For ZTE, which is in the process of restoring its operations, it has undoubtedly added a burden. In the previous three-month “rejection order” storm, ZTE was in a state of shock until July 13, US Eastern Time. The US Department of Commerce terminated the refusal order on April 15, 2018. When ZTE entered the 'resurrection', it ushered in a new round of college entrance examinations.
On July 15, ZTE officially launched the business reconstruction plan that had been prepared before, and began to fully restore its global business. Now, it has been half a month since ZTE resumed its operations. What is the specific situation of various business recovery? The reporter contacted ZTE’s interview, but as of press time, it was not answered.
'ZTE's most important thing now is to repair the relationship with the operator.' Communication expert Fu Liang said in an interview with the China Business News that ZTE can only get stable after resuming its relationship with the operator. Order, and then resume operations.
Domestic and international business is gradually recovering
Since the United States lifted the refusal order, these eight words have been displayed on the homepage of ZTE's official website, reminding ZTE of the '89 days of crisis'.
On the evening of April 16, 2018, the US Department of Commerce issued a notice stating that the US government would ban ZTE from purchasing sensitive products from US companies within the next seven years. The US 'blocking' has caused ZTE to fall into an unprecedented crisis.
On the afternoon of April 20, ZTE held a press conference at its headquarters in Shenzhen. Yin Yimin, former chairman of ZTE, said in a speech that the US sanctions immediately put the company into a state of shock. On May 9, ZTE announced that it was affected by the refusal. The main business activities of the company have been impossible.
ZTE’s state of shock has been maintained until mid-July. On July 13, US Eastern Time, the US Department of Commerce issued a notice stating that ZTE had paid the final amount of a $1.4 billion fine, and the Ministry of Commerce lifted its lock-up order, ZTE. The communication went out of the 89-day 'dark moment'.
After the ban was lifted, ZTE’s business at home and abroad quickly recovered.
Some media said that ZTE’s first order came from ZTE’s terminal line in Mexico. On July 18th, Italian operators Wind Tre and ZTE announced that they would continue to strengthen their cooperation in the national mobile network modernization project in Wind Tre, Italy. According to Austrian media reports, ZTE and Hutchison Austria jointly announced the strengthening of strategic cooperation to prepare for the deployment of more advanced communications technology in Austria.
At the same time, ZTE's domestic business is also rapidly recovering. Within a week of the lifting of the refusal, ZTE has successively won orders for the three major operators exceeding 500 million yuan.
According to the list of successful bidders for a number of communication equipment announced by the three major operators, ZTE won the China Mobile 2018 GPON equipment order (with a winning bid of not less than 70%) and won the bid for the China Unicom high-end switch expansion project from 2017 to 2018. China Telecom announced 2017 CN2 network expansion project and other projects.
On July 25, ZTE said on the investor interaction platform that the company has resumed its main business activities. On August 1, the “China Business News” reporter called ZTE on behalf of investors, and its staff of the secretarial office said that the ban After the release, ZTE's operations can be restored to normal. As before, it is currently being carried out, and domestic and foreign businesses are being carried out in an orderly manner.
ZTE can quickly resume its main business activities and obtain orders from major operators at home and abroad, which is related to the accumulation of ZTE for many years.
'This shows that ZTE has matured in these markets and has been accepted by customers. Customers also have this demand.' On July 31, Fu Liang said in an interview with China Business News that he recently signed a contract with ZTE. The operators, most of them have a basis for cooperation before.
Xiang Ligang, a well-known observer in the communications industry, said in an interview with the China Business News that ZTE has a large share of the global communications market. If ZTE collapses, the original equipment cannot be expanded, updated and upgraded. Equipment replacement, it takes a lot of cost, so customers will choose to support ZTE.
After ZTE resumed its operations, our business docking was on the normal process. ' On August 3, ZTE’s supplier Jintuo’s staff of the Board of Directors of the Board of Directors said in an interview with the China Business News. The related business with ZTE is in the process of recovery.
