External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>ZTE delivered robust sales growth in 1H25, with revenue rising 15% YoY to RMB71.6bn.</li><li>NP declined 12% YoY to RMB5.1bn. A shift in product mix toward higher-volume servers weighed on profitability, dragging GPM and NPM down by 8.0ppt and 2.1ppt to 32.5% and 7.1%, respectively.</li><li>By segment: 1) Carrier revenue (49% of 1H25 sales) declined 6% YoY, reflecting subdued telecom capex in China (-9% YoY in 2025 from CM/CT/CU combined, per their guidance); 2) Consumer revenue (24%) grew 8% YoY to RMB17.2bn, supported by strong overseas smartphone shipments; 3) Government &amp; Enterprise (27%) emerged as the key growth engine, with revenue surging 110% YoY, which was largely fuelled by over 200% growth in server and storage sales, with AI servers accounting for ~55% of total server sales. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTE delivered robust sales growth in 1H25, with revenue rising 15% YoY to RMB71.6bn.NP declined 12% YoY to RMB5.1bn. A shift in product mix toward higher-volume servers weighed on profitability, dragging GPM and NPM down by 8.0ppt and 2.1ppt to 32.5% and 7.1%, respectively.By segment: 1) Carrier revenue (49% of 1H25 sales) declined 6% YoY, reflecting subdued telecom capex in China (-9% YoY in 2025 from CM/CT/CU combined, per their guidance); 2) Consumer revenue (24%) grew 8% YoY to RMB17.2bn, supported by strong overseas smartphone shipments; 3) Government &amp; Enterprise (27%) emerged as the key growth engine, with revenue surging 110% YoY, which was largely fuelled by over 200% growth in server and storage sales, with AI servers accounting for ~55% of total server sales. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTE (763 HK/000063 CH) - AI Server Momentum Drives Growth...

<ul><li>ZTE has announced 1Q25 results. Revenue increased by 8% YoY and 5% QoQ to RMB33.0bn, driven by strong revenue growth in enterprise/gov’t segment (doubled YoY growth per mgmt.), benefitting from increased capex in compute infra. by leading domestic CSPs. NP decreased by 11% YoY to RMB2.5bn on a lower margin.</li><li>GPM dropped YoY to 34.3% in 1Q25 vs. 42.0%/30.6% in 1Q24/4Q24, mainly due to an unfavourable product mix (higher revenue contribution from non-carrier business segments).</li><li>Maintain BUY as we view ZTE as a beneficiary in domestic AI market, with TP revised to RMB26.5.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTE has announced 1Q25 results. Revenue increased by 8% YoY and 5% QoQ to RMB33.0bn, driven by strong revenue growth in enterprise/gov’t segment (doubled YoY growth per mgmt.), benefitting from increased capex in compute infra. by leading domestic CSPs. NP decreased by 11% YoY to RMB2.5bn on a lower margin.GPM dropped YoY to 34.3% in 1Q25 vs. 42.0%/30.6% in 1Q24/4Q24, mainly due to an unfavourable product mix (higher revenue contribution from non-carrier business segments).Maintain BUY as we view ZTE as a beneficiary in domestic AI market, with TP revised to RMB26.5.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTE (763 HK) - Strong Growth in Second-Curve Businesses

<ul><li>ZTE released 3Q24 results. 3Q revenue was RMB27.6bn, down 3.9% YoY and 13.6% QoQ. GPM was 40.4% in 3Q24 (vs. 39.0%/44.6% in 2Q24/3Q23).</li><li>NP was RMB2.2bn, down 8.2% YoY and 27.3% QoQ. The decline was mainly due to lower telecom spending in China (~5% decrease in domestic telcos’ capex in 2024) and the delayed progress in ZTE’s AI servers.</li><li>Looking forward, we expect the company’s overall growth to be flat this year and grow 8.2% in 2025E, driven by double-digit growth in overseas carrier/consumer/enterprise &amp; gov’t segments, partially offset by domestic telecom weakness.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTE released 3Q24 results. 3Q revenue was RMB27.6bn, down 3.9% YoY and 13.6% QoQ. GPM was 40.4% in 3Q24 (vs. 39.0%/44.6% in 2Q24/3Q23).NP was RMB2.2bn, down 8.2% YoY and 27.3% QoQ. The decline was mainly due to lower telecom spending in China (~5% decrease in domestic telcos’ capex in 2024) and the delayed progress in ZTE’s AI servers.Looking forward, we expect the company’s overall growth to be flat this year and grow 8.2% in 2025E, driven by double-digit growth in overseas carrier/consumer/enterprise &amp; gov’t segments, partially offset by domestic telecom weakness.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTE (763 HK) - Stable GPM Despite Domestic Telecom Headwinds

