ZTE is forgoing short-term gains, pivoting from the fiercely competitive "connectivity" market to the more unpredictable "computing power" domain. The company's Q3 2025 performance report reveals that while revenue surpassed 100 billion yuan in the first three quarters, the net profit attributable to the parent company for Q3 alone stood at a mere 264 million yuan, marking a staggering year-on-year drop of 87.84%, which has caught the market's keen eye.

The plunge in net profit isn't a result of mismanagement; rather, it stems from the "growing pains" associated with strategic realignment. Revenue from the traditional carrier network business has dwindled as carriers have cut back on capital expenditures. Meanwhile, the "second curve" government and enterprise, along with the computing power businesses, have witnessed triple-digit growth. However, operating in a high-investment, "low-margin-for-market-share" phase, these segments have thin profit margins that can't bridge the profit shortfall from traditional operations.

Nonetheless, the transformation has yielded substantial progress, with the computing power business showing remarkable growth. The company must first "get in the game" through low-margin ventures to establish a foundation for its in-house chip development. Additionally, substantial R&D investments have further compressed profit margins in the short run. The "surprise" element in this Q3 report, though a pain point of transformation, is also an unavoidable step towards a promising future.