Goldman Sachs has released a research report indicating that, following the first-quarter results, it has lowered its profit forecasts for ZTE Corporation (00763) for the years 2026, 2027, and 2028 by 8%, 7%, and 6% respectively. This adjustment primarily reflects a downward revision in gross margin assumptions. The target price for the Hong Kong-listed shares has been reduced by 7% from HK$40.4 to HK$37.5, based on an unchanged forecasted 2027 price-to-earnings ratio of 18.2 times. The target price for the A-shares has been lowered from 62.6 yuan to 58.2 yuan. The firm maintains its "Neutral" rating on both ZTE's H-shares and A-shares.

ZTE Corporation's first-quarter revenue increased by 6% year-on-year to 350 billion yuan, aligning with the bank's expectations. Revenue from computing-related businesses now accounts for 27% of total revenue, up from 24.6% for the full year 2025. However, the gross margin declined to 28.3%, down from 29.4% in the fourth quarter of last year and 34.3% in the first quarter of the previous year. Management attributes this decrease to lower domestic telecommunications capital expenditure, which led to a reduced contribution from domestic network product revenue.