On September 2, ZTE (00763.HK) fell 3.5% in regular trading, trading at 23.18 HKD/share, with turnover of HKD 135 million. The decline was driven by a combination of weak interim earnings and sustained selling pressure from multiple foreign institutional investors.

ZTE's first-half results revealed a widening gap between top-line and bottom-line performance. Revenue rose 9.05% year-over-year to RMB 78.025 billion, while net profit attributable to shareholders plunged 45.57% to RMB 2.753 billion, marking eight consecutive quarters of profit decline. Operating costs surged 20.29%, and the company announced no interim dividend. Citigroup maintained a neutral rating with a target price of HKD 25.9, while cutting profit forecasts for the current and next fiscal year by 19.4% and 14.5%, respectively.

Compounding the earnings pressure, several foreign institutions recently reduced their H-share holdings. UBS sold 543,000 shares on August 24 at approximately HKD 23.90 each, lowering its stake to 6.97%. Citigroup's long position fell from 5.04% to 4.23%, and BlackRock sold 128,000 shares on August 26. The dual headwinds of deteriorating profitability and institutional outflows continued to weigh on the stock.

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