ZTE(000063) 国信证券·2024-03-13 16:00Investment Rating - The report maintains a "Buy" rating for ZTE Corporation (000063.SZ) [1][4][16] Core Views - ZTE Corporation achieved a revenue of 124.25 billion yuan in 2023, a year-on-year increase of 1.1%, and a net profit attributable to shareholders of 9.33 billion yuan, up 15.4% year-on-year [1][5] - The company aims to maintain growth in 2024, focusing on enhancing its "connection + computing power" strategy [2][11] Summary by Sections Financial Performance - In 2023, ZTE's revenue was 124.25 billion yuan, with a net profit of 9.33 billion yuan and a non-recurring net profit of 7.40 billion yuan, reflecting year-on-year growth of 15.4% and 20.0% respectively [1][5] - The fourth quarter of 2023 saw revenue of 34.86 billion yuan, a 14.7% increase year-on-year, and a net profit of 1.49 billion yuan, up 17.8% year-on-year [1][5] Business Segments - The operator network business accounted for 66.6% of total revenue, growing by 3.4% year-on-year, while the enterprise business represented 10.9% of revenue, decreasing by 7.1% [2][6] - Consumer business made up 22.5% of revenue, with a slight decline of 1.3% year-on-year, primarily due to reduced revenue from international home terminals and mobile products [2][6] Cost and Profitability - The overall gross margin for 2023 was 41.53%, an increase of 4.34 percentage points year-on-year, driven by improvements in both enterprise and consumer business margins [2][8] - Research and development expenses increased by 17% year-on-year, with a focus on 5G-related products, chips, servers, and storage technologies [2][8] Future Outlook - ZTE plans to strengthen its core competitiveness in wireless and wired fields while advancing its computing power capabilities in infrastructure and software platforms [2][11] - The company expects net profits for 2024, 2025, and 2026 to be 10.32 billion yuan, 10.99 billion yuan, and 11.495 billion yuan respectively, with corresponding price-to-earnings ratios of 14, 13, and 13 times [2][15]