ZTE Corporation (“ZTE” or the “Group”) (A share stock code: 000063.SZ/ H share stock code: 0763.HK) today announced its Interim results for the day ended 30June 2009.

Based on ASBEs and HKAS, ZTE recorded a revenue of RMB 27.71 billion in the first half of 2009, representing an increase of 40.4% against the same period of 2008. Net profit was RMB780 million. Basic earnings per share were RMB0.45.

During the reporting period, benefited by the full-scale construction of 3G networks in China, the Group reported operating revenue of RMB14.95 billion in the domestic market, representing a year-on-year growth of 111.7%. The Group’s wireless products delivered expected performance in the network tenders of China Unicom and China Telecom and significant breakthroughs were achieved in major coastal provinces that are more prosperous riding on the cost advantages and customization capabilities.

From the international market, the Group made revenue of RMB12.76 billion, up by 0.7% year-on-year and accounted for46.0% of its total operating revenue. Second-generation (2G) network construction and capacity expansion in key markets in developing countries and growing demand for bandwidth upgrades and innovative services in developed countries have been the force behind steady growth of the Group’s international market. The ever stronger cooperation between the Group and mainstream global carriers has presented the Group with opportunities for expand its market in both depth and width in the future.

On the product front, the Group recorded year-on-year revenue growth of 46.2% for carriers’ networks, 29.8% for handset products and 29.2% for telecommunication software systems, services and other products during the reporting period.

ZTE puts about 10% of its revenue to R&D every year. During the reporting period, the Group’s R&D cost grew by 58.2% year-on-year, which was higher than the rate of revenue growth. Selling and distribution cost and administrative expenses also grew, by 21.4% and 21.0% respectively, whereas financing expenses was down by 8.6%, which is slower than the rate of revenue growth. These figures indicated the emphasis of the Group on R&D and that it managed to improve management of its operations.

Mr. Hou Weigui, Chairman of ZTE, said, “the Group will seek to consolidate its businesses with the three leading PRC carriers on the back of its initial market shares in the domestic 3G sector. Meanwhile, the Group will seek to maintain its competitive edge in the international market and focus on large, populous countries as potential emerging markets.We will also strengthen cooperation with key strategic carriers in high-end markets such as Western Europe and North America to unfold further opportunities for cooperation with top-tier global carriers, in response to upgrades of communications technologies taking place in developed countries/regions and changes in the competitive scenario for global suppliers.

The Group will continue to implement the strategies of differentiation and cost leadership in the second half of the year, seeking to pursue stable development and deliver sound results by enhancing project-based operations and extending its advantages in cost and technology as well as its ability in one-stop project delivery.”