[ET Net News Agency, 30 October 2017] Goldman Sachs raised its target price for ZTE
Corporation (00763) to HK$29 from HK$23, and maintained its "buy" rating.
The research house said believes the 5% yoy decline in 3Q revenue was overstated, since
ZTE completed two spin-offs this year, ZTE Supply Chain in 2Q and Nubia in 3Q. Excluding
these, 3Q revenue grew 1% yoy.
Goldman sees a number of positives: (1) operating cash flow (OCF) for the first 9 months
of 2017 was the highest in its history (excluding the US settlement of Rmb5.6bn; (2)
working capital improved as accounts receivable days shortened to the lowest level since
2010.
It believes this sts if result of ZTE's strengthening market position. (KL)