Core Insights - ZTE Corporation reported a revenue of 100.52 billion yuan for the first three quarters of 2025, marking an 11.63% year-on-year increase [2] - The company faced challenges in profitability, with a net profit of 5.322 billion yuan, and a significant decline of 43.77% in net profit after excluding non-recurring gains and losses [2][4] Revenue Growth - The "second curve" strategy focusing on computing power has driven significant revenue growth, with computing revenue increasing by 180% [3] - The enterprise business saw a remarkable growth of 130% year-on-year, while server and storage revenue surged by 250% [3] - Computing revenue now accounts for 25% of total revenue, indicating a strong shift towards this new business model [3] Profitability Challenges - In Q3 2025, the company reported a revenue of 28.967 billion yuan, a 5.11% increase year-on-year, but net profit dropped by 87.84% to 264 million yuan [4] - The net profit for the first three quarters declined by 32.69%, with a 43.77% drop in net profit after excluding non-recurring items [4] - The increase in operating costs, which reached 69.811 billion yuan (up 30.08% year-on-year), has significantly impacted profitability [4] Cash Flow and Future Outlook - The net cash flow from operating activities for the first three quarters was 1.777 billion yuan, a substantial decrease of 77.92% [5] - The company is navigating a critical transformation period, balancing traditional operator business adjustments with the growth of new business lines [5] - Future focus will be on enhancing the profitability of the new computing-driven enterprise business while managing cash flow challenges during the transition [5]

Core Viewpoint - Huamai Technology (603042) has suspended trading due to planned control changes, which were ultimately terminated due to a lack of consensus with the counterpart [2][3]. Company Overview - Huamai Technology is a provider of information and communication network infrastructure solutions, focusing on creating value for clients in the telecommunications sector with industry-leading products and solutions [3]. - The company possesses integrated capabilities in R&D, design, manufacturing, sales, and service, catering to domestic and international telecom operators, main equipment manufacturers, network integrators, and enterprise clients [4]. Product and Service Offerings - The product range includes ODN (Optical Distribution Network) solutions from central office OLT (Optical Line Terminal) to user ONU (Optical Network Unit), wireless communication network construction products, and various integrated solutions for data centers and IoT [4]. - Products cover a wide array of applications, including FTTX (Fiber to the X), transmission network construction, and indoor wireless signal distribution, addressing diverse needs of public and private network users [4]. Financial Performance - In the first half of 2025, Huamai Technology reported revenue of 375 million yuan and a net loss of 21.8 million yuan, with losses increasing year-on-year due to macroeconomic factors and intensified market competition leading to price declines [5]. - The third quarter of 2025 saw further declines in performance, with net losses of 14.58 million yuan for the period and 36.38 million yuan year-to-date, compared to losses of 4.12 million yuan and 8.20 million yuan in the same periods last year [6][7].

Report Industry Investment Rating No information provided in the content. Core Viewpoints of the Report - From June 3rd to June 6th, 2025, the A-share market oscillated and consolidated, with major stock indices rising moderately. The small and medium-cap and science and technology innovation sectors performed prominently. The convertible bond market warmed up overall, with funds preferring small and medium-cap high-elasticity targets. The daily average trading volume rose to 64.57 billion yuan. The valuation of low-par convertible bonds was significantly repaired, while the medium and high-par range showed caution, and risk appetite increased. At the industry level, convertible bonds in sectors such as media and light manufacturing led the gains. At the individual bond level, those with higher gains were mostly driven by underlying stocks. The supply in the primary market was stable, and clause games were active. It is necessary to pay attention to changes on the supply side. Overall, the market's rotation and repair trend continued. Short-term allocation suggestions should balance low-valuation repair opportunities and the defensive value of high-rated blue-chip convertible bonds, and flexibly grasp the structural market [2][6]. Summary According to Relevant Catalogs Market Weekly Review - **A-share Market**: The major A-share stock indices continued their moderate warming trend. The Shanghai Composite Index rose 1.1%, the Shenzhen Component Index rose 1.4%, and the ChiNext Index led the gains with a 2.3% increase. In terms of style, small and medium-cap and science and technology innovation indices were more elastic, with the Science and Technology Innovation 50 Index rising 2.3%, indicating a gradual repair of market risk appetite. In terms of funds, the daily average trading volume rose to 1.2 trillion yuan, and the net outflow of main funds narrowed by 6.4 billion yuan to 7.3 billion yuan compared with the previous week, and trading activity increased moderately. Overall, the risk appetite of the A-share market warmed up, and capital games were concentrated in small and medium-cap and science and technology innovation directions. The market entered a rotation and repair stage. It is recommended to focus on high-prosperity and low-level repair opportunities in the short term, and balance the structural opportunities of active small and medium-cap sectors [10]. - **Convertible Bond Market**: The convertible bond market significantly warmed up, and activity was moderately repaired. The ChinaBond Convertible Bond Index rose 1.08% across weeks, and the daily average trading volume rose to 64.57 billion yuan. Structurally, small and medium-cap convertible bonds were more active, indicating that funds were seeking offensive opportunities under the previous cautious sentiment, and market risk appetite increased. There was a differentiation in the parity range. The valuation of low-par convertible bonds was significantly repaired, while the medium and high-par range had limited fluctuations, reflecting active capital games on low-level high-elasticity targets. The implied volatility and price median increased slightly, and there was still repair momentum. At the industry level, convertible bonds in the media and light manufacturing sectors performed prominently, while adjustment