On October 11, ZTE announced that the companys 2 billion yuan medium-term bills and 8 billion yuan ultra-short-term financing bills have been registered and approved by the Traders Association. The registration quota shall be valid for two years from the date of the deposit of the notice and may be issued in stages.
In the first half of 2019, ZTE achieved a revenue of 44.61 billion yuan, an increase of 13.1% over the same period last year, mainly due to the growth of business income of operatorsnetworks and government enterprises over the same period last year; the net profit of ordinary shareholders belonging to listed companies was 1.47 billion yuan, an increase of 118.8% over the same period last year; and the basic earnings per share was 0.35 yuan. It is expected that the net profit attributable to common shareholders of listed companies will be 3.8-4.6 billion yuan in the first three quarters.
ZTEs R&D investment in the first half of 2019 amounted to 6.47 billion yuan, accounting for 14.5% of its business income, up 1.7 percentage points from 12.8% in the same period last year, according to Zhongdao. ZTE said it has won 25 5G commercial contracts worldwide covering major 5G markets in China, Europe, Asia-Pacific and the Middle East. It has launched 5G cooperation with more than 60 operators worldwide and participated fully in the deployment of 5G network in China.
ZTEs last bond issue in the interbank bond market was in 2015, and its current standing medium-term bill of 6 billion yuan will face the issuers option of redemption in January 2020.
In addition, Chinas 30 billion yuan medium-term bills have also been approved.
On September 25, the Traders Association accepted two interim bills totaling 30 billion yuan from Huawei Investment Holding Co., Ltd. The registered amount of the two interim bills was 20 billion yuan and 10 billion yuan respectively, which were mainly underwritten by Industrial and Commercial Bank and Construction Bank respectively. The registration limit is valid for 2 years.
Interestingly, on September 26, Ren Zhengfei, the founder of Huawei, and Zhang Wenlin, the president of Huaweis strategy department, spoke to Jerry Kaplan, a famous American computer scientist, and Peter Cochrane, an academician of the Royal Academy of Engineering.
In the dialogue, Ren Zhengfei talked about the issue of Huaweis debt issuance of 30 billion yuan, saying that the cost of issuing debt is very low, only 4%. If we increase employeesinvestment in enterprises, the cost is too high and the dividend is too high.
Ren Zhengfei mentioned that he didnt know about the issue of debt at first, but then he called the people in the management department when he saw the news outside. The management department said, We must issue debts under the best conditions, enhance the understanding and trust of the society, and not issue debts again in difficulty.
Ren Zhengfei said that in the past, Huawei mainly used to finance in Western banks, but now the financing channels of Western banks are slowly not smooth, so Huawei changed to finance in domestic banks. Domestic banks used to have high interest rates, but now try and find out whether they will ultimately raise 30 billion or 20 billion yuan, which I am not sure. They will issue as much debt as they want, because there is no problem of repayment, because we have relatively abundant funds. With more money, we hope to give more support to universities, scientific research institutions and standard organizations, to support the development of the world, and not to narrowly safeguard our own interests.
Source: Responsible Editor of Economic Report in the 21st Century: Wang Fengzhi_NT2541