ZTE, facing difficulties, once again "Brokeback"

Absrtact: In the face of the plight of ZTE (000063.SZ) again Brokeback to survive. In Friday, ZTE announced that it would sell its subsidiaries to long-flying investment stakes, which are expected to increase investment gains of 450 million to 850 million yuan for ZTE. According to the announcement, collect

The beleaguered ZTE (000063.SZ) once again "Brokeback".

In Friday, ZTE announced that it would sell its subsidiaries to long-flying investment stakes, which are expected to increase investment gains of 450 million to 850 million yuan for ZTE.

According to the announcement, the acquirer for the construction of Silver International and China full pass, prior to the transfer, ZTE holds 75.3838% of the long-term investment stake, through to the individual shareholder Liu Weili acquisition of 5.6162% of the equity, a total of 81% shares. Among them, Jian Yin International 480 million yuan to buy the price of long Fei investment 30% of the equity, China all through to 816 million yuan to buy long fly investment 51% of the equity.

ZTE said the proceeds will be used to supplement operating funds and support the development of the main business. This is the second time ZTE has sold its subsidiaries in recent months.

September 21 this year, ZTE and Shenzhen Innovation Investment Group Co., Ltd., Guangdong Laterite Venture Capital Limited, Nanjing Red Clay Venture Capital Co., Ltd. and other 10 investors signed the agreement, the transfer of ZTE Special Equipment Co., Ltd. (hereinafter referred to as "ZTE Special") 68% of the equity.

The sale of ZTE's special shares for ZTE increased investment income between 360 million to 440 million yuan. The sale of the subsidiary's background is ZTE and other equipment companies into the industry trough, the major equipment manufacturers in the face of income, net profit of a substantial decline or even loss, ZTE is no exception.

According to ZTE's third-quarter earnings, revenue fell 13.13% per cent year-on-year, to 18.092 billion, net profit fell 750.04% Year-on-year, the first quarterly losses since the IPO, the loss reached 1.945 billion. Third-quarter losses led to the first three quarters of the net profit fell 259.14%, loss of more than 1.7 billion yuan.

Before the earnings release, ZTE President Shi accepted the "first financial daily" interview pointed out that ZTE will concentrate all resources in the dominant market and the advantages of product areas, while doing some "subtraction", some weak markets and loss markets, if not to bring long-term gains, will be a number of structural changes.

According to ZTE's plan, ZTE will be in the fourth quarter of this year to achieve losses, now it seems, through the sale of subsidiaries to obtain direct profits, is also an important way for ZTE's turn.

According to reporters, ZTE has been combing various subsidiaries and affiliates in the past few months to further focus on the main business. Now through two sales of subsidiaries, ZTE received a total of 810 million to 1.29 billion yuan in revenue.

A former ZTE analyst said in the history of ZTE, has faced three crises, respectively, the 1993 ZTE New (major shareholders of ZTE) equity crisis, ZTE took the opportunity to comb the governance structure, and then listed, the second crisis is the beginning of the two years of growth in 2005 sluggish, and finally through international expansion to regain growth, It's the third time. "ZTE in the 2001 market bubble period, through PHS and CDMA smooth clearance, 2008, with the help of China's 3G investment clearance, this time can be by virtue of 4G clearance, very difficult." "he said.