ZTE (000063) H1 2024 earnings summary

Executive summary

• Achieved stable growth in H1 2024, with revenue up 2.94% year-over-year to RMB62.49 billion and net profit attributable to shareholders up 4.76% to RMB5.73 billion.

• Maintained strong R&D investment, focusing on digitalization, AI, and green development, with R&D expenses at RMB12.73 billion, 20.37% of revenue.

• Significant growth in government and corporate business, while carrier network revenue declined due to domestic investment sentiment.

• International revenue rose 10.44% year-over-year, now 31.09% of total revenue.

Financial highlights

• Operating revenue: RMB62.49 billion, up 2.94% year-over-year.

• Net profit attributable to shareholders: RMB5.73 billion, up 4.76% year-over-year.

• Gross profit margin: 40.47%, down 2.75 percentage points year-over-year.

• Net cash flows from operating activities: RMB7.00 billion, up 8.94% year-over-year.

• Basic and diluted EPS: RMB1.20, up 4.35% year-over-year.

Outlook and guidance

• Plans to accelerate development in computing and handset businesses, while strengthening core wireless and wireline products.

• Focus on innovation in 5G-A, optical networks, and intelligent computing, with continued international expansion.

• Aims for stable, long-term growth by leveraging digitalization, intelligentization, and low-carbon trends.