PRESS RELEASE: Bolstered with sustained investment in R&D and great commitment to developing new 5G industrial landscape, ZTE Corporation today has posted its financial results for the first nine months of 2020.

According to the announcement, for the nine months ended 30 September 2020, ZTE reported operating revenue of RMB 74.13 billion, representing a year-on-year increase of 15.4%. Net profit attributable to holders of ordinary shares of the listed company reached RMB 2.71 billion, and net profit after extraordinary items attributable to holders of ordinary shares of the listed company amounted to RMB 1.45 billion. Basic earnings per share was RMB 0.59.

For the three months ended 30 September 2020, ZTE’s operating revenue reached RMB 26.93 billion, representing a year-on-year increase of 37.2%. Net profit attributable to holders of ordinary shares of the listed company amounted to RMB 0.85 billion, and net profit after extraordinary items attributable to holders of ordinary shares of the listed company amounted to RMB 0.54 billion.

During the first nine months of 2020, the company kept strengthening its cash flow management. Its net cash flow from operating activities for the first nine months was RMB 3.87 billion, about 33.2% year-on-year growth.

During the period, ZTE focused on innovations and sustained high investment in R&D, continuously enhancing its core competitive advantages in the 5G era. For the first nine months, the company’s R&D expense reached RMB 10.79 billion, making up 14.6% of 9-month revenue, a year-on-year increase of 15.3 %. The company has proposed its fourth A-share option incentive scheme, covering over 6100 employees, in a bid to strengthen the incentives to the top key talents.

As a road builder of the digital economy, ZTE has been committed to empowering the digital and intelligent transformation of thousands of industries by building “ultimate networks”, “precision cloud networks” and “empowerment platforms”. In terms of business operations, the company has proactively explored the network and industry potential to maintain stable operations, despite the severe challenges posed by the coronavirus outbreak and complicated international situation in the first three quarters of 2020. Seizing the opportunity of rapid 5G development in China, ZTE has explored 5G industry application innovations in partnership with its customers and partners to activate the industry and market vitality and thereby achieved rapid business growth. Moreover, the company has continuously maintained healthy operations in overseas markets by exploring high-value markets and promoting stable business development in pivotal countries. By the end of September 2020, ZTE had secured 55 5G commercial contracts across the globe, in partnerships with over 90 operators worldwide in 5G arena and covering over 500 industry partners.

In terms of operator network services, ZTE has developed ultimate 5G networks from two perspectives of business and customers. For the networks, ZTE has consolidated its customer-oriented foundation in three dimensions, specifically, strengthening user perception, reducing network construction and operation cost, and improving spectrum efficiency. For the industries, ZTE has empowered its business-oriented services by virtue of the site computing power engine and wireless PRB hard-isolation slicing.

Underpinned by its 5G ATG solution, 5G smart mining solution and Ocean Application Supporter, ZTE has helped its customers build three-dimensional (ground, sea and air coverage) 5G networks, hence its comprehensive leading position in various fields of industry applications. Moreover, the company has continued to strengthen 5G energy saving and consumption reduction, launching an innovative AI-based PowerPilot energy saving solution, with the entire network energy saved up to 20%.
In the field of 5G messaging, ZTE is the first to put 5G messaging into pre-commercial use, covering more than 100 industrial applications in 9 industries, and built the world’s largest commercial site of 5G messaging. In the 5G 700 M field, ZTE is the industry’s first to complete the 5G NR broadcast based on the 5G NR physical layer technology, realizing end-to-end 5G HD video broadcast service on 700MHz spectrum. Moreover, the company has deployed its full series of end-to-end 5G transport products on a large scale, with 320 5G transport networks built or under construction. In the optical network field, the company has helped China Telecom build the world’s largest all-optical ROADM network, and worked with China Mobile to build the world’s largest 200G OTN commercial network.

In the aspect of government and enterprise business, ZTE has collaborated with customers and industry partners to build demonstration projects, precisely empowering the digital transformation of industries, by virtue of its precision cloud networks and empowerment platforms. In the third quarter of 2020, the company had cooperated with industry-leading customers, such as the Guangzhou branch of China Mobile, China Telecom, Fuzhou Metro, China Southern Power Grid, and China Baowu Steel Group to implement innovative 5G applications in transportation, power, mining, commercial complex and other fields. ZTE’s GoldenDB has become China’s first domestic financial transaction distributed database commercially used in the core service systems of large banks. It has also supported the commercial use of China’s first Distributed Database Joint Laboratory. Moreover, the company has commercialized its full-module data center solution and won the bidding for Tencent’s centralized purchase while its remote security office solution has been increasingly adopted by large enterprises.

In the field of consumer business, the company has fully deployed a range of 5G terminal devices, continuously promoting the implementation of innovative applications for individuals, families, and industries. In September 2020, ZTE unveiled Axon 20 5G, the world’s first under-display camera smartphone, which supports all frequency bands of Chinese operators, including 700MHz 5G. In terms of MBB, IoT, and IoV products, ZTE has launched its new-generation 5G Indoor CPE MC801A in South Africa and Hong Kong. ZTE’s 5G Industrial Module ZM9000 has taken the lead in passing China Telecom’s warehousing test while its V2X cloud control platform has supported the V2X vehicle-road coordination construction in Xiong’An New Area.

Moving forward, ZTE will continue to strengthen its competitiveness of core technologies, adhering to openness and win-win strategy. Underpinned by its capabilities in 5G, cloud, AI, and other core technologies, the company will work with industry partners to facilitate the development of the industry and the digital economy. Meanwhile, ZTE will accelerate its own digital transformation, expecting to improve the operational efficiency of the company on an overall basis through digital empowerment.