ZTE (000063) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 reached ¥34.99 billion, up 6.13% year-over-year, while net profit attributable to shareholders dropped 46.58% to ¥1.31 billion.

• Operating cash flow turned negative at -¥1.98 billion, compared to a positive ¥1.85 billion in Q1 2025.

• Earnings per share (basic and diluted) fell to ¥0.27 from ¥0.51 year-over-year.

Financial highlights

• Gross margin and operating profit margin declined due to higher costs and increased impairment losses.

• Non-recurring gains totaled ¥374 million, mainly from financial asset fair value changes and investment income.

• Total assets rose 3.67% to ¥225.72 billion, and shareholders’ equity increased 1.84% to ¥76.81 billion since year-end 2025.

Outlook and guidance

• Management attributes profit decline to increased financial expenses, lower other income, and higher impairment losses.

• Cash flow challenges are expected to persist if sales receipts remain weak and procurement outflows high.