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 reported FY25 results with revenue up 10.4% YoY to RMB134bn, 7.7% below our estimate and 3.9% below Bloomberg consensus, while net profit fell 33.3% YoY to RMB5.6bn, 30% below our estimate and 24% below Bloomberg consensus.</li><li>GPM declined sharply to 30.3%, down 7.7ppts from 37.9% in FY24, mainly due to a higher mix of Enterprise &amp; Government (E&amp;G) sales.</li><li>In 4Q25, revenue rose 6.8% YoY and 15.2% QoQ to RMB33.3bn, while net profit fell 42.9% YoY but increased 11.9% QoQ to RMB296mn. </li></ul><p><em>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.</em></p>

ZTE reported FY25 results with revenue up 10.4% YoY to RMB134bn, 7.7% below our estimate and 3.9% below Bloomberg consensus, while net profit fell 33.3% YoY to RMB5.6bn, 30% below our estimate and 24% below Bloomberg consensus.GPM declined sharply to 30.3%, down 7.7ppts from 37.9% in FY24, mainly due to a higher mix of Enterprise &amp; Government (E&amp;G) sales.In 4Q25, revenue rose 6.8% YoY and 15.2% QoQ to RMB33.3bn, while net profit fell 42.9% YoY but increased 11.9% QoQ to RMB296mn. 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) - Accelerating Compute Power but Decelerating Margins

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><p><em>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.</em></p>

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>Our view on China telecom sector is unchanged. We think this sector is a defensive play amid macro-economic pressure.</li><li>We expect China telcos to be the most favorable defensive picks with stable operations, strong FCF, high dividend yield and potential share repo opportunities.</li><li>China Mobile and China Telecom’s (941 HK/ 728 HK, not rated) share prices grew 25.5%/23.8% YTD.</li></ul><p><em>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.</em></p>

Our view on China telecom sector is unchanged. We think this sector is a defensive play amid macro-economic pressure.We expect China telcos to be the most favorable defensive picks with stable operations, strong FCF, high dividend yield and potential share repo opportunities.China Mobile and China Telecom’s (941 HK/ 728 HK, not rated) share prices grew 25.5%/23.8% YTD.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 5G Sector – China telecom sector remains as a defensive play

<div><div><div><div><ul><li>We regard the domestic telecom sector as a defensive play amid macro- economic pressure, consumer weakness, rising uncertainties, etc.</li><li>We expect China telcos to be the most favorable defensive picks with ample FCF, high dividend yield and potential share repo opportunities.</li><li>China Mobile’s (600941 CH/941 HK) share price grew 12.5%/8.3% YTD. The investors’ appetite seems to confirm our previous prediction “Good compound returns (dividends, share repo) in an environment of uncertainty will become more valued by investors.” </li></ul></div></div></div></div><p><em>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.</em></p>

We regard the domestic telecom sector as a defensive play amid macro- economic pressure, consumer weakness, rising uncertainties, etc.We expect China telcos to be the most favorable defensive picks with ample FCF, high dividend yield and potential share repo opportunities.China Mobile’s (600941 CH/941 HK) share price grew 12.5%/8.3% YTD. The investors’ appetite seems to confirm our previous prediction “Good compound returns (dividends, share repo) in an environment of uncertainty will become more valued by investors.” 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 5G Sector – Expect telecom names continue to show strength in broad market weakness

<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><p><em>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.</em></p>

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...

China

ZTE Corporation is a Chinese technology company specializing in telecommunications equipment, networking solutions, and mobile devices. It offers a wide range of products including wireless and wireline networks, optical transmission systems, data communication gear, and smartphones under brands like Axon and Nubia. ZTE was founded in 1985 and is headquartered in Shenzhen, Guangdong, China.

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

ZTE (763 HK)

ZTE (763 HK) - Accelerating Compute Power but Decelerating Margins

ZTE reported FY25 results with revenue up 10.4% YoY to RMB134bn, 7.7% below our estimate and 3.9% below Bloomberg consensus, while net profit fell...

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

China 5G Sector – China telecom sector remains as a defensive play

We expect China telcos to be the most favorable defensive picks with stable operations, strong FCF, high dividend yield and potential share repo...

CMB International

China 5G Sector – Expect telecom names continue to show strength in broad market weakness

We expect China telcos to be the most favorable defensive picks with ample FCF, high dividend yield and potential share repo opportunities.

CMB International

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)