The ZTE Corp. reported that their profits had increased without taking into account the impact of US sanctions, which could plunge their crucial global expansion into next-generation telecommunications networks.
China's second-largest telecommunications supplier to delay its business Publishing the results by a week to digest a seven-year ban on the purchase of American components did not provide any update to the crisis. Instead, the Shenzhen-based company reported a 39 percent increase in net income for the first quarter saying it would still assess the impact of the Ministry of Commerce blacklist.
"The Company is currently unable to accurately and comprehensively assess its impact in this report," ZTE said in a statement released on Friday. Once the company has fully and accurately assessed the impact, the company will publish an updated first quarter report. ZTE's plight encapsulates tensions between the world's two largest economies, which are threatening to stifle world trade and discouraging investment in technology. ZTE was preparing to lead the country's cargo into the era of super-fast fifth generation wireless technology, along with local rival Huawei Technologies Co. Instead, it ran for the second time in a year against Washington. Moratorium on purchases by US suppliers for breaches of a 2017 sanction regime and lies about it
The company faces renewed sanctions as major mobile operators prepare to launch 5G networks worldwide. ZTE, which once had ambitions to compete with Apple Inc. in telephones, called the penalty "unacceptable" and threatened to take legal action.
ZTE stock remains suspended in Hong Kong and Shenzhen until further notice.  – With the support of Edwin Chan and Alfred Liu