ZTE First-Quarter Net Profit Rises 35.9% as Operational Review Drives Rebound

  ZTE First-Quarter Net Profit Rises 35.9% as Operational Review Drives

  Improvement in cash flow and profitability sustained as company focuses on
             higher margin contracts and maintains cost controls

Business Wire

SHENZHEN, China -- April 26, 2013

ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code:
000063.SZ), a publicly-listed global provider of telecommunications equipment,
network solutions and mobile devices, reported a 35.9% increase in net profit
in the first-quarter, as the company’s operational review continued to deliver
improvements in cash flow and profitability.

Net profit attributable to shareholders of the parent company rose to RMB205
million in the first quarter, and basic earnings per share increased to
RMB0.06. Operating cash flow in the first quarter significantly improved
compared to a year earlier. ZTE’s gross profit margin has expanded for two
consecutive quarters, as the company strengthened efforts to control costs.
Revenue dropped 2.8% to RMB18.09 billion.

Since the second half of 2012, ZTE has stringently enforced measures to focus
resources on key products and markets, target higher-margin contracts, improve
cash flow management and reduce costs, under the company’s operational review.
This has helped the company achieve a more optimal product and customer mix,
and an improved cost structure. The company achieved combined savings of RMB
350 million in selling, administration and research costs in the first quarter
compared with a year earlier. The results of the operational review, combined
with the disposal gain, allowed the company to overcome the negative effects
from currency fluctuation and asset write-downs to record higher net profit.

Looking ahead to the next reporting period, equipment investment by the
telecommunications industry is expected to be focused on broadband conversion
of wireless and wireline networks and the construction of ancillary
facilities. The Group will commit its efforts to product innovation and
solution-based operations with a strong focus on mainstream products and
improve R&D efficiency. The strategy for populous nations and mainstream
carriers will be reinforced, as we seek to concentrate on markets in which we
claim strengths while vigorously expanding in the government, enterprise and
service segments. The Group will continue to implement the settlement system
to facilitate resource management and control, so as to refine cost management
and enhance operating efficiency.

About ZTE

ZTE is a publicly-listed global provider of telecommunications equipment and
network solutions with the most comprehensive product range covering virtually
every telecommunications sector, including wireless, access & bearer, VAS,
terminals and professional services. The company delivers innovative,
custom-made products and services to over 500 operators in more than 140
countries, helping them to meet the changing needs of their customers while
growing revenue. ZTE commits 10 per cent of its annual revenue to research and
development and has leadership roles in several international bodies devoted
to developing telecommunications industry standards. ZTE is committed to
corporate social responsibility and is a member of the UN Global Compact. The
company is China’s only listed telecom manufacturer that is publicly traded on
both the Hong Kong and Shenzhen Stock Exchanges (H share stock code: 0763.HK /
A share stock code: 000063.SZ). For more information, please visit


ZTE Corporation
Margrete Ma, +86 755 26775207
Edelman PR
Mark Lee / Andres Vejarano
+852 2837 4756 / 2837 4735
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