The analyst rating for ZTE (00763.HK) was kept at Neutral by Citi Research due to several factors. While the company's reported revenues for FY2025/4Q25 were largely in line with expectations, the net profit missed forecasts significantly, primarily because of a decline in gross margins. Additionally, the decline in the carrier business exceeded expectations and is anticipated to continue into 2026, driven by reduced capital expenditure from domestic operators. Although there is potential growth in the international carrier business and overseas smartphone sales, which could improve the product mix, the overall outlook remains cautious. Consequently, Citi Research trimmed its target price for ZTE from $29.2 to $25.4, reflecting these concerns.
