ZTE Corp, the Chinese mainland's second-largest telecoms equipment maker, saw its 2005 net profits inch up only slightly over the previous year, despite a climb in overseas sales.

 

ZTE, which released its 2005 financial results yesterday, made 1.29 billion yuan (US$161 million) in net profits last year, an increase of 1.2 percent from 2004.

 

ZTE President Yin Yimin attributed the flat number to more expenditure in 2005 than in the year prior.

 

Results showed ZTE's revenue from overseas sales surged by 68.3 percent in 2005 to reach 7.7 billion yuan (US$962 million).

 

The company's focus for 2006 is geared on increasing these overseas sales.

 

"In addition to the domestic market that we have been dedicated to, we will put a keen focus in the development of the overseas markets in 2006 and years to come," said Yimin.

 

Yin told reporters that the company will further expand its overseas markets into Europe and North America this year.

 

The company plans to sell CDMA system products and data telecommunications products into the North American market this year, Yin said.

 

ZET currently sells its telecommunications products in more than 50 countries and regions.

 

ZTE has been active in the past two years in building third-generation (3G) networks outside its home market. The company expects trials in many markets to wrap up this year, resulting in much bigger orders for full-scale networks.

 

In the domestic 3G market, Yin said that the company started its TD-SCDMA network on trial in two cities in the Chinese mainland a month ago and things are going smoothly. Yin expected the trial run to be completed successfully by the end of this year.

 

The company's turnover rose slightly by 1.7 percent to 21.6 billion yuan (US$2.7 billion) in 2005, with the wireless communications segment contributing 41.4 percent, and the handsets segment accounting for 20.1 percent.

 

ZTE's capital expenditure for 2006 is expected to reach about 1 billion yuan (US$125 million), Chief Finance Officer Wei Zaisheng said.

 

The expenditure for the related equipments will remain unchanged for 2006 but funding for factory and facility construction facilities will be increased, said Wei.

 

The company's share price rose by 4.29 percent to close at HK$32.85 (US$4.20) yesterday.

 

(China Daily April 7, 2006)