ZTE Corporation

000063.SZ

Communication Equipment · Technology

Price

¥33.78

-0.06 (-0.18%)

Market Cap

¥161.59B

Exchange

Shenzhen Stock Exchange

Winston Score

Winston is serious

Below-average fundamentals — multiple weak pillars.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Weak

Growth

Weak

Cash Flow

Strong

Stability

Weak

Valuation

Good

Dividends

Good

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Share count rising — dilution

+4.3% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 4.64B (2021) → 4.84B (2025)

Winston Score History

The full picture

ZTE Corporation is a Chinese company that makes equipment used to build phone networks and internet infrastructure. Its main products include 5G base stations, fiber-optic gear, smartphones, and networking hardware. ZTE sells to telecom carriers, governments, and businesses across China and many other countries, making it one of the largest telecommunications equipment makers in the world.

ZTE earns money by selling hardware, software, and related services to its customers. Most of its revenue comes from China, but it also operates in over 160 countries, competing directly with Huawei, Ericsson, and Nokia. ZTE's main competitive advantage is its deep ties to Chinese state-owned carriers and its large portfolio of 5G patents. However, the company faces serious risk from ongoing geopolitical tensions — it has previously been targeted by US export restrictions — and its thin operating margin of around 2.6% leaves little room for error if growth slows or new sanctions emerge.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+11.5% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-44.4% YoY

YoY Growth Rate

Earnings declining

R&D Spend

¥19.9B/ year

↓ Declining (-17% vs prior year)

14.9% of revenue

In line with sector average (15%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

37.9%ownership

Insiders own a meaningful stake in the company

Cash Position

Cash flow positive

¥93.8B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

ZTE Corporation is a rare growth stock that's already generating positive cash flow while growing at 12%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

21.4%

Thin — 21.4% gross margin

Profit after running costs

Operating Margin

1.3%

Thin — 1.3% operating margin

Return on the money invested

ROCE

0.8%

Weak — 0.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth

Sales YoY

+7.7%

Steady sales growth (+7.7% YoY)

Profit growth

EPS YoY

-57.3%

Earnings shrinking (-57.3% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is

EPS Consistency

0/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash

Cash Conversion

159%

Turns 159% of profit into real cash

Spare cash per sale

FCF Margin

1.0%

Thin free cash flow (1.0%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns

Debt / Equity

1.21

Elevated debt (1.21)

Covers its interest

Interest Cover

0.42x

Dangerous — barely covers interest (0.4x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

Price vs profit

P/E Ratio (TTM)

49.2x

Expensive — P/E 49.2

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

+24.7

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (49.2 → 24.4)

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Dividends

Dividend

Dividend Yield

1.15%

Small dividend — 1.15% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record

Dividend Growth

+122.2%

Dividend growing fast (122.2% YoY)

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