ZTE (000063) Annual Report Comments: First Quarterly Report Exceeds Expectations, Prepares for 5G

ZTE (000063) Annual Report Comments: First Quarterly Report Exceeds Expectations, Prepares for 5G

Ready for 5G, ZTE Sailing will launch the 2018 annual report and 2019 first quarter report on the evening of March 27. Among them, the first quarter of 2019 is expected to achieve net profit attributable to mothers 8?
1 billion, exceeding market expectations.

We believe that the expansion of operator capital expenditures in 2019 will drive the industry back on the growth track. As one of the world’s four largest equipment vendors, the company is committed to benefiting from the improvement of the industry’s business climate and 5G pre-commercialization.

We 北京桑拿 believe that the 4G boom in 1919 and the integration of the company’s consumer business are still in the recovery stage. Based on this, we expect the company’s 19?
The 21-year EPS is 1.

10/1.

40/1.

94 yuan (19?
20-year earnings per share).

08/1.

41 yuan), comparable company’s 19-year PE valuation average value 33x, considering the company’s industry leader ranking, given a 19-year PE reasonable variable interval of 31?

35x, corresponding to a target price of 34.

1?38.

5 yuan, re-buy rating.

  The 18-year performance came to an end. The first-quarter report in 19 was higher than expected in 2018, which was at the end of the 4G construction cycle, and the operator ‘s capital expenditure expanded by 6.

33%.

In this context, the company gradually realized revenue of 85.5 billion yuan, a decrease of 21 each year.

41%.

In terms of net profit, the company achieved net profit attributable to its mother for -69 years.

800 million, a year-on-year decrease of 252.

88%.

Performance changes mainly include a $ 1 billion budget, operating losses and estimated accrual losses.

At the same time, the company announced the forecast of the first quarter of 19 years.
1 billion, and an increase of 114.

79%?
122.

19%, exceeding market expectations.

  In 19 years, the communications industry ushered in an inflection point, 4G boom verification, and 5G commercial warm-up. On Wednesday, the major operators released their capital expenditure plans for 2019. Is it expected that the maximum capital expansion will be 2945?
303.1 billion, a capital expansion range of 2 in 2018 alone.

6%?
5.

6%, the industry inflection point was reset.

In terms of capital expenditure structure, the scale development and construction of China Unicom’s 4G wireless base stations has driven a high level of investment in the wireless side.

08%.

In addition, in terms of 5G investment, the annual scale of 5G investment of the three major operators is expected to be 236?
34.2 billion.

2019 will be a key year before the average 5G commercialization. Bidding plans around the construction of 5G trial commercial networks will be launched one after another to preheat 5G commercialization.
  Grasp the improvement of the 4G boom and embrace the 5G commercial Dawning Company as the top two wireless main equipment supplier for internal distribution, aiming to directly benefit from the improvement of the domestic 4G wireless boom.

In addition, in terms of 5G, in December 2018, OVUM released an inquiry report that in the six major 5G product series such as massive MIMO, serialized base stations, microwaves, bearers, central networks, and terminals, there are strictly only global equipment vendorsZTE can provide a complete 5G end-to-end processing solution and has the scale advantage of a complete product series. ZTE is one of them.

In 2019, the company’s 5G products and experimental research and development continued to make breakthroughs, showing its industry leadership.

We believe that 5G is the industry’s deterministic development potential, and ZTE’s leading 5G layout is expected to benefit from the industry’s growth potential.

  Investment suggestion We believe that the 4G boom in 1919 has strengthened and the restructuring of the company’s consumer business is still in the recovery stage. Based on this, we expect the company’s 19?
The 21-year EPS is 1.

10/1.

40/1.

94 yuan, comparable company’s 19-year PE estimated average value of 33x, considering the company’s industry leader ranking, given a 19-year PE reasonable estimation interval is 31?
35x, corresponding 北京夜生活 to a target price of 34.

1?38.

5 yuan, re-buy rating.
  Risk warning: 5G commercial use is less than expected; trade friction between China and the US has intensified.