ZTE Corp, China's second-biggest maker of telephone-network equipment, has been upgraded to "overweight" at Lehman Brothers Holdings Inc, citing the company's outlook for profit growth.
"We expect ZTE's earnings to accelerate in fiscal year 2009, driven by higher growth in its domestic market," analysts Paul Wuh and Lei Tang wrote in a report to clients yesterday.
Lehman raised the rating from "underweight" and increased the 12-month price estimate to HK$49 (US$6.28) from HK$30, Bloomberg News reported.
The introduction of high-speed mobile-phone services in China and an expected government-led revamp of the nation's state-owned carriers will boost demand for ZTE's products, according to Lehman.
The Shenzhen-based company is also winning market share in India and Africa, the analysts wrote.