HK Stock Market Move | ZTE Corporation (00763) fell more than 4% after reporting that its first quarter net profit decreased by 46% year-on-year. Analysts believe that the short-term demand from operators is affecting the company's performance.

ZTE Corporation (00763) fell by more than 4% after the performance report, dropping by 2.97% to HKD 23.52 at the time of publication, with a turnover of HKD 94.761 million. On the news front, ZTE Corporation released its first-quarter report, with revenue increasing by 6.13% year-on-year to RMB 34.988 billion and net profit attributable to shareholders decreasing by 46.58% year-on-year to RMB 1.31 billion. Due to exchange rate fluctuations, financial expenses turned from net income in the same period last year to net expenditure, with a year-on-year change of 200.28%. Increased provision for impairment and the decline in policy-related income also affected profits. Huatai pointed out that the decline in profits in the first quarter was mainly due to the decline in domestic communication infrastructure investment, pressure on the scale of domestic network products, and a revenue structure skewed towards low-margin computing power business. It is optimistic about the company's continued solidification of its "connection" foundation. The full-stack computing power layout may gradually enter a period of harvest, and with the mass introduction of self-developed chips in the future, the company's profitability in the government and enterprise business is expected to significantly improve. Both A-shares and H-shares maintain a "buy" rating.