Breaking New Ground with Dedication, Courage, and Innovation -2025 New Year Message from Chairman Li Zixue

As a new year begins, everything takes on a new look. On behalf of ZTE, I would like to extend my heartfelt gratitude and warm greetings to our global customers, partners, investors, and friends from all walks of life. My best wishes also go to all ZTErs for your unwavering dedication and to your families for their continuing support.

The year 2024 marks the end of the company's Expansion Phase A. Together, we have overcome numerous challenges along this journey, forging ahead with steadfast determination.

In 2024, we rose to challenges and marched forward with perseverance. In response to the maturation of 5G networks, rapid development of AI technologies, and accelerating cross-industry integration, the company prioritized its transformation into "connectivity + computing". Thanks to the joint efforts of all employees, the company demonstrated strong operational resilience and great momentum for development despite challenges.

· In the field of networking, we adapted to changes in customers' investment structures, and deepened collaboration and targeted operations, achieving a steady increase in the company's global market share.

· In the field of computing, we kept pace with the boom in infrastructure construction, continuously optimized our intelligent computing solutions, and gradually turned market opportunities into projects.

· In terms of terminals, key profitable markets have been developed for smartphones overseas, and high-speed revenue growth attained in cloud PCs.

· As for digital energy, rapid growth has been achieved in the data center business, and long-term development opportunities identified with entry into PV energy storage.

In 2024, we made headway with determination and passion. In both Chinese and international markets, from production lines to equipment rooms, our frontline employees made dedicated efforts and explored new business opportunities. We secured three first prizes and two second prizes at the State Scientific and Technological Progress Awards of China. What lie behind these prizes were our R&D team's tireless endeavors and relentless pursuit of independent innovation. As the first five-star 5G factory in China, ZTE Nanjing Binjiang Base proved our dedication to promoting "intelligent manufacturing powered by 5G", as well as the solid steps in empowering and advancing new industrialization. In addition, we were named on CDP's "A List" for leadership in climate action, demonstrating our commitment to green and low-carbon development. Regarding disaster relief, in the heavy rain-hit Huludao and the super typhoon-stricken Hainan, we built a lifeline for timely rescue by using emergency communication drones, fulfilling social responsibility through technological innovation.

Looking ahead to 2025, the external environment will remain complex and volatile. The new round of technological revolution and industrial transformation will continue to advance, with AI holding the key to competition and 5G-A unlocking new scenarios of intelligent connectivity. In the middle of every difficulty lies opportunity, and therefore we must maintain strategic determination and speed up transformation into "connectivity + computing", going all out for groundbreaking advancements.

Guided by the principle of "Seeking Steady Growth, Breaking New Ground", we should prevent and control major risks to ensure robust business performance and maintain a balance between revenue and profits. To be specific, we will increase market share in existing business, improve the success rate in business with market potential, and seek every possible opportunity for growth. Aiming for long-term business operations, we will strive to increase revenue with robust profitability and guarantee strong profits with healthy cash flows.

To further expand our business, we will—in the networking field, continue to tap into market potential by seizing opportunities in 5G-A and all-optical networks, so as to enhance our market position; in the computing field, keep focusing on intelligent computing for strategic development in the long run, which means honing capabilities to build large models and computing clusters with over 10,000 cards, and leveraging our strength in full-stack technologies to foster a dynamic intelligent computing ecosystem featuring openness and decoupling, advanced network for stronger computing, and win-win collaboration; in government and enterprise business, ride the trends to seize major opportunities in computing infrastructure construction, national emergency management system building, and vehicle-road-cloud integration, further explore key industries and build partnerships with top players, continuously enhance channel building, and improve professional capabilities, to achieve leapfrog growth; regarding terminals, adhere to the strategies of cost leadership and product differentiation for smartphones in the international market, expand our presence on e-commerce platforms and make breakthroughs with flagship models in the Chinese market, and seize the window of opportunity to quickly increase revenue from cloud PCs.

In R&D, committed to technological leadership and innovative breakthroughs in key underlying technologies, we will shift to the new paradigm of "chipset + device + composable R&D + large model", and further consolidate the foundation of core technologies. In doing so, we aim to secure a leading position in the competitiveness of network products, strengthen capabilities in integrated computing solutions, improve user experience and cost advantages of terminal products, and inject strong momentum into breakthroughs in new fields such as new energy and automotive electronics.

In corporate management, we will be brave enough to innovate and reform, and proactively adapt to the gradual business shift toward government, enterprise, and consumer markets. That is to say, we will promote the innovative model of "small team operation based on a large enterprise" to accelerate our transformation toward an agile organization and deepen cross-departmental collaboration; meanwhile, we will create a new co-opetition ecosystem to continuously expand our partnerships. Furthermore, we will strive to build an ultimate AI company, significantly increasing process and operational efficiency with AI. Also, dedicated to bringing simplicity to customers and partners, we will establish a standardized, intelligent quality management system, taking quality as the bottom line and building competitiveness with high quality.

Going forward, we will continue to consolidate the three strategic cornerstones—talent, compliance, and internal control. More specifically, we will remain value contributor–oriented and unleash organizational creativity, build a best-in-class compliance management system, and strengthen the long-term internal control system to prevent risks, ensure stability, and promote development. In the capital market, we will strengthen market capitalization management, boost investor confidence, and deliver returns to shareholders. In addition, we will actively embrace the global initiative for green and low-carbon practices, and take on social responsibility, to shape a sustainable future.

The year 2025 marks the 40th anniversary of ZTE. Owing to the unremitting efforts of generations of ZTErs, the company has grown from a small processing factory into a global leading provider of integrated ICT solutions. Over the past four decades, our corporate culture, which is rooted in the core values established by ZTE founder Mr. Hou Weigui, has been passed down from one generation to another, inspiring all ZTErs to stride forward with confidence and courage.

Looking back, the waves of competition have shaped our past; moving forward, the winds of progress are filling our sails. Four decades of steady growth has made dedication and innovation part of our DNA, fueling our momentum to press on with heads held high. Four decades of commitment to independent development of core technologies has led to comprehensive breakthroughs in key underlying technologies, boosting our confidence to pursue technological leadership. Four decades of perseverance through thick and thin have witnessed our efforts to seize every opportunity in technology transformations, demonstrating the resilience as we forge ahead with determination. Reflecting on this journey, our determination has grown much stronger along the way. Despite the harsh external environment and in-depth internal transformation, no challenges could ever hold us back. As always, we will remain true to our original aspiration and mission. Together, let's be brave to make breakthroughs and take firm steps, writing a brilliant new chapter on the journey ahead.

At such a beautiful moment when everything begins anew, I wish all of you a refreshing, healthy, and happy new year!                                                                                                                                                                                  

Li Zixue

Chairman of ZTE

December 30th, 2024