Ge Long Hui·2025-09-04 07:12Core Viewpoint - ZTE Corporation reported strong mid-term performance with a revenue growth of 15%, driven by robust demand in the government and enterprise sector as well as consumer business [1] Revenue Performance - Revenue from the government and enterprise business increased by 110%, while consumer business revenue grew by 8% [1] - The overall revenue growth is attributed to favorable demand in the domestic internet service provider sector [1] Profitability Metrics - Gross margin narrowed by 8.1 percentage points year-on-year to 30.9%, primarily due to a higher proportion of lower-margin server sales in the government business and an increase in AI server shipments [1] Future Outlook - The company is expected to maintain strong growth in the remaining part of the year, with a forecasted annual revenue growth of 104% for the government business and 14% for the following year [1] - Although gross margin may continue to be under pressure throughout the year, it is believed that further deterioration is unlikely [1] Analyst Rating - The firm maintains a "Outperform" rating for ZTE Corporation, raising the target price from HKD 33 to HKD 40 [1]