[ET Net News Agency, 29 October 2019] Goldman Sachs lowered its target price for ZTE
Corporation (00763) to HK$33.6 from HK$35 and maintained its "buy" rating.
The research house said its key takeaway from ZTE's 3Q results is the continuing
improvement in its core profitability. Cash flow from operation remained at a healthy
level at Rmb1.6bn.
The key negative surprise was the lower-than-expected revenue, which missed Goldman's 3Q
estimate by 22%. It was mainly the result of weak telecom network and enterprise revenue
overseas.
Goldman maintained its constructive view on ZTE and its key thesis has not changed that
the company remains a key beneficiary of China's 5G ramp-up. It cut its earnings estimates
by 2%/5%/5% for 2019/20/21 to reflect lower revenue in enterprise ICT (information
communication technology) and consumer business and lower 4G revenue for 2020/21. (KL)