Sales Surge 50% in US and Europe

Cloud Computing and Integrated Circuit strategy to be key in 2011

17 March 2011, Hong Kong – ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code: 000063.SZ), a leading global provider of telecommunications equipment and network solutions, today announced its annual results for the year ended 31 December 2010.

Based on HKFRS and PRC ASBEs, ZTE recorded revenue of RMB 70.264 billion (USD 10.609billion) in 2010, representing an increase of 21% (in USD rate) against 2009. Net profit was RMB 3.250 billion (USD 490.74 million), representing an increase of 32.22% compared with 2009. Basic earnings per share were  RMB1.17 (USD 0.177).

The Board of Directors recommended payment of a final dividend for the year ended 2010: A bonus issue of two shares for every 10 shares held and a cash dividend of RMB3 (USD 0.45) (before tax) for every 10 shares.

During the year, the Group's revenue from domestic operations amounted to RMB 32.198 billion (USD 4.861 billion), representing year-on-year growth of 5.90%. 

This increase can be attributed to expansion of the 3G markets and ZTE's leading position in terms of CDMA and WCDMA market share. ZTE also gained 50% growth in the government and enterprise network markets which further enhances the Group's domestic market share. During the reporting period, the Group also began supplying high-end data equipment such as T8000 and M6000 to the three major national carriers in large volumes, while its smart terminal equipment also gained significant market recognition.

The Group's revenue from its international operations grew 27.45% to RMB38.066 billion (USD 5.747 billion) and accounted for 54.18% of total operating revenue.  For the first time, the US and European markets contributed the largest portion of overseas revenue. These markets recorded year-on-year growth of 50% which accounted for 21% of total operating revenue. 

The Group's systems products were launched in high-end European markets such as Germany, Belgium, Hungary and Austria. Business deals were also brokered with other mainstream carriers such as France Telecom, MTN of South Africa, America Movil, KPN and Hutchison. Moreover, ZTE's terminal products gained full access to the four leading carriers of the United States as well as the Japanese market, achieving annual shipments of 90 million units to rank among the top five vendors worldwide. In addition, ZTE's Blade and Light smart devices have gained ground due to their performance and quality in the European markets.

In 2010, ZTE made substantial achievements in innovation, delivery ability and market expansion. In early 2011 ZTE was ranked second by the World Intellectual Property Organization (WIPO) for having 1,863 international patent applications. In addition, ZTE owns 7% of LTE patents in the industry, making it one of the top five telecom vendors in the world.

In 2011, the company will continue to increase its presence and share in both domestic and international markets by deepening relations with mainstream carriers, and by moving from strategic engagement to strategic cooperation. ZTE will also strengthen its development capabilities to move into emerging technologies such as cloud computing and Integrated Circuit.

The focus for wireless communications will be to develop LTE markets, while wired communications will look to strengthen bearer networks and expand in the fixed broadband markets. Mobile phones, especially the high-end smart phones, will aim to increase handset shipments in order to improve the competitiveness of the company.

ZTE Chairman Mr. Hou Weigui, said: "In the coming year, the Group will proactively respond to the dynamic requirements of customers and strengthen strategic cooperation in response to the profound changes in the global telecommunications market. Other areas of focus will also include the recruitment and development of high-caliber staff, product differentiation as well as cost-effectiveness and quality of ZTE's solutions. We aim to achieve an excellent performance to benefit society and our shareholders."