Key Takeaways
- ZTE Corporation reported RMB 62.49 billion in revenue for H1 2024, a 2.9% increase year-on-year.
- The company’s net profit attributable to shareholders rose to RMB 5.73 billion, reflecting a 4.8% year-on-year gain.
- ZTE made significant advancements in technologies like AI, 5G-A, and optical networks, while investing heavily in R&D, accounting for 20.4% of operating revenue.
Financial Performance Highlights
ZTE Corporation has announced its financial results for the first half of 2024, revealing a revenue of RMB 62.49 billion, representing a 2.9% increase from the same period last year. The company reported a net profit of RMB 5.73 billion, marking a year-on-year rise of 4.8%. After accounting for extraordinary items, the net profit was RMB 4.96 billion, an increase of 1.1%. Basic earnings per share were noted at RMB 1.20, and net cash flows from operating activities grew by 8.9% to reach RMB 7.00 billion.
ZTE attributed these stable performances to its steadfast commitment to technological innovation in a complex and competitive market. The company has experienced considerable growth in emerging technologies and applications such as Artificial Intelligence Generated Content (AIGC), 5G-A, and the low-altitude economy. This synergy of “connectivity + computing” has helped ZTE maintain a favorable position in the industry.
Sector Performance
In the operator network segment, ZTE faced challenges in domestic markets due to an unfavorable investment environment, while experiencing robust international growth with telecom operators, achieving double-digit growth rates. Notably, the company’s expansion into the government-enterprise and consumer sectors greatly contributed to revenue growth, with increases of 56.1% and 14.3% respectively.
In total, ZTE’s domestic revenue accounted for RMB 43.06 billion (68.9%), while international revenue was RMB 19.43 billion (31.1%). Revenue from operator networks, government-enterprise, and consumer businesses amounted to RMB 37.30 billion, RMB 9.17 billion, and RMB 16.02 billion respectively.
Research and Innovation Investment
Investment in research and development was significant, with ZTE’s R&D expenses totaling RMB 12.73 billion, which is 20.4% of its operational revenue. The company has submitted over 90,000 global patent applications and holds around 46,000 granted patents. Specifically in AI, ZTE has about 5,000 patent applications, with over 2,000 patents granted, enhancing its competitiveness in the digital intelligence sector.
ZTE has focused on continued innovation in connectivity technologies, achieving significant success with its 5G base stations and core networks, ranking second globally. Its optical network offerings saw the highest quarter-on-quarter growth rate in market share. The company also successfully piloted 50G PON solutions with over 50 operators globally and laid down the first large-scale commercial deployment of a 400G all-optical inter-provincial backbone network.
Future Outlook
Looking ahead, ZTE aims to reinforce its technological innovations and extend its outreach in the domains of connectivity, computing, capability, and intelligence. By enhancing its digital and intelligent infrastructure and fostering open collaboration with industry partners, ZTE aspires to build a highly efficient and intelligent digital future, positioning itself at the forefront of the technology industry.
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