Group 1: Financial Performance - The company's cash flow situation significantly improved in the first half of the year, primarily due to a substantial increase in domestic system equipment orders and good collection status domestically [2] - Since 2013, the company has focused on the profitability and cash flow of overseas contracts, enhancing collection efforts on these contracts [3] Group 2: Market Development - China Mobile has completed the first phase of TD-LTE construction with 200,000 stations, while the second phase is ongoing. China Telecom and China Unicom have recently obtained expanded trial network FDD-LTE licenses, and network construction is in progress [3] - The company has clarified its M-ICT future development strategy, actively expanding into government and enterprise network markets, and increasing long-term R&D investment in key products such as servers, storage, routers, and chips [3] - Despite some countries in Europe and the US completing their first round of investments, many Asian countries and some European countries are just beginning to initiate 4G development, presenting future opportunities for overseas operators [4]

中兴通讯股份有限公司 2022 年第三季度报告 1 证券代码（A/H）：000063/763 证券简称(A/H)：中兴通讯 公告编号：202280 中兴通讯股份有限公司 2022 年第三季度报告 本公司及董事会全体成员保证信息披露的内容真实、准确、完整，没有虚假记载、误导性陈 述或重大遗漏。 本公告在境内和香港同步刊登。本公告根据《深圳证券交易所股票上市规则》规定在境内刊 登。本公告依据《香港联合交易所有限公司证券上市规则》第 13.09(2)条及第 13.10B 条的披露 义务及香港法例第 571 章《证券及期货条例》第 XIVA 部内幕消息条文而公布。 §1 重要内容提示 1.1 中兴通讯股份有限公司（以下简称"中兴通讯"、"本公司"或"公司"）董事 会、监事会及董事、监事、高级管理人员保证本季度报告内容的真实、准确、完整， 不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法律责任。 1.2 本公司第九届董事会第七次会议已审议通过本季度报告。董事李步青先生因工作 原因未能出席本次会议，委托董事诸为民先生行使表决权。 1.3 本公司董事长李自学先生、财务总监李莹女士和会计机构负责人许建锐先生声明： ...

Financial Performance - ZTE Corporation reported a significant increase in revenue, achieving a total of 50 billion CNY in the first half of 2022, representing a year-on-year growth of 15%[7]. - Operating revenue for the first half of 2022 reached CNY 59,818,300 thousand, representing a 12.71% increase from CNY 53,070,970 thousand in the same period of 2021[11]. - Net profit attributable to shareholders increased by 11.95% to CNY 4,565,826 thousand, up from CNY 4,078,613 thousand year-over-year[11]. - The net profit excluding non-recurring gains and losses surged by 65.83% to CNY 3,725,359 thousand compared to CNY 2,246,454 thousand in the previous year[11]. - Basic earnings per share rose by 9.09% to CNY 0.96, compared to CNY 0.88 in the same period last year[11]. - The company's total revenue for the first half of 2022 was 59.82 billion RMB, representing a year-on-year increase of 12.71%[48]. - International market revenue reached 19.22 billion RMB, accounting for 32.12% of total revenue, with a year-on-year growth of 12.27%[48]. - The operator network segment generated 38.72 billion RMB in revenue, up 10.47% year-on-year, driven by growth in fixed network and core network products[49]. - The enterprise business revenue increased by 18.32% year-on-year to 6.71 billion RMB, primarily due to growth in domestic enterprise services[49]. - Consumer business revenue grew by 16.51% year-on-year to 14.39 billion RMB, supported by sales of home information terminals and mobile phones[49]. Research and Development - The company has reported a 35% increase in R&D investment, focusing on next-generation network technologies[7]. - Research and development investment amounted to 10.15 billion RMB, a 14.56% increase year-on-year, representing 16.97% of total revenue[51]. - The company has over 26 years of R&D experience in the chip sector, enhancing its full-process design capabilities, which are now industry-leading[19]. - The company is actively investing in new technologies, with a focus on developing smart photovoltaic solutions, which are expected to enhance energy efficiency by 30%[8]. - ZTE is advancing its research in mobile edge computing, aiming to reduce latency by 50% for its telecommunications services[8]. Market Expansion and Strategy - ZTE is expanding its market presence in Southeast Asia, targeting a 20% market share in the region by the end of 2023[7]. - The company aims to enhance customer satisfaction and market share while pursuing core technology innovation and building a collaborative industry ecosystem[16]. - The company is actively leveraging opportunities in 5G, digital