Goldman Sachs maintained a Neutral rating on ZTE due to a 6% year-on-year revenue increase in 1Q, which met expectations. However, a decline in gross margin from 34.3% to 28.3% and reduced domestic telecom capital expenditure led to lowered earnings forecasts for 2026-2028 by 8%, 7%, and 6%. Consequently, the target price for both H-shares and A-shares was cut by 7% and 5.5%, respectively.
