ZTE : DISCLOSEABLE TRANSACTION ACQUISITION OF LAND USE RIGHTS IN SHENZHEN

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

中興通訊股份有限公司

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

The Board is pleased to announce that on 27 June 2017, the Company entered into the Confirmation with Shenzhen Land & Real Estate Exchange Center, which confirms that the Company had succeeded in the bid for the land use rights of the Land located in the Shenzhen Bay Super Headquarters Base, Nanshan District, Shenzhen, the PRC through the Tender for the consideration of RMB3,542,000,000 (equivalent to approximately HK$4,044,964,000).

As a result of the successful bidding, the Land Use Rights Transfer Agreement is expected to be entered into between the Company and Nanshan Land Bureau within 15 business days after entering into the Confirmation.

As one or more applicable percentage ratios calculated in accordance with the Hong Kong Listing Rules in respect of the Acquisition exceed 5% but are less than 25%, the Acquisition constitutes a discloseable transaction of the Company which is subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules.

The Board is pleased to announce that on 27 June 2017, the Company entered into the Confirmation with Shenzhen Land & Real Estate Exchange Center, which confirms that the Company had succeeded in the bid for the land use rights of the Land located in the Shenzhen Bay Super Headquarters Base, Nanshan District, Shenzhen, the PRC through the Tender for the consideration of RMB3,542,000,000 (equivalent to approximately HK$4,044,964,000).

As a result of the successful bidding, the Land Use Rights Transfer Agreement is expected to be entered into between the Company and Nanshan Land Bureau within 15 business days after entering into the Confirmation.

The principal terms of the Acquisition are as follows:

27 June 2017

1. Shenzhen Land & Real Estate Exchange Center; and

2. the Company.

The parcel of Land with lot no. T208-0049 to be acquired by the Company is located in Shenzhen Bay Super Headquarters Base, west to the intersection of Binhai Avenue and Shenwan 5th Road, Nanshan District, Shenzhen, the PRC with a site area of approximately 47,730.83 sq.m. (with a construction site area of 43,167.36 sq.m. and a road area of 4,563.47 sq.m.).

The Land shall be used for commercial purposes. The term of the land use rights shall be 30 years.

The total consideration of RMB3,542,000,000 (equivalent to approximately HK$4,044,964,000) was the bidding price offered by the Company through the Tender for the Acquisition, which was determined by the Company with reference to, among other things, the initial Tender price as specified in the Tender Notice and the market prices of the properties adjacent to the Land.

The Company opted to settle the consideration by way of instalments pursuant to the terms of the Tender Notice, thus the Company shall settle an amount of not less than 50% of the total consideration within 15 business days from the date of the Land Use Rights Transfer Agreement (part of which has been satisfied by the deposit of RMB710,000,000 (equivalent to approximately HK$810,820,000) paid by the Company for the Tender) and settle the remaining balance within one year without interest.

The total consideration will be funded by the internal resources of the Company.

The Company currently intends to develop the Land into commercial complex buildings for the office premises of the Group or for investment purposes. The Acquisition could satisfy the business development needs of the Group. Based on the above, the Directors

(including the independent non-executive Directors) are of the view that the terms of the Acquisition and the transactions contemplated thereunder are fair and reasonable and the Acquisition is in the interests of the Company and the Shareholders as a whole.

The Company is a joint stock limited company incorporated in the PRC and the H shares and A shares of which are listed on the Hong Kong Stock Exchange and the Shenzhen Stock Exchange respectively.

The Group is principally engaged in the design, development, production, distribution and installation of a broad range of advanced ICT-related systems, equipment and terminals, including carriers' networks, government and corporate business and consumer business.

Shenzhen Land & Real Estate Exchange Center is a working unit under Urban Planning, Land & Resources Commission of Shenzhen Municipality (深圳市規劃和國土資源委員 會).

Nanshan Land Bureau is an institution under Urban Planning, Land & Resources Commission of Shenzhen Municipality ( 深 圳 市 規 劃 和 國 土 資 源 委 員 會 ) and is responsible for urban planning and management of land and resources of Nanshan District, Shenzhen, the PRC.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of Shenzhen Land & Real Estate Exchange Center, Nanshan Land Bureau and their respective ultimate beneficial owners (if any) is third party independent of the Company and its connected persons.

As one or more applicable percentage ratios calculated in accordance with the Hong Kong Listing Rules in respect of the Acquisition exceed 5% but are less than 25%, the Acquisition constitutes a discloseable transaction of the Company which is subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules.

Unless the context requires otherwise, capitalised terms used in this announcement shall have the meanings as follows: