ZTE Corporation has reported its 2019 annual results.
According to the announcement, for the twelve months ended 31 December 2019, ZTE reported operating revenue of RMB90.74 billion, representing a year-on-year increase of 6.1%, of which operating revenue from operators' networks reached RMB66.58 billion, a year-on-year increase of 16.7%. Net profit attributable to holders of ordinary shares of the listed company amounted to RMB5.15 billion, a year-on-year growth of 173.7%. Basic earnings per share was RMB1.22.
In 2019, the company strengthened its management of cash flows and sales receivables. Its net cash flows from operating activities for 2019 amounted to RMB7.45 billion, a year-on-year increase of 180.8%. The company has been continuously enhancing its investment on 5G research and development. For the twelve months ended 31 December 2019, ZTE’s research and development costs amounted to RMB12.55 billion, which was 13.8% as a percentage of operating revenue, increased by 1 percentage point compared to 12.8% in 2018.
In 2019, the company, while adhering to a steady and pragmatic operation strategy and the sustainable development concept, continued to focus on its major business channels. The company actively participated in global operators’ network construction and technological evolution of 4G, 5G, and optical communication.
Building its core competitive advantages in standards, patents, key technologies, products and solutions, ZTE adhered to compliance operation and strengthened its internal governance, thereby achieving steady development and consolidating healthy corporate operation on an overall basis.
As a major contributor and participant in the research of global 5G technologies and standards, ZTE has submitted over 7,000 5GNR/5GC proposals to international standardization organizations. According to the latest 5G industry patent report of IPlytics and Technical University of Berlin, ZTE has declared 2,561 families of 5G Standard-Essential Patents(SEP) to the European Telecommunications Standards Institute (ETSI), thereby being included among the global top 3.
Committed to building the core competitiveness of independent innovation in the 5G era, ZTE’s new-generation 5G wireless system chipsets and transport switching network chipsets feature both flexibility and efficiency to support 5G. The company has completed the mass production of the 7nm chipsets and put them into commercial use on a global scale. Moreover, ZTE has embarked on the R&D of the next-generation chipsets. By means of system architecture optimization, advanced processes, and multi-dimensional heterogeneous packaging, ZTE has been constantly and rapidly innovating and revolutionizing its chipsets to create more value for customers.
By virtue of its leading 5G end-to-end products and solutions, ZTE has carried out extensive commercial practices around the world, obtained 46 5G commercial contracts globally, and established cooperation with over 70 operators worldwide. In China, ZTE has helped operators build the world's largest multi-mode hybrid-architecture network and the world's largest RAN sharing network, achieving Giga+ 5G continuous coverage experience. Meanwhile, the company has cooperated with top operators overseas to build 5G commercial networks in Spain, Austria, Italy and other countries, and continued to promote global 5G deployments.
In terms of operator network business, ZTE's competitiveness in various product categories was further enhanced in 2019. In the field of wireless access, ZTE, powered by the industry-leading 7nm process chipsets and NSA/SA dual-mode architecture, has comprehensively upgraded its serialized commercial products and solutions. The company’s new 5G series is ideal for full-scenario and full-band 5G deployments, precisely meeting a variety of requirements, including macro coverage, indoor coverage, outdoor hotspots, high-speed railway tunnels and airline coverage.
Moreover, ZTE has leveraged innovations, such as Massive MIMO algorithm optimization, dynamic spectrum sharing and carrier aggregation, to continuously forge the ultimate 5G network performance. By means of product technology innovation and AI-powered energy saving, the company has comprehensively improved the network operation efficiency to help operators build cost-effective, green and intelligent 5G superior networks featuring all-round coverage and fast deployment.
In the field of core network, ZTE, backed up with its SBA-based core network, builds the most brilliant brain for the 5G network, and supports 2/3/4/5G integrated access, on-demand elastic function, and intelligent deployment of end-to-end slicing.
ZTE has carried out in-depth 5G cooperation with mainstream operators, including China Mobile, China Telecom, China Unicom, Orange, Telefonica, and MTN. To date, ZTE’s cloud core network has been deployed in over 550 NFV commercial/PoC projects worldwide.
Moreover, ZTE’s end-to-end 5G transport products have been deployed on a large scale. By the end of 2019, more than 40 5G commercial transport networks and existing network pilot sites had been deployed in China, Italy, Austria, and other countries.