transformation, and carbon neutrality to enhance its ICT product competitiveness and market share[18]. - The company is expanding its consumer business centered around mobile phones, aiming to establish a "1+2+N" development pattern and strengthen its market position in smart home products[91]. Operational Efficiency - ZTE's operational efficiency has improved, with a reduction in costs by 15% through the implementation of a new cloud infrastructure[9]. - The overall gross margin improved by 0.90 percentage points to 37.04%, with the operator network gross margin rising to 45.31%[50]. Legal Matters - ZTE Corporation's legal proceedings include a claim for approximately 31.35 million Brazilian Reais (about 44.29 million RMB) against a Brazilian company, with a court ruling in favor of ZTE for the same amount[134]. - In a separate case, ZTE faces a lawsuit claiming damages of approximately 82.97 million Brazilian Reais (about 117 million RMB) for alleged fraud and negligence, with external legal counsel engaged for defense[135]. - The Brazilian court has ruled that ZTE can offset potential liabilities in the fraud case with the awarded amount from the previous case, totaling 176.99 million Brazilian Reais (about 250 million RMB)[136]. - ZTE has been involved in a lawsuit regarding a construction project, with claims for overdue payments and interest totaling 12.31 million RMB, and has filed a counterclaim for 17.96 million RMB due to project delays and quality issues[138]. - The company is also engaged in a legal dispute with a construction firm, with claims and counterclaims amounting to approximately 2.57 billion RMB and 400 million RMB respectively, with ongoing court proceedings[140]. - ZTE's financial position remains unaffected by the ongoing legal matters, as per legal opinions obtained[136][140]. Environmental Compliance - ZTE Corporation reported a total VOCs emission of 0.042705 tons, which is compliant with the emission standards[124]. - The company emitted 0.4015 tons of particulate matter, also within the regulatory limits[124]. - ZTE has implemented VOC treatment equipment at emission outlets, ensuring compliance with environmental regulations[126]. - The company has established a management system and emergency plans for environmental protection, with regular safety inspections[126]. - ZTE has not faced any administrative penalties due to environmental issues during the reporting period[130]. Shareholder and Stock Options - The company distributed a total of RMB 1,420,213,433.4 in cash dividends to shareholders, amounting to RMB 3 per 10 shares[102]. - The stock option incentive plan granted 149,601,200 options to 1,996 participants, with an initial exercise price of RMB 17.06 per share[105]. - A total of 4,971,974 stock options were exercised during the reporting period, resulting in an increase of the company's A-shares by the same amount[109]. - The total number of unexercised stock options at the end of the reporting period was 283,928[110]. - The company has no strategic investors or general corporations participating in the placement of new shares during the reporting period[191]. Financial Position - Total assets increased by 6.50% to CNY 179,724,762 thousand as of June 30, 2022, compared to CNY 168,763,425 thousand at the end of 2021[10]. - Cash and cash equivalents at the end of the period were 44,081,165 thousand RMB, representing a 9.15% increase from 40,384,110 thousand RMB in the previous year[59]. - The company's long-term equity investments amounted to approximately 161,962 million RMB, a decrease of 7.85% compared to 175,750 million RMB as of June 30, 2021[64]. - The capital debt ratio for the first half of 2022 was 44.6%, an increase of 1.2 percentage points from 43.4% in 2021, mainly due to an increase in interest-bearing liabilities[75]. Employee and Management - As of June 30, 2022, the total number of employees in the group was 73,191, with the parent company employing 68,658 individuals, and total employee compensation during the reporting period was approximately 14.7 billion RMB[86]. - The board of directors and supervisory board were re-elected on March 30, 2022, with new appointments for senior management[199]. - The term for the newly appointed independent non-executive directors is from March 30, 2022, to June 28, 2024[199].

