[ET Net News Agency, 30 October 2019] UOB Kay Hian raised its target price for ZTE
Corporation (00763) to HK$23.4 from HK$22.9 and maintained its "hold" rating, given its
more conservative view on telcos' 5G capex.
The research house said ZTE's 3Q net profit grew 371% to Rmb2.66bn. However, excluding
the extraordinary items of Rmb2.6bn, 3Q core net profit should have dwindled by 19% to
Rmb98m.
UOBKH also noted ZTE is on a fund-raising spree for its heavy 5G investment. It lifted
its 2019 profit forecast by 20% mainly due to higher gross margin and one-off income
despite lowering revenue forecast by 5%. UOBKH also slightly revised up 2020 and 2021
profit forecasts by 3% to reflect the higher gross margin assumptions. (KL)