On January 16, 2020, ZTE issued the “Announcement on Determining the Issuance Price of Non-Public Issuance of A Shares and Signing a Subscription Agreement”. According to the announcement, the total number of A shares ZTE intends to issue is 381,098,968 shares, the issue price is RMB 30.21 per A share, the total amount of funds raised is RMB 11.513 billion, and the net amount of funds raised after deducting issuance expenses is RMB 11.459 billion. It will be used for technical research and product development projects for 5G network evolution and to supplement working capital.
As a 5G pioneer, ZTE has the ability to provide complete 5G end-to-end solutions and rich experience in network construction, and has carried out extensive cooperation with global operators and industry customers in the 5G field. ZTE has won 35 5G commercial contracts around the world, and has carried out in-depth 5G cooperation with more than 60 operators around the world. ZTE has fully participated in the construction of the first phase of the 5G network of the three major domestic operators.
ZTE is committed to strengthening independent innovation, continuously increasing investment in core technology R&D, and building its core competitiveness in the 5G era. Among them, R&D investment in the first three quarters of 2019 accounted for 14.6%. From 2013 to 2018, R&D investment was 65.22 billion yuan, with an average annual investment of 65.22 billion yuan. Over 10 billion yuan. Up to now, ZTE has authorized 36,000 patents worldwide, 4,100 5G strategic layout patents, and disclosed 2,204 5G standard essential patents to ETSI. and contributors.
Relying on the leading comprehensive technical strength of 5G, ZTE has made a comprehensive layout to accelerate global 5G commercial use and promote the implementation of 5G applications. Build a 5G commercial network. The strength of ZTE’s 5G end-to-end technology and solutions has gradually been recognized by the world’s mainstream operators, ranking first in the world.
The evolution of communication network technology has continuously put forward higher requirements for technology research and development. This non-public issuance of A shares is used for technology research and product development projects for the evolution of 5G networks, including cellular mobile communication networks, core networks, transmission and bearer networks. , Fixed network broadband, big data and network intelligence technology research and product development will help ZTE continue to maintain high R&D investment, adhere to technology leadership, strengthen the company’s advantages in the process of 5G network evolution, and create a core competition. The main products and business of the company will increase the market share of the mainstream market and mainstream products, and continuously improve customer satisfaction, thereby enhancing the company’s profitability. In addition, this non-public issuance of A shares can supplement the liquidity needs of the company’s business development, and the company’s capital structure will be further optimized, which is conducive to enhancing the company’s ability to resist risks.
The non-public issuance of A shares is based on the accelerated evolution of global communication networks to 5G and the fact that ZTE is facing historic opportunities and challenges in the evolution of 5G networks. The scale of this fund-raising is at the leading level in the scale of non-public issuance of A-shares since 2017, and it is the first non-public issuance of A-shares of over 10 billion in recent years. The raised funds will help ZTE seize the opportunities arising from changes in technology and pattern of the global telecommunications market in the 5G era and enhance its global market position.
ZTE will continue to focus on the main business, strengthen execution, further optimize the market structure, increase market share, operate steadily, and achieve quality growth.