ZTE (0763) AI Stock Analysis

• Market Cap: HK$192.36B
• Dividend Yield: 2.43%
• Average Volume (3M): 35.55M
• Price to Earnings (P/E): 146.8
• Beta (1Y): 1.33
• Revenue Growth: 5.14%
• EPS Growth: -38.37%
• Country: HK
• Employees: 68,375
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.49
• Shares Outstanding: 755,502,560
• 10 Day Avg. Volume: 14,904,030
• 30 Day Avg. Volume: 35,546,862
• PEG Ratio: -1.27
• Price to Book (P/B): 1.50
• Price to Sales (P/S): 0.90
• P/FCF Ratio: 14.65
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 1.77
• Revenue Forecast (FY): HK$154.44B

• Rating: 47 Neutral
• Price Target: HK$25.00 ▼(-11.79% Downside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is held down primarily by weakening cash flow and margin/return compression alongside higher leverage. Technicals also indicate a sustained downtrend with weak momentum. A very high P/E further weighs on the profile, despite a moderate dividend yield.

Positive Factors

Strong revenue growth

TTM revenue growth of ~124% demonstrates substantial demand expansion and scale across ZTE’s segments. Durable top-line gains improve capacity to invest in R&D and network projects, deepen customer relationships, and create a larger installed base that supports recurring service revenue over the next several quarters.

End-to-end, diversified product portfolio

ZTE’s breadth across wireless and wireline network equipment, core/transmission, software, services and consumer devices creates multiple revenue channels and cross-sell opportunities. Structural diversification reduces reliance on any single product cycle and supports stable operator and enterprise contract flows over time.

Recurring after-sale services revenue

Maintenance, managed services and SLAs produce recurring revenue linked to the installed base, improving revenue visibility and customer stickiness. These semi-recurring streams cushion equipment sales cyclicality and support steadier cash inflows for reinvestment and debt servicing over the medium term.

Negative Factors

Margin compression

Material declines in gross and net margins suggest either rising input costs, weaker pricing or a less profitable product mix despite revenue growth. Sustained margin pressure diminishes operating profitability and free cash generation, limiting internal funding for strategic investments and reducing resilience to demand shocks.

Weakened cash generation

Operating cash flow more than halved year-over-year and free cash flow fell sharply, reducing the company’s buffer for capex, R&D and debt servicing. Persistent cash weakness constrains financial flexibility, increases reliance on external funding, and can hinder execution of longer-term strategic initiatives.

Rising leverage and weaker returns

Higher debt-to-equity alongside falling ROE signals tightening financial flexibility. With reduced margins and lower cash flow, elevated leverage raises interest and refinancing risk, limits room for opportunistic investment, and increases vulnerability to macro or sector downturns over the medium term.

ZTE Business Overview & Revenue Model

Company Description

ZTE 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 Money

ZTE generates revenue through multiple streams, primarily by selling telecommunications equipment and providing network solutions to telecom operators and businesses. The company's revenue model includes the sale of hardware such as base stations, routers, and switches, as well as software and services related to network planning, deployment, and maintenance. Additionally, ZTE earns income from its mobile devices, including smartphones and tablets, which are sold in various markets. Significant partnerships with telecom operators and collaborations with government and enterprise clients further enhance its revenue, while ongoing investments in research and development help ZTE to innovate and adapt to the evolving telecommunications landscape.

ZTE Financial Statement Overview

Summary

Mixed fundamentals: revenue is up sharply in TTM (~+124%), but profitability has compressed (gross margin ~29.9% vs ~37.9% in 2024; net margin ~4.4% vs ~6.9%). Leverage increased (debt-to-equity ~1.07 vs ~0.73), returns weakened (ROE ~7.9% vs ~11.6%), and cash generation fell materially (operating cash flow ~5.0B vs ~11.5B in 2024; free cash flow ~1.0B).

Income Statement

Revenue is up strongly in TTM (Trailing-Twelve-Months) (about +124%), but profitability has compressed sharply versus recent annual periods: gross margin fell to ~29.9% (from ~37.9% in 2024) and net margin declined to ~4.4% (from ~6.9% in 2024). Earnings power remains positive (EBIT margin ~4.5% in TTM), but the step-down in margins and profits versus 2023–2024 signals higher cost pressure and/or a less favorable mix despite the revenue expansion.

