ZTE Shares Tumble 14% in Hong Kong As Trading Resumes
ZTE shares listed in Hong Kong have tumbled by 14% as trading resumed for the first time in one month. The company has revised down its 2015 profit, citing US trade restrictions.
Tech firm ZTE said net profit for last year jumped 22% to 3.2bn Chinese yuan ($493.3m; £350m). In January, the company indicated its 2015 net profit was at 3.8bn yuan.
Meanwhile the broader market, in the shape of the benchmark Hang Seng, is marginally down, by 0.09% or 18 points.
ZTE said the trimmed profit figure was due to a “reassessment” of future cash inflows, arising from related contracts following US export restrictions.
Its shares had been suspended from trading since 7 March, at the request of the company. That was when the US announced restrictions against ZTE for alleged violations of US export controls regarding Iran.
The company has announced to shareholders that it is currently cooperating with the US Commerce Department, the US Department of Justice, the US Department of Treasury and other relevant US government departments, in their respective investigations of ZTE’s compliance with the US Export Administration Regulations.
ZTE is the second-biggest supplier of telecommunications equipment in China after Huawei.
Based in Shenzhen, ZTE is known for its smartphones, but the company also makes semiconductors and other products.