Shanxi Securities·2024-08-20 22:00Investment Rating - The report maintains an "Accumulate-A" rating for ZTE Corporation (000063.SZ) [1] Core Views - ZTE is accelerating the expansion of its second curve businesses, such as computing power and mobile phones, while maintaining stable operational progress [1][3] - The company reported a revenue of 62.49 billion yuan for the first half of 2024, a year-on-year increase of 2.94%, with a net profit of 5.73 billion yuan, up 4.76% year-on-year [1][3] Financial Performance - For H1 2024, revenue from the operator, government enterprise, and consumer segments was 37.30 billion, 9.17 billion, and 16.02 billion yuan, respectively, showing year-on-year changes of -8.61%, +56.09%, and +14.28% [1] - The gross margin and net margin for H1 2024 were 40.47% and 9.14%, respectively, with year-on-year changes of -2.75 and +0.26 percentage points [1] - The company achieved a revenue of 31.91 billion yuan in Q2 2024, reflecting a year-on-year increase of 1.10% and a quarter-on-quarter increase of 4.4% [1] Business Segments - The traditional operator network business faced pressure due to reduced capex from domestic operators, with a revenue of 37.30 billion yuan in H1 2024, down 8.6% year-on-year [1] - The enterprise business saw rapid growth, with revenue reaching 9.20 billion yuan in H1 2024, driven by AI computing power expansion [3] - The consumer business, particularly mobile phones, is recovering, with innovative products targeting young consumers [3] Future Outlook - The company expects net profits of 10.52 billion, 11.24 billion, and 12.13 billion yuan for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 12.8%, 6.9%, and 7.9% [3][4] - The report anticipates an EPS of 2.20, 2.35, and 2.54 yuan for the same years, with corresponding P/E ratios of 12.3, 11.5, and 10.6 [3][4]