ZTE Corporation (00763) fell more than 7% following the release of its annual results. At the time of writing, the stock was down 7.4%, trading at HK$23.56, with a turnover of HK$115 million. On March 6, ZTE announced its 2025 financial performance, reporting revenue of approximately RMB 133.896 billion, a year-on-year increase of 10.38%. However, net profit attributable to ordinary shareholders of the listed company was RMB 5.618 billion, down 33.32% compared to the previous year. Basic earnings per share stood at RMB 1.17, with a proposed final dividend of RMB 4.11 per 10 shares (tax inclusive). In 2025, revenue from the carrier network business declined by 10.62% to RMB 62.857 billion, primarily due to lower income from wireless access and fixed-network products. The gross margin for this segment was 48.09%, down 2.81 percentage points year-on-year, mainly impacted by a decrease in the gross margin of wireless access products. Revenue from the government and enterprise business surged by 100.49% to RMB 37.222 billion, driven by growth in server and storage sales. However, the gross margin for this segment fell by 4.36 percentage points to 10.97%, largely due to changes in the revenue mix. According to China Merchants Securities, ZTE's gross margin is facing temporary pressure amid industry cycle shifts and changes in business structure, leading to a downward revision in profit forecasts.