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In
March, the U.S. Commerce Department hit ZTE with some of the
toughest-ever U.S. export restrictions for allegedly breaking
sanctions against Iran but has since issued temporary reprieves
on the curbs.
The latest reprieve comes after ZTE said this week it had
appointed Matthew Bell as its new chief export compliance
officer based in the United States.
If imposed, a ban for U.S. component makers and software firms
to do business with ZTE could cut off much of the Chinese
network equipment and smartphone maker's supply chain.
ZTE's Hong Kong shares closed down 1.9 percent on Friday and is
down 35 percent for the year to date due to uncertainty over the
export restrictions.
UOB Kay Hian (Hong Kong) analyst Cindy Lam said the key catalyst
for the stock would be a permanent removal of the ban, which
will likely result in a small one-off penalty payment for ZTE.
Speculation arose earlier this year that ZTE might switch to
non-U.S. component suppliers after the ban, but the fact that it
was continuing to source chipsets from Qualcomm Inc was proof to
some analysts such as Lam that ZTE was not switching suppliers
and would work toward getting the ban lifted.
"There's a high chance that there will be a permanent removal of
the US export restriction," Lam said in an email.
ZTE said it will continue to cooperate with the relevant U.S.
government departments to reach a final solution on the matter
and strictly comply with relevant U.S. laws.
(Reporting by Donny Kwok; Additional reporting by Sijia Jiang;
Editing by Edwina Gibbs and Muralikumar Anantharaman)
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