Revenue increases 48% Net profit increases 45%ZTE Corporation (ZTE Corporation 000063) published its half-yearly report 2003 on August 12. According to the report, ZTE Corporation recorded the revenue from principal business of RMB 5.8682 billion, net profit of RMB 194.78 million and earnings per share of RMB 0.292. The revenue from principal business and net profit increased 48% and 45% respectively over the corresponding period of the previous year. This continued increase further enhanced the Company’s core competencies and its leading position in the industry.Given the growth momentum at the end of 2002, the Chinese telecom industry sustained fast development in the first half year of 2003. In order to seize the market opportunity, ZTE Corporation carried out the effective product and marketing strategies to actively promote the customer-oriented services and focus on the development of wireless products, network products, optical transmission and handsets.In respect of wireless products, apart from the massive expansion of existing market, PHS achieved breakthroughs in the emerging markets such as Beijing, Guangzhou and Hunan, with the market share of over 40%. BWA 3.5G broadband wireless access products topped the list in the market and won the contracts of key projects like Tianjin Telecom and Beijing Mobile. ZTE rolled out deep coverage solutions, wide area coverage solutions and integrated data service solutions in respect of CDMA products. GSM products still accounted for approximately 40% market share in the marginal network market. All these achievements further consolidated ZTE’s top brand image of homemade wireless equipment. Regarding the wired product market, ZTE’s optical transmission products made an outstanding performance in the large projects like the northern backbone transmission network of China Telecom and the phase fourth construction of China Netcom’s core network. Furthermore, there are over 2.6 million lines of ZTE ADSL products operating over the network, and ZTE continues to maintain the dominant position in the broadband construction market.In the area of handsets, ZTE has a good lead over its Chinese counterparts in the research and development of handset technology, and the company is able to develop certain core SIM cards. Being the only supplier in the world that is engaged in the development of products ranging from system equipment to handsets in the fields of GSM, CDMA and PHS, ZTE has the unparalleled advantages in the market coverage and system interface as well as the cooperation (especially in respect of new services and sales packages) with operators. ZTE’s handsets business increased at a tremendous speed in 2003, accounting for approximately 15% of its revenue from principal business. Through couple years of efforts in the international market, ZTE achieved many breakthroughs in overseas market in the first half year of 2003, with a year-on-year increase of over 100% in its overseas sales. ZTE was awarded with GSM, CDMA and switches contracts of large sums in Russia, Nigeria, Ethiopia and other countries.Looking ahead, as the pace of recovery in the global telecom industry accelerates, by capitalizing on its strong R&D strength and technical reserve as well as the accurate perception of the market, ZTE will undoubtedly outperform in the new round of market competition.