ZTE (000063) H2 2024 earnings summary

Executive summary

• Revenue for 2024 was RMB121.3 billion, down 2.38% year-over-year, with net profit attributable to ordinary shareholders at RMB8.42 billion, a 9.66% decrease year-over-year. Net profit after extraordinary items fell 16.49% to RMB6.18 billion.

• Operating cash flow dropped 34.05% to RMB11.48 billion, while total assets grew 3.17% to RMB207.3 billion. Owners' equity rose 7.06% to RMB72.8 billion.

• The company maintained its strategic focus on transitioning from connectivity to computility, emphasizing innovation, R&D, and digital transformation across business segments.

Financial highlights

• Gross profit margin was 37.91%, down 3.57 percentage points year-over-year.

• Weighted average return on net assets was 11.97%, down 3.22 percentage points year-over-year.

• Basic and diluted EPS were RMB1.76, both down 10.20% year-over-year.

• Net cash flows from operating activities per share were RMB2.40, down 34.07% year-over-year.

• Gearing ratio improved to 64.74% from 66.00% last year.

Outlook and guidance

• The company expects a complex and volatile external environment in 2025, with AI and digital transformation as key growth drivers.

• Plans include deepening market share in 5G-A, full-optical networks, and intelligent computing, while expanding government, corporate, and consumer businesses.

• Focus on qualitative growth, agile marketing, and leveraging partnerships for mutual benefit.