pressures emerged in high-elasticity directions such as home appliances and communications. At the individual bond level, those with higher gains were mostly driven by underlying stocks, and the market preferred repair opportunities that combined fundamental support and elasticity. Overall, the convertible bond market continued to be actively volatile, and capital allocation focused on medium and low-price high-elasticity targets [10]. - **Primary Market**: The supply in the primary market of convertible bonds was generally stable. One enterprise updated its convertible bond issuance plan and was in the stage of passing the listing committee. The total scale of convertible bond issuance projects at the exchange acceptance stage and later remained at 58.99 billion yuan, and the supply rhythm was generally stable. In terms of clause games, five convertible bonds announced that they were expected to trigger downward revisions, and five announced no downward revisions. On the redemption side, two announced that they were expected to trigger redemptions, one announced no early redemption, and one announced early redemption. Overall, the market supply remained stable, and clause games and redemption operations continued. It is still necessary to pay attention to marginal changes on the supply side in the future [10]. Convertible Bond Allocation Suggestions - The convertible bond market was actively volatile during the week, and risk appetite increased slightly. In terms of allocation, it is recommended to adhere to the idea of "balanced allocation + gaming elasticity": focus on allocating large-cap blue-chip convertible bonds with high ratings, low premiums, and sufficient liquidity to balance low volatility and stable returns; at the same time, moderately grasp the periodic repair opportunities of low-par high-elasticity convertible bonds, focus on high-quality bonds in sectors such as media and light manufacturing with underlying stock prosperity support and performance certainty, and balance returns and risks [8]. Market Theme Weekly Review - **Equity Theme Weekly Review**: From June 3rd to June 6th, 2025, the A-share market continued its structural rotation. The technology sector warmed up, and short-term gaming sentiment was active. The daily limit style was prominent, with the daily limit index rising 8.0%, the first daily limit non-ST index rising 7.5%, and the first daily limit index rising 7.1%, reflecting high activity of short-term funds. Meanwhile, high-prosperity directions such as the digital economy and communication infrastructure strengthened. The optical module (CPO) index and the optical communication index rose 9.6% and 6.6% respectively, and the digital currency index and the east-west computing index also recorded gains of over 4%. Funds focused on structural repair opportunities for high-quality themes. The financial technology and pharmaceutical sectors also performed well, with the financial technology index rising 3.9%, the pharmaceutical centralized procurement index rising 3.7%, the cross-border payment index rising 3.4%, and the innovative drug index rising 2.6%. However, the automotive sector corrected, with theme sectors such as the new energy vehicle index, intelligent driving index, humanoid robot index, and Huawei automotive index experiencing corrections. Overall, the market was still mainly driven by events and capital games in the short term, with obvious characteristics of rotation repair and high-low level switching. The technology sector warmed up, but funds preferred low-level directions with fundamental support [14]. - **Convertible Bond Weekly Review**: From June 3rd to June 6th, 2025, the convertible bond market significantly warmed up, and overall trading activity increased significantly. Capital allocation tilted towards small and medium-cap directions with high elasticity and prosperity support. In terms of the market, the ChinaBond Convertible Bond Index rose 1.08% across weeks, the large-cap index rose 0.66%, the medium-cap index rose 1.19%, and the small-cap index performed the strongest, with a gain of 1.61%, indicating an increase in market risk appetite and a preference for small and medium-cap elastic targets. In terms of the parity range, the valuation of medium and low-par convertible bonds stretched significantly, while the medium and high-par range overall warmed up slightly. There was also a structural differentiation in the market price range, and the high-price range adjusted. At the industry level, the media, light manufacturing, and beauty care sectors led the gains. At the individual bond level, the convertible bonds with higher gains were mostly driven by underlying stocks, and trading opportunities were concentrated in targets with prosperity support and high elasticity. The supply rhythm in the primary market slowed down. Only one listed enterprise updated its convertible bond issuance plan during the week, with a scale of 450 million yuan, and the supply risk was temporarily controllable. Overall, the risk appetite of the convertible bond market warmed up moderately in the short term, and capital preferences were concentrated in medium and low-price and some medium and high-par range convertible bonds. It is recommended to pay attention to repair opportunities in the medium and low-par range and balance the stable allocation of large-cap convertible bonds [17]. Weekly Market Outlook - **A-share Market**: The A-share market is expected to continue its oscillating rotation characteristics, and the market style will gradually tilt towards balanced allocation. Capital layout will also tend to low-level repair and growth directions. In the short term, it is necessary to be vigilant against the high-level adjustment pressure of some previously strong sectors. It is recommended to focus on sectors such as pharmaceuticals and consumption with good prosperity sustainability and performance support [19]. - **Convertible Bond Market**: In the short term, the convertible bond market may experience a decline in activity with the fluctuations of the equity market, and risk appetite will still be differentiated. It is recommended to focus on allocating medium and high-price convertible bonds with low premiums, high certainty, and underlying stock elasticity, and pay attention to targets with capital allocation value in industries such as basic chemicals and transportation. In terms of strategy, it is recommended to balance the defensive attributes of high-rated blue-chip convertible bonds and the periodic gaming opportunities of small and medium-cap elastic convertible bonds, moderately grasp the structural repair window, and prevent the trading congestion risk of high-level sectors [19].