Balance Sheet

The balance sheet shows meaningful leverage and a deteriorating trend: debt-to-equity rose to ~1.07 in TTM (Trailing-Twelve-Months) from ~0.73 in 2024 as total debt increased materially. Equity is sizable (~75.5B) and returns are still positive, but return on equity declined to ~7.9% in TTM from ~11.6% in 2024, indicating weaker efficiency in generating profit on the capital base. Overall, the company has scale, but financial flexibility appears to be tightening with higher leverage.

Cash Flow

Cash generation weakened materially in TTM (Trailing-Twelve-Months): operating cash flow dropped to ~5.0B from ~11.5B in 2024 and ~17.4B in 2023, while free cash flow declined to ~1.0B (down ~23% year over year). Free cash flow still covers a meaningful portion of profits (free cash flow at ~62% of net income), but the sharp reduction in operating cash generation and lower free cash flow reduces cushion for debt service and reinvestment compared with prior years.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	133.39B	121.30B	124.25B	122.95B	114.52B	101.45B
Gross Profit	39.56B	45.99B	50.80B	45.73B	40.36B	32.07B
EBITDA	9.96B	17.65B	18.27B	15.08B	14.57B	10.53B
Net Income	5.61B	8.42B	9.33B	8.08B	6.81B	4.28B
Balance Sheet
Total Assets	218.20B	207.32B	200.96B	180.95B	168.76B	150.63B
Cash, Cash Equivalents and Short-Term Investments	51.68B	57.65B	78.70B	56.86B	52.07B	36.70B
Total Debt	80.62B	53.06B	56.11B	46.54B	40.36B	36.00B
Total Liabilities	142.53B	134.21B	132.63B	121.41B	115.48B	104.51B
Stockholders Equity	75.46B	72.81B	68.01B	58.64B	51.48B	43.30B
Cash Flow
Free Cash Flow	1.04B	7.47B	13.40B	2.63B	10.04B	3.76B
Operating Cash Flow	4.95B	11.48B	17.41B	7.58B	15.72B	10.23B
Investing Cash Flow	-8.00B	-28.67B	-20.90B	-1.29B	-10.59B	-7.08B
Financing Cash Flow	603.08M	-5.82B	7.37B	1.45B	2.78B	-289.90M

ZTE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0763, the sentiment is Negative. The current price of 28.34 is above the 20-day moving average (MA) of 26.89, above the 50-day MA of 27.80, and below the 200-day MA of 29.22, indicating a bearish trend. The MACD of -0.64 indicates Positive momentum. The RSI at 33.57 is Neutral, neither overbought nor oversold. The STOCH value of 21.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0763.

ZTE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1473	68 Neutral	HK$556.70M	7.47	12.27%	2.53%	19.80%	―
6869	65 Neutral	HK$165.86B	46.77	4.79%	0.54%	14.38%	-41.96%
1617	65 Neutral	HK$723.68M	1.60	7.40%	―	-9.34%	605.26%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0763	47 Neutral	HK$192.36B	146.85	7.73%	2.43%	5.14%	-38.37%
2342	46 Neutral	HK$5.74B	21.06	-10.70%	0.24%	-13.99%	-32.74%
1613	41 Neutral	HK$72.34M	-1.99	-30.44%	―	-58.81%	-10.51%

ZTE Corporate Events

ZTE Posts Audited 2025 Results and Proposes Cash Dividend

ZTE Corporation has released its audited annual results for the year ended 31 December 2025, confirming that its 2025 financial statements have received an unqualified audit opinion from Ernst & Young Hua Ming LLP and that the full annual report will be made available to investors in due course. The board has approved a proposal to distribute a cash dividend of RMB4.11 per 10 shares for 2025, subject to shareholder approval, underscoring the company’s confidence in its financial position and providing direct returns to investors while reaffirming its commitment to transparent governance and regulatory compliance.

The announcement emphasizes that all directors attended the approving board meeting, senior management has certified the accuracy and completeness of the financial disclosures, and the report outlines risk factors and forward‑looking elements without constituting specific commitments to investors. This combination of clean audit results, a defined dividend proposal and detailed corporate governance disclosures is likely to be viewed positively by shareholders and the market, as it signals operational stability and continued adherence to listing and disclosure standards in Hong Kong.

