ZTE has stunned investors this week with a new report showing that its net profit in the first quarter of this year may drop by up to 50%.

ZTE said this forecast was based on two reasons. One was the seasonable changes of the domestic telecom operators' expenditure in the first quarter has affected ZTE's income from domestic services. Second, the revenue contributions made by overseas contracts have not been realized because work for those clients has not finished.

The first quarter is a down period for many companies in China. However, ZTE may be intentionally releasing this report in response to a recent rumor saying that it will implement a share stimulus program later this year.

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