Research Dispatch | ZTE Corporation receives visits from multiple institutions including Tianfeng Securities; the revenue from its computing power business increases by 150%, becoming a new growth engine

On March 30, 2026, ZTE Corporation (“ZTE”) held an earnings briefing at its Shenzhen headquarters in the form of an online live network broadcast. The meeting received many institutions and online investors and analysts, including Tianfeng Securities (for rights protection), Nomura, China Merchants Securities, PICC Asset Management, CITIC Securities, Citigroup, China Construction Investment Securities, China International Capital Corporation, and Guotai Junan Haitong Securities, among others. The company’s management team, including Executive Director and President Xu Ziyang, Executive Vice President and CFO Li Ying, Executive Vice President and COO Xie Junshi, and Board Secretary and Company Secretary Ding Jianzhong, attended the meeting and conducted detailed exchanges with investors on issues of concern such as the company’s 2025 performance and strategic planning and business layout.

Basic Information on Investor Relations Activities

Strategic Planning: “Connection + Computing Power” Twin-Wheel Drive to Deepen Revenue Structure Diversification

In 2025, ZTE achieved revenue of RMB 133.9 billion, up 10.4% year over year, delivering its best performance in nearly four years. The company shifted from a single growth model that relied on 5G carrier/operator business to a diversified growth structure driven by computing power and terminals. The revenue structure across network, computing power, and home and personal terminals was optimized from “7-2-1” to “2-1-1.”

Management stated that the company is currently in a mixed phase combining a network investment decline cycle and a smart computing investment upcycle. Its decision to choose the computing power track is mainly based on technological commonality and market space. 5G and AI infrastructure align highly in core technical characteristics such as high computing power, high bandwidth, low latency, and low power consumption. The company’s accumulated technical capabilities in the 5G field can be transferred to the AI computing power domain. At the same time, the computing power market has large market space, high growth potential, and high technical complexity, matching the company’s business traits of a long operating cycle and high R&D investment.

In 2026, the company will continue its “connection + computing power” twin-wheel-drive strategy: for network business, it will adhere to “stabilize inventory, improve the overall pattern, and protect profitability,” capture the domestic policy dividends of the “14th Five-Year Plan” and further “15th Five-Year Plan” policies, and advance more refined operations overseas; for computing power business, it will “build end-to-end full-stack capabilities and balance scale and profitability,” focus on “chips + ecosystem,” expand market scale and improve profitability; for home and personal terminals, it will “strengthen integrated innovation and firmly commit to a 2C transformation,” launching breakout products such as AI-native mobile phones.

AI Deployment: Building an End-to-End, Full-Scenario Technology System with Clear Differentiated Advantages

In response to the development of the AI industry, ZTE proposed the strategic concepts of “All in AI” and “AI for All.” “All in AI” focuses on building an end-to-end, full-scenario, secure and controllable AI capability system, including rebuilding technical systems such as chips, networks, and computing power, and creating end-to-end intelligent computing solutions. “AI for All” is committed to becoming a value contributor in the AI industrial chain, promoting technology openness and achieving win-win outcomes with the ecosystem.

The company’s differentiated advantages are reflected in three areas: first, extensive accumulation of end-to-end, full-scenario technologies, with 41 years of technology accumulation in the ICT field, supporting system-level coordination and delivery of complex systems; second, leading architecture-level design—its independently developed orthogonal interconnection architecture supports multi-vendor GPU compatibility and flexible expansion, decoupling software and hardware to improve compute efficiency; third, a solid foundation in the on-device market. Home terminals have had annual shipment volumes exceeding 100 million units for two consecutive years. In cooperation with ByteDance and others to advance AI-native experiences for smartphones, the company builds an advantage in end-cloud coordination.

Computing Power Business: In 2026, Revenue Is Expected to Sustain High Growth, While Gross Margin Improves Gradually

In 2025, ZTE’s computing power business revenue increased 150% year over year, accounting for nearly 25% of total revenue. Server and storage revenue grew by more than 200%, becoming a new engine for revenue growth. In 2026, the company’s pre-computing power business will continue its high growth, mainly benefiting from demand in the trillion-dollar AI track, breakthroughs with leading customers, and the effects of scaling.

