Financials ZTE Corporation Hong Kong S.E.

Equities

763 CNE1000004Y2

Communications & Networking

Market Closed - Hong Kong S.E. Other stock markets 09:08:22 10/05/2024 BST			5-day change	1st Jan Change
17.22 ^HKD	+2.01%		-0.12%	-1.26%

05-09	Ying Li Extends Loan Agreement with China Everbright Finance	MT
05-09	US could ban Chinese connected vehicles or impose restrictions	RE

Valuation

Fiscal Period: December	2019	2020	2021	2022	2023	2024	2025	2026
Capitalization ¹	138,979	142,125	146,171	114,433	118,615	124,767	-	-
Enterprise Value (EV) ¹	142,872	141,743	135,290	103,837	90,208	96,466	90,953	86,352
P/E ratio	29 x	36.6 x	22.8 x	15.1 x	13.5 x	12.8 x	11.6 x	11.2 x
Yield	0.57%	0.59%	0.9%	1.55%	2.58%	2.47%	2.72%	3.36%
Capitalization / Revenue	1.53 x	1.4 x	1.28 x	0.93 x	0.95 x	0.96 x	0.88 x	0.86 x
EV / Revenue	1.57 x	1.4 x	1.18 x	0.84 x	0.73 x	0.74 x	0.64 x	0.59 x
EV / EBITDA	13.5 x	15.7 x	10.5 x	8.08 x	6.4 x	5.87 x	5.41 x	4.82 x
EV / FCF	51.4 x	37.6 x	13.2 x	39.2 x	6.73 x	10.8 x	9.76 x	8.67 x
FCF Yield	1.95%	2.66%	7.58%	2.55%	14.9%	9.27%	10.2%	11.5%
Price to Book	5.19 x	3.59 x	3.08 x	2.09 x	1.86 x	1.77 x	1.6 x	1.46 x
Nbr of stocks (in thousands)	4,227,429	4,610,461	4,726,548	4,736,113	4,783,252	4,783,252	-	-
Reference price ²	35.39	33.65	33.50	25.86	26.48	27.99	27.99	27.99
Announcement Date	27/03/20	22/01/21	08/03/22	10/03/23	08/03/24	-	-	-

¹CNY in Million²CNY

Estimates

Income Statement Evolution (Annual data)

Fiscal Period: December	2019	2020	2021	2022	2023	2024	2025	2026
Net sales ¹	90,737	101,451	114,522	122,954	124,251	130,100	141,340	145,696
EBITDA ¹	10,614	9,036	12,859	12,853	14,098	16,443	16,803	17,931
EBIT ¹	7,552	5,471	8,676	8,795	9,172	11,968	12,628	13,320
Operating Margin	8.32%	5.39%	7.58%	7.15%	7.38%	9.2%	8.93%	9.14%
Earnings before Tax (EBT) ¹	7,162	5,064	8,499	8,752	10,203	11,800	12,975	13,741
Net income ¹	5,148	4,260	6,813	8,080	9,326	10,426	11,405	11,856
Net margin	5.67%	4.2%	5.95%	6.57%	7.51%	8.01%	8.07%	8.14%
EPS ²	1.220	0.9200	1.470	1.710	1.960	2.188	2.405	2.506
Free Cash Flow ¹	2,780	3,770	10,258	2,650	13,401	8,940	9,315	9,963
FCF margin	3.06%	3.72%	8.96%	2.16%	10.79%	6.87%	6.59%	6.84%
FCF Conversion (EBITDA)	26.19%	41.73%	79.77%	20.62%	95.06%	54.37%	55.44%	55.56%
FCF Conversion (Net income)	54%	88.51%	150.56%	32.8%	143.7%	85.74%	81.67%	84.03%
Dividend per Share ²	0.2000	0.2000	0.3000	0.4000	0.6830	0.6910	0.7602	0.9414
Announcement Date	27/03/20	22/01/21	08/03/22	10/03/23	08/03/24	-	-	-

¹CNY in Million²CNY

Estimates

Income Statement Evolution (Quarterly data)

