ZTE shares continue ascent on mainland mobile data growth in China, global 5G prospects

Analysts see the country’s largest-listed telecommunications equipment supplier benefiting from a fresh slate of mobile infrastructures projects worldwide

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ZTE chairman Yin Yimin, told shareholders at the company’s annual meeting last week that he wants to increase investments in 5G research, development and marketing, while providing improved service to major customers in strategic markets. A man checks ZTE Axon7 device at Mobile World Congress in Barcelona. Photo: Reuters

Published: 8:15pm, 26 Jun 2017Updated: 2:39pm, 29 Jun 2017

ZTE Corp’s share price continued its steady ascent since mainland China’s largest-listed telecommunications equipment maker emerged from US sanctions purgatory three months ago, reaching a two-year high of HK$19.20 on Monday.

Shenzhen-based ZTE, the world’s fourth-largest telecommunications equipment supplier by revenue, is widely expected to benefit from skyrocketing domestic mobile data growth and the accelerated global deployments of advanced 5G networks.

“The trend is definitely positive,” said Jefferies equity analyst Edison Lee. “Developments over the past three months have prompted us to be even more bullish.”

Eleven market analysts out of 19 who cover ZTE had “buy” ratings on the company as of Monday, according to a Bloomberg survey. Four of them had a “hold” recommendation, while four others had a “sell” rating.

Jefferies, which has a buy recommendation on ZTE, raised its price target to HK$25.95 on Friday from the previous HK$18.60.

Shares of ZTE were up 4.4 per cent to finish at HK$19.20 on Monday, the stock’s highest close since reaching HK$19.72 on June 30, 2015.

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