July 17 (NBD) -- The stock of Chinese telecommunication equipment maker ZTE Corp soared by the daily limit of 10 percent as soon as trading started on Monday, after the Bureau of Industry and Security of the U.S. terminated the April 15, 2018 Denial Order and removed the company from the Denied Persons List.
On July 13, the U.S. Commerce Department announced that it lifted the ban on ZTE pursuant to a June settlement agreement.
ZTE began to resume its global business on Monday and it received the first order from its Mexican branch.
Affected by the U.S. ban and penalty payment, the telecom giant is predicted to post a loss of 7-9 billion yuan (1.0-1.3 billion U.S. dollars) in the first half of 2018 according its performance forecast, representing a plunge of 405.29-492.52 percent compared to the profit of 2.293 yuan (343.2 million U.S. dollars) during the same period of last year.
To increase cash flow, ZTE applied to the Bank of China and the Shenzhen branch of National Development Bank on June 29 for credit lines of 30 billion yuan (4.5 billion U.S. dollars) and 6 billion yuan (897.9 million U.S. dollars), respectively.
However, ZTE's weak performance didn't undermine investors' confidence in the company.
The company's stock in the Hong Kong market closed 16.45 percent higher at HK$16 (2.0 U.S. dollars) on Monday.
In the A-share market, ZTE shares closed at 15.51 yuan (1.3 U.S. dollars) per share on the same day, with a turnover of 3.23 billion yuan (483.4 billion U.S. dollars). Data show that an institutional investor bought ZTE shares worth 100 million yuan (15.0 million U.S. dollars).
Despite the loss forecasted by ZTE, the telecommunication firm could be valued higher considering the valuable patents it has, a source at a Guangzhou-based broker told the 21st century Business Herald.
Telecommunication stocks also placed gains after the rebound in ZTE's share price. The SWS telecom index rose 1.74 percent on July 16 and the 5G index increased 1.84 percent. Stocks of ZTE's upstream vendor Accelink Technologies went up by 2.48 percent on Monday.