[ET Net News Agency, 7 January 2021] Nomura cut its target price for ZTE Corporation
(00763) to HK$24 from HK$27.5 but upgraded its rating to "buy" from "neutral".
The research house said ZTE plays a vital role in China's 5G network, which should
become the cornerstone for China's digitalization in the next few years or even decades.
ZTE weathered the US government's sanctions in 2018 while making steady progress in
China's 5G rollout, achieving 30%+ market share in the 5G wireless equipment market, and
is on track to gain more traction in the world's largest 5G market in the next few years.
Moreover, the geopolitical risk will likely be lower following US President-elect
Biden's inauguration in Jan 2021, and ZTE may take a break while focusing on the domestic
carrier business. Nomura cut its 2020-22 earnings forecasts by 10-21% to reflect slower
capex from China's telecom carriers. (KL)