On 11 April 2005, ZTE Corporation ("ZTE" or the "Group") (Stock code: 0763.HK 000063.SZ) announced in Hong Kong its annual results for the year ended 31 December 2004.
 
This is the Group´s first results announcement since it was listed on the Main Board of HKSE in December 2004. Based on Hong Kong GAAP, the Group reported a turnover of RMB 21,200 million (approximately US$2,563 million) for the full year of 2004, representing an increase of 24.6% as compared to 2003. Profit attributable to shareholders increased to RMB 1,273 million, 23.8% higher than that in 2003. Weighted average earnings per share were approximately RMB 1.57. The Directors have recommended the payment of a final dividend of RMB 0.25 per share for the year ended 2004（include tax）.

Mr. Hou Weigui, Chairman of ZTE, said "We are pleased to witness the Group´s substantial growth in the past year. We believe it resulted from the overall favourable development of the communications sector and also our own efforts towards realizing the best operating results. The Group was successfully listed on the Main Board of the HKSE in December 2004, becoming the first A share listed company to be listed on the Main Board of the HKSE. The successful listing marked a new milestone in our development. It has not only provided the Group with an access to international capital market, but is also a drive for the Group to practice the highest corporate governance standards and transparency."

In 2004, ZTE strengthened its development in the international market, aiming to capture opportunities as the global telecommunications sector recovers. It has established business relationships with over 60 countries and 150 customers in the world. Leveraging its competitive strengths, ZTE reinforced its efforts to develop rapidly growing emerging markets while aggressively exploring the international telecommunications service provider market. This resulted in the substantial revenue growth from the international market. Turnover from the international market increased by 133.5% over 2003 to reach RMB 4,575.6 million (approximately US$553.28 million), representing 21.5% of ZTE´s 2004 turnover.  This not only marked a major growth driver for the Group in 2004, but also made ZTE one of the fastest growing communications equipment enterprises in the world.

ZTE endeavored to enhance its strength in R&D so as to ensure its competitiveness in the long run. Besides strengthening its research and development efforts on strategic new products, which will allow it to capture any market opportunities for business advancement, it also participates in compiling industry standards, expanding its international R&D base, and attracting and recruiting international technology experts.

 Mr. Hou said, "As a high-tech enterprise, research and development is key to our development. We will continue to invest about 10% of our revenue into research and development each year and will focus on the accumulation and protection of intellectual property rights in the long run to ensure the our sustainable development. In November 2004, we successfully developed the world´s smallest and lightest 3G mobile phone, proving yet again our strong R&D capability." 

Mr. Hou concluded, "Looking ahead, we will continue to adhere to our internationalization strategy and strive for even better performance in the international market. We will remain committed to enhancing overall customer satisfaction and consolidating our competitiveness and market share through improving R&D management, implementing stringent quality control measures and improving operational efficiency. We expect to see steady growth in both the global and Chinese communications industry. We aim to grasp development opportunities arising from the demand for new technologies and new products in the communications sector, and thereby increase the value of the Group and yield good returns for our shareholders."

Note: For your convenience, this announcement contains translation between Renminbi amounts and United States dollars at RMB8.27 = US$1.00  The translations are not representations that the Renminbi and United States dollars amounts could actually be converted at this rate, or at all.