ZTE fall researchers found that the problem did not dare write

House leakage slants meet rain of the same night. As the domestic telecommunications industry is one of the leaders, ZTE is caught in the United States of America ” ban” the swamp failed to extricate themselves, and recently presented listed first loss in 15 years. Contrary to expectation, there is no sign of the huge losses, as the ” troubled ” Blue-chip company cast a shadow.

ZTE released late October 25th three quarterly show, the first three quarters of this year a net loss of 1700000000 yuan, the same period last year profit 1068000000 yuan, drops 259.14% compared to the same period; only in the third quarter, ZTE profit net losses of $1945000000, while year-on-year profit of 299000000 yuan, drop compared to the same period – about 750.04%.

Early in the evening of October 14th, ZTE in three quarterly disclosure revealed loss of pre clue, capital markets reacted quickly. Opened October 15th, ZTE immediately encounters the hunt, to a closed limit. Since October 15th, the deadline to reporters in October 25th, ZTE’s A shares fell 14.7% to. As a financial institution in the eyes of ” Ruoshi anchor “, ZTE since this year the stock price to fall 45.61%, and in the near future to become this year ‘s most vulnerable A unit one.

Paradoxically, until three quarterly reports disclosed before beforehand, almost all of the report of the securities are not mentioned in the ZTE may contain risk, of ZTE’s rating to “buy, recommend, overweight” and a bullish comments, more firms have given the target price of 27.44 yuan, and now the ZTE A shares only in 9 yuan to wander up and down.

Why the report of the securities collective misjudge ZTE ZTE hide? Is too good or broker the own goal?

” This question to see one divides into two. Securities research fellow will nonskedly to listing Corporation survey, but not all researchers can find problems. ” A broker who said, ” more to the point, the majority of firms and listing Corporation to maintain a good cooperative relationship, which causes the researchers are not purely station in valuation perspective to report writing. Even found listing Corporation risks, may not be written into the report. ”

Low margin

Long-term since, ZTE ‘s A shares the science and technology section leader, also be a lot of index constituent stocks, many securities research fellow as important specimens, ZTE is the fund Chong Canggu list regulars. Because of this, the ZTE ” minefield ” outbreak, affected body a lot number.

According to the Wind information data, as of June 30, 2012, a total of 157 held by the fund ZTE communications, a total of 410000000 shares, the stock market value is 5720000000 yuan. If a volume did not change, only in October 15th on the same day, the 157 fund deficit of more than 400000000 yuan.

One was in July of ZTE undertaken survey brokerage researcher says, ” did not think of so many losses in the three quarter, the thunder is big, we understand that the situation is in production, research and development, sales as compared to normal. ”

ZTE will the performance loss due to being part of the international project schedule delay, domestic operators purchase mode change, low gross margin contract during the reporting period to confirm the performance factors. Many people in the industry think, the core issue is the wool interest rate. To this, the researchers say, wool interest rate is low is resurgence communication the usual problems, but most researchers think that the effect of cycle is not too long, not as for the formation of such poor financial performance.

In fact, in the low-cost market share has become ZTE development process characteristics. And do not say Huawei, ZTE early years overseas low grabs one suspected of unfair competition, the recent resurgence communication also practice ” country T ( Telecom ) ” low-cost strategy in the international market exhibition hands. India market as an example, the India state-owned operator BSNL company announced countrywide network expansion planning, ZTE won an overwhelming price advantage, successful order in this big fight, ZTE bid for $840000000, while its opponents on a price of $2500000000, Ericsson bid $2300000000, Huawei bid 1300000000 dollar.

A person close to the ZTE ZTE said: ” many overseas orders is not only the problem of wool interest rate is low, there are many simply do not earn. Internal management and budget making and so on and not very strict, true implementation after the discovery rate of profit is not so ideal. ” ZTE’s country strategy to accelerate the implementation of step T since 2010, according to the president of ZTE Shi Lirong explanation at that time, country behind T’s logic is to sacrifice short-term profits, as far as possible from the big market and big customers get the maximum number of orders.

Societe Generale Securities researcher Li Mingjie thought, the overseas expansion strategy too radical. Huawei and ZTE ” although in the global expansion of the road, but Huawei starts earlier, also more appropriate choice point. ZTE large-scale overseas expansion of these two years, coincides with the global economic growth is lack of power, communications industry as a whole is not optimistic, at this time still with low cost dilate not reason. ”

According to the three of the Quarterly Bulletin, ZTE’s single season wool interest rate is 18.2%. But in contrast to other communications companies, although this year gross margin declined, but Ericsson, Huawei Company gross margin is in 30% the left and right sides, ZTE profit level was significantly weaker than those of competitors.

Fled the fund

In fact, ZTE’s business development bottleneck already somewhat. In 2011, ZTE semi-annual report is profitable, but the main source of the national technology is to rely on to sell shares in cash and. While the 2012 semi-annual report shows, first half of ZTE’s net profit of 245000000 yuan, the same period last year dropped 68%, the profit is mainly composed of a software product to provide value-added tax refund.

Even so, each big securities trader, but invariably ignored ZTE implied risk. In 2012 July three quarterly disclosure prior to the Securities Research Fellow, has published more than 30 copies on the ZTE company research reports, in addition to Shenyin & Wanguo Securities, CITIC Securities, Guotai Junan, Galaxy Securities and the few Securities Institute of ZTE’s ratings dropped slightly, the remaining firms have not changed the rating results. Moreover, almost all the brokerage of ZTE’s earnings per share target price and have good fantasy.

