Achieving sound growth with its second-curve business
26 August 2022, Shenzhen, China - ZTE Corporation (0763.HK / 000063.SZ), a major international provider of telecommunications, enterprise and consumer technology solutions for the mobile internet, today has posted its financial results for the first half of 2022.
According to the results, for the six months ended 30 June 2022, ZTE achieved operating revenue of RMB 59.82 billion, 12.7% higher than a year earlier. During the period, net profit attributable to holders of ordinary shares of the listed company reached RMB 4.57 billion, an increase of 12.0%, and net profit after extraordinary items attributable to holders of ordinary shares of the listed company amounted to RMB 3.73 billion, representing a year-on-year increase of 65.8%. Basic earnings per share was RMB 0.96.
In the first half of 2022, ZTE, despite the challenges of the pandemic and complex external environment, has ensured the security and stability of its own supply chain, realized continuous delivery to its global customers and continuously improved the company's operational quality and efficiency, leveraging its advantages of being an ultimate cloud company, rich experience in digital transformation, mature business continuity system, and its own self-developed cloud platform that can support tens of thousands of people across the globe to work online.
ZTE has been committed to strengthening its end-to-end R&D investment and innovations. In the first half of 2022, the company’s R&D spending reached RMB 10.15 billion, accounting for 17.0% of its total operating revenue.
From January to June of 2022, ZTE's operating revenue in both domestic and international markets and its three major businesses (carriers' networks, government and enterprise, and consumer business) all achieved double-digit increase year on year. For the domestic market, the operating revenue reached RMB 40.60 billion, a year-on-year increase of 12.9%, accounting for 67.9% of the total operating revenue, while for the international market, the operating revenue amounted to RMB 19.22 billion, a year-on-year increase of 12.3%, covering 32.1% of the total operating revenue.
In terms of carriers' networks, ZTE achieved an operating revenue of RMB 38.72 billion yuan, an increase of 10.5%, compared with a year earlier. In the operators’ traditional network market, ZTE proactively participated in the global 5G constructions including 5G network, Gigabit fiber network and 5G transport network,and continuously strengthened the competitiveness of its products and solutions, building excellent cost-effective networks for its customers and optimizing the market structure accordingly.
To date, ZTE has entered into 5G cooperation with over 110 operators across the globe, covering major markets including Europe, Asia Pacific and the Middle East. Meanwhile, the company has actively seized the opportunity of domestic operators' cloud-network transformation, and deeply integrated its own capabilities with their requirements while providing its well-matched products and solutions. ZTE has secured the domestic operators' centralized procurements for multiple years.
In terms of government and corporate business, ZTE’s operating revenue increased by 18.3% year on year to RMB 6.71 billion during the period. Focusing on the internet, finance, electric power, transportation, government affairs and the industry, and relying on its "Precision Cloud Network" and "Digital Nebula", the company has deeply cultivated the digital transformation of the industry, promoted the deep integration of 5G and the industry, and fully participated in major projects such as the east-data-west-computing project in China. In addition, ZTE's core products and solutions such as server and storage, data center, enterprise network, video conference, cloud computer and distributed database were widely applied in the government and corporate markets, gradually forming a good cloud network ecosystem.
In consumer business, ZTE harvested revenue of RMB 14.39 billion, a year-on-year increase of 16.5% in the first half of 2022. ZTE, committed to offering its global users a seamless digital lifestyle in all scenarios, continued to make efforts in branding, products and channels to promote the sales of personal and household products.
During the period, ZTE, while consolidating the businesses in the first curve represented by wireless and wired products, has been rapidly expanding its businesses in the second curve, including server and storage products, terminals, 5G industry applications, automotive electronics, and digital energy. In H1, the company has achieved around 40% increase year on year in terms of the operating revenue from its second curve business.
Moving forward, ZTE, adhering to the positioning of "a driver of digital economy", will keep continuously promoting its own digital transformation. The company will stay committed to building a highly resilient organization and implementing the “dual-carbon” strategy to achieve sustainable development. In addition, the company will actively strengthen cooperation with its customers, industries and ecological partners to jointly advance the development of the global digital economy.