ZTE’s interim report for the six months ended 30 June 2026 shows that operating revenue climbed 9.05 % year on year to RMB 78.03 billion, supported by ongoing momentum in intelligent computing and government-enterprise projects. Net profit attributable to shareholders declined 46 % to RMB 2.75 billion, reflecting a deliberate surge in research, AI and product-mix investments.
Revenue Mix and Margins • Carriers’ Network sales fell 9.41 % to RMB 31.77 billion; segment gross margin slipped 14.88 ppt to 38.06 %. • Government & Corporate revenue jumped 43.51 % to RMB 27.63 billion, buoyed by servers, storage and data-centre projects; gross margin improved 7.57 ppt to 15.84 %. • Consumer revenue rose 8.09 % to RMB 18.63 billion, with gross margin at 18.35 % (+0.57 ppt). • Group gross margin contracted 6.97 ppt to 25.48 % as product mix shifted toward lower-margin lines.
Cost Structure R&D expenditure fell 13.70 % to RMB 10.93 billion yet remained 14.01 % of revenue. Selling expenses declined 8.79 % to RMB 4.00 billion, while administrative expenses were broadly flat at RMB 2.15 billion. Finance costs swung to a small charge of RMB 11.02 million from a credit in the prior-year period due to forex losses and lower interest income.
Cash Flow and Balance Sheet Operating cash outflow reached RMB 0.13 billion versus an inflow of RMB 1.30 billion a year earlier, driven by higher inventory purchases and lower reserve releases. Total assets expanded 10.47 % to RMB 240.55 billion; net gearing (interest-bearing debt to total capital) edged up to 47.1 % from 46.3 % at end-2025.
Capital Allocation • The board approved an interim A-share buy-back programme; by 30 June 2026 ZTE had repurchased 24.56 million A-shares for RMB 0.86 billion, rising to 28.66 million shares (RMB 1.00 billion) by 20 July. • A 2025 final dividend of RMB 0.411 per share (pre-tax) totalling RMB 1.95 billion was paid in July 2026. • RMB-denominated medium-term notes outstanding totalled RMB 6.78 billion; zero-coupon USD-settled H-share convertible bonds due 2030 amounted to RMB 3.43 billion after conversion-price adjustment to HKD 29.72 per share.
Strategic Progress ZTE highlighted accelerated investment in “connectivity + computing,” committing to AI-driven product development across networks, servers, terminals and energy. H1 R&D focused on heterogeneous computing chips, 5G-A solutions, AI-native core networks and SuperPOD intelligent-computing clusters. Government-enterprise digital-infrastructure contracts were a key growth driver, offsetting softer domestic carrier capex.
Outlook and Risks Management expects continued domestic carrier spending pressure but sees international 5G rollouts and intelligent-computing demand supporting revenue. Key risks include evolving global compliance requirements—ZTE remains under a U.S. Department of Justice monitorship—and ongoing litigation in China, though no material financial impact is currently anticipated.
Financial Position Summary (30 June 2026) • Total assets: RMB 240.55 billion • Equity attributable to shareholders: RMB 76.98 billion • Total liabilities: RMB 163.42 billion • Cash & cash equivalents: RMB 22.66 billion • Current ratio: 1.71; quick ratio: 1.15
ZTE stated no interim dividend or capital-reserve conversion is planned for H2 2026.