ZTE Corporation (0763.HK) stock analysis

In our weekly check, ZTE Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 4, red flags: 8.

About ZTE Corporation

ZTE Corporation is a Technology company (Communication Equipment) based in China, listed on HKSE as 0763.HK.

What our checks show for 0763.HK

Red flags

• Operating profit covers interest only 1.2 times: a weak year could make the payments hard.
• 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 9.6 points, to 25.6%: costs are rising faster than prices.
• The net margin is only 2.9%: little room if costs rise.
• The dividend takes 137% of profit: little cushion if profit falls.
• The price swings a lot: 50% annual volatility. Expect large ups and downs.
• The stock has fallen as much as 72% from a peak. Would you have held through that?
• Return on capital (ROCE) is only 1.8%.

Warning signs

• Net debt is 3.6x a year of EBITDA (debt/equity 0.76). That limits room in a downturn and raises refinancing risk.
• Earnings per share fell 19.5% a year over the last 3 years.
• Net profit fell 18.7% a year over the last 3 years.
• Free cash flow is only 1% of revenue.

Strengths

• Analysts expect earnings per share to grow about 31.2% a year over the next years.
• A large company: market value $17.28 billion.
• Actively traded: about 8.4 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 (0763.HK) have?

In our weekly check, ZTE Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 4, red flags: 8. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of 0763.HK stock?

This week's biggest flags for ZTE Corporation: Weak interest cover, Margins falling, Gross margin falling. In total 12 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 HKSE as 0763.HK.

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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