Thematic (Sector/Industry)

<ul><li>China’s stock markets (both A/H shares) have soared recently on government stimulus policies.</li><li>Per Reuters, Chinese stocks recorded their biggest single-day gains since 2008, with highest turnover (domestic A-share) on 30 Sep.</li><li>As of 2 Oct 2024, HSI and CSI 300 have surged 32.2% and 18.5% YTD, respectively, currently ranking as top performing indices globally. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China’s stock markets (both A/H shares) have soared recently on government stimulus policies.Per Reuters, Chinese stocks recorded their biggest single-day gains since 2008, with highest turnover (domestic A-share) on 30 Sep.As of 2 Oct 2024, HSI and CSI 300 have surged 32.2% and 18.5% YTD, respectively, currently ranking as top performing indices globally. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Semiconductors - Sector Valuation Revisit After Recent Rally; Potential Rerating Opportunities Ahead

<ul><li>ZTE’s announced 1H24 results. Revenue increased by 2.9% YoY to RMB62.5bn, while net profit grew by 4.8% YoY to RMB5.7bn in 1H24.</li><li>Despite the headwinds from declining capex of domestic telcos for ZTE’s carrier business, non-carrier businesses managed to grew double-digits (14.3% and 56.1% YoY growth in consumer and gov’t/enterprise segments).</li><li>On a quarterly basis, Q2 revenue increased by 1.1% YoY / 4.4% QoQ, while net profit increased by 5.7% YoY / 9.1% QoQ. GPM declined sequentially to 39%, mainly due to unfavorable product mix (i.e., lower contribution from high-margin carrier segment). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTE’s announced 1H24 results. Revenue increased by 2.9% YoY to RMB62.5bn, while net profit grew by 4.8% YoY to RMB5.7bn in 1H24.Despite the headwinds from declining capex of domestic telcos for ZTE’s carrier business, non-carrier businesses managed to grew double-digits (14.3% and 56.1% YoY growth in consumer and gov’t/enterprise segments).On a quarterly basis, Q2 revenue increased by 1.1% YoY / 4.4% QoQ, while net profit increased by 5.7% YoY / 9.1% QoQ. GPM declined sequentially to 39%, mainly due to unfavorable product mix (i.e., lower contribution from high-margin carrier segment). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China

ZTE Corporation develops and markets switches, access servers, videoconferencing systems, mobile communication systems, data communication devices, and optical communication devices.  The Company also offers networking solutions for setup, refurbishment and optimization of networks.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Zte Corp A (000063 CH)

ZTE (763 HK/000063 CH) - AI Server Momentum Drives Growth...

We believe ZTE is well-positioned to sustain robust growth in the coming years, backed by the AI infrastructure investment cycle and domestic...

CMB International

ZTE (763 HK) - Strong Growth in Second-Curve Businesses

Revenue increased by 8% YoY and 5% QoQ to RMB33.0bn, driven by strong revenue growth in enterprise/gov’t segment (doubled YoY growth per mgmt.)

CMB International

ZTE (763 HK) - Stable GPM Despite Domestic Telecom Headwinds

ZTE released 3Q24 results. 3Q revenue was RMB27.6bn, down 3.9% YoY and 13.6% QoQ. GPM was 40.4% in 3Q24 (vs. 39.0%/44.6% in 2Q24/3Q23).

CMB International

Semiconductors - Sector Valuation Revisit After Recent Rally; Potential Rerating Opportunities Ahead

China’s stock markets (both A/H shares) have soared recently on government stimulus policies. Per Reuters, Chinese stocks recorded their biggest...

CMB International

ZTE (000063 CH) - Mixed 1H24 Results

ZTE’s announced 1H24 results. Revenue increased by 2.9% YoY to RMB62.5bn, while net profit grew by 4.8% YoY to RMB5.7bn in 1H24.

CMB International

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)