ZTE Corporation (000063.SZ) stock analysis

In our weekly check, ZTE Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 12 pass, warnings: 5, red flags: 8.

About ZTE Corporation

ZTE Corporation is a Technology company (Communication Equipment) based in China, listed on SHZ as 000063.SZ.

What our checks show for 000063.SZ

Red flags

• Net debt is 4.8x a year of EBITDA (debt/equity 0.76). That limits room in a downturn and raises refinancing risk.
• Operating profit does not cover the interest bill (0.8x): interest is paid from cash or new debt.
• The net margin fell by 3 points over 5 years, to 2.9%: the company keeps less of each sale as profit.
• The gross margin fell by 9.5 points, to 25.1%: costs are rising faster than prices.
• The net margin is only 2.9%: little room if costs rise.
• The dividend takes 138% of profit: little cushion if profit falls.
• The stock has fallen as much as 73% from a peak. Would you have held through that?
• Return on capital (ROCE) is only 1.8%.

Warning signs

• Earnings per share fell 19.2% a year over the last 3 years.
• Net profit fell 18.6% a year over the last 3 years.
• Free cash flow is only 1.1% of revenue.
• The price swings a lot: 44.5% annual volatility. Expect large ups and downs.
• Recovering from its deepest fall took about 2.3 years.

Strengths

• Operating cash flow is 1.2x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 27.9% a year over the next years.
• A large company: market value $18.39 billion.
• Actively traded: about 79.4 million shares a day.
• Pay in shares is only 0% of free cash flow.

Similar companies

6869.HK · 300394.SZ · 6285.TW · MSI · LITE · 300502.SZ

Questions

What grade does ZTE Corporation (000063.SZ) have?

In our weekly check, ZTE Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 12 pass, warnings: 5, red flags: 8. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of 000063.SZ stock?

This week's biggest flags for ZTE Corporation: High debt, Weak interest cover, Margins falling. In total 13 of 25 checks show a warning or a red flag.

What does ZTE Corporation do?

ZTE Corporation is a Technology company (Communication Equipment) based in China, listed on SHZ as 000063.SZ.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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