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ZTE Corporation Class H (HK:0763)
:0763

ZTE (0763) AI Stock Analysis

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HK

ZTE

(OTC:0763)

Rating:70Outperform
Price Target:
HK$25.00
▲(2.67%Upside)
ZTE's overall stock score reflects strong financial health and a reasonable valuation, tempered by mixed technical indicators. The company's robust profitability and stable revenue growth are significant strengths. However, challenges in cash flow management and mixed technical signals suggest caution. The valuation remains favorable, offering a balanced risk-reward profile.
Positive Factors
Financial Performance
Revenue increased by 2.9% YoY to RMB62.5bn, while net profit grew by 4.8% YoY to RMB5.7bn.
Valuation
The stock is currently trading below its historical 3-year average P/E, indicating potential value.
Negative Factors
Revenue Challenges
The decline in revenue was mainly due to lower telecom spending in China and the delayed progress in ZTE’s AI servers.

ZTE (0763) vs. iShares MSCI Hong Kong ETF (EWH)

ZTE Business Overview & Revenue Model

Company DescriptionZTE Corporation provides integrated communication information solutions in the People's Republic of China, rest of Asia, Africa, Europe, the United States, and Oceania. It operates through three segments: Carriers' Networks, Government and Corporate Business, and Consumer Business. The Carriers' Network segment provides wireless access, wireline access, bearer networks, core networks, telecommunication software systems and services, and other innovative technologies and product solutions. The Consumer Business segment offers smart phones, mobile data terminals, home information terminals, and innovative fusion terminals, as well as related software application and value-added services. The Government and Corporate Business segment focuses on providing informatization solutions for the government and corporations through the application of products, such as communications networks, Internet of Things, big data, and cloud computing. The company was founded in 1985 and is headquartered in Shenzhen, the People's Republic of China.
How the Company Makes MoneyZTE makes money primarily through the sale of telecommunications equipment and services. The company's revenue model is diversified across its three main business sectors: Carrier Networks, Government and Corporate Business, and Consumer Business. In the Carrier Networks sector, ZTE generates revenue by supplying network infrastructure, such as 5G equipment and solutions, to telecommunications operators. The Government and Corporate Business sector focuses on providing customized ICT solutions and services to government agencies and enterprises, contributing to ZTE's revenue through projects and long-term service contracts. The Consumer Business sector earns revenue from the sale of smartphones and other smart devices to individual consumers. ZTE's earnings are further supported by strategic partnerships with telecom operators and technology firms, as well as ongoing investments in research and development to drive innovation and maintain a competitive edge in the market.

ZTE Financial Statement Overview

Summary
ZTE demonstrates strong financial health with robust profitability, stable revenue growth, and a solid balance sheet. However, cash flow management presents a moderate concern, with declining free cash flow impacting liquidity.
Income Statement
84
Very Positive
ZTE demonstrates strong profitability with a Gross Profit Margin of 35.9% and a Net Profit Margin of 6.6% for TTM (Trailing-Twelve-Months). The EBIT Margin stands at 7.3%, while EBITDA Margin is at 10.0% indicating efficient operations. Revenue growth is modest, with a slight increase from 2024 to TTM. The company maintains stable profitability, although there was a slight decline in gross profit margin from 2023 to TTM.
Balance Sheet
78
Positive
The balance sheet reflects a stable financial structure with an Equity Ratio of 33.2% and a manageable Debt-to-Equity Ratio of 0.75 in TTM. ROE is strong at 11.3%, showcasing efficient use of equity to generate profits. The company maintains a healthy balance between debt and equity, though total debt has increased over the years, which could impact future leverage.
Cash Flow
72
Positive
Operating Cash Flow to Net Income Ratio is 0.49 in TTM, indicating room for improvement in cash generation efficiency. The Free Cash Flow to Net Income Ratio stands at 0.63, showing positive but moderate cash flow health. Free Cash Flow decreased from the previous year, indicating potential cash flow management challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue123.69B121.30B124.25B122.95B114.52B101.45B
Gross Profit44.44B45.99B50.80B45.73B40.36B32.07B
EBITDA12.41B17.65B18.27B15.08B14.57B10.53B
Net Income8.14B8.42B9.33B8.08B6.81B4.28B
Balance Sheet
Total Assets217.92B207.32B200.96B180.95B168.76B150.63B
Cash, Cash Equivalents and Short-Term Investments59.47B57.65B78.70B56.86B52.07B36.70B
Total Debt54.16B53.06B56.11B46.54B40.36B36.00B
Total Liabilities145.35B134.21B132.63B121.41B115.48B104.51B
Stockholders Equity72.28B72.81B68.01B58.64B51.48B43.30B
Cash Flow
Free Cash Flow5.08B7.47B13.40B2.63B10.04B3.76B
Operating Cash Flow4.02B11.48B17.41B7.58B15.72B10.23B
Investing Cash Flow-15.00B-28.67B-20.90B-1.29B-10.59B-7.08B
Financing Cash Flow-6.87B-5.82B7.37B1.45B2.78B-289.90M

