Telecommunications equipment vendor ZTE Corp has played down the advantages of tapping into the potential of third-generation (3G) mobile-telephone services in the mainland, emphasising instead on expansion in emerging markets overseas.
At a presentation to about 150 fund managers and investors yesterday to promote its H-share offering, ZTE management said overseas sales would be the firm's key earnings driver and that their revenue contribution would more than double in the next few years.
Fund managers said the A-share company, which is selling 141 million H shares at $17.50 to $22 each, spent more time promoting its overseas expansion plan than the prospects of a 3G business.
By planning to spend 60 per cent of the proceeds from the offering - or about $1.58 billion - to expand overseas, ZTE expects foreign sales to rise to 30 per cent of its revenue from 13 per cent.
It said its low-cost advantage would make it more competitive in winning contracts in emerging markets such as India, South Africa and Indonesia.
Some investors at the presentation said they were surprised to hear ZTE pitching itself as a low-cost manufacturer for 'the world market'.
