HK Stock Market Move | ZTE Corporation (00763) rose more than 6%, ASIC chip is expected to break through, Goldman Sachs is optimistic about the company's growth potential.

ZTE Corporation (00763) surged more than 6%, rising 6.25% to 24.65 Hong Kong dollars, with a trading volume of 5.52 billion Hong Kong dollars at the time of this report. In terms of news, Goldman Sachs released a research report maintaining a "Neutral" rating on ZTE Corporation, with a target price raised by 14.3% to 28.8 Hong Kong dollars from 25.2 Hong Kong dollars. The bank stated that while optimistic about ZTE Corporation's growth potential in non-telecom sectors, they see short-term negative factors as Chinese telecom companies' capital expenditure slows down in the middle and later stages of the 5G investment cycle. The bank holds an optimistic view on ZTE Corporation's growth potential supported by diversified new businesses and continuous technological development, raising the group's 2025-2026 earnings forecasts by 0.5%/2.5%/2.1% and also increasing ZTE Corporation's 2025-2026 revenue forecasts by 0.9%/1.6%/2.3%. China Minsheng Securities previously pointed out that ByteDance's AI edge has made initial efforts in collaboration with ZTE Corporation in the mobile phone business, with the company participating in design and manufacturing, jointly redefining AI phones. This cooperation reshapes the company's consumer business imagination space; ZTE Microelectronics is the second largest domestic semiconductor design company after Huawei's Hisilicon, with chip products continuously raising the company's gross profit margin. Recently, it has started shipping CPUs to major internet companies, and the bank expects ASIC chips to also have breakthroughs; the operator side is also expected to pick up. Despite the decline in capital expenditure on 5G base stations by operators, investments in 5G-A and fixed-line sides are expected to offset the impact on the company's revenue, with a prosperous overseas market; traditional core business revenues are expected to decline only slightly, while second-line products such as servers and switches are expected to maintain a higher growth rate.