Core Insights - ZTE Corporation is deepening its "connection + computing power" strategy, showing significant results with a revenue of 71.55 billion yuan in the first half of 2025, a year-on-year increase of 14.5% [1] - The company is embracing AI opportunities, with revenue from computing power and terminal products growing nearly 100% year-on-year, accounting for over 35% of total revenue [1] - The recent release of the "Artificial Intelligence +" action plan aligns with ZTE's focus on comprehensive layout and technological breakthroughs in the "connection + computing power" field [1] Group 1: Computing Power Infrastructure - ZTE has developed a "distributed high-performance domestic intelligent computing resource pool" that supports various computing power acceleration hardware, contributing to multiple large-scale projects [3] - The AI Booster training platform enables efficient deployment of large models, significantly reducing migration costs [3] - ZTE's AiCube intelligent computing machine supports large models with 671 billion parameters, achieving millisecond-level responses and allowing thousands of concurrent users [5] Group 2: Green Computing Initiatives - ZTE's modular data center solution shortens construction time by 40%, supporting 850,000 5G base stations and achieving a carbon reduction of 6 million tons annually [6] - The company integrates a five-dimensional intelligent system in its manufacturing processes, exemplifying the fusion of intelligent manufacturing and green computing [6] Group 3: AI Technology Innovations - ZTE's Nebula Coder-V6 model scored 67.4 points in the SuperCLUE Chinese model evaluation, excelling in scientific reasoning and code generation [7] - The company has filed over 5,500 AI-related patents, with nearly 50% granted, establishing a strong foundation in AI technology research [7] - ZTE's AIR Net high-level intelligent solution enhances network operations, while its low-altitude comprehensive solution has completed over 100 commercial and pilot projects [7] Group 4: Industry Applications and Ecosystem - ZTE's digital star cloud 4.0 platform integrates large model technology to create benchmark projects across 18 industries, improving operational efficiency in various sectors [8][10] - The company is building a comprehensive AI ecosystem that spans industry applications and consumer terminals, promoting AI education and healthcare solutions [10][11] - ZTE's new human-computer interaction paradigm is showcased in its Nubia series terminals, enhancing user experience through AI capabilities [13] Group 5: Future Directions - ZTE's president emphasizes the company's commitment to being a leader in network connectivity and intelligent computing power, focusing on "intelligent symbiosis and digital-physical integration" [15] - The company aims to drive AI technology from laboratory settings to industrial applications, contributing to the high-quality development of China's AI industry [15]

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]

