ZTE to raise $1.7b to boost market share

Chinese telecom equipment producer ZTE Corp will raise 11.5 billion yuan ($1.7 billion) through a private share placement to finance 5G technology research and development (R&D) and increase working capital, according to a company notice on Thursday.

Analysts said ZTE needed more capital to maintain its good development in the past year through R&D and pursue its goal of taking more global market share.

The funds raised through the private placement will be used for R&D of 5G technology and products, including cellular mobile communications networks and big data, which will help the company maintain a high level of R&D input, ensure competitiveness in technology and increase global market share, according to ZTE’s notice.

“ZTE has had good development, which requires huge spending on R&D to stay in the lead in mobile telecom technology, in order to capture more global market share,” Xiang Ligang, director-general of the telecom industry association Information Consumption Alliance, told the Global Times on Thursday.

The company has authorized 4,100 patents for 5G technologies, making it a major participant and contributor in global 5G technology research. R&D investment in the first three quarters of 2019 accounted for 14.6 percent of its revenue, according to ZTE.

The company’s shares rose as much as 4 percent to 38.10 yuan in early trade on Thursday and ended at 37.41 yuan, up 1.33 percent.