HK Stock Market Move | ZTE Corporation (00763) falls more than 10%, due to decline in demand from operators and impact of slow collection pace, with net profit for the third quarter decreasing by 88% year-on-year.

ZTE Corporation (00763) plunged more than 10% after its performance, dropping 10.67% to HK$35.34 as of the time of writing, with a turnover of HK$10.38 billion. On the news front, on the evening of October 28, ZTE Corporation released its performance for the first three quarters of 2025. The group achieved operating income of RMB 100.52 billion, an increase of 11.63% year-on-year; net profit attributable to ordinary shareholders of the listed company was RMB 5.322 billion, a decrease of 32.69% year-on-year. Looking at the quarter, the company achieved operating income of RMB 28.97 billion in the third quarter, an increase of 5% year-on-year, with net profit attributable to the parent company of RMB 2.64 billion, a decrease of 88% year-on-year. Huatai believes that the main reason for the decline in profits is the year-on-year decline in operating income of the operator business with high gross margin and a decrease in proportion, while the revenue structure tends towards low-margin computing power business. Huatai stated that the short-term performance pressure on the company is due to the downturn in operator demand and the impact of the pace of acceptance, but the long-term logic of the company's development around the computing power curve has not changed. In the first three quarters, the bank observed that the company's full-stack computing power layout continued to make breakthroughs: 1) In terms of chips, the company independently developed DPU (Dinghai series) and high-capacity switching chips (Lingyun and Tianyi series), realizing large-scale high-performance interconnection of domestic GPU cards; 2) In terms of smart computing servers, the company has entered into core business scenarios of many domestic Internet manufacturers such as Alibaba, Tencent, ByteDance, Baidu, and JD.com, as well as core businesses of financial and power sector enterprises. The company has also developed orthogonal super node systems for high-performance training and inference, supporting the creation of ultra-large-scale clusters with tens of thousands of cards.