Most popular ZTE's performance declines cost contr

2022-07-26
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ZTE's declining performance and cost control become a top priority

as one of China's national brands going global, ZTE's declining performance is causing widespread concern in the market. As the director of New Jersey's core technology research and Franklin Lake development

at the end of August, ZTE (the results for the first half of 2012 were announced. In the first half of 2012, the operating revenue was 42.642 billion yuan, up 15.21% year-on-year; but at the same time, the net profit decreased by 68.17% compared with the same period in 2011, to 245million yuan.

it is worth noting that this is not the first decline in ZTE's profit. As a reference for the 68.17% decline in the first half of 2012, ZTE's financial report for the first half of 2011 was not good. The data show that ZTE's actual profit in the first half of 2011 The current operating income is 37.3 billion yuan, an increase of 21% over 30.7 billion yuan in the same period of 2010; The net profit attributable to the shareholders of the listed company was 768million yuan, a year-on-year decrease of 12.4%. The company's share price fell sharply due to the fact that the increase in income did not increase in profit

people can't help asking, what is the reason for ZTE's profit decline for two consecutive years? For ZTE, what is the strategy behind increasing revenue without increasing profits? Is this strategy consistent with an accurate interpretation of the current macroeconomic environment? At present, what is the most fatal problem of ZTE

at the same time, the answers to the above questions will become an important sample of how Chinese telecom manufacturers, including Huawei, can survive the global winter, and become a background for explaining that the multinational companies Alan and Ericsson in this industry are laying off staff globally

dilemma: competition for overseas market layout

on the premise of maintaining market share, ZTE's overseas bad debt provision in 2011 was about 590million, mainly due to its high production cost

just in August, investment banks and securities companies from both international and domestic countries lowered their ratings or expectations for ZTE. According to the Market Research Report from Dahe bank, we maintained the most conservative expectations for ZTE's 2012 revenue, and predicted that its net profit growth was only 0.5%

after careful analysis of the reports of these investment banks, it is not difficult to find that, while making careful evaluation, they also give almost similar reasons: the uncertainty caused by the global economic crisis has led governments and their operators to significantly reduce their investment in the purchase of infrastructure equipment with high profit margin. Huawei, ZTE, Alan, Ericsson and other telecom equipment manufacturers have tried their best to compete for the few orders they have, The situation of too many but too few leads to the marketing strategy that equipment suppliers only want market share and do not look at profits

liushujie, a researcher at Pacific Securities, told China Business Daily that in order to maintain its original market position, the current development status of China's domestic plastic machinery industry is that there is no mistake in the practice of low independent innovation ability and few high-grade and personalized special varieties. Because only when the infrastructure is first laid in, can the enterprise have the opportunity of late service and new orders. This is a common practice of telecom equipment suppliers, especially in emerging markets such as Africa and India, almost every equipment supplier will grab it

from the perspective of industry, telecommunication equipment belongs to the field of infrastructure. When the economic situation is good, governments or operators of all countries will increase investment. However, when the economic situation is bad, such as the European debt crisis, survival becomes the first. It is natural that telecommunication expenditure will be the first to be cut

however, without financial support, it does not mean that the telecommunications industry in these countries will no longer develop. As the economic development in the 21st century has been inseparable from the development of the telecommunications industry, the layout of the development of the telecommunications industry in various countries has only slowed down, while adopting more flexible strategies, such as financial leasing, or simply taking advantage of the competition among equipment suppliers to provide more favorable advance funds as the bid winning conditions

there are usually two ways to advance funds. One is that equipment suppliers and large banks provide credit support to equipment purchasers (operators); The other is to send the equipment directly to extend the payment time of the other party. Both approaches are aimed at solving the dilemma of the other party's development without money

however, the direct consequence of the above practices is to increase the financial cost of equipment manufacturers and the risk of accounts receivable

Jerry (not his real name), an investment manager from an international investment bank, told this newspaper that for telecom equipment suppliers, it should be noted that most of the equipment suppliers' money is formed by bank loans, and the advance interest is usually lower than the bank loan interest, which virtually increases the financial cost of the enterprise. At the same time, if the money is not recovered, it will become bad debt in the international market, The risk of accounts receivable is significantly higher than that of hardware. According to Article 6.3 of the national standard gb/t2611 (2) 007 general technical requirements for testing machines, it has been clearly stated that electrical equipment should have the ability to protect personal safety and avoid electric shock, which has been specified in detail in China

it is worth noting that ZTE's overseas market layout just follows the above path. According to the financial report of ZTE in the first half of 2012, the financial expenses were 831million yuan, an increase of 88.9% year-on-year. Accounts receivable reached 26.587 billion yuan. Meanwhile, in the past two years, the proportion of overseas accounts receivable in ZTE's accounts receivable is higher than that in China, which exceeds the proportion of overseas operating revenue in the total operating revenue

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