ZTE Commits over 15% of Revenue on R&D Spending in Q1 2020

SHENZHEN,China,April 24,2020 -- ZTE Corporation (0763.HK / 000063.SZ),a major international provider of telecommunications,enterprise and consumer technology solutions for the Mobile Internet,today announced its first quarterly results ended 31 March 2020.

According to the announcement,for the three months ended 31 March 2020,ZTE reported operating revenue of RMB21.484 billion. Net profit attributable to holders of ordinary shares of the listed company reached RMB780 million,and net profit after extraordinary items attributable to holders of ordinary shares of the listed company amounted to RMB160 million,representing a year-on-year increase of 20.5%.Basic earnings per share was RMB0.18.

The company continued to strengthen its R&D investment to build up its core competitiveness. For the three months ended 31 March 2020,the research and development costs amounted to RMB3.241 billion,15.1% of operating revenue,increased by 1.2 percentage point compared to the same period last year.

During the first quarter of 2020,ZTE has placed great priority on its employee health and global customer services by promptly building and upgrading a remote office and customer service platform for all its employees. Moreover,the company has coordinated withpartners to fight against COVID-19 and facilitate the resumption of production with digital means in an orderly manner.

Meanwhile,ZTE has been actively practicing social responsibilities.The company has collaborated with operators to guarantee the communication services of the front line against COVID-19. It has constructed 4G/5G networks and telemedicine diagnosis systems for hundreds of hospitals in China.

As a responsible corporate citizen,ZTE has donated materials to support Wuhan and other regions in Hubei province,and has distributed face masks,ventilators,and other materials toorganizations and local hospitals around the world. In collaboration with various overseas operators,ZTE has also carried out the diagnosis with hospitals,and provided small and medium enterprises with office facilitiesand a series of anti-COVID-19 programs as well.

Teaming up with industry partners,ZTE has been committed to empowering various industries to fight against COVID-19 by leveraging its leading technological strength like 5G and AI. Specifically,ZTE has released 5G remote diagnosis and mobile diagnosis services,as well as the smart video cloudsolution forepidemic prevention and control.

Moreover,the company haslaunched the family "cloud classroom" services to support online education. Featuring high efficiency and collaborativeness,ZTE's secureremote office solution has enabled users of different industries to have remote office services during the outbreak of COVID-19,thereby facilitating the safe and rapid resumption of work and enhancing economic resilience.

With the acceleration of new infrastructures,such as 5G and the Industrial Internet,ZTE hasbeen activelyinvolved in the deployments of operators' 5G infrastructure,and constantly scaled up its 5G production capacity. Meanwhile,the company has solidified cooperation with top industry players to promote the digital transformation of power,transportation,finance,government affairs and other key industries.

By the end of the first quarter of 2020,ZTE has consecutively securedsignificant shares for the 5G RAN,5G SA core network,5G transport centralized procurement of China Mobile,China Telecom and China Unicom. The company has constructed 5G demonstration networks in multiple cities in China,achieving Giga+ 5G continuous coverage experience. Moreover,the company has completed 5G commercial deployments in Europe,Asia-Pacific,the Middle East and other major 5G markets.

In addition,ZTEhas sustained high growth in market shares inoptical networks,as well as in the segments of Metro WDM and Backbone WDM. The company and its partners have jointly explored 86 application scenarios and carried out over 60 demonstration projects on a global scale,building a series of 5G intelligent manufacturing demonstration projects along with top industry players.

In the field of terminal devices,ZTE has unveiled its first 5G video smartphone ZTE Axon 11 5G. The company has continuously strengthened its 5G terminal devices cooperation with more than 30 operators worldwide. It has embarked on the 5G terminal market in Japan by partnering withoperators.

Moving forward,ZTE will pay close attention tothe global epidemic situation,and make reasonable coordination accordingly withits global customersand partnersto cope with the global epidemic. The company will unswervingly concentrate on its major businesseswhile leveraging the opportunities of new infrastructure construction,expecting to create more values for its customers and the society.

Media Contacts:

Margaret Ma

ZTE Corporation

Tel: +86 755 26775189

Email: ma.gaili@zte.com.cn