Growth Recovery On The Back Of Market Share Gains And Margin Expansion
While the telco’s 5G capex plans remain unexciting, we believe it is time to revisit ZTE as we believe its earnings growth is now on a recovery trend. We see potential in market share gains in its carrier network business, as well as robust demand from new infrastructure investments and China’s digitalisation theme amid the 5G era. ASP has stabilised and margins look set to recover on the back of operating scale and cost optimisation. Maintain BUY and raise target price to HK$29.10.