(Yicai) March 11 -- Zhongxing Telecommunication Equipment Corp., better known as ZTE, logged a 15.4 percent jump in net profit last year from the previous year thanks to higher revenue from its core business, but the Chinese telecommunications equipment supplier is facing challenges in the handset and other sectors due to weak demand and fierce competition.

ZTE raked in CNY9.3 billion (USD1.3 billion) in net profit in 2023, according to the Shenzhen-based company’s latest financial report. Revenue climbed 1 percent to CNY124.2 billion (USD17.2 billion). Of this, revenue from its business network, which is its core business and technology, advanced 3.4 percent to CNY82.7 billion.

However, ZTE’s revenue from its government and corporate business segments sank 7.1 percent over the period to CNY13.5 billion (USD1.8 billion). The firm is unable to hike its fees due to its commitment to industrial investment and to building up client loyalty, the report said.

And revenue from its individual household business dipped 1.3 percent over the period to CNY27.9 billion (USD3.8 billion). The firm’s self-developed System-on-a-Chip products are selling well in overseas markets such as Japan, Spain and Italy and it has also introduced new mobile phones onto the market. However, it faces difficulties in raising its revenue from its household business and handsets in foreign markets due to weak market demand and fierce competition, it said.

ZTE is working on solutions to boost these segments, it said. The firm’s self-developed System-on-a-Chip products are selling well in overseas markets such as Japan, Spain and Italy and it has also introduced new mobile phones onto the market.

ZTE will integrate its marketing agencies to spur expansion into first-tier markets, hike investment in research and development, master opportunities in the computing power and information technology application sectors to get back to the track of rapid growth, it said.

More than 2 billion 5G smartphones had been shipped worldwide as of Feb. 27, half of which were from the US’ Apple and South Korea’s Samsung, according to market research firm Counterpoint. As demand for 5G smartphones falters, Apple and Samsung remain strong rivals.

ZTE’s share price [SHE: 000063] dipped 0.6 percent to close at CNY30 (USD4.10) apiece today.

Editor: Kim Taylor