2021.09.06
■ ZTE reported its 1H21 results earlier; yoy top-line growth was in line, while yoy bottom-line growth was better than expected, given higher-than-expected profitability.
■ Apart from telecommunications equipment, ZTE will benefit from gaining market share in ICT products.
■ Its gross profit margin in 1H21 was better than we expected, mainly because of an increase in profitability of 5G products.
■ We raised our net profit forecasts after factoring in higher profitability.
■ We reiterate our ADD rating, with a higher target price of HK$31.48 (based on 19x 2021F P/E).