The most recent analyst rating on (HK:0763) stock is a Hold with a HK$29.00 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Proposes Final 2025 Cash Dividend, Key Details Pending

ZTE Corporation has announced a proposed final ordinary cash dividend of RMB 4.11 per 10 shares for the financial year ended 31 December 2025. Key implementation details, including the Hong Kong payment currency, exchange rate, ex-dividend and record dates, shareholder approval date, as well as any withholding tax treatment and information on related warrants or convertible securities, will be confirmed later, leaving the precise timetable and net payout for investors still to be finalized.

The dividend declaration underscores ZTE’s intention to return cash to shareholders following its 2025 performance, signalling confidence in its earnings and balance-sheet position. However, with critical parameters and dates still “to be announced,” Hong Kong investors and other stakeholders must wait for further disclosures to assess the effective yield, tax impact and timing of cash distributions, which may influence trading sentiment once the full details are released.

The most recent analyst rating on (HK:0763) stock is a Hold with a HK$29.00 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Board Clears 2025 Reports and Seeks Mandate for RMB8 Billion Bond Issue

ZTE Corporation’s board has approved its 2025 working report, annual report, and final financial accounts, clearing the way for these documents to be submitted to shareholders at the upcoming general meeting. The board also endorsed the president’s 2025 work report, underscoring a unified governance stance on the company’s operational and financial performance over the past year.

In a key financing move, directors backed a plan to seek shareholder authorization to issue up to RMB8 billion of corporate bonds in 2026, via one-off or tranche offerings, either publicly or privately. The proposed bond proceeds would be used to repay maturing debts and replenish working capital, providing ZTE with additional balance-sheet flexibility and funding support for its ongoing operations.

The most recent analyst rating on (HK:0763) stock is a Hold with a HK$29.00 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Sets March Board Meeting to Approve 2025 Annual Results and Profit Plan

ZTE Corporation has announced that its board of directors will convene a meeting on 6 March 2026 in Shenzhen, China, to review and approve the group’s audited annual results for the financial year ended 31 December 2025. The board will also consider a potential profit distribution proposal, which may include dividend recommendations, for subsequent publication and implementation.

The timing of the meeting indicates that ZTE is preparing to release full-year financial data that will inform investors about its 2025 operational and financial performance. Any decision on profit distribution will be closely monitored by shareholders, as it will influence income returns and may signal management’s confidence in the company’s cash flow, balance sheet strength, and future growth prospects.

The most recent analyst rating on (HK:0763) stock is a Hold with a HK$29.00 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Sets 2026 Framework for Connected-Party Raw Material Purchases from Controlling Shareholder

ZTE has approved a Zhongxingxin Purchase Framework Agreement under which its group may procure a broad range of raw materials and components from Zhongxingxin Group during 2026, covering items such as wiring equipment, optical and antenna parts, printed circuit components, industrial imaging gear and batteries used across its business lines. As Zhongxingxin is ZTE’s controlling shareholder, the arrangement constitutes a continuing connected transaction under Hong Kong and Shenzhen listing rules; however, because the relevant percentage ratios for the 2026 annual caps fall between 0.1% and 5%, the agreement is subject only to reporting, annual review and announcement requirements and is exempt from independent shareholder approval, with purchases to be made strictly through ZTE’s existing qualification and competitive tender processes that treat connected and independent suppliers on the same basis.

The most recent analyst rating on (HK:0763) stock is a Hold with a HK$29.00 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Corporation Announces A Share Repurchase Plan to Boost Shareholder Value

ZTE Corporation has announced a plan to repurchase its A shares, with an allocation of between RMB1,000 million and RMB1,200 million for this initiative. The repurchase aims to support the company’s employee share ownership schemes and share incentives, enhancing long-term shareholder value and operational sustainability. The company has outlined a risk of uncertainty in the repurchase plan, including potential price cap issues and regulatory compliance challenges. This move is part of ZTE’s strategy to maintain its operational health and safeguard investor interests.

The most recent analyst rating on (HK:0763) stock is a Hold with a HK$39.00 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.

ZTE Under Investigation for FCPA Compliance

ZTE Corporation has announced that it is under investigation by the United States Department of Justice for potential non-compliance with the Foreign Corrupt Practices Act (FCPA). Despite the ongoing investigation, ZTE has stated that its current production and operations remain normal and that it is committed to strengthening its compliance framework and maintaining a zero-tolerance policy towards corruption.

The most recent analyst rating on (HK:0763) stock is a Hold with a HK$39.00 price target. To see the full list of analyst forecasts on ZTE stock, see the HK:0763 Stock Forecast page.