Shenzhen cultivates BL computing _ power generation MM domain A, ry] full-stack full-scene solutions to empower thousands of industries. The company grasped the new opportunities brought by the big AI model and launched a full-stack global intelligent computing solution covering computing power, networks, capabilities, large models and applications. In the field of servers and storage, the company provides high-performance high-training servers, cost-effective inference servers, all-in-one training and promotion machines, integrated computing servers, etc. Among them, total computing servers maintain the lead among domestic operators. In the field of switches, the company launched an open source decoupled Nebula intelligent network solution. Based on self-developed 7.2T distributed forwarding chips and 112Gb/s high-speed bus technology, domestic ultra-high density 400GE/800GE frame switches have industry-leading performance. The box-type switch won the first and second place bids for China Unicom and China Telecom's collection projects. In the data center sector, the company launched innovative products such as immersion liquid cooling, cold plate liquid cooling, high-power inter-steam, and integrated power modules. The Binjiang Liquid Cooling Intelligent Computing Center model site using the cold plate liquid cooling scheme was officially launched; it broke through the Hong Kong strategic market and continued to grow in size in the Philippines and Indonesia.

5G-A multiple application scenarios continue to be implemented, and the field of high-speed networks is progressing steadily. In the field of 10-gigabit networks, the company successfully supported wireless ultra-high-definition video shooting at the 2024 CCTV Lunar New Year Spring Festival Gala based on ultra-high-capacity 5G-A distributed microstations and base station-level computing power; in the field of integrated sensing, it completed the largest 5G-A low-altitude communication network in Binjiang, Nanjing; in the field of aerospace integration, it completed simulation verification and comprehensive service carrying verification tests in the first-time domestic operator NR-NTN low-orbit satellite laboratory. It achieved new breakthroughs in in-orbit technology tests with terminals connected to low-orbit satellites in orbit and won the bid for the China Mobile Low Orbit Test Star Regeneration Star Project. Furthermore, breakthroughs have continued to be made in core networks and cabling. The company's high-speed network business is expected to continue to grow in the future with the application of new communication connection technologies such as 5G-A and aerospace integration and upgrades and iterations of backbone network equipment.

“AI for All” lays out all AI terminals. The company has a perfect layout in the field of AI terminals, and launched innovative products such as the 5G+AI naked eye 3D tablet Nubia Pad 3D II, the AI all-round imaging flagship Nubia Zubia Flip, the national AI compact folding nubia flip, the Pratt & Whitney AI naked eye 3D phone ZTE Yuanhang 3D, and the AI-enabled dual-satellite dual-system 5G security flagship phone Axon 60 Ultra.

Profit forecast: ZTE is a leading international communications equipment provider, and is optimistic about the company's competitive advantage and continued growth in the field of computing power+connectivity. The company is expected to achieve operating income of 129.25/135.694/143.749 billion yuan and net profit to mother of 9.766/10.363/11.15 billion yuan in 2024-2026, corresponding to EPS 2.04/2.17/2.33 yuan, maintaining a “buy” rating.

Risk warning: trade policy change risk, exchange rate risk, etc.