ZTE, Hekang Co-Establish New VC Firm

Hong Kong Exchanges and Clearing, 9/27/10

ZTE Corporation (0763.HK; 000063.SZ) announced today that it will co-invest RMB 30 mln with equity investment firm Hekang Investment Management Company to establish a new venture capital firm, ZTE Capital Management Company. ZTE Corporation will invest RMB 16.5 mln for a 55% stake in the new company, while Hekang will invest RMB 13.5 mln for the remaining 45% share.

ZTE will also subscribe to a new RMB 1 bln fund, the ZTE Venture Capital Fund, with a capital contribution of RMB 300 mln. ZTE Capital Management Company will be the sole general partner of ZTE Venture Capital Fund, while other investors will be limited partners. Targets of fund investment will be leaders in sub-segments of high-growth industries supported by the industrial policy of China and related to the restructuring of the economy, with a special focus on the TMT sector which is expected to account for no less than 70% of investments to be made by the fund.

Yin Yimin, director of ZTE Corporation, is concurrently an executive director of Hekang, and owns a 22% equity share of Hekang. Hekang was established in Shenzhen on September 17, 2010, with registered capital of RMB 30,000, and is principally engaged in equity investment, investment consultancy and investment management.