Tuesday, August 18, 2009

ZTE Posts 40% Annual Growth in 1H09, Driven by China's 3G Rollout

ZTE reported revenue of RMB27.7 billion in the first half year of 2009, representing an increase of 40.4% against the same period of 2008. Net profit was RMB780 million, a year-on-year growth of 40.5 %. Basic earnings per share were RMB 0.45.

ZTE said it benefited from the full-scale construction of 3G networks in China, recording operating revenue of RMB14.95 billion in the domestic Chinese market, representing a year-on-year growth of 111.7%.
ZRW's revenue from its international operations grew 0.7% to RMB12.76 billion in this time period and accounted for 46.0% of its total operating revenue. Sales were driven by 2G network construction and capacity expansion in key developing markets, coupled with the demand for bandwidth upgrades and innovative services in developed countries. The company cited traction with mainstream operators from the world's top 20 most populous countries including Indonesia, Vietnam and Turkey while also successfully forging partnerships with tier-one operators from Europe and the Americas including Verizon, TeliaSonera, Telstra and Telenor.

By product group, ZTE registered year-on-year revenue growth of 46.2% for carriers' networks, 29.8% for handset products and 29.2% for telecommunication software systems, services and other products.

In 1H09, ZTE's CDMA base stations achieved a record high shipment volume of 75,000 units: 1.5 times greater than total shipments in 2008. Meanwhile, the Company's WiMAX products entered high-end markets including Malaysia, Saudi Arabia, Japan and various European countries.

ZTE noted that its investment in R&D grew 58.2% during the first half of the year-- higher than the growth rate of revenue - - and stands at about 10% of revenue. Selling and distribution costs and administrative expenses grew 21.4% and 21.0% respectively, and financing expenses declined [8.6]%, lower than the growth rate of revenue.

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