2 1 Shi Ji Jing Ji Bao Dao·2025-08-21 09:17Core Viewpoint - ZTE Corporation's stock experienced significant volatility, initially surging before retreating, influenced by a recent brokerage report recommending the stock as a major buy due to its advancements in AI and network business [1][2][5]. Group 1: Stock Performance - ZTE's A-shares opened strong, hitting the daily limit within two minutes, while H-shares rose over 14% before both experienced a pullback, closing with a 6.56% increase and a market capitalization of 203.6 billion yuan [1]. - The stock's trading volume exceeded 20 billion yuan, making it the top performer in the A-share market [1]. Group 2: Analyst Recommendations - A report from Zheshang Securities, authored by a senior analyst, rated ZTE with a "major recommendation" and a 3A rating, highlighting the company's undervalued AI computing and network business [2]. - The report noted that ZTE's advancements in AI products and its core offerings in high-speed interconnect chips position it for a potential value reassessment [2]. Group 3: Recent Contracts and Market Position - ZTE secured over 50% of a significant 1.7 billion yuan AI equipment contract from China Mobile, winning the largest share of the project [2]. - The company has been actively expanding its second curve business, focusing on AI and computing, which has started to show positive results [6]. Group 4: Financial Performance and Concerns - ZTE's Q1 2025 report indicated a revenue increase of 7.82% to 32.968 billion yuan, but a net profit decline of 10.50% to 2.453 billion yuan, raising questions about the sustainability of its growth [5][6]. - The company's accounts receivable increased by 25.10%, indicating potential cash flow concerns [5]. - Analysts have expressed skepticism regarding the rapid conversion of ZTE's AI business into actual profit growth, which may affect investor confidence [6]. Group 5: Future Outlook - ZTE is expected to release its mid-year report on August 29, 2025, with analysts predicting a slowdown in revenue growth as the 5G market stabilizes, although the second curve business is expected to maintain high growth [7]. - Forecasts for ZTE's net profit in 2025 and 2026 have been revised downward, reflecting cautious market sentiment [7].