ZTE : ● 2020 Interim Report

stock code : 000063.SZ

763.HK

INTERIM REPORT 2020

Important

The Board of Directors, Supervisory Committee and the Directors, Supervisors and senior management of the Company warrant that the contents of this report are true, accurate and complete without any false information, misleading statements or material omissions, and accept individual and collective legal responsibility.

There are no Directors, Supervisors or senior management who do not warrant or who dispute the truthfulness, accuracy and completeness of the contents of this report.

This report has been considered and approved at the Twenty-second Meeting of the Eighth Session of the Board of Directors of the Company.

The interim financial reports of the Group for the six months ended 30 June 2020 were unaudited.

Mr. Li Zixue, Chairman of the Company, Ms. Li Ying, Chief Financial Officer of the Company and Mr. Xu Jianrui, Head of Finance Division of the Company, hereby declare that they warrant the truthfulness, accuracy and completeness of the financial reports contained in this report.

No profit distribution or conversion of capital reserves will be implemented in respect of the interim period of 2020.

This report contains forward-looking statements in relation to subjects such as future plans, which do not constitute any specific undertakings to investors by the Company. Investors are asked to beware of investment risks and their attention is drawn to the description of the potential risks inherent in the operations of the Company set out in the section headed "Report of the Board of Directors (VI) Business outlook for the second half of 2020 and risk exposures" in this report.

This report has been prepared in Chinese and English respectively. In case of discrepancy, the Chinese version shall prevail, except for the financial statements prepared in accordance with Hong Kong Financial Reporting Standards, of which the English version shall prevail.

China Securities Journal, Securities Times, Shanghai Securities News and http://www.cninfo.com.cn are designated media for the Company's information disclosure. Investors are asked to beware of investment risks.

Contents

DEFINITIONS	2
GLOSSARY	4
I.	CORPORATE INFORMATION	6
II.	HIGHLIGHTS OF ACCOUNTING DATA AND FINANCIAL INDICATORS	7
III.	SUMMARY OF THE COMPANY'S BUSINESS	9
IV.	REPORT OF THE BOARD OF DIRECTORS	12
V.	MATERIAL MATTERS	34
VI.	CHANGES IN SHAREHOLDINGS AND INFORMATION OF SHAREHOLDERS	55
VII.	DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT	61
VIII. FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH PRC ASBEs (UNAUDITED)
	AND NOTES THERETO	65
IX.	FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH HONG KONG
	ACCOUNTING STANDARD 34 (UNAUDITED) AND NOTES THERETO	220
X.	DOCUMENTS AVAILABLE FOR INSPECTION	252

ZTE CORPORATION INTERIM REPORT 2020

Definitions

In this report, unless the context otherwise requires, the following terms shall have the meanings set out below. Certain other terms are explained in the section headed "Glossary."

Company or ZTE	ZTE Corporation, a limited company incorporated in China, the shares of
	which are listed on the Shenzhen Stock Exchange and the Hong Kong Stock
	Exchange, respectively
Articles of Association	The Articles of Association of ZTE Corporation
Company Law	Company Law of the People's Republic of China
Securities Law	Securities Law of the People's Republic of China
Group	ZTE and one or more of its subsidiaries
Board of Directors	The board of directors of the Company
Directors	Members of the board of directors of the Company
Supervisory Committee	The supervisory committee of the Company
Supervisors	Members of the supervisory committee of the Company
China or PRC	The People's Republic of China
MOF	PRC Ministry of Finance
CSRC	China Securities Regulatory Commission
Shenzhen CSRC	The CSRC Shenzhen Bureau
Shenzhen Stock Exchange	The Shenzhen Stock Exchange
Shenzhen Listing Rules	Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange
Hong Kong Stock Exchange	The Stock Exchange of Hong Kong Limited
Hong Kong Listing Rules	Rules Governing the Listing of Securities on The Stock Exchange of Hong
	Kong Limited
SFO	Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
PRC ASBEs	PRC Accounting Standards for Business Enterprise (Generally accepted
	accounting principles in China)
HKFRSs	Hong Kong Financial Reporting Standards (including Hong Kong Accounting
	Standards ("HKASs") and Interpretations)
ZTE HK	ZTE (H.K.) Limited
Zhongxing Software	Shenzhen Zhongxing Software Company Limited
Mentech	Dongguan Mentech Optical & Magnetic Co., Ltd
Union Optech	Union Optech Co., Ltd.

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