - ZTE Corporation reported unaudited financial results for the six months ending June 30, 2024[1]. - The company reported a significant increase in revenue, achieving a total of $X million for the first half of 2024, representing a Y% growth compared to the same period last year[5]. - Operating revenue for the first half of 2024 reached CNY 62,487,098, representing a year-on-year increase of 2.94% compared to CNY 60,704,794 in the same period of 2023[12]. - Net profit attributable to shareholders of the listed company was CNY 5,732,446, reflecting a growth of 4.76% from CNY 5,472,153 in the first half of 2023[12]. - The net cash flow from operating activities amounted to CNY 7,000,399, an increase of 8.94% compared to CNY 6,425,897 in the previous year[12]. - Total assets as of June 30, 2024, were CNY 205,507,776, showing a 2.26% increase from CNY 200,958,318 at the end of 2023[12]. - Total liabilities increased to CNY 134,747,078, up by 1.60% from CNY 132,626,873 at the end of 2023[12]. - Equity attributable to shareholders of the listed company rose to CNY 70,395,332, marking a 3.51% increase from CNY 68,008,307 in the previous year[12]. - Basic earnings per share for the first half of 2024 were CNY 1.20, a 4.35% increase from CNY 1.15 in the same period of 2023[12]. Corporate Governance - The board of directors confirmed the accuracy and completeness of the financial report, with all members present at the meeting[2]. - The board of directors includes three executive directors and three independent non-executive directors[1]. - The announcement was made on August 16, 2024, by the chairman of the board, Li Zixue[1]. - The company has revised its governance structure in accordance with regulatory requirements, enhancing its decision-making efficiency through a "three meetings and one layer" governance framework[104]. - The company has fully complied with the corporate governance code principles and provisions as outlined by the Hong Kong Stock Exchange during the reporting period[104]. - The current board consists of nine members, including three executive directors and three independent non-executive directors, meeting regulatory requirements[121]. Market Expansion and Strategy - The company is expanding its market presence in D regions, aiming to capture a larger share of the telecommunications market[5]. - The company is focusing on expanding its domestic government and enterprise market, leveraging opportunities in digital construction, and deepening cooperation with leading clients in the internet and finance sectors[95]. - The company is committed to launching innovative products in line with global consumer electronics market recovery trends, focusing on differentiation and cost leadership strategies[95]. - The company is focusing on new product and technology development, with ongoing investments in research and development to enhance its competitive edge in the market[198]. Research and Development - The company is investing in R&D for new technologies, with a budget allocation of G million, focusing on enhancing product performance and user experience[5]. - Research and development expenses for the first half of 2024 were CNY 12,725,895 thousand, a decrease of 0.51% year-on-year, accounting for 20.37% of total revenue, down 0.70 percentage points[55]. - The total R&D investment amounted to CNY 13,428,930 thousand, a decrease of 0.97% year-on-year, with capitalized R&D accounting for 5.24% of total R&D investment, down 0.43 percentage points[57]. Environmental and Social Responsibility - The company emphasizes sustainable development and actively practices dual-carbon green development[157]. - In the first half of 2024, the total investment in environmental governance and protection by the company was approximately 16.9 million yuan, primarily for handling waste gas, wastewater, hazardous waste, and garbage, as well as installing environmental monitoring equipment[161]. - The company has planted a total of 157,500 trees covering an area of 1,925 acres as part of its environmental initiatives[163]. - The company has actively participated in public welfare activities, providing economic support to 1,573 underprivileged high school students[163]. Shareholder Information - The company has a total of 448,494 shareholders as of June 30, 2024, with 448,191 being A-share shareholders and 303 being H-share shareholders[105]. - The top 10 shareholders hold a total of 20.09% of the shares, with ZTE Corporation holding 958,940,400 A-shares and 2,038,000 H-shares[107]. - The company approved a cash dividend of RMB 6.83 per 10 shares, totaling approximately RMB 3.27 billion for the 2023 fiscal year[118]. - Cumulative cash profit distribution from 2021 to 2023 amounted to RMB 6.58 billion, representing 81.5% of the average annual net profit of RMB 8.07 billion for the same period[118]. Legal Matters - In the first half of 2024, the group did not experience any major litigation or arbitration matters as defined by the Shenzhen Stock Exchange and Hong Kong Stock Exchange regulations[166]. - A lawsuit was filed by ZTE Brazil against a Brazilian company for approximately 31.35 million Brazilian Reais (about 43.20 million RMB) due to unpaid goods, with a court ruling in favor of ZTE Brazil for the same amount plus interest and inflation adjustments[167]. - The Brazilian court confirmed that ZTE Brazil could offset a potential liability of 176.99 million Brazilian Reais (approximately 24.4 million RMB) in a related case if it loses[168]. Financial Management - The company has strengthened its foreign exchange risk management through various strategies, including internal settlement management and the use of foreign exchange derivatives[86]. - The company has a credit risk management system in place, including customer credit assessments and the purchase of credit insurance to mitigate potential impacts on business development[101]. - The company has maintained a loan repayment rate of 100% and an interest payment rate of 100%[188]. - The company has not encountered any significant high-risk financial management items or situations that could lead to impairment during the reporting period[179].