ZTE's （the "Company"） probation period imposed by the United States has ended and the Company faces no more penalties. On 22 March 2022 （U.S. time）， the Company received an order from the court declining to revoke probation or impose any penalties upon ZTE, and confirming that the term of probation and the term of the monitor will end as scheduled on 22 March 2022 （U.S. time）。
The Company achieved good performance in FY21 and we expect the Company's three main business lines to all maintain steady growth. In FY21, ZTE recorded revenue of RMB114,522 million, up by 12.9% yoy. We expect that China's 5G base stations volume will be about 600,000 in each year of 2022-2023. We expect the market share of the Company in domestic telecom equipment to improve. Besides, part of the unrealized orders in 2021 will be realized in 2022. Overall, we expect carriers' network business to grow by double-digit percentage in 2022. We expect that the broad market space and the Company's active channels expansion will continue to bring steady growth momentum to government and corporate business. We expect consumer business to still grow in 2022, but the growth rate will largely slow compared to 2021, given the already high base. Given that 5G business is already relatively stable, we expect gross margin of carriers' network business to be stable; overall, we expect gross margin to be stable and between 35%-36% in FY22.
Our current investment rating for the Company is "Buy" with a target price of HK$26.00 per share. The TP represents 12.4x, 11.6x and 11.3x FY22-FY24 PER.