As the report of the securities fund companies to influence, a resigned before the securities research fellow said, ” nice buyer researcher will reference the report of the securities, but not entirely dependent on the report of the securities. If the problem is more serious, securities research fellow and fund company telephone communication, the listing Corporation hidden risks and research obtained in bad news to public in the form of delivery to the buyer. ”

A few fund company took the lead out. A Shanghai in the two quarter China ZTE fund investment and research said: ” ZTE semi-annual report came out, the fund company’s began selling ZTE, currently holding the amount is not much. ” While most hold 重仓ZTE fund companies are carefully conceal mentioning, said ” not convenient in response to the content “.

Since the evening of October 14th ZTE pre disclosure of losses in the three quarter after the news, resurgence communication in the capital market performance is very fierce. Opened in October 15th, ZTE word limit, the day only turnover of 82670000 yuan, and the preceding trading day 381000000 yuan compared to fall significantly.

Shenzhen stock exchange publicly traded information display, in October 15th to sell ZTE’s first five seats were occupied agencies, total sale amount amounts to 46540000 yuan, occupy the 56% turnover. While the first five seats bought in, only one institution bought 14170000 yuan, the remaining four seats are for the securities business department, purchase amount is not more than 1600000 yuan, the total purchase amount is 19720000 yuan.

A broker who read said, ” from the seller transaction data, there is a large probability events fund company is in the hand. And the purchase of four seats is biased piecemeal money and retail. October 15th day of ZTE is the word limit, these hot money may have Bo rebound to start. ”

” The public offering of the fund performance pressure, as the market has occurred in the black swan events, fund companies will usually choose to flee as soon as possible. ” The broker said, ” if not for the first time limit disc fled, later on the performance of the tie may be greater. ”

“This is probably the ZTE fell, there may be a resurgence communication business development start turning. ” In a press interview process, many brokerage researcher expressed ZTE concerns, this in former days “white horse ” encounters a hitherto unknown market crisis. Gold securities and securities then gradually lowered on ZTE’s ratings, the ZTE’s target price set at 10 yuan and 10.2 yuan.

In this round of stock price fluctuation, ZTE H-share market performance is relatively rational, in addition to the October 15th pre disclosure after the loss of slump, follow-up share price picks up somewhat. A Hongkong market personage analysis says, A stock market investors worried about ZTE expansion abroad suffocate suffocate the chain effect, but the H-share market foreign investors prefer, resurgence communication the main market in China, the future will benefit 4G orders increase.

” The white horse stock save ”

In order to deal with the crisis, ZTE has begun to broaden sources of income and reduce expenditure. In addition to the executives get outside, on the number of employees in the adjustment and control to the unprecedented critical state. The reporter understands, first half of the year ZTE has thousands of layoffs, the second half of the year will further control number. This resurgence communication official said: ” the company emphasizes the more difficult times, more is to increase staff of the incentive strength. But at the same time, the company will also further strengthen the employee performance appraisal to performance appraisal, unqualified staff, the company will also undertake corresponding elimination. ”

For this statement, ZTE internal staff felt very helpless. ” Performance appraisal is not very rigid target, mainly by the minister to decide check section chief. ” ZTE an internal staff. ZTE assessment indexes are divided into S, A, C1, C2 four, if is evaluated as C, mean, floating, getting only 80% of the wages. “A lot of people will get C ‘ voluntary ‘ resignation. ” The staff said.

Another said: ” ZTE since 2009 has added more than 3 people in 2009, ZTE performance development well, from employee salary cost pressure is not outstanding. But from the beginning of 2010 industry into the weak cycle, the manpower cost pressures became apparent, ZTE ‘ diet ‘ is not already. ”

In addition to the control of human resource cost, ZTE started to open source, one of the most important point is to adjust the scale ” first” development strategy. ” Recently, ZTE has started to give up part of the short term it is difficult to see the return of the order, now the next order to pay more attention to the balance between income and profit, no longer blindly rely on low to grab share. ” The above approach ZTE said.

In addition, ZTE at an operational level is also trying to unearth the new point of growth. Societe Generale Securities researcher Li Mingjie thought, the development of 4G is possible for ZTE provides performance highlights. ” If next year China launched a large scale 4G deployment, will pull the industry, ZTE will benefit, may promote the growth performance. But the overseas 4G development prospects are uncertain, unable to determine whether the try for a substantial performance. ”

In October 15th, ZTE announced, has received the China Mobile TD-LTE tender notice, resurgence communication will assume Beijing, Tianjin, Guangzhou, Shenzhen and Shenyang five city TD-LTE network construction, the total load frequency exceeds 13000.

Another unnamed brokerage researcher thinks, intelligent mobile phone terminal service may also be ZTE growth point. ” The industry is periodic, now the communication industry is in winter, ZTE occupy the scale is relatively large, if the industry better, resurgence communication will have a performance. If the increase of mobile phone terminal input to form the scale effect, resurgence communication in the procurement can increase bargaining chips, the long term for the gross margin improvement should be helpful, ” the researcher said. ZTE three quarterly reports demonstrated that, the three quarter terminal product income grew 15.36%, mainly due to the rapid growth of sales of 3G mobile phone, mobile phone and GSM data card sales decline caused by combined effect.

In three quarterly reports, ZTE so looking forward to the future development of the company: ” will focus on the mainstream product and plan management, optimizing the population big country and mainstream carriers strategy, expand the enterprise and service markets, strengthening cash flow management, reasonable control of contract risk, optimization of process system, improve operational efficiency and business performance. ” In the above approach ZTE’s official view, improve operational efficiency and to strengthen cash flow management is one of the most important two links.