ZTE is in talks with a major internet company to spin off its consumer smartphone business into a joint venture backed by Shanghai state assets. The proposed deal packages ZTE consumer phone lines across domestic and international markets while excluding the RedMagic gaming brand. According to reporting by Leifeng, negotiations involve an investment of 8 billion yuan against a target valuation of 40 billion yuan.
Valuation numbers, equity distribution, and transaction methods remain in discussion between the parties. The internet firm offered an investment of 8 billion yuan, while ZTE wants the deal framed around a 40 billion yuan valuation. Both sides held preliminary discussions earlier in the year, reached an understanding on the collaboration model months later, and delayed a planned public announcement.
The transaction covers only ZTE consumer phones sold in domestic and global markets. Other consumer hardware will remain under central corporate control. Network routers, connected home hardware, and terminal equipment return to the parent group. RedMagic mobile hardware remains entirely outside the scope of this transaction.
ZTE established a dedicated operating entity named Shanghai Shenqi Jiyuan Intelligent Terminal to manage the transition. Corporate filings show this subsidiary is 100% owned by ZTE, with Wang Xiyu serving as chairman and Ni Fei serving as director. Mobile staff and human resource relationships have already transferred into this company ahead of final investment agreements.
