ZTE(000063) Minsheng Securities·2025-04-24 06:18Investment Rating - The report maintains a "Recommended" rating for the company [4][7]. Core Views - The company reported a revenue of 32.968 billion yuan in Q1 2025, a year-on-year increase of 7.8%, while the net profit attributable to shareholders decreased by 10.5% to 2.453 billion yuan [1]. - The second curve business, which includes intelligent computing servers and AI terminals, has accelerated growth, contributing over 35% to total revenue [2]. - The company is transitioning from a fully connected model to a "connection + computing power" strategy, showing early signs of success [2]. - The enterprise business has doubled its revenue year-on-year, now accounting for over 20% of total revenue, up from 15% in 2024 [2]. - The consumer business, particularly mobile products, continues to grow, and cloud computer sales are accelerating [2]. - The operator network business faces pressure due to declining capital expenditure from major operators [2]. - The company's gross margin decreased to 34.3%, down 7.8 percentage points year-on-year, primarily due to the rapid growth of lower-margin enterprise business [3]. - The net profit margin decreased to 7.5%, down 1.6 percentage points year-on-year, but effective cost control has mitigated the decline in net profit margin [3]. - The company is expanding its intelligent computing and AI terminal businesses, leveraging opportunities from increased computing power investments by leading internet companies and operators [4]. - Future profit forecasts for 2025-2027 are 8.6 billion, 8.8 billion, and 9.0 billion yuan, respectively, with corresponding PE ratios of 18, 17, and 17 times [4]. Financial Summary - The company expects total revenue to grow from 121.299 billion yuan in 2024 to 157.226 billion yuan in 2027, with growth rates of -2.4%, 7.3%, 9.4%, and 10.5% respectively [6][10]. - The net profit attributable to shareholders is projected to increase from 8.425 billion yuan in 2024 to 9.031 billion yuan in 2027, with growth rates of -9.7%, 1.8%, 2.6%, and 2.6% respectively [6][10]. - The earnings per share are expected to rise from 1.76 yuan in 2024 to 1.89 yuan in 2027 [6][10]. - The company maintains a price-to-earnings (PE) ratio of 18 for 2025 and 17 for 2026 and 2027 [6][10].