ZTE Posted Strong Profit Rise in the Fist Six Months of 2021

ZTE recorded robust profit growth in the first half of 2021. A double-digit rise in revenue was fueled by a sharp increase in its consumer business, while its key carrier division remained flat.

Net profit surged 134.2 percent to CNY2.11 billion ($325.7 million). Excluding extraordinary items, net profit hit CNY4.08 billion. ZTE said in a statement that the efforts to optimise its cost structure led to gross profit margin rising 2.7 percentage points year-on-year to 36.1 percent.

Operating revenue rose 12.4 per cent to CNY53.07 billion, with domestic sales increasing 13.2 percent to CNY35.95 billion. International turnover rose 10.8 percent to CNY17.1 billion, accounting for 32.3 percent of total revenue which was down slightly from the same period in 2020.

Carriers’ networks revenue was flat year-on-year at CNY35.05 billion, as strong domestic demand was offset by uncertainties outside of China caused by the COVID-19. The pandemic, said the company, posed considerable pressure and challenge for overseas network investment, 5G progress and network construction in the short term.

Its consumer business recorded 66.6 percent growth to CNY12.35 billion, as residential terminal and mobile device revenue rose more than 90 percent and 40 percent respectively. Revenue in its government and corporate business increased 17.7 percent to CNY5.67 billion, with server and storage products doubling year-on-year in the domestic market.

R&D spending in the six-month period increased 33.5 percent to CNY8.86 billion. The expenditure as a percentage of operating revenue rose to 16.7 percent from 14.1 percent in the same period in 2020.