Doubled revenues and a profit increase of more than 108% were the highlights of a record six months for ZTE Corporation of China (SZ 000063), global supplier of advanced telecommunications equipment.
As the Chinese telecoms industry continued its rapid growth, alongside marked global market recovery, ZTE’s ongoing commitment to R & D funding, the employment of highly qualified personnel and the establishment of additional overseas offices has reaped major rewards. During the six months ending June 30, 2004, ZTE recorded revenue from principal operations of RMB 11.774 billion (US$ 1.4 billion), up 100.65% over the same period of previous year; profits from principal operations of RMB 4.303 billion (US$520.3 million), up 108.10% over the previous year; and net profits of RMB 513 million (US$ 62 million), up 163.46% over the previous year. The earnings per share was up to RMB 0.641.
Growth in mobile handset sales was a significant factor to the strong first half performance. Sales of GSM, CDMA and PCS handsets contributed RMB 2.653 billion ($320.8 million) to the revenue from principal operations, up 194% over the previous year, with PCS handset growth being particularly large.
Sales of handsets in international markets increased significantly. Overall, ZTE´s international sales grew strongly, and it made significant breakthroughs in strategic markets. International revenue from principal operations was RMB 2.069 billion (US$ 250.2 million), up 353.48% over the previous year.
In addition to expanding its operations, ZTE continued to focus on control over costs and expenses, and has reaped the benefits of economies of scale. Growth in profits and net profits from principal operations outstripped growth in revenues from principal operations.
ZTE is looking to further develop its international markets and customer support in such markets, improve the functionality of its products and enhance customer satisfaction. At the same time, ZTE aims to consolidate its competitiveness in the market, and improve accounting policies and internal controls to match international standards.
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