Fiscal Period: December	2019 S2	2020 S1	2020 S2	2021 S1	2021 Q4	2021 S2	2022 Q1	2022 Q2	2022 Q3	2022 Q4	2022 S2	2023 Q1	2023 Q2	2023 Q3	2023 Q4	2023 S2	2024 Q1	2024 Q2	2024 Q3	2024 Q4	2025 Q1	2025 Q2
Net sales ¹	46,127	47,199	54,251	53,071	30,696	61,451	27,930	31,888	32,741	30,395	63,136	29,143	31,562	28,689	34,857	63,546	30,578	32,819	32,022	36,849	33,834	36,642
EBITDA ¹	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	3,533	4,234	2,496	-	-
EBIT ¹	-	2,938	-	-	973.3	-	2,423	2,844	2,516	1,240	3,528	3,113	2,463	2,958	868.8	4,156	3,006	3,803	3,583	2,813	-	-
Operating Margin	-	6.22%	-	-	3.17%	-	8.67%	8.92%	7.68%	4.08%	5.59%	10.68%	7.8%	10.31%	2.49%	6.54%	9.83%	11.59%	11.19%	7.63%	-	-
Earnings before Tax (EBT) ¹	4,924	2,841	2,223	5,527	845.8	2,972	-	-	2,300	1,240	3,540	3,089	2,970	2,402	1,742	4,144	3,207	3,388	3,476	2,707	-	-
Net income ¹	3,677	1,857	2,402	4,079	960	-	-	-	2,254	1,260	3,514	2,642	2,830	2,369	1,485	3,854	2,741	2,635	2,836	2,198	-	-
Net margin	7.97%	3.93%	4.43%	7.69%	3.13%	-	-	-	6.88%	4.15%	5.57%	9.07%	8.97%	8.26%	4.26%	6.06%	8.96%	8.03%	8.86%	5.96%	-	-
EPS ²	-	-	0.5200	-	0.2100	-	0.4700	0.4900	0.4800	0.2700	0.7500	0.5600	0.5900	0.5000	0.3100	0.8100	0.5700	0.5645	0.5432	0.3838	-	-
Dividend per Share	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Announcement Date	27/03/20	28/08/20	22/01/21	27/08/21	08/03/22	08/03/22	25/04/22	26/08/22	26/10/22	10/03/23	10/03/23	21/04/23	18/08/23	23/10/23	08/03/24	08/03/24	25/04/24	-	-	-	-	-

¹CNY in Million²CNY

Estimates

Balance Sheet Analysis

Fiscal Period: December	2019	2020	2021	2022	2023	2024	2025	2026
Net Debt ¹	3,893	-	-	-	-	-	-	-
Net Cash position ¹	-	382	10,881	10,596	28,407	29,531	33,840	37,029
Leverage (Debt/EBITDA)	0.3667 x	-	-	-	-	-	-	-
Free Cash Flow ¹	2,780	3,770	10,258	2,650	13,401	8,940	9,315	9,963
ROE (net income / shareholders' equity)	20%	10.2%	14.5%	14.7%	15.2%	14%	14.1%	13.6%
ROA (Net income/ Total Assets)	3.81%	2.92%	4.27%	4.62%	4.88%	5.06%	5.24%	5.49%
Assets ¹	135,292	145,932	159,699	174,860	190,957	206,261	217,766	216,009
Book Value Per Share ²	6.820	9.380	10.90	12.40	14.20	15.80	17.50	19.20
Cash Flow per Share ²	1.760	2.220	3.390	1.600	3.640	3.530	2.730	4.090
Capex ¹	4,667	6,462	5,466	4,928	4,005	4,642	4,542	4,548
Capex / Sales	5.14%	6.37%	4.77%	4.01%	3.22%	3.57%	3.21%	3.12%
Announcement Date	27/03/20	22/01/21	08/03/22	10/03/23	08/03/24	-	-	-

¹CNY in Million²CNY

Estimates

EPS & Dividend

Year-on-year evolution of the PER

Year-on-year evolution of the Yield

Change in Enterprise Value/EBITDA

Ratings for ZTE Corporation

Trading Rating

Investor Rating

ESG Refinitiv

More Ratings

Analysts' Consensus

Sell

Buy

Mean consensus

OUTPERFORM

Number of Analysts

Last Close Price

27.99 CNY

Average target price

33.55 CNY

Spread / Average Target

+19.86%

Consensus

EPS Revisions

Estimates Revisions

Quarterly earnings - Rate of surprise

Company calendar

Sector Other Communications & Networking

	1st Jan change	Capi.
CISCO SYSTEMS, INC.	-4.87%	195B
ARISTA NETWORKS, INC.	+33.34%	98.41B
FOXCONN INDUSTRIAL INTERNET CO., LTD.	+58.20%	65.76B
MOTOROLA SOLUTIONS, INC.	+15.89%	60.52B
GARMIN LTD.	+31.42%	32.45B
NOKIA OYJ	+13.99%	20.69B
ZHONGJI INNOLIGHT CO., LTD.	+51.63%	18.63B
ERICSSON	-7.78%	17.9B
JUNIPER NETWORKS, INC.	+17.50%	11.26B

Other Communications & Networking