ZTE: 09 overseas business or exceed forecast can still grow in 10

Guotai Temporary Maintenance ZTE 2009-2011 EPS forecast is 1.70 yuan, 1.92 yuan, 2.22 yuan, the next three years net profit compound growth rate of 22%, given the current market excluding bank stocks after the average valuation level, 2009 25 times times PE, corresponding target price of 42.5 yuan, give "　　Overweight "rating.　　ZTE in the domestic business at the peak of 2009 years, in 2009, overseas business income will be due to the decline in capital expenditure of international operators, whether or not to maintain growth in 2010 has become the focus of investors, Guotai on its overseas business and long-term competitiveness of the understanding of:　　The financial crisis accelerated the pace of ZTE's march overseas, especially in developed countries.　　1 The financial crisis accelerated the decline of international equipment business, Alcatel-Lucent cut the CDMA sector sustained losses, motor losses, NSN profit decline, Nortel bankruptcy protection, for the Chinese equipment manufacturers to give up market share, industry competition is still fierce but tend to ease.　　2 ZTE after years of market expansion of developed countries gradually accumulate the recognition of operators, such as in April, Hong Kong's largest mobile operator CSL15 billion HK HSPA+IP Network Technology program orders, Guotai that this year will also be in the overseas special developed countries to make breakthroughs, into a new stage of development. 3) The synergy of 3 major competitive advantages: A cost advantage not only embodies the price advantage brought by the low cost of manpower, but also reflects the cost decrease brought by the development, technical service and the maturity of the purchase chain; b Customization advantages, providing equipment to the terminal package services; C financing advantages, international operators are affected by the economic crisis, financing difficulties,　　ZTE received 15 billion U.S. dollars and other credit lines, expanding customers at the same time for domestic commercial banks to introduce High-quality international customers. Guotai estimates that overseas signatures will be more than Guotai expected 1 quarters earlier than the 2 quarter since 2009, reversing year-on-year decline, showing year-on-year growth.　　The prospect of overseas business revenues exceeding Guotai's previous year-on-year growth 15-20% is likely to be high throughout the year. 2010 growth is still sustainable. Domestic 3G capital expenditure remains high for the next 2-3 years, although global capital expenditure has declined in overseas markets, ZTE's share of the market in developed countries has been low, with two more years of competitive partners, ZTE and Huawei, who will be among the top three in the international communications equipment industry over the next 3 years.