ZTE reinvests over 15% of its turnover in R&D expenditure in the first quarter of 2020

 ZTE Corporation (0763.HK / 000063.SZ), a telecommunications and enterprise and consumer technology solutions for the mobile internet, announced the results of its first quarter ended March 31, 2020.

According to the announcement, for the three months ending March 31, 2020, ZTE reported operating revenues of RMB 21.484 billion. The net profit attributable to the shareholders holding ordinary shares of the listed company reached 780 million RMB and the net profits, net of exceptional elements, attributable to the holders of ordinary shares of the listed company, amounted to RMB 160 million, representing 20.5% year-on-year growth. Basic earnings per share was RMB 0.18 .

The company has continued to strengthen its R&D investment to consolidate its core competitiveness. For the three months ending March 31, 2020, research and development costs were RMB 3.241 billion, 15.1% of operating turnover, an increase of 1.2 percentage points over the same period last year.

During the first quarter of 2020, ZTE prioritized the health of its employees and services to global customers by promptly setting up and updating a remote office and customer service platform for all its employees. In addition, the company coordinated with its partners to combat COVID-19 and facilitate the resumption of production with digital means in an orderly manner.

In the meantime, ZTE has proactively practiced social responsibility by collaborating with operators to ensure first-line communication services in the fight against COVID-19. He has built 4G / 5G networks and telemedicine diagnosis systems for hundreds of hospitals in China.

As a responsible company with a strong civic commitment, ZTE has donated materials to support Wuhan and other regions in the province of Hubei and has distributed masks, respirators and other materials to local organizations and hospitals around the world. In collaboration with various operators abroad, ZTE also conducted diagnoses with hospitals and provided office and small and medium-sized enterprises with a series of anti-COVID-19 programs.

Working together with industry partners, ZTE has been committed to enabling various industries to fight against COVID19, leveraging its dominant technological strength such as 5G and AI. In particular, ZTE has provided remote diagnosis and 5G mobile diagnosis services, as well as the cloud smart video solution for the prevention and control of the epidemic.

In addition, the company launched "cloud-class" family services to support online education. With great efficiency and collaboration, ZTE's secure remote office solution allowed users in various sectors to have remote office services during the COVID19 epidemic, thus facilitating safe and rapid recovery of work and promoting economic resilience. .

With the acceleration of new infrastructures, such as 5G and industrial internet, ZTE is actively involved in the implementation of the operators' 5G infrastructure, and has gradually increased its 5G production capacity. At the same time, the company has consolidated cooperation with the major players in the sector to promote the digital transformation of energy, transport, finance, government affairs and other key sectors.

At the end of the first quarter of 2020, ZTE has consecutively secured significant shares for the core network 5G RAN, 5G SA, the centralized supply of 5G transport by China Mobile, China Telecom and China Unicom. The company built 5G demonstration networks in various cities in China, achieving a continuous Giga + 5G coverage experience. It also completed 5G commercial deployments in Europe, Asia-Pacific, the Middle East and other primary 5G markets.

In addition, ZTE supported high growth in optical network market share, as well as in the Metro WDM and Backbone WDM segments. The company and its partners jointly explored 86 application scenarios and conducted over 60 demonstration projects on a global scale, forming a series of intelligent 5G production demonstration projects together with the major players in the sector.

In the field of terminal devices, ZTE presented its first 5G ZTE Axon 11 5G video smartphone. The company continuously strengthens cooperation in 5G terminals with more than 30 operators worldwide. It launched into the 5G terminal market in Japan by forming partnerships with operators.

Looking ahead, ZTE will pay close attention to the situation of the global epidemic and consequently achieve reasonable coordination with its global customers and partners to deal with the situation. The company will focus tirelessly on its main businesses by taking advantage of the opportunities to build new infrastructures, in order to be able to create more value for its customers and for society as a whole.