ZTE on line for solid year as first-quarter sales forecast to increase

Now its US export ban has been lifted, analysts expect Chinese tech giant to be in a much-stronger position to gain market share internationally

Reading Time:2 minutes

ZTE employees check smartphones at the end of an assembly line in Shenzhen. Photo: Zigor Aldama

Published: 8:15pm, 16 Apr 2017Updated: 4:17pm, 17 Apr 2017

ZTE Corp is expected to post a modest year-on-year increase in revenue for the first quarter, roughly three weeks after Washington removed the Chinese technology company from the US trade blacklist.

“Now that the US export ban has been lifted, we expect ZTE to be in a much-stronger position to gain market share internationally,” said Jefferies equity analyst Edison Lee.

ZTE, listed in both Hong Kong and Shenzhen, is predicted to report a 4 per cent rise in revenue to 22.7 billion yuan (US$3.3 billion) on Monday for the three months ended March 31, up from 21.8 billion yuan in the same period last year, according to consensus estimates from a Bloomberg poll of analysts.

The company, China’s largest listed telecommunications equipment manufacturer, emerged from a year in US sanctions purgatory after it was taken off Washington’s so-called Entity List on March 29 upon recommendation of the Bureau of Industry and Security (BIS), which is under the US Department of Commerce.

A Chinese flag and two flags bearing the name of ZTE fly outside its R&D building in Shenzhen. Photo: Reuters

That followed ZTE’s deal earlier that month to pay record-high civil and criminal penalties totaling US$1.2 billion to the BIS, the US Department of Justice and the Office of Foreign Assets Control under the US Department of the Treasury.

Of that amount, a US$300 million penalty payable to the BIS was suspended for a probationary period of seven years.