By Yifan Wang

ZTE Corp.'s shares soared in Hong Kong and China after the Chinese telecom equipment maker said a U.S. court had officially ended its period of compliance probation related to a Iran sanctions violation case.

The company's Hong Kong-traded shares jumped as much as 60% on Wednesday while its Shenzhen-listed shares surged 10% to hit the market's daily limit for share price gains.

In a midday exchange filing, ZTE said it has received a U.S. court order declining to revoke probation or impose any additional penalties against it, and confirming that the terms of probation on ZTE will end as scheduled on 22 March 2022.

The multi-year probation was part of the penalties from a 2017 settlement between ZTE and U.S. prosecutors, in which ZTE agreed to pay $892 million in fines and plead guilty to violating U.S. sanctions on Iran and obstructing justice.

The latest court ruling to end the probation removes a major risk factor for ZTE's share price. "The market had been very concerned about further sanctions or further penalties," said UOB Kay Hian analyst Johnny Yum. He added that investors had tended to sell the stock upon even the slightest signs of potential changes to the probation.

"The news removes this fundamental overhang," he said. "This is definitely really positive."


Write to Yifan Wang at yifan.wang@wsj.com


(END) Dow Jones Newswires

03-23-22 0316ET