Turnover from principal operations reached RMB 10,303 million (increased 1.22%)
Income from international market was RMB3,147million (increased 130.8%)
For the first six months of 2005, ZTE maintained its operating results at similar levels compared with the same period last year, driven by the significant growth of international revenues. Thanks to its outstanding brand name and effective marketing strategies, ZTE boosted its market share in the PRC. The Group also successfully expanded its international coverage, resulting in a substantial increase in sales globally. During the period under review, income from the international market contributed a 30.5% to the Group´s turnover from principal operations, up by 130.8% as compared with the corresponding period in 2004.
Based on financial statements prepared in accordance with Hong Kong Accounting Standards and reviewed by Ernst & Young, the Group´s turnover from principal operations for the six months ended 30 June 2005 amounted to RMB10,303 million, representing an increase of 1.22% compared with the same period last year.
Based on financial statements prepared in accordance with PRC GAAP, net profit amounted to RMB688 million, representing an increase of 34.0% compared with the same period last year. Earnings per share were RMB0.72.
Looking forward, ZTE anticipates a clearer picture in respect of the restructuring of the PRC telecommunications industry and the issuance of 3G licences in the second half of 2005. It is expected that domestic carriers in the PRC will increase their capital expenditure as they seek to compete primarily on network quality and service standards by making more specific, customer-oriented investments. Internationally, the Group expects the positive growing trend of the telecommunications sector in the first six months to continue in the second half of the year.
Mr. Hou Weigui, Chairman of ZTE, said, "With a well-developed overseas marketing regime, the Group will be able to optimize its resource allocation and fully leverage its marketing strategies. As such, we expect strong growth to continue in our international operations in the latter half of the year."
ZTE envisions to become a leading international enterprise by building its core competitive strengths and increasing revenue levels. In particular, the Group will adopt the following measures in the second half of 2005 to achieve this goal: to enhance its effort in making inroads into the international market by developing its overseas sales force; it will also improve its research and development process and with a stronger emphasis on marketing. For example, the Group will focus its research and development efforts on 3G technology to increase the competitiveness of its 3G technology-based products. Lastly, ZTE will pursue prudent financial management to ensure that it is a cost-efficient player in the telecommunications equipment industry.
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