Financial Performance - The company's operating revenue for Q1 2022 was CNY 27,930,271 thousand, representing a 6.43% increase compared to CNY 26,241,647 thousand in Q1 2021[4] - The net profit attributable to shareholders of the listed company was CNY 2,216,659 thousand, showing a slight increase of 1.60% from CNY 2,181,649 thousand in the same period last year[4] - The net profit attributable to shareholders after deducting non-recurring gains and losses reached CNY 1,952,471 thousand, a significant increase of 117.13% compared to CNY 899,213 thousand in Q1 2021[4] - The company reported a significant increase in other income, with a year-on-year growth of 266.78% due to increased compensation income[8] - The company reported a total comprehensive income of RMB 1,889,930 thousand for Q1 2022, compared to RMB 1,932,408 thousand in Q1 2021, indicating a decrease of about 2.2%[41] Cash Flow - The net cash flow from operating activities was CNY 1,187,207 thousand, a decrease of 50.29% from CNY 2,388,242 thousand in the previous year[4] - The net cash flow from financing activities increased by 187.26% compared to the same period last year, mainly due to increased cash received from borrowings[8] - Total cash inflow from operating activities reached CNY 38,098,145 thousand, an increase of 13.7% compared to CNY 33,652,649 thousand in the same period last year[42] - Net cash flow from operating activities was CNY 1,187,207 thousand, a decrease of 50.3% from CNY 2,388,242 thousand year-on-year[42] - The ending balance of cash and cash equivalents was CNY 44,477,507 thousand, up from CNY 32,029,995 thousand year-on-year, reflecting a growth of 38.9%[42] Assets and Liabilities - The total assets as of March 31, 2022, were CNY 179,243,960 thousand, reflecting a 6.21% increase from CNY 168,763,425 thousand at the end of 2021[4] - Total liabilities as of March 31, 2022, were RMB 123,928,190 thousand, up from RMB 115,475,765 thousand at the end of 2021, indicating an increase of approximately 7.5%[40] - The company's total equity reached RMB 55,315,770 thousand as of March 31, 2022, compared to RMB 53,287,660 thousand at the end of 2021, marking an increase of about 3.8%[40] - The total current liabilities were RMB 81,149,546 thousand as of March 31, 2022, compared to RMB 78,685,256 thousand at the end of 2021, representing an increase of approximately 3.7%[40] - The total non-current liabilities increased to RMB 42,778,644 thousand as of March 31, 2022, from RMB 36,790,509 thousand at the end of 2021, reflecting an increase of approximately 16.3%[40] Investments - The company reported a profit of 9.38 million RMB from derivative investments during the reporting period[35] - The total initial investment in foreign exchange derivatives was approximately 727.37 million RMB, with a current investment amount of 540.10 million RMB, representing 10.05% of the company's net assets[35] - The company held 957,300 shares of Zhongjing Electronics, accounting for 0.16% of its total share capital[28] - The company held 6,011,600 shares of Huaheng Biological, accounting for 5.55% of its total share capital[29] - The company held 791,300 shares of Anji Technology, accounting for 1.49% of its total share capital[31] Stock Options and Management - The company appointed new board members and management on March 30, 2022, with terms extending until 2025[12] - The company appointed new supervisory board members, with the term lasting from March 30, 2022, to March 29, 2025[13] - The company renewed the contracts of key executives, including the president and four executive vice presidents, for the same term period[13] - The 2017 stock option incentive plan granted 149.6012 million options, with an adjusted exercise price of RMB 16.66 per share[17] - The company’s stock options for senior management totaled 255,896 options, all of which were exercised during the reporting period[19] Compliance and Governance - The company’s compliance with U.S. export control laws was monitored by an independent compliance officer until March 22, 2022[16] - The company continues to focus on compliance and governance as part of its operational strategy following the conclusion of the monitoring period[16] - There were no significant lawsuits or arbitration matters during the reporting period that would adversely affect the company's financial status or operating results[25] - The company actively responded to a lawsuit regarding shareholder interests, which was ultimately dismissed by the court, ensuring no financial impact[26] Research and Development - Research and development expenses amounted to RMB 4,698,227 thousand in Q1 2022, reflecting a significant increase from RMB 1,135,737 thousand in Q1 2021[41]