ZTE 0763

Re: ZTE 0763

Postby winston » Wed Oct 10, 2012 12:30 pm

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ZTE (00763.HK) lifted to Buy on little impact by US accusation - BofA ML

The impact of the US Congress accusation against ZTE (00763.HK) would pose only little impact on its business and finance, Bank of America Merrill Lynch said in report, as the Company's equipment sales income from the US is extremely low and the incident is not related to the Group's mobile business.

The Bank noted that the EU is not likely to follow the US example, as the European manufacturers such as Ericsson, Nokia and Siemens have been earning mainly from China.

It noted that the current low price gives chance to buy on dip, so the rating is lifted to Buy.

On expectation for 39% growth in earnings next year, the target price is maintained at $13.9.


Source: AAStocks Financial News
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Re: ZTE 0763

Postby winston » Wed Oct 10, 2012 1:06 pm

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DJ MARKET TALK: ZTE Bounces 2.7%; Accumulate On Weakness -JPMorgan

1056 [Dow Jones] ZTE (0763.HK) rebounds 2.7% to HK$12.22 after slumping 11.2% in the past two days on news that a U.S. congressional probe concluded that the company and its peer pose a national security threat, and recommended that Huawei and ZTE be barred from acquiring U.S. assets and from supplying equipment to telecom network projects in the U.S.

JPMorgan says "while probably unlikely, Congress could put ZTE on a black list that prevents U.S. companies from dealing with it entirely due to national security concerns, real or imagined."

Still, the house suggests accumulating the stock on weakness, as ZTE's U.S. earnings contribution is minor, while "the acceleration of TD-LTE deployment of China Mobile (0941.HK) will help the stock re-rate."


Source: Dow Jones & Company, Inc.
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Re: ZTE 0763

Postby winston » Mon Oct 15, 2012 7:20 am

ZTE braces for whopping loss on sales slump and Iranian links by Victor Cheung

ZTE Corp (0763) is set to face its first quarterly loss in at least 10 years , amid a sales slowdown and investment delays across the globe.

The mainland telecommunications equipment maker expects to incur a net loss of 1.9 billion yuan (HK$2.35 billion) to 2 billion yuan for the three months to September 30, compared to net profit of 299 million yuan last year.

For the first nine months of 2012, the Shenzhen-based firm expects to accumulate a loss of between 1.65 billion and 1.75 billion yuan, from a profit of 1.07 billion yuan earned during the same period last year.

Operating revenue in the third quarter fell 13 percent year-on-year because of delays in some overseas projects, ZTE said in a statement.

Gross margin contracted by 13 percentage points, reflecting more low-margin contracts it had to undertake in Europe, Asia and the mainland.

Also, ZTE dealings with Iran had a negative impact on performance, as they were investigated by the US Department of Commerce and Department of Justice.

The firm not only faces an investment slowdown in China's 3G mobile phone network, but also pressure from the United States.

US lawmakers, in a report last week, urged American companies not to do business with ZTE and mainland rival Huawei due to security concerns.

Following the report, computer network specialist Cisco Systems terminated its strategic partnership with ZTE.

ZTE shares plunged 4.3 percent to HK$12.54 last Friday, and were down 6.4 percent for the week.


http://www.thestandard.com.hk/news_deta ... 21015&fc=1
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Re: ZTE 0763

Postby winston » Mon Oct 15, 2012 9:37 am

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DJ MARKET TALK: ZTE Bid Down 8.3%; Wait For Better Entry - Barclays

0911 [Dow Jones] At pre-open, ZTE (0763.HK) is indicated to fall 8.3% to HK$11.50, after it warns of a 3Q12 net loss of between CNY1.9 billion and CNY2.0 billion, which would more than wipe out its 1H12 net profit of CNY245 million.

Barclays says while it's not surprised to see the disappointing 3Q12 results as it has been cautious on the ZTE's margin pressure, "the magnitude of loss was much worse than expected.

We believe the worst may not be over yet" given no major pick-up of Chinese and overseas operators' capex in the near term, network margin continues to be under pressure given aggressive pricing and handset margin will not likely to recover significantly soon due to keen competition.

Barclays remains cautious on the stock and suggests longer-term investors (who want to play the China 4G theme) wait for a better entry point despite current attractive valuations.

It keeps ZTE at Equal Weight with a price target of HK$12.54.


Source: Dow Jones & Company, Inc.
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Re: ZTE 0763

Postby winston » Mon Oct 15, 2012 12:01 pm

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<Research Report>ZTE (00763.HK) maintained Buy by BofA ML on pft warning one-time event

ZTE (00763.HK) expects to post a loss of RMB1.9 billion - RMB2 billion for the third quarter.

Although ZTE gained RMB370 million from disposing of special equipment, income for 3Q was down by 13% year-on-year with gross margin slipping 13 percentage points.

The decline was mainly attributable to postponement in capital expenditure of operator, more conservative income confirmation policy (which created an one-time effect), and delay of certain international projects, said Bank of America Merrill Lynch.

ZTE (00763.HK) was maintained Buy with target set at $13.9 on expecting business performance reach bottom in 3Q and would improve in 4Q12 and 1H13.


Source: AAStocks Financial News
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Re: ZTE 0763

Postby winston » Mon Oct 15, 2012 1:22 pm

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DJ ZTE Shares Tumble As Loss Forecast Sparks Concerns About Outlook By Juro Osawa

HONG KONG--ZTE Corp.'s (0763.HK) net loss forecast for the third-quarter, sparked investor concern over shrinking margins and sent its stock sharply lower Monday, amid fierce price competition in the telecommunications equipment sector and expected challenges due to the recent U.S. congressional report linking the Chinese company to a national-security threat.

