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].
中兴通讯(00763) - 2023 - 中期业绩