2 1 Shi Ji Jing Ji Bao Dao·2025-08-21 09:19Core Viewpoint - The stock performance of ZTE Corporation has attracted significant market attention, particularly following a recent report from a brokerage firm that recommended the stock as a major buy, highlighting its potential in AI and network business [4][6]. Group 1: Stock Performance - On August 21, ZTE's A-shares surged, hitting the daily limit within two minutes of opening, while H-shares rose over 14% before experiencing a pullback, closing with a 6.56% increase and a market capitalization of 203.6 billion yuan [1]. - The stock has seen a notable increase of over 20% in A-shares this week and more than 4% last week [5]. Group 2: Analyst Recommendations - A report from Zheshang Securities, authored by a senior analyst, rated ZTE with a "major recommendation" and a 3A rating, suggesting that the market has undervalued the company's advancements in AI and network business [4]. - The report indicates that domestic manufacturers are accelerating their deployment of super nodes, with ZTE positioned to benefit significantly from this trend [4]. Group 3: Recent Contracts and Developments - ZTE secured over 50% of a major contract from China Mobile for AI computing devices, amounting to approximately 8.85 billion yuan, with ZTE winning the largest share of the contract [5]. - There were reports of ByteDance developing an AI phone with ZTE as the ODM, but ByteDance has denied these claims, stating there are no plans for a proprietary phone product [5]. Group 4: Financial Performance and Market Sentiment - ZTE's Q1 2025 report showed revenue growth of 7.82% year-on-year to 32.968 billion yuan, but net profit declined by 10.50% to 2.453 billion yuan, raising concerns about the sustainability of its growth [6][7]. - The company is transitioning from traditional communication equipment to AI and computing solutions, but faces challenges such as rising material costs and pressure on profit margins [7]. - Analysts have expressed skepticism about ZTE's ability to convert its AI business into substantial profit growth, which may affect investor confidence [7].