ZTE's shares, traded in Hong Kong, sank 16% to HK$10.54, sharply underperforming the broader Hang Seng index which was down 0.2%. Its shares on the Shenzhen bourse were also down by their daily limit of 10% at CNY9.45 apiece.

Heavy selling was triggered by the company's announcement over the weekend that it expects a net loss of between 1.9 billion yuan and two billion yuan in the third quarter.

The forecast, worse than analysts' expectations, came as ZTE, China's second-largest telecommunications equipment supplier after Huawei Technologies Co., is struggling to cope with weakening demand for telecommunications infrastructure and equipment amid a global economic slowdown.

The magnitude of the loss forecast by ZTE "was much worse than expected," said Barclays analyst Jones Ku in a report Monday. "We believe the worst may not be over yet."

The U.S. House intelligence committee, which had been investigating Huawei and ZTE for the past year, said earlier this month that the two Chinese companies pose national security risks for the U.S. as their equipment could be used by Beijing to spy on Americans. Both Huawei and ZTE strongly denied such allegations.

To be sure, ZTE's weak earnings for the third quarter are due in part to broader challenges facing the telecommunications sector as a whole. The European debt crisis and an economic slowdown in the U.S. and China have created a harsh climate for the industry.

Mr. Ku said in the report that telecom carriers in China and other parts of the world are unlikely to significantly increase their capital investment in the near term, and aggressive pricing to win orders continues to put pressure on ZTE's margins.

In July, Huawei, the world's second-largest telecommunications equipment supplier after Sweden's Ericsson (ERIC), said its operating profit for the first-half fell 22% from a year earlier. Ericsson posted a 64% drop in its second-quarter earnings, while France's Alcatel-Lucent SA (ALU) warned in July that it would miss its previous earnings forecasts for 2012.

Still, for Huawei and ZTE, the U.S. congressional report means they are effectively shut out of new business opportunities in the U.S. telecommunications equipment market in the coming years, analysts say.

Even though the U.S. currently accounts for only a tiny portion of the two firms' revenue, the lost opportunities in a potentially large market like the U.S. could limit their overall growth over the next few years, analysts said. Some analysts have cited concerns that more governments other than the U.S. may start investigating Chinese telecommunications suppliers from a national-security standpoint.

Mr. Ku said that the national-security allegations in the U.S. "will continue to be a near-term overhang for the share price and may dampen the company's future overseas sales."


Source: Dow Jones & Company, Inc.
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Re: ZTE 0763

Postby winston » Mon Oct 15, 2012 3:48 pm

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<Research Report>ZTE (00763.HK)'s 3Q performance disappointing with gross pft may remain under pressure - CS

ZTE (00763.HK) issued a profit warning, expecting to post a net loss of RMB1.65 billion - RMB1.75 billion for the first nine months of this year. The expected loss disappointed Credit Suisse, who deems ZTE may only be able to book profits for its equipment businesses in Mainland and Africa in 2013 in view of its lowering of income target for 2012 to RMB90 billion - RMB93 billion.

On the other hand, Credit Suisse believes gross profit of ZTE may still be under pressure next year if the global telecom spending does not scale down. ZTE was maintained Neutral at the moment with target set at $11.75.

Source: AAStocks Financial News
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Re: ZTE 0763

Postby winston » Tue Oct 16, 2012 9:34 am

DJ MARKET TALK: ZTE Down 1.3% Pre-Open; Jefferies Stays Underperform

0909 [Dow Jones] At pre-open, ZTE (0763.HK) is bid down 1.3% at HK$10.42, adding to a 15.8% mauling it took Monday due to its 3Q12 profit warning.

Still, the stock appears unlikely to trouble its 52-week low of HK$9.23 set on September 6, on hopes for an earnings recovery in 4Q12 and FY13.

Jefferies keeps ZTE at Underperform with a target price of HK$10.50, implying forward FY13 P/E of 12X.

It says while domestic telco capex is on track, the timing of revenue recognition remains uncertain, and fundamentals in key overseas markets continue to deteriorate; "risk is management execution as the company increases its global expansion and builds its handset brand."


Source: Dow Jones & Company, Inc.
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Re: ZTE 0763

Postby winston » Tue Oct 16, 2012 1:54 pm

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DJ MARKET TALK: ZTE Rebounds 3.8%; Worst Is Over - UOB-KH, BOA-ML

1326 [Dow Jones] ZTE (0763.HK) bounces 3.8% to HK$10.96 after taking a 15.8% beating Monday due to its 3Q12 profit warning, as investors bet that 3Q marks an earnings trough and there will be an earnings recovery in 4Q12 and FY13.

"We believe the worst has happened in 3Q12 and the company's results should see sequential improvement over the next few quarters," UOB KayHian says;

It keeps ZTE at Buy with a target price of HK$13.00, based on 14.2X FY13 P/E, the average P/E for overseas peers.

Separately, Bank of America - Merrill Lynch believes the worst is over for ZTE, and that ZTE "is best positioned from the TD-LTE capex in China."


Source: Dow Jones & Company, Inc.
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Re: ZTE 0763

Postby winston » Thu Oct 25, 2012 2:14 pm

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ZTE (00763.HK) downgraded to Neutral, excluded from Conviction Buy by GS
Oct 19, 2012

ZTE (00763.HK) issued profit warning recently, stating that is expected the loss of the first three quarter reached RMB1.75 billion, worse than market consensus.

Goldman Sachs noted in a report that it lowered the 2012-14 revenue and EPS forecast for ZTE by 9-15% and 25.1-67.8%, respectively.

Based on 2013 forecast P/E of 12 times, the target price was lowered from $20 to $12.5, with rating cut from Buy to Neutral. The Group is excluded from the Conviction Buy list.


Source: AAStocks Financial News
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