Chinese vendor ZTE recorded modest profit and revenue gains in the opening quarter of 2024, highlighting a shift beyond its core telecoms business as domestic operators encounter pressure from a downbeat investment environment.

In a statement, the company acknowledged it faced challenging market conditions, prompting it to accelerate its transition to support industrial digital transformation.

Net profit in Q1 rose 3.7 per cent year-on-year to CNY2.7 billion ($372.6 million), aided by CNY91.7 million in one-off gains. Operating revenue grew 4.9 per cent to CNY30.6 billion.

ZTE didn’t break down revenue by business group but said it “intensified its expansion” in its consumer, government and enterprise units, with the segments “returning to rapid growth paths”. It is beefing up its offering of high-speed networks and computing infrastructure for global customers.

R&D spending increased 23 per cent to CNY6.4 billion, accounting for 20.9 per cent of operating revenue, up from 20.3 per cent a year earlier.

Last month the company reported mixed results for 2023, with profit rising 15.4 per cent to CNY9.3 billion and operating revenue up 1.1 per cent to CNY124.3 billion.