King's Wealth News | ZTE (00763) rises against the market, as of the time of publication, trading at 19.98 Hong Kong dollars, up 2.36%, with a turnover of 0.19 billion Hong Kong dollars.

HTSC issued a report, stating that ZTE's performance in the third quarter is under short-term pressure, with revenue dropping 4% year-on-year, net profit dropping 8% year-on-year to 2.17 billion yuan, falling short of the bank's expected 2.44 billion yuan. The bank expects the main reason to be the pressure on revenue in the operator sector, combined with some fluctuations in profitability.

The bank is bullish on ZTE's extension of computing power second curve, as it continues to expand towards 'connectivity + computing power', exploring the long-term value of smart computing infrastructure (AI servers + cluster networking interconnection), and 5G-A commercial value.

The bank maintains a 'buy' rating, with a target price for H shares of 25.51 Hong Kong dollars, equivalent to a forecast P/E ratio of 10 times next year.