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Bien Perez

With a new leader at the helm, telecommunications powerhouse ZTE aims to chart an aggressive business expansion amid the lingering uncertainty of a US probe, after posting solid earnings results for last year.
Zhao Xianming, ZTE’s new chairman and president, said in a regulatory filing late Wednesday that the company has also applied to the Hong Kong stock exchange to resume trading of its shares on Thursday.
Trading was halted from March 7 after the US government slapped ZTE with export restrictions for allegedly violating longstanding trade sanctions on Iran.
ZTE appoints new chairman in management reshuffle amid talks with US to lift curbs
Zhao said the company was committed to “actively communicate with the US governmental departments to seek a final solution on the matter”.
ZTE has received a temporary relief from the export curbs with a temporary general licence until June 30, during which its US suppliers can ship parts and other products to the company with no restrictions.
“As at the date of this announcement, the investigations are still in progress, and may result in criminal and civil liabilities under US laws,” Zhao said in a separate statement last night. “Further, the potential impact of the investigations and the potential legal liabilities on the results and financial position of the company and its subsidiaries cannot be fully assessed by the company at present.”
Nomura research analyst Huang Leping estimates that “US-made components accounted for between 10 and 15 per cent of ZTE’s total bill of materials last year”.
For ZTE and more Chinese tech firms, the Promised Land in 2016 may be the United States
ZTE, mainland China’s largest listed telecommunications equipment manufacturer, yesterday reported a 22 per cent increase in net profit last year to 3.21 billion yuan (HK$3.84 billion).
The company attributed that result to strong 4G infrastructure, corporate network equipment and international smartphone sales, as well as a healthy portfolio of corporate information technology services and “smart city” public sector projects.
Total revenue rose 23 per cent to 100.19 billion yuan last year from 81.47 billion yuan in 2014.
‘Innovation is neither an option nor an embellishment’: China’s ZTE vows to hit goal of US$31 billion by 2020 despite export ban
The mainland accounted for 53 per cent of ZTE’s revenue last year as the domestic expansion of 4G mobile networks and fixed-line broadband infrastructure continued.
ZTE’s carriers networks business made up the bulk of its revenue, contributing 57.22 billion yuan. Its consumer business had 32.47 billion yuan in sales, while its government and corporate business took in 10.50 billion yuan.
The company, however, still had to write off bad debts totalling 243.71 million yuan from 15 accounts of trade receivables, which it considered unrecoverable.
Zhao said there were plenty of opportunities this year from “the age of M-ICT, the mobile interconnection of all things” in an apparent attempt to craft a fancy new description for ZTE’s business direction.
Telecoms maker ZTE vows to cooperate with Washington to resolve import restrictions, but China blasts US for ‘incorrect’ handling of issue
“The sophistication of 4G technologies has provided a tremendous boost to users’ demand for smart mobile terminals and all types of mobile applications which has in turn driven investment requirements in the telecommunications industry,” Zhao said.
Preparing for future growth, Shenzhen-based ZTE has budgeted expenditure totalling about US$220 million worldwide on developing 5G and other advanced mobile communications technologies from this year to 2018.
The company has also proposed to apply for a huge amount of credit facilities to support its expansion initiatives. These included 69.2 billion yuan from eight domestic banks and foreign currency totalling US$7.23 billion from four other banks.


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