SZSE:000063

Stock Analysis Report

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Executive Summary

ZTE Corporation provides integrated telecommunications and information technology (IT) solutions worldwide. More Details


Snowflake Analysis

Average dividend payer with acceptable track record.


Similar Companies

Share Price & News

How has ZTE's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 000063's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.3%

63

-1.9%

CN Communications

-1.3%

CN Market


1 Year Return

4.4%

63

14.2%

CN Communications

28.5%

CN Market

Return vs Industry: 000063 underperformed the CN Communications industry which returned 14.7% over the past year.

Return vs Market: 000063 underperformed the CN Market which returned 28.8% over the past year.


Shareholder returns

63IndustryMarket
7 Day-3.3%-1.9%-1.3%
30 Day-1.9%0.3%1.7%
90 Day-11.3%-1.4%3.5%
1 Year5.0%4.4%14.7%14.2%30.8%28.5%
3 Year12.7%12.1%-0.8%-2.0%12.2%6.8%
5 Year92.0%87.8%3.0%0.8%13.1%5.6%

Price Volatility Vs. Market

How volatile is ZTE's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is ZTE undervalued compared to its fair value and its price relative to the market?

26.83x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 000063 (CN¥33.63) is trading above our estimate of fair value (CN¥17.94)

Significantly Below Fair Value: 000063 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 000063 is good value based on its PE Ratio (26.8x) compared to the CN Communications industry average (55.8x).

PE vs Market: 000063 is good value based on its PE Ratio (26.8x) compared to the CN market (41.5x).


Price to Earnings Growth Ratio

PEG Ratio: 000063 is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: 000063's PB Ratio (3.8x) is in line with the CN Communications industry average.


Next Steps

Future Growth

How is ZTE forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

17.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 000063's forecast earnings growth (17% per year) is above the savings rate (3.3%).

Earnings vs Market: 000063's earnings (17% per year) are forecast to grow slower than the CN market (24.1% per year).

High Growth Earnings: 000063's earnings are forecast to grow, but not significantly.

Revenue vs Market: 000063's revenue (7.9% per year) is forecast to grow slower than the CN market (17.6% per year).

High Growth Revenue: 000063's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 000063's Return on Equity is forecast to be low in 3 years time (14.2%).


Next Steps

Past Performance

How has ZTE performed over the past 5 years?

-0.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 000063 has a large one-off gain of CN¥3.4B impacting its June 30 2020 financial results.

Growing Profit Margin: 000063's current net profit margins (5.9%) are higher than last year (2.6%).


Past Earnings Growth Analysis

Earnings Trend: 000063's earnings have declined by 0.8% per year over the past 5 years.

Accelerating Growth: 000063's earnings growth over the past year (137.1%) exceeds its 5-year average (-0.8% per year).

Earnings vs Industry: 000063 earnings growth over the past year (137.1%) exceeded the Communications industry -2.9%.


Return on Equity

High ROE: 000063's Return on Equity (14.2%) is considered low.


Next Steps

Financial Health

How is ZTE's financial position?


Financial Position Analysis

Short Term Liabilities: 000063's short term assets (CN¥125.3B) exceed its short term liabilities (CN¥92.0B).

Long Term Liabilities: 000063's short term assets (CN¥125.3B) exceed its long term liabilities (CN¥29.2B).


Debt to Equity History and Analysis

Debt Level: 000063's debt to equity ratio (106.8%) is considered high.

Reducing Debt: 000063's debt to equity ratio has increased from 67% to 106.8% over the past 5 years.

Debt Coverage: 000063's debt is not well covered by operating cash flow (17.4%).

Interest Coverage: 000063's interest payments on its debt are well covered by EBIT (9.3x coverage).


Balance Sheet


Next Steps

Dividend

What is ZTE current dividend yield, its reliability and sustainability?

0.59%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 000063's dividend (0.59%) is higher than the bottom 25% of dividend payers in the CN market (0.35%).

High Dividend: 000063's dividend (0.59%) is low compared to the top 25% of dividend payers in the CN market (1.65%).


Stability and Growth of Payments

Stable Dividend: 000063's dividend payments have been volatile in the past 10 years.

Growing Dividend: 000063's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16%), 000063's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 000063's dividends in 3 years are forecast to be well covered by earnings (24.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure


CEO

Ziyang Xu (48 yo)

2.25yrs

Tenure

CN¥7,769,000

Compensation

Mr. Ziyang Xu has been President of ZTE Corp. since July 5, 2018 and its Executive Director sine August 28, 2018. Since July 2018, Mr. Xu has been director of ZTE Microelectronics Technology Company Limite ...


