ZTE (000063): Performance Exceeds Expectations

ZTE (000063): Performance Exceeds Expectations

The company released the 2018 annual report and the 2019 first quarter report notice, which 佛山桑拿网 slightly exceeded market expectations.

The company achieved revenue of 855 in 2018.

1.3 billion, a decrease of 21 a year.

41%, with an initial budget of 69.

8.3 billion.

Revenue for the fourth quarter of 2018 was 267.

470,000 yuan, the profit is 2.

76 ppm; at the same time, Q4’s operating net cash flow turned positive, reaching 10.

07 billion.

The profit for the first quarter of 2019 is expected to be 8-12 trillion, exceeding market expectations.

After going through various ups and downs, the company is ready to launch 5G before the 5G start gun fires.

Operator business is strong, and consumer business is in urgent need of recovery.

Operator revenue in 2018 was 570.

76 ppm, 10-year average of 10.

51%; government and business income 92.

27 ppm, a ten-year average of 6.

13%; consumer business income 192.

1 ‰, 45 years ago.


The company experienced a 89-day ban in 2018 (4.


13) Under the background, operators, government and corporate affairs suffered less damage, and consumer business was severely affected due to their weight control in Europe and the United States.

At the same time, the company’s increase in gross profit margins in China, Africa and other 上海夜网论坛 regions also confirms what we quoted in our previous report: the company’s core profit source-the internal major operators’ business is operating well.

The terminal business is expected to return to the customized model with operators. Because in the early stage of 5G development, the promotion of operators is still an important force for 5G terminal dissemination. The company can rely on its deep cooperation relationship with operators in Europe to promote terminal business.restore.

The operating situation in the fourth quarter was more optimistic than the report.

In 2018, the company made approximately 10 provision for impairment of Nubia’s long-term equity investments.

RMB 940 thousand (investment income -1.

6 trillion, asset impairment loss 9.

At the same time, the company’s fourth-quarter non-profit deductions were generally affected by the changes in ZTE Venture Capital’s profits.

However, these impacts have not been reduced. The actual operating situation of the company in the fourth quarter is far more optimistic than the net profit achieved through integration. From the fourth quarter, the operating net cash flow in a single quarter is reaching 10.

07 thousand yuan can also be polished.

4G capacity expansion exceeds expectations, and 5G is in urgent need of volume.

In 2019, the three major operators have obvious needs for 4G capacity expansion, and China Unicom has opened 41.

With 60,000 base stations collected, mobile telecommunications will follow up one after another.

At the same time, 2019 will also be the first year of 5G construction, and the carrier ‘s capital expenditure will stop falling and pick up.

(6%, ending a three-year transition). As one of the world’s four major communications major equipment manufacturers, ZTE is expected to continue to shine in the new round of operators’ capital expenditure up cycle.

Profit forecast: We expect the company’s net profit attributable to mothers to be 48-20 in 2019-2021.

1 ppm / 63.200 million / 82.

800 million.

The corresponding estimates are 23, 18 and 14 times, maintaining the “Buy” level.

Risk reminder: the risk of the impact of the subsequent progress of trade sanctions on the company’s business; the 5G construction progress is less than expected, affecting the risk of the company’s related business; the company’s changes may affect more than expected; the company’s 5G R & D progress is less than expected.