Company sees 26% growth in domestic market

22 August 2012, Shenzhen, China – ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code: 000063.SZ), a publicly-listed global provider of telecommunications equipment and network solutions, today announced its interim results for the six months ended June 30, 2012.

Based on HKFRS, ZTE recorded revenue of RMB 42.64 billion for the period, an increase of 15.2% year-on-year. Pre-tax profit in the period was RMB 656 million, a decrease of 48.5% year-on-year. Basic earnings per share for the period were RMB 0.07.

Applying PRC ASBEs for period ending June 30, operating revenue was RMB 42.64 billion, representing year-on-year growth of 15.2%. Total profit in the period was RMB 656 million, a decrease of 48.5% year-on-year. Basic earnings per share for the period were RMB 0.07.

During the reporting period, ZTE reported operating revenue of RMB 20.89 billion from the domestic market, accounting for 49% of overall operating revenue and representing year-on-year growth of 26.4%.

From the overseas market, ZTE reported operating revenue of RMB 21.76 billion during the period, accounting for 51% of its overall operating revenue and representing year-on-year growth of 6.2%. The company endeavored to enhance its market position by focusing on growing its business in developed nations and by cooperating with mainstream global carriers. It also consolidated market share in emerging markets.

ZTE reported revenue of RMB 21.28 billion for carrier network products during the period, representing year-on-year growth of 3.9%. Terminal products revenue was RMB 14.25 billion, representing year-on-year growth of 27.1%. Revenue for telecommunication software systems, services and other products was RMB 7.11 billion, representing year-on-year growth of 33.8%.

In the first half of 2012, ZTE capitalized growth opportunities for 4G and wireless products in Asia Pacific markets such as China, Japan and India. In July 2012, ZTE won an LTE network construction project with China Mobile in Hong Kong. The completed network will be the first dual-mode LTE network in the Asia-Pacific region.

In April 2012, ZTE assisted Bharti Airtel, one of the largest mobile operators in India, with the launch of the first commercial TD-LTE network in Kolkata, a milestone for TD-LTE commercial network deployment in India. To date, ZTE has constructed trial and commercial networks in 19 countries for 33 leading global operators. Of these, nine are commercial networks.

ZTE also saw a 70% increase in sales in its government and enterprise business for the period ending June 30, compared with the same period a year earlier. This was partially due to the company’s launch of data center products and a series of smart solutions in the government and business arenas, including Smart Mine, Smart City and the Smart Traffic System. ZTE’s videoconferencing products also have been adopted by leading operators in Europe and the United States.

During the period, ZTE entered the global top five of smartphone manufacturers, maintaining its No. 4 ranking for number of handsets shipped in the second quarter of 2012, according to IDC research. In addition, ZTE has moved into the mid- to high-end smartphone market with the recent launch of its ZTE Grand series of smartphones in several countries.

In the second half of 2012, ZTE will capitalize on opportunities presented by capacity expansion and upgrades of global wireless networks, national broadband strategies and changing government and corporate smart terminal requirements. ZTE will continue to focus on developing nations and mainstream carriers while expanding its business in the government and corporate service sectors. Meanwhile, the company will maintain its efforts to strengthen cash flow, control risk and optimize processes with a view to improving efficiency.