The Comparison Of Huawei And ZTE In Finalcial Performance,Policy And Strategy

Communication equipment manufactring industry is the basic industry,pillar industry and pilot industry of national economy in China.In recent years,the electronic and communications products manufacturing industry in China has expanded steadily,becoming the world's electronics and communications products manufacturing center,with No.1 rank in industry scale.Also,China's mobile phones and computer output ranks No.1 in the world.With the rapid development of the industry,in the 1980s,two major electronic communication giants,Huawei and ZTE,were born in China.Both of them develop at a similar pace in the 1990s,while the trajectory of Huawei and ZTE changed in the early 21st century.By 2016,Huawei is several times as big as ZTE in terms of total assets and revenue.The difference in company's nature,management mode,and development strategy,among other factors,are the reasons for the gap between the two companies.This paper investigates the difference between Huawei and ZTE in financial management and business model so as to find out their advantages and problems.Specifically,this paper compares financial statement of this two companies,covering from 2012 to 2016.By comparing Huawei's and ZTE's balance sheet,income statement,the cash flow statement and using the three-dimensional analysis method from the perspective of "create profit-and now-the value creation-risk control-growth".This paper puts forward financial policy suggestions to improve management efficiency and help investors improve decision-making efficiency by analyzing the financial performance,financial policies and financial strategies of the two companies.This paper includes three major modules.The first part(the first chapter,chapter 2)introduce the background of the research such as the development of the industry,main financial data of Huawei and ZTE.The second part(chapter 3-5)conducts"three-dimensional" analysis,financial index analysis and business model analysis of Huawei and ZTE.The third part(chapter 6?8)compares of the financial policies and strategic matrix that inferred from the analysis mentioned above.Also,this part concludes and put forward suggestion for the development of these two companies.In conclusion,Huawei has seized the industry opportunities and expanded rapidly while ZTE is more conservative.Based on the analysis of financial statement,this paper finds that Huawei has better operating performance than ZTE.ZTE's operating capacity,innovation ability and liquidity are worse than that of Huawei.Therefore,on the basis of the trend of this industry,this paper suggests that both companies need to improve their core competitiveness,seize the development opportunity in 5 G era,strengthen technology R&D,and get rid of their image in consumers as cheap and low-end manufacturers;Huawei has abundant cash and thus can further increase R&D investment as well as continuously improve its competitive advantage.Also,Huawei should seize the opportunities of globalization and exploit new market all over the world.ZTE should decrease dividends spending,increase R&D inputs,increase product value-added,and shut down inefficient and low-margin sub—industries so as to improve overall efficiency...