ZTE (0763) AI Stock Analysis

• Market Cap: HK$185.20B
• Dividend Yield: 2.48%
• Average Volume (3M): 35.55M
• Price to Earnings (P/E): 20.6
• 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): 0.07
• 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: HK$35.72
• Price Target Upside: 31.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: HK$29.00 ▲(7.09% Upside)

ZTE's overall stock score is driven by strong financial performance, particularly in profitability and balance sheet stability. However, technical analysis indicates bearish momentum, and cash flow management remains a concern. The valuation is moderate, with a fair P/E ratio and a reasonable dividend yield.

Positive Factors

Profitability

Strong profitability margins indicate efficient operations and the ability to maintain competitive pricing, supporting long-term financial health.

Balance Sheet Stability

A stable balance sheet with manageable debt levels enhances financial flexibility, allowing for strategic investments and resilience against economic fluctuations.

Revenue Growth

Consistent revenue growth, albeit modest, reflects ongoing demand for ZTE's products and services, supporting sustainable business expansion.

Negative Factors

Cash Flow Management

Declining free cash flow indicates potential challenges in cash generation, which could limit investment in growth opportunities and impact liquidity.

Earnings Decline

A significant decline in EPS growth suggests potential challenges in maintaining profitability, which could affect investor confidence and future earnings potential.

Debt Levels

Rising debt levels can strain financial resources and limit the company's ability to invest in growth, potentially impacting long-term competitiveness.

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

ZTE demonstrates strong profitability with a Gross Profit Margin of 35.9% and a Net Profit Margin of 6.6%. The balance sheet is stable with a strong ROE of 11.3%. However, cash flow management presents a moderate concern with declining free cash flow impacting liquidity.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	134.46B	121.30B	124.25B	122.95B	114.52B	101.45B
Gross Profit	40.98B	45.99B	50.80B	45.73B	40.36B	32.07B
EBITDA	10.01B	17.65B	18.27B	15.08B	14.57B	10.53B
Net Income	5.86B	8.42B	9.33B	8.08B	6.81B	4.28B
Balance Sheet
Total Assets	234.62B	207.32B	200.96B	180.95B	168.76B	150.63B
Cash, Cash Equivalents and Short-Term Investments	57.50B	57.65B	78.70B	56.86B	52.07B	36.70B
Total Debt	87.55B	53.06B	56.11B	46.54B	40.36B	36.00B
Total Liabilities	152.23B	134.21B	132.63B	121.41B	115.48B	104.51B
Stockholders Equity	82.07B	72.81B	68.01B	58.64B	51.48B	43.30B
Cash Flow
Free Cash Flow	1.36B	7.47B	13.40B	2.63B	10.04B	3.76B
Operating Cash Flow	2.30B	11.48B	17.41B	7.58B	15.72B	10.23B
Investing Cash Flow	-12.09B	-28.67B	-20.90B	-1.29B	-10.59B	-7.08B
Financing Cash Flow	1.59B	-5.82B	7.37B	1.45B	2.78B	-289.90M

ZTE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 27.08 is below the 20-day moving average (MA) of 30.40, below the 50-day MA of 33.26, and below the 200-day MA of 28.23, indicating a bearish trend. The MACD of -1.50 indicates Positive momentum. The RSI at 36.87 is Neutral, neither overbought nor oversold. The STOCH value of 10.37 is Positive, 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
6869	71 Outperform	HK$73.59B	63.08	4.79%	0.57%	14.38%	-41.96%
1473	66 Neutral	HK$462.94M	12.58	12.27%	2.53%	19.80%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0763	61 Neutral	HK$185.20B	20.62	7.73%	2.48%	5.14%	-38.37%
1617	61 Neutral	HK$162.62M	2.49	7.40%	―	-9.34%	605.26%
2342	46 Neutral	HK$7.57B	-19.15	-10.70%	0.25%	-13.99%	-32.74%
1613	41 Neutral	HK$234.24M	-3.06	-30.44%	―	-58.81%	-10.51%

ZTE Corporate Events

ZTE Reports Revenue Growth Amidst Profit Decline in Q3 2025

ZTE Corporation has released its third quarterly report for 2025, highlighting a notable increase in operating revenue by 11.63% over the first nine months of the year compared to the same period last year. However, the company experienced a significant decline in net profit attributable to ordinary shareholders, which fell by 32.69%. The report also indicates a decrease in net cash flows from operating activities by 77.92%, reflecting challenges in maintaining profitability despite revenue growth. These financial results suggest that while ZTE is expanding its revenue base, it faces operational challenges that may impact its financial stability and stakeholder confidence.

ZTE Corporation Schedules Board Meeting to Approve Q3 Results

ZTE Corporation has announced that its Board of Directors will convene a meeting on October 28, 2025, in Shenzhen, China. The meeting’s agenda includes the approval and publication of the company’s third-quarter results for the period ending September 30, 2025, and addressing any other business matters. This announcement indicates ZTE’s ongoing commitment to transparency and regular financial reporting, which is crucial for maintaining investor confidence and ensuring compliance with market regulations.