ZTE Technical Analysis

Technical Analysis Sentiment
Positive
Last Price24.35
Price Trends
50DMA
22.80
Positive
100DMA
24.56
Negative
200DMA
22.23
Positive
Market Momentum
MACD
0.27
Negative
RSI
61.25
Neutral
STOCH
86.98
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0763, the sentiment is Positive. The current price of 24.35 is above the 20-day moving average (MA) of 23.28, above the 50-day MA of 22.80, and above the 200-day MA of 22.23, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 61.25 is Neutral, neither overbought nor oversold. The STOCH value of 86.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0763.

ZTE Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
$161.16B13.2711.39%2.75%-2.65%-14.96%
63
Neutral
$33.22B5.99-11.76%1.91%5.54%-19.87%
$692.22M-18.09%1.29%
$3.19B11.706.68%4.72%
59
Neutral
HK$187.02M4.325.02%1.01%660.00%
48
Neutral
HK$144.98M4.8213.21%61.65%98.79%
46
Neutral
HK$123.40M-21.92%108.35%58.07%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0763
ZTE
24.35
8.38
52.43%
COBJF
Comba Telecom Systems Holdings
0.21
0.09
75.00%
YZOFF
Yangtze Optical Fibre and Cable Joint Stock Co
1.64
0.65
65.66%
HK:1473
Pangaea Connectivity Technology Limited
0.15
-0.03
-16.67%
HK:1613
Synertone Communication Corporation
0.28
-0.11
-28.21%
HK:1617
Nanfang Communication Holdings Ltd.
0.12
0.03
33.33%

ZTE Corporate Events

ZTE Appoints Ms. Li Miaona as Employee Director for Tenth Board Session
May 23, 2025

ZTE Corporation announced the election of Ms. Li Miaona as the employee director for the Tenth Session of its Board of Directors. Her term will begin on May 23, 2025, and end on March 27, 2028. Ms. Li has been with ZTE since 2000 and has held various management roles, bringing extensive experience to her new position. This appointment is part of ZTE’s ongoing efforts to involve employees in its governance structure, potentially enhancing its operational effectiveness and stakeholder engagement.

The most recent analyst rating on (HK:0763) stock is a Sell with a HK$19.47 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Corporation Announces Board of Directors and Committee Roles
May 23, 2025

ZTE Corporation has announced the composition of its Board of Directors and the roles each member will play in various committees. This announcement is crucial as it outlines the leadership structure and governance framework that will guide the company’s strategic decisions and compliance efforts, potentially impacting its operational efficiency and stakeholder confidence.

The most recent analyst rating on (HK:0763) stock is a Sell with a HK$19.47 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Corporation Expands Wealth Management Investments
Apr 30, 2025

ZTE Corporation has announced its plans to apply internal funds for the subscription of wealth management products with a total amount not exceeding RMB20 billion in 2024 and RMB30 billion in 2025. These investments, characterized by high security and good liquidity, are part of the company’s strategy to manage its financial resources efficiently. The transactions, conducted with the Bank of Hangzhou, have been classified as discloseable under the Hong Kong Listing Rules, necessitating reporting and announcement requirements due to the aggregated transaction size exceeding the 5% threshold.

ZTE Corporation Concludes First Extraordinary General Meeting of 2025
Apr 24, 2025

ZTE Corporation held its First Extraordinary General Meeting of 2025, which was conducted through a combination of on-site and online voting. The meeting, presided over by Ms. Fang Rong, the Chairman of the Board, saw no vetoed or changed resolutions, indicating a smooth decision-making process. This meeting underscores ZTE’s commitment to compliance with legal and regulatory standards, as it adhered to relevant laws and listing rules, ensuring transparency and shareholder engagement.

