ZTE reports net profit of RMB 9.33 billion in 2023, up 15.4% YoY

• ZTE's 2023 net profit reached RMB 9.33 billion, showcasing a dual-drive strategy focusing on connectivity and computing power
• The company demonstrated resilience amidst challenges, with a strengthened focus on R&D investment, covering 20.4% of the operating revenue

Shenzhen, China, 8 March 2024 - ZTE Corporation (0763.HK / 000063.SZ), a global leading provider of information and communication technology solutions, today reported a full-year operating revenue of RMB 124.25 billion in 2023.

According to ZTE's results announcement today, in 2023, the company's gross profit margin was 41.5%. The net profit attributable to holders of ordinary shares of the listed company reached RMB 9.33 billion, up 15.4% year-over-year. The net profit after extraordinary items attributable to holders of ordinary shares of the listed company for 2023 amounted to RMB 7.40 billion, representing a 20.0% year-on-year rise.

In 2023, the company's net cash flows from operating activities reached RMB 17.41 billion, a year-over-year increase of 129.7%, with total cash dividends proposed to be distributed accounting for 35.0% of the net profit attributable to the holders of ordinary shares of the listed company.

In 2023, amidst a challenging external landscape, ZTE demonstrated precision and pragmatism, maintaining steady operations. With a strengthened focus on research and development investment, the company fortified its core capabilities, elevating product competitiveness through a fusion of foundational technological innovation and advanced manufacturing processes. With an investment of RMB 25.29 billion into R&D in 2023, covering 20.4% of the operating revenue, ZTE drove its business innovation initiatives, paving the way for sustainable growth.

In addition, ZTE sustained its efforts in strengthening risk prevention capabilities, emphasizing digital transformation to enhance operational resilience. Capitalizing on opportunities in industry digitization, intelligent computing, and green low-carbon initiatives, the company pursued a diversified strategy across multiple product lines and sectors, achieving robust expansion of new business initiatives alongside overall operational stability.

In 2023, the company's domestic market realized operating revenue of RMB 86.48 billion, representing 69.6% of the total. Meanwhile, the international market achieved operating revenue of RMB 37.77 billion, accounting for 30.4% of the total.

The company's operator network, government and enterprise business, and consumer business achieved operating revenues of RMB 82.76 billion, RMB 13.58 billion, and RMB 27.91 billion, accounting for 66.6%, 10.9%, and 22.5% respectively.

In 2023, with its first curve services centered around "connectivity," ZTE maintained its leading position in both wireless and wired domains. The company's shipments of 5G base stations and 5G core networks consistently ranked second globally for four consecutive years. Its RAN and 5G core network products were recognized as industry leaders, while its optical access product, 10G PON, held the second-largest global market share.

Simultaneously, ZTE continuously evolved innovative technologies and solutions, such as 5G-A, all-optical networks, and 5G new applications. Collaborating with operators, ZTE conducted commercial deployments and verifications in various scenarios, including 10Gbps experiences, industrial field networks, communication-sensing-computing integration, and RedCap.

In the second curve services represented by "computing power," the company actively embraced the new opportunities and challenges arising from breakthroughs in artificial intelligence technology. Leveraging its extensive experience in both hardware and software development in the telecommunication field, the company intensified its investments in computing infrastructure, software platforms, large-scale models, and applications. With a comprehensive approach, it launched products like servers and storage, data center switches, data centers, and the Nebula series of large-scale models. These endeavors accelerated the company's strategic shift from connectivity towards a stronger focus on computing power.

In the terminal field, ZTE is dedicated to constructing the Full-Scenario Intelligent Ecosystem 3.0, and continuously introducing pioneering products and solutions across various sectors such as mobile terminals, smart homes, cloud computers, automotive electronics and more. The industry-first cutting-edge product lineup includes groundbreaking innovations like 5G+AI eyewear-free 3D tablet nubia Pad 3D II, all-around photography flagship nubia Z60 Ultra, AI 5G FWA products, Wi-Fi 7 and FTTR series products, and 5G cloud laptops. Among them, ZTE has achieved global leadership in the 5G FWA&MBB market, boasting the world's highest market share. The shipment volumes for PON CPE, DSL CPE, and IP set-top boxes have secured the top position globally. Maintaining its stronghold, the company has led the top position in the global gaming smartphone market share with stable sales of RedMagic. Concurrently, ZTE has also forged extensive collaborations with major automotive companies.

Moving forward, amidst the dynamic and evolving external landscape and the rapid advancements in digital technologies, ZTE is poised to actively embrace the momentum of digital transformation. Upholding principles of openness and collaboration, the company remains steadfast in its commitment to shaping a sustainable future that is efficient, green, and intelligent, in close partnership with stakeholders worldwide.

ABOUT ZTE:

ZTE helps to connect the world with continuous innovation for a better future. The company provides innovative technologies and integrated solutions, and its portfolio spans all series of wireless, wireline, devices and professional telecommunications services. Serving over a quarter of the global population, ZTE is dedicated to creating a digital and intelligent ecosystem, and enabling connectivity and trust everywhere. ZTE is listed on both the Hong Kong and Shenzhen Stock Exchanges. www.zte.com.cn/global

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