ZTE(SZ:000063) CHINA DRAGON SECURITIES·2024-10-24 06:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a slight decline in performance for the third quarter of 2024, with a year-on-year revenue increase of 0.73% to CNY 90.045 billion and a net profit attributable to shareholders of CNY 7.906 billion, up 0.83% year-on-year [1] - The third quarter revenue was CNY 27.557 billion, representing a year-on-year decline of 3.94% and a quarter-on-quarter decline of 13.64% [1] - The gross margin for the third quarter was 40.35%, down 4.28 percentage points year-on-year [1] - The company maintains a leading position in both wireless and wired core products, with stable domestic market share and growth in specific segments such as indoor distribution and high-speed rail [1] - The company is actively expanding into 5G-A innovations and has secured projects in international markets, including Cameroon and Côte d'Ivoire [1] Financial Performance Summary - For the first three quarters of 2024, the company achieved total revenue of CNY 90.045 billion, with a net profit of CNY 7.906 billion [1] - The projected revenue growth rates for 2024 to 2026 are 4.58%, 5.84%, and 5.83%, respectively, with expected revenues of CNY 129.94 billion, CNY 137.53 billion, and CNY 145.55 billion [2] - The projected net profit for the same period is expected to be CNY 10.111 billion, CNY 11.329 billion, and CNY 12.722 billion, with corresponding P/E ratios of 14.2, 12.7, and 11.3 [2][3] - The company’s total assets are projected to grow from CNY 180.954 billion in 2022 to CNY 251.021 billion by 2026 [4][5] Market Position and Competitiveness - The company has maintained a dual oligopoly in the domestic core network product market and has made significant inroads in international markets, including Thailand and several African countries [1] - The company’s wired products continue to lead globally, with market share growth in Italy, Indonesia, and Brazil [1] - The company is positioned as a key player in the digital economy, focusing on "connection + computing power" as its main strategy [1]