ZTE profit soars 169% for Q3

But the company warned earnings growth in the fourth quarter might slow due to a high base in the same period of 2002.

Net earnings for the July-September rose to 100.71 million yuan ($12.17 million) ?? small, but a huge rise from just 37.38 million yuan in the year-ago period.

"The domestic telecommunications industry is seeing strong growth this year," ZTE said in a results report published in the official Shanghai Securities News.

"As a result, sales of our company s products such as telecommunications exchanges, fiber transmission and digital data equipment maintained strong momentum."

ZTE in April scrapped a plan to float shares in Hong Kong, citing a weak market. Its quarterly report made no mention of that despite the Hong Kong market rising 40% since mid-April.

It was one of the first four companies to attract foreign investment under a landmark scheme ?? known as Qualified Foreign Institutional Investor (QFII) ?? when Swiss bank UBS bought an undisclosed amount of its stock in July.

The QFII scheme admitted overseas investors into massive but restrictive primary stock and debt markets in China that had previously been limited to domestic players.

For the first nine months, net profit rose 72% year-on-year to 295.49 million yuan as turnover jumped nearly 60% to 9.8 billion yuan, ZTE said.

But earnings in the final quarter may prove less encouraging.

"Earnings in the fourth quarter of last year accounted for 69.77% for all of 2002," the company said.

"This situation will not be repeated this year," it said without elaborating.

Analysts have said ZTE is better placed to take advantage of an industry recovery this year on the back of the booming economy because it is one of the largest domestic players. Some forecast at least a 20% rise in net profit for all of 2003.

Its shares have surged 43% this year, vastly outperforming a flat market.

The market had foreseen the rise since the company forecast in September a steep jump in profits for the first nine months of the year, citing a low earnings base in the comparable period.