OTCPK:ZTCO.F

Stock Analysis Report

Executive Summary

ZTE Corporation provides telecommunications and information technology (IT) services worldwide.


Snowflake Analysis

Mediocre balance sheet with limited growth.


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: ZTCO.F has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

10.8%

ZTCO.F

0.009%

US Communications

0.06%

US Market


1 Year Return

36.7%

ZTCO.F

-7.3%

US Communications

19.3%

US Market

Return vs Industry: ZTCO.F exceeded the US Communications industry which returned -7.3% over the past year.

Return vs Market: ZTCO.F exceeded the US Market which returned 19.3% over the past year.


Shareholder returns

ZTCO.FIndustryMarket
7 Day10.8%0.009%0.06%
30 Day7.2%-3.7%1.7%
90 Day47.0%4.5%9.0%
1 Year36.7%36.7%-5.4%-7.3%21.8%19.3%
3 Year166.2%166.2%32.6%24.4%49.5%39.9%
5 Year93.4%93.4%59.9%42.2%73.1%54.1%

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?

42.57x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ZTCO.F ($4.1) is trading above our estimate of fair value ($3.45)

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


Price To Earnings Ratio

PE vs Industry: ZTCO.F is poor value based on its PE Ratio (42.6x) compared to the Communications industry average (24.9x).

PE vs Market: ZTCO.F is poor value based on its PE Ratio (42.6x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: ZTCO.F is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: ZTCO.F is overvalued based on its PB Ratio (5.6x) compared to the US Communications industry average (2x).


Next Steps

Future Growth

How is ZTE forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

12.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZTCO.F's forecast earnings growth (12.9% per year) is above the savings rate (1.7%).

Earnings vs Market: ZTCO.F's earnings (12.9% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: ZTCO.F's revenue (7.9% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: ZTCO.F'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: ZTCO.F's Return on Equity is forecast to be low in 3 years time (18.2%).


Next Steps

Past Performance

How has ZTE performed over the past 5 years?

-34.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ZTCO.F has a large one-off loss of CN¥4.7B impacting its September 30 2019 financial results.

Growing Profit Margin: ZTCO.F became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: ZTCO.F's earnings have declined by -34.1% per year over the past 5 years.

Accelerating Growth: ZTCO.F has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ZTCO.F has become profitable in the last year, making it difficult to compare its past year earnings growth to the Communications industry (-20.1%).


Return on Equity

High ROE: ZTCO.F's Return on Equity (13.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ZTE's financial position?


Financial Position Analysis

Short Term Liabilities: ZTCO.F's short term assets (CN¥107.9B) exceed its short term liabilities (CN¥92.8B).

Long Term Liabilities: ZTCO.F's short term assets (CN¥107.9B) exceed its long term liabilities (CN¥17.1B).


Debt to Equity History and Analysis

Debt Level: ZTCO.F's debt to equity ratio (107.1%) is considered high.

Reducing Debt: ZTCO.F's debt to equity ratio has increased from 98.5% to 107.1% over the past 5 years.

Debt Coverage: ZTCO.F's debt is not well covered by operating cash flow (9.8%).

Interest Coverage: ZTCO.F's interest payments on its debt are well covered by EBIT (13x coverage).


Balance Sheet

Inventory Level: ZTCO.F has a high level of physical assets or inventory.

Debt Coverage by Assets: ZTCO.F's debt is covered by short term assets (assets are 2.7x debt).


Next Steps

Dividend

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

0.91%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ZTCO.F's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ZTCO.F's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ZTCO.F's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ZTCO.F's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: ZTCO.F is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ZTCO.F's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

2.1yrs

Average management tenure


CEO

Ziyang Xu (47yo)

1.6yrs

Tenure

CN¥3,465,884

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 ($USD493.51K) is below average for companies of similar size in the US market ($USD10.79M).

Compensation vs Earnings: Insufficient data to compare Ziyang's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Zixue Li
Chairman1.7yrsCN¥1.06mno data
Ziyang Xu
President & Executive Director1.6yrsCN¥3.47m0.00091% CN¥251.1k
Ying Li
EVP & CFO2.1yrsCN¥1.86m0.00060% CN¥165.6k
Junying Gu
Executive Vice President & Executive Director1.7yrsCN¥956.59kno data
Xiyu Wang
Executive Vice President2.1yrsCN¥1.91mno data
Matthew Bell
Chief Export Compliance Officer and Legal Counsel3.3yrsno datano data
Wang Dong
Senior VP1.8yrsno datano data
Xiaoyue Xia
Deputy Head of Dept of HR4yrsno data0.0011% CN¥303.6k
Weimin Ye
Senior Vice President and Principal Deputy General Manager of the Handset Product Division0yrsno datano data
Jie Chen
Senior Vice President18.1yrsno datano data

2.1yrs

Average Tenure

49.5yo

Average Age

Experienced Management: ZTCO.F's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Zixue Li
Chairman1.7yrsCN¥1.06mno data
Ziyang Xu
President & Executive Director1.6yrsCN¥3.47m0.00091% CN¥251.1k
Junying Gu
Executive Vice President & Executive Director1.7yrsCN¥956.59kno data
Xiaoyue Xia
Deputy Head of Dept of HR4yrsno data0.0011% CN¥303.6k
Ng Gordon
Independent Non-Executive Director1.7yrsCN¥125.00kno data
Daxiong Xie
Chairman of Supervisory Committee6.9yrsCN¥2.63m0.011% CN¥3.0m
Rong Fang
Non-Executive Director1.7yrsCN¥50.00kno data
Buqing Li
Non-Executive Director1.7yrsCN¥50.00kno data
Manli Cai
Independent Non-Executive Director1.7yrsCN¥125.00kno data
Bao Yuming
Independent Non-Executive Director1.7yrsCN¥125.00kno data

1.7yrs

Average Tenure

49.5yo

Average Age

Experienced Board: ZTCO.F's board of directors are not considered experienced ( 1.7 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: ZTE Corporation
  • Ticker: ZTCO.F
  • Exchange: OTCPK
  • Founded: 1985
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: CN¥193.818b
  • Listing Market Cap: CN¥27.598b
  • 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

Biography

ZTE Corporation provides telecommunications and information technology (IT) services worldwide. It operates through three segments: Carriers’ Networks, Consumer Business, and Government and Corporate Business. The company offers wireless products, such as base stations, network optimization tools, controllers, GoTa products, network management products, and wireless infrastructure products; and bearer network products, including optical transmission, data transmission, and microwave products. It also provides cloud computing and IT products that include cloud infrastructure, cloud platform, and cloud hardware, as well as home media center products; and cloud core network products, which comprise 5G Cloud ServCore, packet core, IP multimedia subsystem and CS, user data convergence, and intelligent OSS products. In addition, the company offers fixed access products, including optical access and CPE products; and energy products, such as telecom energy, government and enterprise energy, and ZEGO IDC. Further, it provides consulting, customer support, and learning services. The company was founded in 1985 and is headquartered in Shenzhen, the People’s Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 00:59
End of Day Share Price2020/02/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.