China - ZTE revenues up 50%

ZTE Announces 2007 Annual Results

ZTE Corporation ("ZTE" or the "Group") today announced its audited annual results for the year ended 31 December 2007.

Based on HKAS, ZTE recorded a revenue of approximately RMB34,777 million in 2007, representing an increase of 49.8% against 2006. Net profit was RMB1,252 million.Basic earnings per share were RMB1.30.

Applying PRC GAAP, for the year under review, the Group's revenue from principal operations was approximately RMB34,777 million. Net profit was RMB1,252 million. Earnings per share amounted to RMB1.30.

The Board of Directors recommended payment of a final dividend of RMB2.5 （including tax）per 10 shares and the Group proposed to increase issued capital by Reserve on a basis of 4 shares for every 10 shares for the year ended 2007.

During the year, the Group's revenue from domestic operations amounted to RMB14,687 million, representing a year-on-year growth of 13.8%. The Group continued to implement the strategies of product differentiation and cost leadership heeding development trends in the domestic communications market. At the same time, it strengthened ties with domestic mainstream carriers in China by providing them with quality products and services.

The Group's revenue from international principal operations grew 94.8% to RMB20,091 million and accounted for 57.8% of its total revenue, which was 13.4 percentage points higher compared with the previous year. The revenue growth was driven by continued growth of income from emerging markets and increased sales in developed countries.

Mr. Hou Weigui, Chairman of ZTE, said, "Wireless communications business continues to be our main income source. Sales of the Group's wireless communications products grew rapidly in 2007. As for GSM products, their sales saw significant year-on-year growth, keeping overall market dominance and extending reach to new markets and carrier-customers. The segment broke grounds with high-end operators and quickly gained market share. On the 3G business front, our TD-SCDMA wireless network and core network products secured significant shares of the tenders for the construction of extended trial network for TD-SCDMA large-scale network technology application of carriers. Our WCDMA products also gained grounds in the international market and assumed a more premium market position. Our CDMA products continued to register sales growth. As for the Group at large, it strived to seize opportunities bred by growing broadband services around the world to develop its optical communications business with the aim of improving market coverage."

Mr. Hou concluded, "In the coming year, there will be opportunities as well as challenges in the domestic communications market as carriers transform their businesses and competition in the global market intensifies. The Group will step up effort to grow itself into a mainstream global operator, to develop new products and also tighten ties with major domestic carriers in China. It will seek to ride on the China 3G market, the booming handset and optical communications market as well as the strong global market to sustain fast growth."