ZTE thanks 4G infrastructure for 100b yuan revenue

Chinese smartphone manufacturer ZTE has attributed its record growth in 2015 to 4G infrastructure, government contracts, and interest rate cuts from the Central Bank of China.
Written by Asha Barbaschow, Contributor

China's ZTE has released its preliminary results for the financial year ending December 31, 2015, expecting to pull in 100.8 billion yuan in operating revenue, bumping up revenue by 23.8 percent from its 2014 results.

According to ZTE, operating profit is expected to tip 1 billion yuan, a percentage change of 1,631.8 percent year-on-year, and net profit should come in at 3.778 billion yuan, up 44 percent from last year's 2.63 billion yuan.

ZTE told shareholders [PDF] that its revenues and gross profit from 4G systems equipment increased in line with the construction of 4G projects in both the domestic and international markets.

The company also attributed its record growth to the optical transmission and optical access systems investment that was made by China's leading carriers, and the increased sale of its high-end routers to international government and corporate customers.

According to ZTE, growth in operation revenue and gross profit was also underpinned by the increase in the number of Smart City contracts signed, the ongoing growth in the datacentre business and the ICT business, and the steady increase in operation revenue from the railway transport sector.

Last year, revenue for the company hit 81.2 billion yuan, with net profit up 94 percent to 2.64 billion yuan, and operating profit improving from the 1.5 billion yuan loss in 2014 coming in at 104 million yuan.

ZTE chairman Hou Weigui said this week that during the reporting period, the Central Bank of China announced interest rate cuts. He said that while there were significant fluctuations in the respective exchange rates of RMB and US, ZTE strengthened control over its financial expenses.

"The consolidated financial expenses of the group for the reporting period decreased substantially as a result compared to the previous year," he said.

ZTE also said it strengthened cash flow management by toughening its payment collection process.

In December, ZTE launched its Axon Max device in China in a bid to reach a broader market. The Chinese company in July launched its flagship Axon model, and then offered a smaller-sized Axon Mini in October at more competitive prices.

Waiman Lam, senior director of technology and partnerships at ZTE Mobile Devices, said the company launched three different kinds of Axon phones in a row in a bid to serve different demands of different consumer groups.

The company shipped a total of 26 million smartphones worldwide in the first six months of 2015 according to its mobile device head, but the number did not include the Axon phones as they were launched in the second half in 2015.

Earlier this month, ZTE US chief Lixin Cheng said that the company was planning to crowdsource its forum-designed handset dubbed Project CSX.

The company said that in return for helping with the forum, users will be given "exclusive access to events, rewards, and products".

"In 2015, we proved we put consumers at the heart of everything we designed, built, and delivered through the Axon smartphone series. We worked hard, persevered, and strove for greatness as defined by consumers and users," Cheng said. "In 2016, we are taking that approach to a new level, and will look to Z-Community for more than improving upon what ZTE has already done, but how we develop products and services moving forward."

At the same time, the company also launched a pair of Qualcomm MSM8909, Android Lollipop-based devices.

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