Shenzhen, China — ZTE Corporation (0763.HK / 000063.SZ), a major international provider of telecommunications, enterprise and consumer technology solutions for the Mobile Internet, reported net profit of RMB 3.905 billion, a 36.58% surge for the first three quarters.
According ZTE's results announcement today, revenue of the first nine months increased 7.01% to RMB 76.580 billion. ZTE posted positive operating cash flow of RMB 1.036 billion in the third quarter.
ZTE's R&D spending increased to RMB 9.197 billion in the first nine months, covering 12% of revenue. ZTE's increasing investment in innovative fields such as 5G, IoTand chips is leading the company to a number of technical breakthroughs: ZTE's self-developed NB-IoT chips, the industry's first T-grade 5G flagship bearer platform, the industry's first ultra-large capacity cross platform based on the optical transmission technology, and the foldable smartphone Axon M launched in the U.S and Japan. ZTE also passed the lab trial of China Mobile's 5G bearer SPN prototypes; and launched the industry's first commercial cloud native Carrier DevOps Builder, winning the "Oscar" Award of SDN NFV Global Conference.
Bolstered by leading 5G technologies and on-going strong partnerships with mainstream European operators, the company recently announced an innovation partnership with Orange, and cooperation with Wind Tre and Open Fiber to build Europe's first 5G pre-commercial network in the 3.6-3.8GHz band. Meanwhile, the company announced recently that it has teamed up with Telenet Belgium to complete the first FDD Massive MIMO field application in Europe, and successfully verified 1Gbps peak data rate in Pre5G Massive MIMO Test with SoftBank.
Meanwhile, the company forecasts that the net profit attributable to holders of ordinary shares of the listed company is to reach RMB 4.3-4.8 billion for the entire year, bolstered by the growth of operations in carriers' network and consumers business.
In the Wireless Networks, ZTE has deployed more than 60 Pre5G networks around the world and more than 280 SDN/NFV commercial/trial networks. By virtue of its leading 5G technology, ZTE is breaking into the European market. It partners with France's Orange, Belgium's Telenet, Italy's Wind Tre and Open Fiber and other European operators as well as Softbank of Japan to deploy 5G networks on a global scale.
In the second phase of China's 5G test, ZTE broke many world records in terms of throughput, mass connectivity and low latency. In cooperation with China Mobile and Qualcomm, ZTE also conducted the world's first 5G low frequency IoDT trial based on the latest 3GPP R15 standards.
In the Wireline Networks, ZTE launched the first T-grade 5G flagship bearer platform with the test result of the key technology FlexE Tunnel to be the top of the industry. ZTE is also the first to complete the 5G bearer OTN low-latency transmission test, and passed the lab trial of CMCC 5G bearer SPN prototype device. In the field of optical transmission, ZTE released the industry's first "Next Generation 256T Ultra-large Cross Platform" based on the optical transmission technology.
In the emerging technologies like IoT, chips, cloud computing and big data, ZTE has developed the new-generation IoT OS&SDK, reducing the difficulty in application development and test for terminal manufacturers.
ZTE's embedded real-time operating system is adopted in the 350km/hr high-speed bullet train 'Fuxing'. ZTE also released the all-band intelligent parking commercial terminal series products, leading the large-scale commercial use of the intelligent parking system based on the NB-IoT technology.
ZTE took the first place to complete all the field tests of China's three operators, helped China Telecom build the world's first commercial network with the largest coverage, and ranked 1st in China Mobile's national 31 province procurement program in the 3rd quarter. ZTE's big video PVP solution is also employed in India, South Africa and Canada for commercial use.
In the Consumer division, ZTE has been focused on major markets and continued global brand development. The company launched its revolutionary foldable smartphone, Axon M, in the U.S. with AT&T and in Japan with NTT docomo. ZTE continued growth in U.S. market share and maintained its position as the fourth-largest smartphone provider. Compared with second quarter results, shipments in the third quarter increased significantly, particularly in Russia, Mexico, Spain, and Italy. In China, ZTE focused on cooperation with carriers and the security handset market. Besides, the terminal STB sales made great breakthroughs in overseas markets, including Japan, Russia, Thailand, Malaysia, and Netherlands. In China, ZTE won the bid of 18 million STB purchasing from China Telecom, consolidating its leading position in STB field.
In domestic Enterprise Business operations, ZTE has been focusing on transportation and financing. In the transportation sector, ZTE consecutively won bids in rail transit deployment, including Zhengzhou three-line metro communication project, Yinchuan-to-Wuzhong railway wireless system project, and Shenyang Line 9 metro project. In the financing sector, the company officially signed the cooperation agreement with the Agricultural Bank of China on big data platform.
In next three years, as a 5G pioneer, ZTE will unswervingly strengthen its R&D investment, and focus on carrier markets and core businesses. The company will keep on building its core competitiveness in the main business, improving the market shares of mainstream markets and products, and enhancing customer satisfaction. In the meantime, the company will strengthen its compliance management, in-house control and benefit of employees and shareholders. Furthermore, the company will keep tracking new technologies and exploring new modes to maintain and improve its leading status in the 5G era.
ZTE is a provider of advanced telecommunications systems, mobile devices, and enterprise technology solutions to consumers, carriers, companies and public sector customers. As part of ZTE's strategy, the company is committed to providing customers with integrated end-to-end innovations to deliver excellence and value as the telecommunications and information technology sectors converge. Listed in the stock exchanges of Hong Kong and Shenzhen (H share stock code: 0763.HK / A share stock code: 000063.SZ), ZTE's products and services are sold to over 500 operators in more than 160 countries. ZTE commits 10 per cent of its annual revenue to research and development and has leadership roles in international standard-setting organizations. ZTE is committed to corporate social responsibility and is a member of the UN Global Compact. For more information, please visit www.zte.com.cn.
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