In this regard, ZTE responded quickly and expressed its firm opposition to the decision made by the US Department of Commerce, resolutely opposed unfair and unreasonable penalties, and even opposed the politicization of trade issues, which had a great impact on enterprises.
ZTE stated that the company issued a code of conduct to comply with the refusal order in the first instance when it learned of the refusal order, strictly implemented the EAR control, and required all employees to firmly observe the bottom line of compliance.
At the press conference held on April 20, Yin Yimin, chairman of ZTE Corporation, said that the US ban may cause the company to immediately enter a state of shock and directly damage the interests of all employees, operator customers, end consumers and shareholders all over the world. . ZTE also responded in a statement given of course that the sanctions were unfair and unacceptable.
In this internal letter, ZTE stated that since the incident occurred, the company has actively communicated with relevant US government agencies. At present, the application for suspending execution of refusal orders has been formally submitted to BIS, and supplementary materials have been submitted according to the BIS guidelines. "We will not give up our efforts to resolve problems through communication and dialogue, and we will use all legal means to safeguard our legitimate rights and interests." ZTE said.
On April 27, ZTE, which was under the influence of the US Department of Commerce’s sanctions and whose stocks were continuously suspended, issued its financial report for the first quarter of 2018. Without considering the impact of the refusal order, its revenue in the first quarter of this year was 28.88 billion yuan, an increase of 12% year-on-year; net profit was 1.687 billion yuan, an increase of 39% year-on-year.
According to public information, ZTE currently has nearly 80,000 employees, including about 30,000 R&D personnel. According to public information, as of December 31, 2017, ZTE has a total of more than 69,000 pieces of global patent assets and more than 30,000 authorized patent assets. Among them, there are more than 1700 patents worldwide in the 5G strategic layout.
"Of course, we must also increase our investment in technology to make our capabilities stronger." Yin Yimin once said. In 2017, ZTE invested 12.96 billion yuan in R&D, accounting for 11.9% of revenue, ranking first in A-share listed technology companies. Among them, the Group continued to increase investment in 5G R&D and related fields. Currently, it has established a 5G wireless R&D team with more than 4,500 employees and invests 3 billion yuan each year for 5G wireless R&D.
The following is the full text of ZTE Internal Communication:
"Strengthening Confidence and Trying to Solve the Problem in Less Time"
After learning of the United States' refusal to activate the company on April 16th, as a global company that has grown up in China, the company has always been in line with the national strategy, and it has consistently acted under the guidance of the Chinese government to promote the problem as quickly as possible.
At the same time, since the incident occurred, the company actively communicated with the relevant US government agencies. The company has formally submitted an application to BIS for suspending execution of the refusal order, and submitted supplementary materials according to the BIS guidelines. The company will not give up its efforts to solve problems through communication and dialogue, but will also use all legal means to protect its own legitimate rights and interests.
The company always regards compliance as the cornerstone of its strategic development. Upon learning of the refusal order, the company issued a code of conduct to be followed in the event of an activation refusal order, strictly enforced the EAR control, and required all employees to firmly adhere to the compliance baseline. The company conscientiously rethought and learned lessons, strengthened compliance internal control, and practiced the standards of the world's first-rate export control compliance companies.
The company has always insisted on independent innovation of core technologies and strengthened R&D investment. In 2017, R&D investment ranks first among domestic A-share listed technology companies. According to the company's first quarter report, without considering the impact of the refusal order, the company achieved operating revenue of RMB 28.88 billion, a year-on-year increase of 12.18% and net profit of RMB 1.687 billion, an increase of 39.01% year-on-year.
After the incident, nearly 80,000 employees of the company held their positions and expressed their best support to the company through practical actions. At the same time, customers, partners, suppliers and so on across the globe also express their understanding and support for the company's current difficulties in different ways. These are all sources of confidence in our firm belief in doing our utmost to relieve the crisis.
The company will continue to maintain close communication with all parties and do its best to solve the problem in a shorter time.
The long road also has a long destination. The night is long and there is an end. Let us strengthen our confidence and hope to welcome the arrival of the dawn!
Corporate Crisis Response Working Group
May 4, 2018