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ZTE is entering a new development cycle.
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With the earnings season on schedule, ZTE's earnings report is quite eye-catching. According to the financial report, in 2021, ZTE's operating income was 114.52 billion yuan, an increase of 12.9% year-on-year, net profit was 6.81 billion yuan, an increase of 59.9% year-on-year, and net operating cash flow was 15.72 billion yuan, an increase of 53.7% year-on-year.
Core financial indicators such as revenue, net profit and net operating cash flow have reached the highest level in ZTE's history, which means that ZTE has not only experienced a period of painful recovery and brought its market position to its original state, but also with the in-depth development of technology and market pattern, the company has entered a new development cycle.
In 2021, ZTE's operating income was 114.52 billion yuan, an increase of 12.9% year-on-year, and net profit was 6.81 billion yuan, an increase of 59.9% year-on-year.
CT business steady progress the new engine of growth is gradually gaining strength
In 2021, ZTE will deeply participate in the large-scale construction of domestic 5G and digitalization, continuously consolidate the position of strategic suppliers, continue to deepen overseas value markets, and deepen healthy operations. For ZTE, basically complete the strategic recovery period and strategic development period expectations, 2022 ZTE will enter the strategic transcendence period, accelerating the creation of the second growth curve.
In terms of operator network business, the annual operating income reached 75.71 billion yuan, an increase of 2.3% year-on-year.
In terms of wireless products, ZTE actively participates in global 5G construction, improves network efficiency, and builds the best cost-effective 5G network. In terms of cable products, the domestic and international market pattern has been further optimized, and 5G has carried a full range of end-to-end products for large-scale deployment, and the optical network operator market continues to lead. In terms of video products, the total capacity of video system users exceeded 200 million, and its market share continued to increase. And actively practice the "double carbon" strategy, help operators build an end-to-end green and low-carbon network, and continue to empower vertical industries to save energy and reduce emissions.
In terms of government and enterprise affairs, ZTE achieved revenue of 13.08 billion yuan in the whole year, an increase of 16.0% year-on-year, and the operating income of domestic government enterprises increased by more than 40% year-on-year.
ZTE grasps market opportunities such as new infrastructure, industry digital transformation, and dual-carbon economy, focuses on energy, transportation, government affairs, finance, Internet, and large enterprises, and relies on "precision cloud network" and "empowerment platform" to achieve overall rapid growth. The revenue of server and storage products has doubled year-on-year, and it has entered the leading enterprises in the financial, Internet, energy and other industries. GoldenDB distributed database was rated as the first brand in the domestic distributed database financial industry, and has been commercially and stably operating in the core system of large commercial banks for more than three years, and has expanded to other industry fields. The influence of ZTE brands in government and enterprise customers continues to increase.
ZTE is not only a supplier of 5G equipment, but also a pioneer in promoting the application of 5G industry. ZTE has joined hands with more than 500 partners to carry out 5G application innovation and business practices, achieving nearly 100 5G innovative application scenarios, and has achieved a breakthrough of 0 to 1. ZTE relevant people told reporters that the future will achieve scale replication from 1 to N, continue to open up a broad market space, and inject "5G heart" into the industry. The establishment of two major industries special teams in mining and metallurgical steel has played a leading role in the application of other industries and opened up new performance growth points for the company.
In terms of consumer business, ZTE continued to exert efforts in terms of brands, products, channels, etc., promoted the sales of personal and family products, and achieved rapid growth, achieving annual operating income of 25.73 billion yuan, an increase of 59.2% year-on-year.
The new generation of under-screen camera phone Axon 30 debuted in the world, leading the update and iteration of under-screen camera technology; The flagship Axon 30 Ultra, a three-shot, four-array image, is the first to introduce converged computational photography. The sales of 5G mobile Internet products exceeded 30 countries and regions. The scale of home information terminals jumped, with shipments increasing by more than 50% year-on-year, with cumulative shipments reaching 580 million units, maintaining a global leading position in the industry. Household terminal operating income increased by more than 80% year-on-year, and mobile phone product operating income increased by nearly 40% year-on-year.
In terms of consumer business, ZTE achieved rapid growth, achieving operating income of 25.73 billion yuan in the whole year, an increase of 59.2% year-on-year.
It can be seen that in 2021, ZTE will achieve year-on-year growth in the three major businesses of operator network, government and enterprise affairs and consumer business. The three major businesses of operator network, government and enterprise affairs and consumers accounted for 66.1%, 11.4% and 22.5% of the total revenue respectively, with year-on-year growth rates of 2.3%, 16% and 59.2% respectively.
For ZTE, the CT business is the first curve of ZTE and the leading business of ZTE. While ZTE is making steady progress in the first curve, it is actively building a second curve business represented by IT business (including IT infrastructure such as servers and storage, as well as digital transformation services such as 5G industry and automotive electronics), digital energy business (including power supply, IDC data center, new energy, etc.), and terminal business (including mobile phones, mobile Internet, smart home, etc.). It is foreseeable that in the future, ZTE operators' network revenue will grow steadily, while the government and enterprise affairs and consumer business will accelerate, and the ratio in total revenue will also break through, pushing the company into a new stage of development.
International and domestic growth
From the perspective of market division, ZTE's domestic market will achieve operating income of 78.07 billion yuan in 2021, an increase of 14.7% year-on-year, and the international market will achieve operating income of 36.45 billion yuan, an increase of 9.1% year-on-year. The ratio of domestic and international market revenue to overall operating income was 68.2% and 31.8% respectively.
From the financial report of ZTE in recent years, it can be seen that the domestic market has a large proportion of overall revenue and a rapid growth rate. In 2021, ZTE will deeply participate in the construction of domestic 5G scale, seize the opportunities for new infrastructure development, and achieve double improvement in market pattern and share. It pays great attention to the digital reform process in the field of national economy and people's livelihood, and cooperates with operators and vertical industry customers in key industries such as industry, medical care, energy and mining, education, etc., and forms nearly 100 demonstration and innovative applications based on different scenarios.
The ratio of domestic and international market revenue to overall operating income was 68.2% and 31.8% respectively.
In the international market, due to the development of the overseas epidemic in 2021, there are still many uncertainties, which will bring certain pressures and challenges to overseas telecommunications network investment, 5G process and network construction in the short term, but the epidemic has also changed the way people work, live and study, and stimulated communication demand. ZTE continues to optimize the product market pattern by taking advantage of market opportunities such as 4G modernization, new 5G construction, and fiber-optic transformation of fixed networks.
In terms of R&D investment, ZTE insists on taking root downwards, and continues to strengthen R&D investment in key areas such as the underlying core technology and pan-5G digitization, and has continued to increase R&D investment over the years, with R&D investment reaching 18.80 billion yuan in 2021, accounting for 16.4% of operating income, an increase of 1.8 percentage points year-on-year.
ZTE related people said that in 2022, ZTE will continue to adhere to the business philosophy of "avenue to simplicity, only fast and not broken, open and win-win", adhere to long-term and sustainable development, and continuously consolidate core competitiveness and optimize the market pattern. We will continue to invest in core technologies such as chips, algorithms and network architectures, maintain technological leadership in key areas and increase the value market share, seek progress in stability, and consolidate the first curve; At the same time, we will strengthen business development such as IT, digital energy, and smart home, and actively exert efforts to the second curve to inject stronger impetus into quality growth.
Written by: Cui Liangliang
EDIT: Bright
Guidance: New text