ZTE(000063) 光大证券·2025-01-12 04:07Investment Rating - The report maintains a "Buy" rating for ZTE Corporation (000063.SZ) with a current price of 38.37 CNY [1]. Core Insights - ZTE Corporation is positioned as a leading enterprise in the "Connection + Computing Power" sector in China, with significant advancements in core technologies such as chips, operating systems, and databases [5][6]. - The company emphasizes self-innovation in foundational technologies, maintaining a strong focus on research and development to enhance its competitive edge [5][6]. - ZTE's consumer business has shown growth, with a revenue increase of 14.3% year-on-year in the first half of 2024, driven by sales in home terminals and mobile products [18][47]. - The operator business remains stable, although revenue decreased by 8.61% year-on-year due to the overall investment environment [20][47]. - The company is actively expanding its AI capabilities and has launched several innovative products, including the world's first 5G + AI naked-eye 3D phone [15][18]. Summary by Sections Company Overview - ZTE Corporation has a total share capital of 4.784 billion shares and a market capitalization of 183.5 billion CNY [1]. Research and Development - The company has nearly 30 years of experience in chip research and development, focusing on advanced design and architecture [6][7]. - ZTE's R&D efforts are directed towards foundational technologies, digital infrastructure, and value patent layout, ensuring long-term competitive advantages [6]. Consumer Business - The consumer business segment generated 160.19 billion CNY in revenue in the first half of 2024, with a gross margin of 18.93% [18][47]. - ZTE has introduced multiple AI-driven products, enhancing its market presence in the consumer electronics sector [15][18]. Operator Business - The operator business segment reported a revenue of 372.96 billion CNY in the first half of 2024, with a gross margin of 54.32% [20][47]. - ZTE continues to lead in wireless and fixed-line products, with significant advancements in 5G technology [19][20]. Financial Performance - For the first nine months of 2024, ZTE achieved a revenue of 900.45 billion CNY, reflecting a year-on-year growth of 0.7% [45]. - The net profit for the same period was 79.06 billion CNY, also showing a year-on-year increase of 0.8% [45]. - The company maintains a strong cash dividend policy, with a cash dividend ratio increasing from 17.9% in 2019 to 35.0% in 2023 [50]. Investment Outlook - The report forecasts ZTE's net profit to reach 95.29 billion CNY in 2024, with a corresponding PE ratio of 19X [51]. - The company is expected to benefit from the growing demand for AI computing power and digital infrastructure in China [51].