CICC International: Raises ZTE Corporation (00763.HK) Target Price to 40 Hong Kong Dollars, Bullish on Government and Enterprise Demand.

According to the Wise News Finance APP, CICC released a research report stating that ZTE Corporation's (00763.HK) mid-year performance was strong, with a 15% increase in revenue mainly driven by strong demand in the government and enterprise sector, as well as growth in consumer business. Revenue from different segments increased by 110% and 8% respectively. However, the gross profit margin in the second quarter narrowed by 8.1 percentage points year-on-year to 30.9%. The bank expects that the pressure on profit margin is due to the increasing proportion of low-profit server sales in the government and enterprise sector and an increase in the proportion of AI server shipments. CICC maintains an outperform rating on ZTE Corporation, raising the target price from HK$33 to HK$40.