Core Insights - ZTE Corporation ranked second in the "Top 100 Innovative Enterprises in China" with a score of 86.74, following Huawei, highlighting its significant R&D investments and patent achievements [1][10] - The company is transitioning from a traditional telecommunications provider to a leader in both network connectivity and intelligent computing, reflecting a strategic shift towards AI and computing power [4][5] Group 1: Strategic Shift - ZTE's management foresaw the structural adjustments in operator investments as 5G network construction matures, prompting a proactive shift from "full connectivity" to "connectivity + computing power" [3][4] - The new vision aims to position ZTE as an "engine manufacturer" in the digital economy, moving beyond merely being a builder of infrastructure [4] Group 2: Technological Foundation - ZTE's strategy is supported by substantial R&D investments, with 2024 R&D expenses projected at 24.03 billion yuan, accounting for approximately 20% of revenue [6] - Cumulatively, ZTE invested 117.07 billion yuan in R&D from 2019 to 2024, resulting in significant technological advancements and numerous patents, including nearly 5,500 AI-related patent applications [6][7] Group 3: Market Performance - In the first half of 2025, ZTE's revenue from its second growth curve, including servers and storage, nearly doubled year-on-year, now representing over 35% of total revenue [8] - The AI server segment alone accounted for 55% of the revenue in this category, indicating strong demand from leading domestic internet companies [8] Group 4: Industry Recognition - ZTE's innovations in AI have garnered industry accolades, including the highest award at the 2025 World Artificial Intelligence Conference and significant contracts from major operators like China Mobile [9][10] - The company's comprehensive self-developed capabilities in AI technology are seen as a unique long-term competitive advantage, as reflected in positive evaluations from multiple brokerage firms [9]

Core Insights - The company reported a significant revenue growth of 14.51% year-on-year for H1 2025, reaching 71.553 billion yuan, with the second curve business revenue nearly doubling [1] - The net profit attributable to shareholders for H1 2025 was 5.058 billion yuan, with a non-recurring net profit of 4.104 billion yuan [1] - The company maintains a "buy" rating, anticipating continued growth in the second curve business alongside the rollout of 5G-A and ongoing computing power construction [1] Business Segments - The operator business generated 35.064 billion yuan in revenue for H1 2025, with a steady increase in market share for core wireless and wired products [2] - The government and enterprise business saw a remarkable revenue increase of 109.93% year-on-year, reaching 19.254 billion yuan, driven by growth in server and storage sales [2] - The consumer business achieved revenue of 17.235 billion yuan, a 7.59% increase, primarily due to growth in mobile products and cloud computer sales [2] Product Development - The company invested 12.665 billion yuan in R&D for H1 2025, launching self-developed chips and various computing acceleration hardware [3] - The introduction of the first domestic optical interconnect GPU super node and high-density switching systems supports large-scale computing clusters [3] - AI servers accounted for 55% of the company's server and storage revenue, which grew by over 200% year-on-year [2][3]