ZTE announced a strong start to 2017, with a 27.8 percent increase in net profit to CNY 1.21 billion in the first quarter. Revenues rose 17.8 percent year-on-year to CNY 25.75 billion, driven by growth in network equipment and smartphones, according Telecompaper. ZTE said it also continued to invest heavily, with R&D spending reaching almost 13 percent of quarterly revenue. This is helping it expand in new areas, such as set-top boxes, which increased shipments over 25 percent in Q1, and chipsets, which rose by 70 percent year-on-year in the period.
The strong results follow reports early this year that ZTE was cutting around 3,000 jobs in order to improve margins. This follows a net loss for 2016, when profits were wiped out by fines for violating US sanctions in Iran and a slowdown in sales in the final quarter of the year.