The Net Profit
of ZTE Has Increased by 94%: Will It Be on a Continuation of High Boom?
2014
is considered as the era of 4G in china. Operators build BTS and strive for
more customers, 4G transaction is in full swing all over the country. Who is
the biggest beneficiary? Maybe we can get some hint from the annual report of
ZTE.
Last
night ZTE released the 2014 performance report which showed the ZTE Corporation
had an operating income of 81.47 billion RMB that was 8.3% higher from the year
earlier. The net profit of CSSC holdings reaches 2.63 billion RMB, which had
grown 94.0% from the year earlier. Almost every share benefits 0.77 Yuan, so
ZTE has planned to distribute all shareholders 2.0 Yuan per 10 shares; The
increase in capital reserve per 10 shares to 2 shares.
Benefit from the
great development of 4G
ZTE
acclaimed that the contract profitability would continually improve and both
the sales scale and the gross margin had grown a lot owing to the domestic
TD-LTE, FDD-LTE and the income growth of international 4G cellphones. At the
same time, ZTE Corporation strengthened the control of financial expenses and
minimized the effect of exchange rate fluctuation, which made comprehensive
financial cost decrease drastically.
The
annual report indicated that the domestic operating income was 40.58 billion
RMB, which occupied 49.8% of the whole operating income. ZTE said it focused on
the three largest markets –operators, government-enterprise and consumers. Besides,
ZTE will deepen the implementation of M-ICT to maintain the dominant position
by competitive creative solutions.
On
one hand, the international market has an operative income of 40.89 RMB, which
make up 50.2% of the whole team receipts. ZTE will continuously stick to the
strategy of deepening the markets of large-population nations and the global mainstream
operators to achieve the target of sound operation and high-quality growth.
On
the other hand, carrier networks and mobile terminal operating income has risen
from the year earlier. The system of telesoftware, service and other products
operating income has a trend of declining when compared with last year.
ZTE
stated that the growth of carrier networks operating income depend on 4G
products, router and switch at home and abroad and optical communication
system. And the growth of mobile terminal operating income is mainly up to 4G
phones operating income. Telesoftware system, service and other products
operating income has declined because of the decrease of international
operating income.
So
we make a conclusion that 4G devices and overseas cellphones transaction are
the key point of rich income in 2014, which can be seen from the terminal
financial statements and the related market data. ZTE start gaining profits
from continual devotement of 4G products reach and development. The whole year
income of wireless products has grown 20% from the year earlier. The shipment
of 4G BTS has doubled and the market share of the global is over 25%, which
made ZTE be the fastest growing manufacturer of 4G again in the world after
2013.
Apart
from above all, what we should pay attention to is that smartphone transaction
has improved in 2014. In the age of M-ICT, to dominate the smart terminal
markets and HCI markets ZTE terminal takes the lead in voice interaction and
terminal security technology. And the star 2 and Grands S3 have been launched successively.
It is enumerated that ZTE phone has 7.8% market share, ranking the fourth. And
the top three are Samsung, Apple and LG.
Can it have a
continuation of high boom in 2015?
Because
of the leading share of operator in 4G bidding, the industry has made an
expectation at early times. As a consequent, can it have a continuation of high
boom in 2015?
ZTE
has a strong confidence when faced with this question. Hou Weigeng, the chairman
of ZTE said in the annual report that though the traditional telecommunications
market met great challenge, the operating data service was on high-speed
growing and the operators was transforming to internet service. At the same
time, everything mobile internet age will be popularity in the
telecommunication field development not only human-human, but human to article
and article to article.
ZTE
will aim for grasping the opportunity of time-reconstruction, creating value depending
on the information and focus on
the three
largest markets –operators, government-enterprise and consumers. Besides, ZTE
will gain profit by means of innovation in business and technology, which are centered
on the smart voice, smart wireless-charging, distributed electricity generation,
large data platforms and applications, internet finance, mobile payment and so
on.
Guotai Junan Securities Research newspaper holds the view that ZTE has gradually made it clear that it must execute
the strategy of diversified competition and the strategy will be launched
deeply and make a breakthrough in M-ICT field.
As for the continuation for the achievement, EMC stock research newspaper thinks that
though domestic 4G construction is growing vigorously, the FDD license is still
not issued and the income identification exhibits hysteresis. So it is forecast
that some orders will be put behind to 2015 and EMC stock research newspaper holds an optimistic attitude for 2015
operator network transaction. In addition, the EMC stock research newspaper also the strategy investment value of
ZTE will stand out with the launch of M-ICT strategy.
