Re­sults af­ter US re­stric­tions

The Pak Banker - - COMPANIES/BOSS -

China's ZTE Corp said it will de­lay the pub­li­ca­tion of its an­nual re­sults be­cause it needs to as­sess the im­pact of tough U.S. ex­port re­stric­tions im­posed on the tele­com equip­ment maker last week.

The U.S. Com­merce Depart­ment has im­posed re­stric­tions on U.S. sup­pli­ers pro­vid­ing cru­cial com­po­nents to ZTE for al­leged Iran sanc­tions vi­o­la­tions, a move likely to dis­rupt its global sup­ply chain.

ZTE was un­able to fi­nal­ize its an­nual re­sults "pend­ing a thor­ough self-as­sess­ment on the po­ten­tial im­pacts of the re­stric­tion mea­sures on the busi­ness and op­er­a­tion of the group," the firm said in a fil­ing to the Hong Kong stock ex­change on Thurs­day. ZTE's board meet­ing would also be post­poned, while its Hong Kong-listed shares would con­tinue to be sus­pended, it added. The shares last closed at HK$14.16, prior to a trad­ing sus­pen­sion on March 7. Gold­man Sachs last week sus­pended its cov­er­age on ZTE, say­ing there was not enough in­for­ma­tion to de­ter­mine an in­vest­ment rat­ing, price tar­get and earn­ings es­ti­mates for the com­pany.

Reuters re­ported on Wed­nes­day that ZTE would ap­peal against the U.S. ex­port re­stric­tions af­ter the firm's costly lob­by­ing ef­fort failed to al­lay con­cerns about its busi­ness.

A spokesman for the Chi­nese Com­merce Min­istry said ZTE was com­mu­ni­cat­ing with the U.S. Com­merce Depart­ment re­gard­ing the ex­port re­stric­tions.

In Jan­uary, ZTE said pre­lim­i­nary net profit for 2015 rose 43.5 per­cent to 3.8 bil­lion yuan ($583 mil­lion). The com­pany said it aimed to dou­ble its an­nual rev­enue by 2020. Hong Kong-listed shares of ZTE have dropped 20 per­cent so far this year.

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