PR92571

SHENZHEN, China, Oct. 26, 2021 /PRNewswire=KYODO JBN/ --

ZTE Corporation (0763.HK / 000063.SZ), a major international provider of

telecommunications, enterprise and consumer technology solutions for the mobile

internet, today announced that the company's Executive Vice President and Chief

Operating Officer Xie Junshi has delivered a keynote speech entitled "Winning

future with digital intelligence" at its Global Analyst Conference held online

on October 25th, 2021. Mr. Xie's speech presents the company's landscape in the

digital economy era, covering corporate positioning, development goal and

strategic initiatives.

"Facing the next strategy period, ZTE will achieve leap-forward development

with the principle of 'three strategies, two curves'. 'Three strategies' here

lie in  innovation, globalization and end-to-end product solutions. 'Two

curves' mean that on one hand, ZTE sticks to solidifying its position, keeping

the steady growth of operators' business in the first curve while on the other

hand, ZTE will create its new horizon to achieve the rapid growth of government

and enterprise business, terminals business and new business in the second

curve.

Meanwhile, ZTE will be committed to becoming a highly resilient operating

organization to adapt to the challenge of the uncertainty in the new normal,

and adhere to a green and low-carbon strategy to achieve the company's

long-term sustainable development.

According to Mr. Xie, ZTE aims to be included in the Fortune Global 500 list in

next two to three years by maintaining a robust annual growth rate.

Here comes the original speech as follows:

Dear friends, good morning, good afternoon, and good evening. It's a pleasure

for me to share with you ZTE's role, objective, and strategy in the era of

digital economy. Five years has passed since our last Global Analyst

Conference. During this period, we have witnessed great changes in the global

environment and in ZTE. Today, ZTE has defined its new vision and mission, and

is forging ahead towards the goal of creating greater value despite various

challenges. Through the Global Analyst Conference, we hope you will know more

about ZTE and feel free to voice your opinions.

Committed to becoming "the driver of digital economy" in the new era

As you may know, ZTE was founded in 1985, with the aspiration of bringing

everyone affordable phone calls and thus realizing convenient communication.

From the very beginning, ZTE has been committed to telecommunications and

independent innovation.

For 36 years, we have been staying true to our original aspiration, and

striving to connect "individuals, families, enterprises, and society" with

ceaseless efforts and innovation. We are determined to fulfill our vision and

mission, that is, "to enable connectivity and trust everywhere," and "to

connect the world with continuous innovation for a better future."

Now, ZTE has grown from CT to ICT field. We have developed core digital

technology, such as chipsets, databases, and operating systems; we provide

complete cloud-network-end solutions; and we use intelligent and efficient

tools for network deployment, O&M, and management. In addition, we are

committed to sustainable development with green technology. With our digital

solutions, we aim to be "a driver of digital economy", providing efficient and

reliable digital infrastructure.

Solidifying its position with innovative initiatives, towards the Fortune

Global 500

To fulfill this role, we have formulated the specific development strategy, to

which the year 2021 is really crucial. In the strategy period from 2020 to

2021, our goal is to maintain robust growth of the business in the 1st curve by

further participating in China's 5G construction and improving the market

position of our key products overseas. Meanwhile, we hope to promote the

business development in the 2nd curve through strengthening investment in the

enterprise business, adjusting the structure of consumer business, and

expanding new business. In the next strategy period, we resolve to maintain

high-quality growth with a solid foundation in the 1st curve, and more

importantly, create new horizons in the 2nd curve to achieve rapid growth.

Our objective for the next period is to strengthen ZTE's resilience to agilely

address risks and seize opportunities in new business, and sustain annual

growth to be ranked among the world's top 500 companies.

Now, let's take a look at our performance in the current strategy period.

Against the backdrop of the pandemic and ever-changing global environment, we

have basically achieved our goal of high-quality growth by promoting

technological innovation and strengthening healthy and efficient operations. In

2020, our operator, enterprise, and consumer business witnessed noticeable

growth, with the revenue increasing by 11.8% and the operating cash flow

increasing by 37.4%.

In 2021, we have maintained high-quality growth and increased profitability. As

shown in the financial report of the first half year, our revenue has scaled

RMB53 billion with a year-on-year growth of 12.4%, and the revenue has grown by

over 10% in both Chinese and overseas markets. Through continuous cost

restructuring, our gross profit margin has increased to 36.1%, an increase of

2.7%. The net operating cash flow in the first half year also reached a record

high. In operator business, we have maintained steady growth with a larger

market share of 5G wireless, core network, and bearer network products in

China. Our revenue of enterprise business grew by 17.7% in H1, with Chinese

enterprise business increasing by over 50% and server and storage products

doubled. The revenue from consumer business hit RMB12.3 billion, with an

increase of 66.6%. Specifically, the revenue from home terminals and

smartphones witnessed an increase of over 90% and 40%, respectively.

