ZTE(000063) 甬兴证券·2025-03-18 01:08Investment Rating - The report initiates coverage with a "Buy" rating for the company [3] Core Views - The company is a global leader in integrated information and communication technology solutions, focusing on operator networks, government and enterprise business, and consumer business [15][21] - The company's revenue for 2024 is projected at 121.299 billion yuan, a year-on-year decrease of 2.38%, with a net profit of 8.425 billion yuan, down 9.66% [21] - The core competitiveness of the connectivity business continues to improve, with an optimized market structure [3][28] Summary by Sections Company Overview - The company provides end-to-end ICT solutions and serves over a quarter of the global population across more than 160 countries [15] - The business is divided into three main segments: operator networks, government and enterprise, and consumer business [16] Operator Network Business - The operator network business is divided into traditional networks and computing networks, with a focus on 5G-A and 50G PON technologies [17][18] - The company has achieved significant market share in both domestic and international markets, particularly in wireless and fixed-line products [17] Government and Enterprise Business - The government and enterprise segment has seen revenue growth driven by digital transformation and innovation in sectors like finance and internet [19] - The company is expanding its international presence, particularly in Asia and Latin America [19] Consumer Business - The consumer segment includes home terminals, mobile devices, and cloud computers, with significant growth in FTTR products and mobile internet [20] - The company has launched innovative products and expanded its market presence internationally [20] Financial Performance - The company’s revenue has grown from 81.471 billion yuan in 2014 to 121.299 billion yuan in 2024, with a compound annual growth rate of approximately 4.06% [21] - The net profit has increased from 2.634 billion yuan in 2014 to 8.425 billion yuan in 2024, with a compound annual growth rate of 12.33% [21] Revenue Composition - In 2024, the operator network business accounted for 57.98% of total revenue, while government and enterprise business and consumer business accounted for 15.31% and 26.72%, respectively [25][28] - Domestic revenue constituted 67.61% of total revenue, with international revenue at 32.39% [35] Profitability Metrics - The overall gross margin for 2024 is projected at 37.91%, a decrease of 3.57 percentage points year-on-year [39] - The company has effectively controlled its overall expense ratio, which has decreased from 15.22% in 2018 to 10.81% in 2024 [42] Future Outlook - The company is well-positioned to capitalize on major opportunities in 5G, new infrastructure, digital transformation, and the dual-carbon economy [3] - Future net profits are projected to grow steadily from 8.777 billion yuan in 2025 to 10.394 billion yuan in 2027 [3]