Zhi Tong Cai Jing·2025-09-02 03:30Core Viewpoint - ZTE Corporation's stock has dropped over 7%, reflecting market concerns about its recent financial performance despite previous gains driven by AI and ASIC chip growth [1] Financial Performance - ZTE reported a revenue of 71.553 billion yuan for the first half of the year, representing a year-on-year increase of 14.51% [1] - The net profit for the same period was 5.058 billion yuan, showing a year-on-year decline of 11.77% [1] - The gross margin decreased to 32.45%, down 7.99% year-on-year [1] Market Analysis - Jefferies noted that ZTE's stock had risen approximately 52% over the past three months, driven by optimism around AI and ASIC chips, but the second quarter performance fell short of expectations, indicating market over-optimism [1] - Jefferies has lowered its profit forecasts for ZTE for the next two years by 26% and 31% compared to market predictions, and downgraded its investment rating from "Hold" to "Underperform," while raising the target price to 27.27 HKD [1] Research Insights - Nomura's report highlighted ZTE's effective cost management, particularly in R&D, which partially offset the impact of declining gross margins [1] - Nomura anticipates continued pressure on profit margins in the second half of the year, with a gradual recovery starting next year due to better cost optimization [1] - The firm has raised its revenue forecasts for ZTE from 2025 to 2027 by 8.5% to 10%, reflecting increased demand for AI servers, but has lowered its profit forecasts for the same period by 4% to 21% due to margin dilution [1]