Core Viewpoint - The article highlights the significant advancements in communication technology showcased at the MWC 2025, emphasizing the role of Chinese manufacturers, particularly ZTE, in driving innovation in both communication infrastructure and intelligent computing solutions [1][2]. Group 1: Communication Acceleration - The 5G-A technology is entering a phase of accelerated development and commercialization, with ZTE leading initiatives such as ATG civil aviation communication and NTN satellite communication to achieve ubiquitous connectivity [4]. - ZTE has made significant strides in the deployment of 5G infrastructure, achieving the first domestic NR-NTN low Earth orbit satellite simulation verification and supporting China Telecom in launching the first IoT NTN commercial network [4]. - ZTE's core capabilities in chipsets, algorithms, and architecture are being leveraged to create efficient, simplified, and green mobile communication networks, with the introduction of AI capabilities across network layers [4][5]. Group 2: All-Stack Intelligent Computing Evolution - ZTE positions intelligent computing as a long-term strategic focus, aiming to build a comprehensive intelligent computing solution that meets the surging demand for computing power driven by AI model advancements [7]. - The company has developed domestic intelligent computing servers and self-developed chips to support various computing acceleration hardware, facilitating efficient deployment of AI applications [7][8]. - ZTE's international expansion in the intelligent computing sector is evident, with a significant increase in overseas data center orders, exceeding 100% year-on-year growth in 2024 [8]. Group 3: Terminal "AI Together" - ZTE's terminal business aims to integrate AI technology across various devices, enhancing user experience and promoting the concept of "AI for All" [9][10]. - The introduction of the "AI Together" concept allows for the intelligent integration of multiple AI models, enabling devices to select the most suitable model for user needs [11]. - ZTE's terminal products, including smartphones and smart wearables, have seen significant market success, with the Nubia brand expanding to over 30 countries and achieving top sales in the gaming smartphone segment [11][12].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [3][11]. Core Insights - In 2024, the company reported a revenue of 121.299 billion RMB, a decrease of 2.38% year-on-year, and a net profit attributable to shareholders of 8.425 billion RMB, down 9.66% year-on-year [1]. - The operator business is under short-term pressure, while the government-enterprise and consumer sectors are experiencing rapid growth, with government-enterprise revenue increasing by 36.68% and consumer revenue by 16.12% [1]. - The company is capitalizing on AI opportunities, with overseas data center orders growing by over 100% year-on-year, driven by high-performance training servers and cost-effective inference servers [2]. - The self-developed chip business is opening up growth space for the company, with significant advancements in chip design capabilities and high-performance hardware [3]. Summary by Sections Financial Performance - In Q4, the company achieved a revenue of 31.254 billion RMB, a decline of 10.34% year-on-year, and a net profit of 518 million RMB, down 65.08% year-on-year [1]. - The company expects revenues of 130.537 billion RMB, 140.723 billion RMB, and 153.672 billion RMB for 2025, 2026, and 2027 respectively, with net profits projected at 9.533 billion RMB, 11.081 billion RMB, and 12.528 billion RMB [3][6]. Business Segments - The operator network business generated 70.327 billion RMB, a decrease of 15.02% year-on-year, primarily due to the overall investment environment in the country [1]. - The government-enterprise business's gross margin was 15.33%, down 19.58 percentage points, affected by declining margins in servers and storage [1]. Market Opportunities - The company is leveraging AI developments to mitigate cyclical fluctuations caused by declining capital expenditures in the operator sector, which is expected to stabilize performance [2]. - The introduction of self-developed high-density switches and chips is anticipated to enhance the company's competitive edge and valuation [3].

Investment Rating - The report maintains a "Recommended" rating for the company, indicating an expected stock price increase of over 15% relative to the benchmark index within the next 12 months [6][12]. Core Views - The company's revenue for 2024 was 121.30 billion yuan, a decrease of 2.38% year-on-year, with a net profit attributable to shareholders of 8.43 billion yuan, down 9.66% year-on-year. The operating cash flow also saw a significant decline of 34.05% [1][2]. - The operator network business faced challenges, but the company is seeing growth in its computing power and terminal segments, which are expected to enhance operational resilience [4][5]. Summary by Sections Overall Performance - The company reported a total revenue of 121.30 billion yuan in 2024, with a decline in operator network revenue by 15.02% to 70.33 billion yuan, while enterprise and consumer segments showed growth [2][3]. - The enterprise business revenue increased by 36.68% to 18.57 billion yuan, although the gross margin decreased by 19.58 percentage points [2]. - Consumer business revenue grew by 16.12% to 32.41 billion yuan, with a slight increase in gross margin [2]. Computing Power - The company accelerated its penetration into major industry clients, with a doubling of revenue from internet giants and large banks, contributing to nearly 60% growth in domestic enterprise revenue [3]. - The company is involved in building distributed high-performance computing resource pools and has developed proprietary chips to support various computing acceleration hardware [3]. Terminals - The company has expanded its AI terminal offerings, with mobile phone revenue increasing by over 40% [4]. - Home broadband terminal shipments exceeded 100 million units, maintaining the top global market share for four consecutive years [4]. Financial Forecast - The company forecasts net profits of 8.74 billion yuan in 2025, 9.31 billion yuan in 2026, and 10.15 billion yuan in 2027, with corresponding PE ratios of 21, 20, and 18 [5][9].