Abstract
ZTE will report its quarterly results on April 24, 2026 post-Market, and this preview consolidates company projections and analyst views to frame likely revenue, margins, net profit, and adjusted EPS outcomes alongside segment highlights and stock-price drivers.
Market Forecast
Market expectations point to revenue of 34.13 billion RMB for the current quarter, representing 12.08% year-over-year growth, with adjusted EPS projected at 0.45 RMB, implying a 4.30% year-over-year increase; EBIT is estimated at 2.01 billion RMB, a 3.47% year-over-year decline, while formal gross margin and net margin guidance for the quarter has not been specified. As a reference point, the prior quarter posted a gross profit margin of 28.78% and a net profit margin of 0.89%, providing a baseline for assessing any near-term improvement.
The company’s main business remains anchored by Carrier Network, with a delivery cadence supported by project wins and a steady backlog across hardware and solutions; the near-term narrative will focus on execution quality and product mix within systems and devices. The most promising segment for incremental growth is the Government and Enterprise business, where revenue was 37.22 billion RMB in the latest segment breakdown and where recent commercial traction and solution deployments suggest a constructive pipeline; year-over-year segment growth data was not disclosed.
Last Quarter Review
In the previous quarter, ZTE reported revenue of 33.38 billion RMB (up 4.61% year-over-year), a gross profit margin of 28.78%, net profit attributable to shareholders of 296.00 million RMB, a net profit margin of 0.89%, and adjusted EPS of 0.05 RMB (down 54.55% year-over-year).
Quarter-on-quarter, the net profit attributable to shareholders improved by 11.85%, indicating some stabilization in profitability from a low base. By business line, the latest breakdown shows Carrier Network at 62.86 billion RMB, Government and Enterprise (政企业务) at 37.22 billion RMB, and Consumer (消费者业务) at 33.82 billion RMB, underscoring the revenue concentration in Carrier Network and the scale achieved in enterprise and consumer solutions.
Current Quarter Outlook
Main Business: Carrier Network Execution
Carrier Network is expected to remain the primary revenue engine in the current quarter, with execution centered on scheduled deliveries and product-mix management across access, transport, and core network layers. The quarterly revenue forecast of 34.13 billion RMB for the group implies a mild sequential step-up from the previous quarter’s 33.38 billion RMB, and the strength of Carrier Network throughput will be pivotal in meeting that top-line target. Given the prior quarter’s gross margin of 28.78% and net margin of 0.89%, incremental margin improvement in this quarter likely hinges on mix gains from higher-value platforms and discipline over bill-of-materials costs and logistics. A key swing factor for profitability is price discipline versus volume commitments; while price competition can compress unit margins, efficient procurement and a tilt toward value-added system solutions can offset part of the pressure. As EBIT is projected at 2.01 billion RMB with a year-over-year decline of 3.47%, delivery mix and operating expense containment will be closely watched to prevent EBIT slippage from overshadowing the expected revenue growth. The quarter’s adjusted EPS projection of 0.45 RMB (up 4.30% year-over-year) implies that the company expects enough bottom-line conversion to outpace last year’s comparable period even as EBIT faces a slight year-over-year dip, suggesting cost ratios and financing/other items may lend support.
Most Promising Growth Engine: Government and Enterprise Solutions
Within the company’s reported breakdown, the Government and Enterprise business (政企业务) generated 37.22 billion RMB and presents a constructive near-term growth narrative. The segment’s momentum is underpinned by demand for integrated solutions, including customized networking, private broadband, and edge connectivity—areas where solution density and services attachment can enhance blended margins at the contract level. While year-over-year growth for this segment was not disclosed, the recent cadence of commercial wins and deployments points to healthy order conversion, and the current quarter’s group revenue forecast of 34.13 billion RMB leaves room for enterprise-led supplementary growth if execution timelines proceed as planned. From a profitability perspective, the enterprise mix generally benefits from recurring software and services layers and can be accretive to gross margin depending on the contract’s lifecycle stage; this introduces a positive bias relative to hardware-heavy quarters, though initial project ramp often involves upfront implementation costs that temporarily narrow margins before stabilization. Successful delivery of enterprise-grade solutions in overseas and domestic markets can also aid geographic mix, which has implications for currency translation and receivables management. Management’s visibility into enterprise pipelines, coupled with project gating and milestones, will be essential for converting backlog into revenue and protecting EBIT from project timing effects.
Factors Most Likely to Move the Stock This Quarter
The primary stock-price driver will likely be the headline revenue print versus the 34.13 billion RMB expectation and the quality of the beat or miss relative to the prior quarter’s 33.38 billion RMB. A second key factor is margin inflection from the prior quarter’s 28.78% gross margin and 0.89% net margin; investors will parse whether product mix and cost control have begun to lift profitability on a sequential basis. Any deviation between EBIT’s projected 2.01 billion RMB and reported EBIT will be particularly price-sensitive given the forecasted year-over-year decline of 3.47%, because it signals whether operating leverage is beginning to rebuild. On the qualitative side, updates on delivery cadence, project milestones, and any commentary on mix—especially within Carrier Network versus enterprise-driven solutions—will shape expectations for the remainder of the year. Overseas execution and selected partnership disclosures can further influence sentiment by illustrating growth optionality; for instance, the collaboration to combine 5G and Wi‑Fi 7 technologies for fixed wireless access services with a major operator overseas underscores ongoing commercialization of advanced devices and could translate to incremental device and platform shipments as deployments scale. The street will also pay attention to expense run-rate management given the adjusted EPS forecast of 0.45 RMB; if expenses track favorably, the company can deliver year-over-year EPS growth even if EBIT underperforms modestly. Lastly, working capital discipline around receivables and inventory will be scrutinized to assess cash conversion and the sustainability of any margin progress.
Analyst Opinions
Bullish opinions constitute the majority among the views gathered, with analysts surveyed by FactSet assigning the shares an average rating of overweight and a mean price target of HK$31.04. The bullish stance aligns with the current-quarter revenue forecast of 34.13 billion RMB, which implies a 12.08% year-over-year increase and suggests that demand and delivery schedules are tracking positively into the new year. Supporters emphasize the potential for a more favorable product mix and services attachment to assist margins over the next few quarters; in this context, the adjusted EPS estimate of 0.45 RMB (up 4.30% year-over-year) is viewed as achievable if operating expense ratios are kept in check and higher-value solutions represent a growing share of shipments. Proponents also underscore the visibility gained from enterprise and selected overseas engagements as incremental proof points that can underpin revenue stability while offering upside if execution delivers on deployment timelines. The mean price target cited by these analysts implies upside from mid‑April trading levels around the low‑20s in Hong Kong dollars, which reflects a belief that the market is discounting a conservative margin recovery path that could normalize as mix improves. Against a prior quarter with a 0.89% net margin and 28.78% gross margin, bullish analysts argue that even modest sequential improvements, combined with a 12.08% year-over-year revenue lift, can translate into better operating leverage than the market currently discounts. They further point to the fact that the prior quarter’s net profit improved 11.85% quarter-on-quarter from a low base, framing a case for incremental margin repair as cost initiatives and procurement efficiencies flow through. In their view, if EBIT lands close to the 2.01 billion RMB projection and revenue meets or exceeds 34.13 billion RMB, the company would demonstrate that its volume and mix strategy is adequately absorbing pricing and cost headwinds, thereby validating the projected 4.30% year-over-year growth in adjusted EPS and supporting a constructive stance into subsequent quarters.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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