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ZTE First Half Profits Rise by 12 Percent

ZTE First Half Profits Rise by 12 Percent

­China’s ZTE Corp. has reported that its first half operating revenue increased by 10.9% year-on-year to US$4.524 billion. Revenue contribution from the European and US markets amounted to 18% of total revenue. The year-on-year revenue contribution from these two markets increased by 45%. The net profit grew by 12% to US$129.143 million in the six months ended June 30, 2010 based on Hong Kong financial reporting standards.

ZTE’s international revenue rose 19.58% year-on-year to USD2.246 billion, accounting for 49.65% of its total operating revenue.

In the first half of 2010, ZTE supported carriers 3G network construction projects and assisted with the replacement, coverage extension and improvements of relevant networks. This helped to consolidate the company’s market share in China’s 3G network construction amid a slowdown of investment in 3G networks.

While revenue from Asia declined due to an incident relating to the safety inspection of communications equipment in India, the Group still reported year-on-year growth in international revenue.

By product, the Group registered year-on-year revenue growth of 1.1% for carrier networks, 39.7% for terminal products and 18% for telecommunication software systems, services and other products.

During the first half of 2010, the Group achieved rapid growth in the sale of its handset division, reporting 39.7% year-on-year growth in revenue. Driven by the build-up of 3G users in China, domestic sales of the Group’s terminal products (comprising 3G handsets in various modes) increased significantly, laying a solid foundation for sales revenue growth of terminal products. Internationally, the Group’s terminal products, particularly the 3G handsets and data card products, have made an impact in high-end markets.

ZTE’s data card products and Android smartphones are top sellers in Europe. ZTE’s customised handsets were adopted by Softbank, the third-largest carrier in Japan. These factors helped drive the continual increase in sales volume and revenue of the company’s terminal products.

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