ZTE's local carrier unit faces tough second half, says Nomura
Nomura expects ZTE's local carrier business to struggle in 2H as China's telecom operators cut capital spending, and keeps a neutral rating.
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what happened
Chinese network equipment maker ZTE's local carrier business is likely to face a difficult stretch in the second half, according to Market Talk, citing a Nomura note. The analysts link the pressure to capital-expenditure controls among domestic telecom operators. They also expect margins to stay under strain because of structural shifts in the product mix.
Still, artificial-intelligence infrastructure spending by China's leading cloud service providers could support top-line growth. Nomura keeps its neutral rating and a 39.00 Hong Kong dollar target price on the shares listed in Hong Kong. The stock rose 3.9% to HK$19.84.
why it matters
Capex limits at domestic operators weigh on demand for telecom equipment and pressure supplier profitability. Investors will focus on margin trends and on whether AI projects at cloud providers can offset weakness in the domestic market.
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sources
- ZTE's Local Carrier Business Likely Facing Challenging Environment in 2H — Market Talk, 27 October 2026 at 07:17 UTC
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