With regard to profitability, although it faces pressure from rising prices of raw materials such as storage, the company will improve gross margin through three initiatives: deepen supply-chain cooperation and use economies of scale and refined management to smooth cost fluctuations; strengthen core technological innovation and enhance product competitiveness through independently developed switching chips and super-node architectures; and enhance comprehensive solution capabilities—transforming from a server provider into a full-stack AI solutions provider to increase added value. Management stated that in 2026, gross margin for computing power products is expected to improve gradually, achieving a balance between revenue and profitability.

Carrier Network: Pursuing Both Inventory Optimization and Incremental Expansion, with Technology Advantages Enduring

In 2025, ZTE’s carrier/operator network revenue was RMB 62.9 billion, down 10.6% year over year, and its share fell below 50% for the first time. In response to the decline in domestic operator investments, the company will address the situation through three measures: first, strengthen the network landscape by advancing large-scale deployments of 5G-A, and lay out cutting-edge technologies such as 6G and T Bit optical networks; second, expand into computing power and government and enterprise business, aiming to maintain the #1 share in the X86 ecosystem in the operators’ general-purpose computing domain and the #1 share in the CUDA-like ecosystem in the smart computing domain; third, maintain leadership in home terminals, capture the new AI entry point, and keep products such as gateways and set-top boxes as #1 in the industry.

Management pointed out that the integration of AI and communications will reshape the direction of network investment. Smart computing centers, edge computing power, AI-native networks, and other areas will become new incremental drivers. The company will achieve bidirectional empowerment through “AI for Network” and “Network for AI,” continue its technology advantages, and support operators in their transformation.

6G and Integrated Space-Air-Ground: Leading Technology Reserves and Laying Out Future Industries

In the 6G field, ZTE began pre-research in 2018, targeting commercial nodes in 2030. The company has deeply participated in global standardization efforts and has already formed more than 30 key technologies and more than 10 core innovative achievements. In the U6G frequency band, it achieved the industry’s first 2000+ antenna element vibrator prototype. For the integrated space-air-ground approach, the company focuses on satellite payload R&D and lays out end-to-end solutions such as star payload processing units and ultra-large antenna array systems. Relying on its accumulated terrestrial network technologies and production capabilities, it will promote the implementation of low-orbit satellite communications.

Mobile Phone Business: Address Storage Price Pressures and Deepen AI-Native Deployment

In 2025, ZTE’s smartphone revenue achieved double-digit growth, with standout performance from gaming phones and international markets. Facing the impact of storage price increases in 2026, the company will respond through supply-chain localization and substitution, product structure upgrades (focusing on AI phones and gaming phones), and channel advantages (operator cooperation + brand direct operations), striving to maintain revenue growth. For AI phones, the company is working with ByteDance and others to advance the next-generation Doubao AI smartphones, strengthening system-level AI capabilities and privacy protection, and building an AI-native experience.

International Markets: Seizing AI and Computing Power Opportunities and Striving for Steady Growth

In 2025, ZTE’s international market revenue was RMB 44.16 billion, up 12.4% year over year, accounting for about 33%. In 2026, the company will focus on four major regions: Asia-Pacific, Europe, Latin America, and the Middle East and Africa. For network business, it will advance the “big country, big T” strategy. For computing power business, it will deepen cooperation with overseas Chinese-funded enterprises. For terminal business, it will build breakout products such as AI mobile phones, striving to achieve synchronized improvement in market share, revenue scale, and profitability.

Profit Guidance and Market Value Management: Improving Quality and Increasing Efficiency as the Core to Solidify Intrinsic Value

Regarding 2026 profits, management stated that falling domestic operator investment will bring pressure, but growth in international markets, the contribution from the computing power business, and expense control are expected to offset it, and the company will strive to achieve a stable level of profitability. In terms of market value management, the company will take steady operations as the foundation, keep its cash dividend policy stable, advance share repurchases according to plan, strengthen communication with investors, and convey intrinsic value.

ZTE emphasized that the theme for 2026 is “Harmony to Promote Prosperity, Improve Quality and Increase Profitability,” and it will improve operating quality through resource optimization, ecosystem synergy, innovation leadership, and cost reduction and efficiency improvement, creating higher value for stakeholders.

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Responsible editor: Xiao Lang Express News