In addition, ZTE has enhanced in-depth R&D in chipsets and algorithms, boasting a full range of core chipsets for 5G transport, optical network, optical access, and routers. The unique Flex Shaping algorithm family helped ZTE set a world record in the field of beyond 100 G ultra-long distance transmission, with over 600km transmission distance in China Mobile's existing 400G network.
Moreover, ZTE’s core routers were employed at China’s national core nodes in 2019 and have been commercially used in 19 provinces. ZTE's flagship optical access platform, TITAN, boasts the industry’s highest capacity and integration level, and has been deployed in countries including China, Brazil and Mexico.
With a global total capacity of big video system reaching 130 million lines, ZTE’s 5G Live TV solution has been employed by the three major operators in China for multiple sporting events.
In the field of cloud video and energy, ZTE offers “terminal-edge-cloud” cloud video solution using an intelligent video cloud platform to integrate video services into daily life. ZTE’s 5G power supply solution helps operators build simpler, more efficient, fully modular, and intelligent telecoms power networks.
In the government and enterprise business, ZTE has seized the opportunities of digital transformation and made intensive efforts in energy, transportation, government affairs, finance, and other key markets. Its core products such as self-developed servers, databases, and operating systems have been widely applied. ZTE’s Database Management System GoldenDB has been launched in the credit card core banking system of China CITIC Bank, and will be deployed in more core banking systems in the financial sector.
Based on 5G+ slicing +MEC, ZTE has built five capability platforms, specifically, cloud video, industry IoT, robotic AI, integrated positioning and three-dimensional security, in order to rapidly develop platforms and solutions oriented to different application scenarios to empower vertical industries. To date, ZTE has developed more than 300 partners in 15 industries, including industrial manufacturing, cultural tourism, education, media, health care, transportation, environmental protection, and energy, exploring 86 application scenarios and carrying out over 60 demonstration projects on a global scale, so as to create an open and win-win 5G industry ecosystem.
In terms of consumer business, ZTE took the lead to launch Axon 10 Pro 5G, which is the first 5G smartphone commercially available in China, Northern Europe and Middle East. ZTE continuously strengthens its 5G terminal devices cooperation with more than 30 operators worldwide. With commitment to deploying a series of diversified 5G terminal device portfolio to meet the requirements of operators, enterprise users, and consumers in multi-service scenarios, ZTE will unveil nearly 10 5G smartphones worldwide, and a total of over 15 5G terminal devices in 2020, covering smartphones, mobile broadband products, and IoT terminal products. Moreover, the company has maintained a global leading position in the home network terminal industry for a long time, with the world's largest market share of CPE.
As we entered into 2020, we are facing the challenges of the coronavirus pandemic, which has profoundly impacted the global economy. During the outbreak of coronavirus in 2020, the company has been actively practicing social responsibility. By means of its global business networks and resources, ZTE Foundation has donated face masks, alcohol, nucleic acid testing equipment, and other materials, proactively responding to the actual requirements of hospitals to assist the front line against coronavirus.
In full support of operators in communication construction in this critical period, ZTE has partnered with operators to build 4G/5G networks for 210 hospitals in 82 cities of 26 provinces in China. Within only 24 hours, ZTE’s video conferencing system was deployed in Wuhan’s 20 mobile cabin hospitals.
In addition, ZTE has further strengthened the application of 5G in specific scenarios, and deployed the innovative 5G applications in various industries, including new media, cloud workspace, telemedicine, distance education, and video surveillance to fight against coronavirus, quickly improving the competitiveness of its products and solutions.
Meanwhile, ZTE has been strengthening its own health and safety "defense line”, and has comprehensively coped with the epidemic and resumed production from the aspects of prevention and control mechanism, employee screening, facilities and materials, and internal management.
Moving forward, ZTE will further adhere to the core concept of “greatness lies in simplicity and swiftness is invincible”, with great commitment to stable corporate operation. The company will make further contribution to the industry by means of continuous innovations in core technology, chipset, algorithm and architecture while optimizing market structure and scaling up market shares, thereby expecting to promote the global large-scale 5G deployments and quality growth. Meanwhile, the company, while leveraging the opportunities of new infrastructure construction including 5G network construction, will be committed to accelerating innovations in business models, and building an open and win-win 5G ecosystem with customers and partners.