ZTE in talks to form joint venture for mobile phone business

ZTE is reportedly in discussions with a major internet company and Shanghai state-owned investors to restructure its consumer mobile division. The plan involves carving out the unit into a standalone entity, with the internet company expected to contribute approximately 8 billion yuan toward the deal.

Discussions regarding valuation, equity stakes, and transaction structure are ongoing. ZTE reportedly aims for a valuation of 40 billion yuan for the division, which covers both domestic and international markets. Notably, the firm’s Red Magic gaming smartphone brand is excluded from the proposed package, while home networking products like routers are expected to remain under the ZTE group.

Internal preparations are underway, as evidenced by the establishment of Shanghai Shenqi Jiyuan Intelligent Terminal Co., Ltd. in April 2025. Currently a wholly-owned subsidiary, it is led by ZTE executives Wang Xiyu and Ni Fei. The restructuring process, which began in earnest earlier this year, has faced minor scheduling delays regarding the public announcement.