Sticking to the principle of "three directions, two curves" to achieve the

sustainable development

We are embracing the next strategy period in 2022, which is essential to ZTE's

future development.

In that period, we will focus on innovation, globalization, and end-to-end

solutions to pursue progress while ensuring stability in the 1st curve, and

seek rapid enhancement in the 2nd curve, so as to achieve sustainable

development.

First, innovations. ZTE has been a company dedicated to independent innovations

since its foundation. Our core competence lies in innovative technology that

can create value for customers. For instance, we launched the ZXJ10 in the

1990s, which was China's first large-capacity digital SPC switching system; we

presented the SDR base station in 2009; and with the Pre5G Massive MIMO

solutions, we won the Best Mobile Technology Breakthrough award at MWC 2016 and

the CTO's Choice 2016 award. Concentrating on "connectivity" and "computing

power", we will strengthen the development of such core technologies as

chipsets, algorithm, and architecture, and further the exploration and R&D of

key products and technologies.

Regarding connectivity, we aim to speed up the R&D of 5G-advanced technology to

create the greatest value. Also, we have started the research on 6G, and will

strive to accelerate the application of key technologies, such as

reconfigurable intelligent surface (RIS). In addition, we are putting in more

efforts to enhance optical network performance. For example, we have

significantly increased the transmission capacity of all-optical networks. As

for computing power, we will enhance the R&D of the next-generation cloud

infrastructure, and further integrate AI and big data into PaaS and SaaS.

What's more, we attach great importance to green design for sustainable

development. To be specific, we adopt new materials, components, and design to

reduce power consumption of equipment, and use such technologies as AI to

improve power efficiency during network operations via intelligent control.

ZTE will increase investment and provide strong support for innovations. We

have established the "Future Lab" for the exploration and R&D of prospective

technologies. We have also partnered with top universities and research

institutes, thus establishing long-term cooperation mechanisms for innovations.

At present, we have launched over 800 projects jointly with our partners in the

fields of CT and advanced manufacturing. Through all these efforts, we expect

to promote technological innovation and create more value with partners from

different industries.

Second, further globalization. The company is committed to globalization based

on our commitment to compliance, cybersecurity, and business continuity

management. In operator business, namely the 1st curve, we aim to maintain

solid growth in global markets.

In Chinese markets, we are devoted to growing from a main supplier to a

top-tier supplier, which requires a larger market share of our key products.

More importantly, we should stimulate customers' demands instead of meeting

requirements only, making a leap from a follower to a leader in the market. To

achieve this goal, we will make further improvement in product innovation,

agile R&D, and efficient delivery.

In overseas markets, we will focus on high-priority markets and strategic

products. Specifically, we plan to increase the investment in emerging Asian

markets, leading operator markets, and strategic European markets, and optimize

our product presence through construction of 5G networks as well as fixed

optical networks, reconstruction of existing 4G networks, upgrade of transport

networks, and iteration of smartphones and home terminals. We will seize the

opportunities in the changing global environment to guarantee healthy

operations and steady growth.

Third, end–to-end solutions. As a part of the end-to-end solutions, terminal

devices are essential to ZTE's future growth. After organizational

restructuring and brand integration, we are now working with more channel

partners, and offering a comprehensive product portfolio of terminal devices,

including smartphones, industrial terminals, home information terminals, and

integrated innovation terminals.

With the increasing competitiveness, ZTE will promote its terminal products in

both China and overseas markets. Through continuous innovation and further

investments, ZTE is bound to take a lead in the terminal business, scaling new

heights in China and maintaining steady growth overseas. In 2021, we plan to

deliver more than 100 million consumer devices, of which 50% will carry our

self-developed chipsets.

Enhancing the initiative capabilities to achieve rapid growth of the business

in the 2nd curve

After consolidating the business in the 1st curve, our key task in the next

strategy period is to achieve rapid growth of the business in the 2nd curve.

We will invest more in the enterprise business in terms of marketing, channels,

and solutions. Also, the company will integrate internal resources, namely, to

give full play to our overall advantages in branding, supply chain, and

cloud-network ecosystem, thus facilitating the growth of enterprise business.

Regarding capability building of channels, we will comprehensively enhance our

services by continuously improving IT resources, processes, incentives, and

training.

In addition, we will enhance the competitiveness of key products, including

data communications, server and storage, distributed database, and data center

products, and further enhance solution marketing in key sectors, such as

e-government, energy, finance, Internet, and transportation. By providing

integrated, scenario-based solutions, we aim to improve our overall competence

in the enterprise market.

To achieve rapid growth in the 2nd curve, we also need to develop new business,

such as automotive electronics and digital transformation.