CEO Compensation Analysis

Compensation vs Market: Ziyang's total compensation ($USD1.17M) is above average for companies of similar size in the CN market ($USD315.16K).

Compensation vs Earnings: Ziyang's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Zixue Li
Chairman2.33yrsCN¥5.81mno data
Ziyang Xu
President & Executive Director2.25yrsCN¥7.77m0.0018%
CN¥ 2.6m
Ying Li
EVP & CFO2.75yrsCN¥5.64m0.0012%
CN¥ 1.7m
Junying Gu
Executive VP & Executive Director2.33yrsCN¥5.67mno data
Xiyu Wang
Executive Vice President2.75yrsCN¥7.21m0.0019%
CN¥ 2.7m
Junshi Xie
Executive Vice President1.08yrsCN¥5.50mno data
Jianzhong Ding
Company Secretary1.25yrsCN¥1.74mno data
Matthew Bell
Chief Export Compliance Officer and Legal Counsel4yrsno datano data
Wang Dong
Senior VP2.5yrsno datano data
Xiaoyue Xia
Deputy Head of Dept of HR4.67yrsno data0.0011%
CN¥ 1.6m
Weimin Ye
Senior Vice President and Principal Deputy General Manager of the Handset Product Divisionno datano datano data
Jie Chen
Senior Vice President18.75yrsno datano data

2.6yrs

Average Tenure

47yo

Average Age

Experienced Management: 000063's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Zixue Li
Chairman2.33yrsCN¥5.81mno data
Ziyang Xu
President & Executive Director2.25yrsCN¥7.77m0.0018%
CN¥ 2.6m
Junying Gu
Executive VP & Executive Director2.33yrsCN¥5.67mno data
Xiaoyue Xia
Deputy Head of Dept of HR4.67yrsno data0.0011%
CN¥ 1.6m
Ng Gordon
Independent Non-Executive Director2.33yrsCN¥250.00kno data
Daxiong Xie
Chairman of Supervisory Committee7.58yrsCN¥2.63m0.011%
CN¥ 15.3m
Rong Fang
Non-Executive Director2.33yrsCN¥100.00kno data
Quancai Li
Staff Representative Supervisor2.92yrsno datano data
Buqing Li
Non-Executive Director2.33yrsCN¥100.00kno data
Weimin Zhu
Non-Executive Director2.33yrsCN¥100.00kno data
Manli Cai
Independent Non-Executive Director2.33yrsCN¥250.00kno data
Jiansheng Zhuang
Independent Non-Executive Director0.33yrno datano data

2.3yrs

Average Tenure

54.5yo

Average Age

Experienced Board: 000063's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10%.


Top Shareholders

Company Information

ZTE Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ZTE Corporation
  • Ticker: 63
  • Exchange: SZSE
  • Founded: 1985
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: CN¥141.959b
  • Shares outstanding: 4.61b
  • Website: https://www.zte.com.cn

Number of Employees


Location

  • ZTE Corporation
  • No. 55, Hi-tech Road South
  • Shenzhen
  • Guangdong Province
  • 518057
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
63SZSE (Shenzhen Stock Exchange)YesDomestic SharesCNCNYSep 1998
63XSEC (Shenzhen Stock Exchange - Shenzhen-Hong Kong Stock Connect)YesDomestic SharesCNCNYSep 1998
763SEHK (The Stock Exchange of Hong Kong Ltd.)Foreign Shares-Foreign ListedHKHKDDec 2004
ZTCO.FOTCPK (Pink Sheets LLC)Foreign Shares-Foreign ListedUSUSDDec 2004
FZMDB (Deutsche Boerse AG)Foreign Shares-Foreign ListedDEEURDec 2004
763SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)Foreign Shares-Foreign ListedHKHKDDec 2004
FZMWBAG (Wiener Boerse AG)Foreign Shares-Foreign ListedATEURDec 2004
ZTCO.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008
FZMADB (Deutsche Boerse AG)UNSPONSORED ADRDEEUROct 2008

Biography

ZTE Corporation provides integrated telecommunications and information technology (IT) solutions worldwide. It operates through three segments: Carriers’ Networks, Consumer Business, and Government and Cor ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/22 14:37
End of Day Share Price2020/10/22 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.