'Resurrection' faces three major challenges
The winning bid for the above projects does not mean that ZTE’s 'resurrection' road is smooth. For ZTE, after the shock, the management’s big exchange of blood, and the huge fine of 1.4 billion U.S. dollars, how to get out of the predicament is still ZTE. The challenges and challenges facing the moment.
On July 27, ZTE updated its first quarter financial report with a net loss of 5.407 billion yuan, compared with a net profit of 1.2 billion yuan in the same period last year. The company turned from profit to loss, which also means that a one-off payment of $1 billion was imposed. ZTE’s quarterly report has an important impact.
Among them, other payables were added to the balance sheet of 14.389 billion yuan, and the non-operating expenses of the income statement were 6.732 billion yuan. In addition, due to the suspension of ZTE’s business activities, the company’s estimated liabilities were 1.258 billion yuan.
According to ZTE's semi-annual results announcement released on July 14, the company's net profit loss will continue to expand, with losses ranging from 7 billion to 9 billion yuan, while the company achieved a net profit of 2.293 billion yuan in the same period last year. Turning losses, falling 405.29%~492.52%
In this regard, the "China Business News" reporter called ZTE in the name of investors, its staff of the secretarial office said that this is only a correction to the quarterly report, the refusal order has been lifted, and the impact on ZTE's future operations should be small. .
In Xiang Ligang's view, the loss will definitely have a certain impact on the operation, but the funds are better resolved. The state and the banks are more supportive of ZTE. On June 29, ZTE to the Bank of China and the National Development Bank. The Shenzhen Branch has applied for a comprehensive credit line of RMB 30 billion and USD 6 billion respectively.
For the future recovery of business, Fu Liang believes that ZTE’s business interruption period is longer, and the negative information may affect its purchase list of operators in the United States, Europe and other regions. How much market share ZTE can eventually recover? , not yet known.
'In addition to the overall adjustment of ZTE's management, it has a relatively large impact on international business, especially in the highly competitive European market, ZTE can win more orders, recovery of future operations and performance. Have a big impact. ' Fu Liang said.
In Xiang Ligang's view, the biggest problem facing ZTE is the credit problem. Although the United States lifted the refusal order, operators will also worry about whether ZTE still has other problems and whether it will be sanctioned by the United States. Next, operators will hesitate, which will have a certain impact on ZTE's future development of new business, and may lose some orders.
In fact, such worries are not groundless. According to the announcement of the US Department of Commerce on July 13, after the lifting of the ZTE ban, the Ministry of Commerce will continue to pay close attention to ZTE’s actions. According to the new agreement, ZTE needs to be retained by the United States. A team of special compliance coordinators selected and responsible by the Bureau of Industry and Security (BIS) for a ten-year term.
This means that in the next 10 years, ZTE is under the close attention of the US Department of Commerce. Once the US Department of Commerce determines that the company has violated the US Export Control Regulations and has not fulfilled its obligations, it can activate the refusal order again.
'Because ZTE was sanctioned by the United States before, they did not dare to sign the contract before they solved the problem. So some people signed the contract, and some of them may stick to the end. ' Fu Liang believes that the most important thing for ZTE now is to repair and operate the carrier. The relationship, only after restoring the relationship with the operator, can get a stable order and truly resume operations.
In addition, after the refusal order is lifted, ZTE may also experience a pain after a major internal adjustment. Xiang Ligang believes that ZTE will certainly adjust internally after undergoing a major exchange of management, which may lead to brain drain. Unfavorable phenomena, but from another perspective, this may be a new change, and it will take time to test.
However, on August 1st, our reporter learned from an employee of the ZTE terminal business that did not want to be named that its department is one of ZTE's largest terminal bases. 75%; the recruitment that has been held every week has also stopped.
This seems to confirm the statement of Zhao Xianming, former president of ZTE Corporation, at the shareholders meeting on June 29: 'The terminal is a part of the ZTE incident that is affected more.'
'Have you ever seen worse than layoffs? Only pay the basic salary, you leave, you don't have to lose money.' The ZTE terminal staff revealed that there will be a big change in the terminal department next week.
For the layoffs and pay cuts, our reporter asked ZTE on August 1, but as of press time, no response was received.