Dahua Jixian: Raised the target price of ZTE to 26.5 Hong Kong dollars, and the quarterly performance once again fell short of expectations.

Jinshi data news on March 3, Dahua Jixian published a research report, pointing out that the performance of ZTE (00763.HK) in the fourth quarter of the 2024 fiscal year once again fell below the bank’s and market expectations, with a 10.3% year-on-year drop in revenue and a big dump of 65.1% in profit. Dahua Jixian maintained a “hold” rating on ZTE, with an H-share target price raised from HK$19 to HK$26.5. In addition, Dahua Jixian’s net profit forecasts for ZTE in the 2025 and 2026 fiscal years were revised downwards by 8.4% and 6.4% respectively. This is mainly due to the increase in revenue forecasts for government, enterprise, and consumer businesses; the drop in revenue forecast for operator network business; the assumption of a drop in profit margin due to changes in the product mix of government and enterprise businesses; and stricter control over operating expenses, leading to a lower operating expense ratio.