ZTE Reports Revenue Growth Amid Profit Decline in Q1 2025
Apr 22, 2025

ZTE Corporation has released its first quarterly report for 2025, highlighting a 7.82% increase in operating revenue compared to the same period last year. However, the company experienced a decline in net profit attributable to ordinary shareholders by 10.50%, and a significant drop in net profit after extraordinary items by 26.14%. The report also notes a decrease in net cash flows from operating activities by 37.93%. These financial results, influenced by changes in accounting policies, suggest challenges in maintaining profitability despite revenue growth, which could impact the company’s market positioning and stakeholder confidence.

ZTE Corporation Announces First Extraordinary General Meeting of 2025
Apr 8, 2025

ZTE Corporation has announced the convening of its First Extraordinary General Meeting of 2025 to be held on April 24, 2025. The meeting will address two key resolutions: a special resolution to amend relevant clauses in the company’s Articles of Association and procedural rules, and an ordinary resolution to provide a guarantee limit of up to USD 1.5 billion for its subsidiary, ZTE KANGXUN TELECOM CO., LTD. This move is significant for ZTE as it aims to strengthen its operational framework and support its subsidiary’s procurement activities, potentially impacting its market positioning and stakeholder interests.

ZTE Corporation Schedules Board Meeting to Approve Q1 2025 Results
Apr 8, 2025

ZTE Corporation has announced that its Board of Directors will convene a meeting on April 22, 2025, to approve and publish the company’s first quarterly results for the period ending March 31, 2025. This meeting is significant as it will provide insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and stakeholder interests.

ZTE Corporation Announces Board Resolutions and Governance Amendments
Apr 7, 2025

ZTE Corporation’s Board of Directors held its Second Meeting of the Tenth Session, where they approved amendments to the Articles of Association and other procedural rules. These changes, which include adjustments to the role of the legal representative and financial assistance provisions, are aimed at improving governance and operational efficiency. The resolutions will be submitted for consideration at the company’s general meeting, potentially impacting ZTE’s corporate structure and stakeholder engagement.

ZTE Corporation Announces Final Dividend Payment Details
Apr 1, 2025

ZTE Corporation has announced the payment of final dividends for its shareholders, with a dividend of RMB6.17 per 10 shares before tax. The dividends will be distributed to H shareholders listed on the register by April 9, 2024, and will be paid in Hong Kong dollars. The company will withhold income taxes on dividends for overseas non-resident shareholders in accordance with Chinese taxation laws, with varying rates depending on the shareholder’s residency and applicable tax treaties.

ZTE Announces Final Dividend for 2024 with Tax Details
Apr 1, 2025

ZTE Corporation, a prominent player in the telecommunications industry, announced a final dividend for the year ending December 31, 2024. The dividend is set at RMB 6.17 per 10 shares, with payments to be made in Hong Kong dollars at an exchange rate of RMB 1 to HKD 1.08333. The payment date is scheduled for April 25, 2025. The announcement also details the withholding tax rates applicable to non-resident and resident shareholders, emphasizing the company’s compliance with international taxation agreements.

ZTE Corporation Announces Closure of H Share Register for Upcoming EGM
Apr 1, 2025

ZTE Corporation has announced the closure of its H share register from April 17 to April 24, 2025, in preparation for its First Extraordinary General Meeting (EGM) scheduled on April 24, 2025. This move is aimed at determining the qualifications of shareholders eligible to attend and vote at the EGM, reflecting the company’s commitment to maintaining transparent and organized shareholder engagement.

ZTE Corporation Announces New Board Appointments and Committee Members
Mar 31, 2025

ZTE Corporation has announced the resolutions from the first meeting of its tenth session Board of Directors. The meeting, held on March 31, 2025, resulted in the election of Ms. Fang Rong as the Chairman and Mr. Xu Ziyang as an Executive Director. Additionally, various members were appointed to specialist committees, including the Audit, Nomination, Remuneration and Evaluation, and Export Compliance Committees. These strategic appointments are expected to strengthen ZTE’s governance structure and enhance its operational efficiency.

ZTE Corporation Announces Board of Directors and Committee Roles
Mar 31, 2025

ZTE Corporation has announced the composition of its Board of Directors, highlighting the roles and functions of each member. The announcement underscores the company’s commitment to strong governance and compliance, with a focus on enhancing its operational efficiency and maintaining its competitive edge in the telecommunications industry.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 24, 2025