Understanding the Market | ZTE's stock fell over 5% during trading, with the company's third-quarter performance announcement imminent

ZTE's stock fell over 5% during the trading session, and as of the time of writing, it was down 4.71%, trading at HKD 39.62, with a transaction volume of HKD 1.701 billion. On the news front, ZTE will hold a board meeting today to approve the company's and its subsidiaries' third-quarter performance for the nine months ending September 30, 2025, and its release. Huatai Securities' recent research report pointed out that the company is a well-established leader in domestic communication equipment and is currently actively transitioning from "connectivity" to "connectivity + computing power." The firm is optimistic about the company's two major logics: the company's fundamentals are solid, and although traditional network capital expenditures by domestic operators have declined in recent years, the company still maintains a high share of centralized procurement and a high level of profitability, while actively expanding its overseas operator business, effectively alleviating the decline in domestic demand. In addition, the forward-looking layout of computing power may soon yield results, as the company has fully laid out AI computing power in the fields of computing, storage, and networking products, and possesses full-stack self-research capabilities from chips to complete machines. A horizontal comparison with domestic computing power chains shows its rarity, and as self-developed chips are gradually introduced into ICT equipment, the company's government and enterprise business profitability is expected to improve significantly