In March 2021, ZTE set up the automotive electronics product line, aiming to

provide underlying technology and core components of digital vehicles, and

intelligent connected products and solutions. By working with partners, ZTE is

committed to providing customized and ultimate automotive experience, and

eventually create a network of intelligent vehicles, optimal routes, and

powerful clouds. Our products range from chipsets, hardware and software

platforms, to intelligent driving algorithms, and intelligent vehicle

infrastructure. What's worth mentioning, we signed strategic cooperation

agreements with China First Auto Works and Shanghai Automotive Industry

Corporation this summer.

Moreover, we strive to seize the business opportunities brought by corporate

digitalization. In this regard, ZTE has been applying cloud technology for

digitalization of its office work, R&D, and operations, thus building a

cloudified company. Through practices, we have now formulated our methodology,

and developed a full series of modular products and solutions. That is to say,

ZTE has become a provider of digital transformation services for enterprises.

ZTE's digital transformation solutions cover cloud-network foundation, data

platforms, unified portals, digital office, digital production, and digital

cybersecurity. With these modular component libraries, ZTE provides targeted

services for various fields of corporate operations, accelerating the digital

transformation of enterprises.

By grasping the opportunities in such new markets, ZTE is bound to achieve the

rapid development of its business in the 2nd curve.

Building ZTE's resilience to grapple with the uncertainty of the new normal  

I've introduced ZTE's strategy to promote business growth in the 1st and 2nd

curves, and to achieve this goal, we need to develop the capability of

guaranteeing sustainable development.

Since the outbreak of COVID-19, the global changes have alerted us to numerous

uncertainties in addition to the existing challenges. We have realized that the

key to addressing uncertainties is resilience, which enables us to quickly

adapt to unexpected changes. Towards the next strategy period, we are committed

to building ZTE into a resilient organization, further enhancing its

capabilities of anticipation, cushioning, and adaptation and shaping.

Therefore, we will be able to ensure early discovery, strong vitality, and fast

recovery when facing operational risks.

Agility makes success. In addition to resilience, we should also respond more

agilely to risks. The key to success is to firmly promote digital

transformation, expand and smooth value chains inside and outside the company,

and optimize the whole processes with the use of big data, thus guaranteeing

agile operations of the company.

As for building a resilient organization, digital transformation is a

prerequisite, and can also enhance the operational quality and efficiency of

the company.

In terms of in-house office work, we have Pocket ZTE, a smartphone app that

enables mobile office and guarantees business continuity. At the beginning of

2020, our self-developed office cloud and R&D cloud allowed over 30,000

employees to work from home, achieving 95% work efficiency on the first

workday. Today, we will get ready for complete telecommuting in several hours

with our digital platforms, while maintaining the same efficiency as working at

office.

Regarding supply chain, we have developed new networks, models, and platforms

through business process reengineering and IT system restructuring. The former

Shenzhen-centered supply chain has been transformed into a supply chain network

with numerous centers located in Shenzhen, Heyuan, Nanjing, Xi'an, and

Changsha, involving various ports, shipment centers, manufacturing bases, and

factories. In addition, we have put our business online and achieved

intelligent management of key business through big data and AI, which displays

demand-supply changes and risks in real time. We have set up an intelligent

operation center, dramatically enhancing the resilience of our supply chain

network and guaranteeing business continuity.

Our resilience in marketing and engineering delivery is enhanced with the use

of digital technology. Facing the challenges posed by the pandemic, we swiftly

established online channels for visiting, demonstration, exhibition, and

testing, ensuring smooth communication with customers. What's more, we have

built a global cloud delivery center. By utilizing end-to-end automation tools

and digital systems, we provide operators with contactless and instant network

deployment and O&M. With our cloud solutions, global users can enjoy easy

services on over 200 networks.

In the next period, we will deepen digital transformation to enhance our

efficiency in operation, R&D, production, and external business, thus

developing into a cloudified company with resilient supply chain, high R&D

compatibility, quick-response operations, and flexible delivery.

Regarding sustainable development, ZTE always adheres to a green development

strategy. We aim to provide operators with the green ICT foundation, and

empower vertical industries with digital innovation to enhance energy

efficiency. As for ZTE, we are committed to low-carbon operations through green

production and circular economy, thus contributing to the reduction of carbon

emissions.

At this pivotal point of ZTE's development, we look forward to building a

win-win future with customers and partners based on openness and cooperation.

Amid the uncertainties in the global context, ZTE will adhere to its

development strategy, striving to respond to risks with resilience, and

creating greater value through innovation. Working with our customers and

partners around the globe, we are confident to enable connectivity and trust

everywhere.

Thank you.

Media Contact:

Margaret Ma                                                      

ZTE Corporation                                                

Tel: +86 755 26775189                                      

Email: ma.gaili@zte.com.cn  

SOURCE: ZTE Corporation

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