HK Stock Market Move | ZTE Corporation (00763) rebounds nearly 6%, institution says the company's chip capabilities are expected to be reassessed, and there is great potential for marginal changes in consumer business.

ZTE Corporation (00763) rebounded nearly 6%, as of the time of writing, up 4.41% to HK$22.5, with a trading volume of HK$2.37 billion. Shenwan Hongyuan Group released a research report stating that according to ZTE Corporation's annual report, ZTE Microelectronics' revenue scale reached 9.73 billion yuan in 2021, with a net profit of 846 million yuan, and its products have covered the "computing power, network, and terminal" fields of the ICT industry. The value contribution of the company's chip capabilities cannot be underestimated, with the current capability to develop a full range of chips including switch network chips, search chips, and NP chips. The company's communication products have also achieved a complete transition to self-developed core chips, which is one of the core driving forces for steady profit growth and has industrial scarcity. The report pointed out that in the third quarter of 2024, the company released the AI imaging flagship nubia Z60 Ultra Premier Edition and AI+ satellite phone nubia Z60S Pro, and launched the affordable 5G phone ZTE FarSail 40s; the nubia brand continues to advance its overseas strategy, with unique products like Neo2, Music, and Focus entering markets such as Argentina, Ethiopia, and Germany. In the past, the company's consumer business accounted for over 30% of total revenue, but external influences caused the proportion to decline in 2018-2019, and has since rebounded in recent years. The current terminal business strategy of the company is clearly "AI for All," and we expect significant potential for change in the company's consumer business with AI empowerment.