By Juan Pedro Tomás
Chinese vendor ZTE said it expects its first-quarter net profit to more than double year-on-year, to an estimated CNY 1.8-2.4 billion (US$276.7-368.9 million), mainly driven by continued revenue growth and improving gross margins and profitability.
In its 2020 earnings statement, the Asian vendor reported a net profit of CNY4.26 billion (US$655.2 million) in 2020, down 17.3 per cent year-on-year, attributed to a one-off gain booked in 2019.
Revenue for full 2020 amounted to CNY101.5 billion, up 11.8 per cent compared to the previous year.
“In the domestic market, the company, leveraging the development opportunities of 5G and new infrastructure, made great achievements in 2020 in both market share and revenue growth. In terms of international market, ZTE’s gross profit margin rose by 4.9 percentage points to 37.2 per cent, the highest in the last decade, thanks to the company’s commitment to continuously improving its profitability by adhering to healthy corporate operation and exploring high-value markets,” ZTE said.
In China, the company generated revenues of CNY 68.1 billion in 2020, up 16.9 per cent year-on-year while operating revenues in international markets totaled CNY 33.4 billion, up 2.7 per cent year-on-year.
Revenue in Asia (excluding China) climbed 11.6 per cent to CNY4.82 billion and declined 9.3 per cent to CNY4.82 billion in Africa. Meanwhile, revenues in Europe, Americas and Oceania totaled CNY13.8 billion, down 1.3 per cent year-on-year.
ZTE’s carrier business achieved 11.2 per cent growth in 2020 with total revenues of CNY74 billion, led by shipments of 5G wireless, transmission and core network kit.
The vendor also said it had deployed 5G technology in more than 240 Chinese cities and rolled out 5G applications with more than 500 partners.
ZTE also said that its 5G wireless products, 5G core networks and 5G transport products respectively account for more than 30 per cent of the domestic operator market.
In its government and enterprise business, ZTE said that it has focused on major industries including energy, transportation, government and finance.
