ZTE Tallies 27.37% Revenue Growth Despite Global Economic Crunch

Company the Clear Leader of China's 3G Industry Garnering 30% of the Total 3G Equipment Market. Based on HKAS, ZTE recorded a revenue of approximately $ 6,388 million in 2008, representing an increase of 27.37% against 2007. Net profit was $ 239 million. Basic earnings per share were $ 1.22.

@telecoms

March 23, 2009

4 Min Read

Company the Clear Leader of China’s 3G Industry Garnering 30% of the Total 3G Equipment Market

Hong Kong, 19 March 2009 – ZTE Corporation (“ZTE” or the “Group”) (H share stock code: 0763.HK / A share stock code: 000063.SZ) today announced its annual results for the year ended 31 December 2008.

Based on HKAS, ZTE recorded a revenue of approximately $ 6,388 million in 2008, representing an increase of 27.37% against 2007. Net profit was $ 239 million. Basic earnings per share were $ 1.22.

Applying PRC GAAP, during the year under review, the Group’s revenue from principal operations was approximately $ 6,388 million and net profit was $ 239 million. Earnings per share amounted to $ 1.22.

The Board of Directors recommended payment of a final dividend for the year ended 2008: based on the total number of issued shares of $196 million as at 31 December 2008, by way of capitalisation of capital reserves, every 10 shares will increase by 3 new shares. And for every 10 shares, $ 0.43 in cash (with tax) will be distributed. In sum, the total new issued capital will be amounted to $ 58 million and $ 58 million will be distributed in cash.

During the year, the Group’s revenue from domestic operations amounted to $ 2,519 million, representing a year-on-year growth of 18.93%. The Group continued to make significant gain in share in the infrastructure products market, riding on opportunities presented by 3G construction and broadband development in the PRC and thereby secured reasonable profit. It was also actively involved in network refinement, business integration and new business development, seizing the opportunities presented by telecommunications carriers transforming into integrated information service suppliers through network integration, business centralisation and competition via differentiation.

As for revenue from the international operations, it grew to $ 3,869 million, 33.53% more year-on-year, and accounted for 60.6% of the total revenue of the Group, 2.83 percentage points higher compared with the previous year. The Group maintained market shares in developing countries and steadily increased the proportion of income from sales in Europe and America in its effort to grow the two markets into an important income source.

Mr. Hou Weigui, Chairman of ZTE, said, “In 2008, the Group made major breakthroughs and strong growth in the main product areas of GSM, WCDMA, FTTX and optical transmission. In China, we submitted bids for 3G projects of the three major carriers to prepare for undertaking the projects. Outside China, we have made major advances in strategic overseas markets and the multinational carrier market, paving the way for the Group to reach new heights in 2009.”

Mr. Hou concluded, “In the coming year, as carriers continue to push forward with works in relation to 3G operations, full-fledged servicing, VAS business, network transformation and optimisation, the Group expects to see growth opportunities in the domestic market.  In the international market, the impact of the financial crisis will continue to be felt and how to achieve major breakthroughs in developed countries and steady growth of business in developing countries will be the Group’s priority.”

The rapid deployment of 3G networks in China is expected to establish about 660,000 3G carrier frequency by mid this year. In the 3G tender bids offered by China’s three largest telecom operators, the Group obtained about 30% of the total local market, positioning the Group as the clear leader in China’s 3G industry.

About ZTE Corporation

ZTE is one of the leading providers of high-technology communications equipment in China. It is the first A share company to issue H shares and listed on the Main Board of The Stock Exchange of Hong Kong on 9 December 2004. The Group is principally engaged in the design, development, production, distribution, installation and maintenance of a broad range of advanced telecommunications systems and equipment, including wireless communications systems, wireline switches and access systems, optical and data communications equipment, handsets, and telecommunications software systems and services. The Group’s products have already successfully penetrated into global telecommunication market and provide telecommunications products for over 500 customers in more than 140 countries and regions around the world, including, Italy, India, Indonesia, Egypt and Hong Kong, etc. The Group has established long-term business cooperation with global telecommunications service providers including Hutchison Telecom, France Telecom, Vodafone, Telefonica and Telus.

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