ZTE’s Revenue and Net Profit Expected to Drop in 2024

In the year 2024, both the operating income and the net profit attributable to shareholders of ZTE Corporation (ZTE) declined by 2.38% and 9.66% respectively compared to the previous year, indicating that the company’s performance was under pressure during the past year.

According to the “2024 Annual Report” released by ZTE on March 1st, the company achieved an annual operating income of 121.299 billion yuan in 2024, compared to 124.251 billion yuan in 2023. The net profit attributable to the shareholders of the listed company was 8.425 billion yuan in 2024, down by 9.66% from 9.325 billion yuan in 2023.

An analysis article by “Southern Metropolis Daily” on March 1st pointed out that the slowdown in investment in the operator market had dragged down the growth of ZTE’s core business. The decline in the operator network business significantly impacted the overall revenue of the company. The financial report showed that in 2024, the revenue from ZTE’s operator network business was 70.33 billion yuan, a 15.0% decrease compared to the previous year.

Apart from slowing demand, rising costs and external environmental changes have also affected ZTE’s profitability. The financial report indicated that ZTE’s overall gross profit margin in 2024 was 35.7%, a decrease of 1.7 percentage points year-on-year. The gross profit margin of the operator network business was 40.9%, down by 2.5 percentage points year-on-year. The supply chain in the communication industry remained challenging, as mentioned in the financial report, with fluctuating chip supplies, rising raw material prices, and increased operational costs in 2024, all contributing to sustained cost pressures for the company.

Moreover, due to changes in the external environment, ZTE faced challenges in its international operations. The financial report stated that uncertainties in overseas markets, changes in trade policies, and currency fluctuations could impact the company’s global business growth and profitability.

Meanwhile, ZTE’s cash flow situation was also under pressure. In 2024, the net cash flow from operating activities was approximately 11.48 billion yuan, a decrease of 34.05% compared to the previous year. Additionally, ZTE’s debt scale further increased in 2024. By the end of the reporting period, the company’s interest-bearing debt amounted to 56.9 billion yuan, higher than the 53.2 billion yuan in 2023. In the current market environment, the increasing debt undoubtedly adds to the company’s financial burden.

Reports indicate that against the backdrop of a slowdown in the global telecommunications industry and a lengthening of the network equipment renewal cycle, ZTE is likely to continue facing challenges of sluggish growth in the short term.

Public information shows that ZTE Corporation was established in 1985 and is a provider of comprehensive communication solutions, listed in both Hong Kong and Shenzhen.