On March 16, ZTE released the 2020 annual report and the first quarter results forecast for 2021.
The report shows that in 2020, ZTE achieved operating income of 101.45 billion yuan, a year-on-year increase of 11.8%; net profit attributable to common shareholders of listed companies was 4.26 billion yuan, a year-on-year decrease of 17.3%, mainly due to the asset disposal in the third quarter of 2019. The one-time pre-tax income was 2.66 billion yuan, which was due to a large increase in net profit in 2019; basic earnings per share were 0.92 yuan.
ZTE expects to achieve a net profit of 1.80 billion to 2.40 billion yuan attributable to ordinary shareholders of listed companies in the first quarter of 2021, a year-on-year increase of 130.8% to 207.7%.
In 2020, ZTE’s domestic and international market operating income achieved year-on-year growth, of which the domestic market operating income increased by 16.9% year-on-year to 68.05 billion yuan, and the international market operating income increased by 2.7% year-on-year to 33.40 billion yuan. In the domestic market, the company seized the development opportunities of 5G and new infrastructure to achieve a double increase in market structure and revenue; in the international market, the company adhered to healthy operations, intensively cultivated the value market, and continuously improved its profitability. The gross profit margin increased by 4.9 percentage points year-on-year to 37.2 %, the highest in the past ten years. In 2020, the operating income of the company’s three major businesses achieved year-on-year growth. Among them, the operator network increased by 11.2% year-on-year to 74.02 billion yuan, the government and enterprise business increased by 23.1% year-on-year to 11.27 billion yuan, and the consumer business increased by 7.8% year-on-year to 16.16 billion yuan. Yuan.
In terms of cash flow, the net cash flow from operating activities in 2020 was 10.23 billion yuan, a year-on-year increase of 37.4% and a new high. At the same time, the company continued to optimize its asset and liability structure, and the asset-liability ratio dropped from 73.1% at the end of 2019 to 69.4% at the end of 2020.
R&D investment hits a record
This is closely related to the company’s increased investment in R&D. In 2020, ZTE has 31,747 R&D personnel, a year-on-year increase of 12.18%; R&D investment reached 14.797 billion yuan, a year-on-year increase of 17.92%, accounting for 14.59% of revenue.
Notably, this R&D investment hit a record high. According to public information, from 2015 to 2019, ZTE’s R&D investment was 12.2 billion, 12.76 billion, 12.96 billion, 10.96 billion and 12.548 billion respectively, and the R&D investment exceeded 10 billion for six consecutive years.
In addition, by the end of 2020, ZTE had approximately 80,000 global patent applications and approximately 36,000 valid authorized patents. Among them, there are more than 4,270 chip patent applications, and more than 1,800 chip patents have been authorized.