UPDATE 1-China's ZTE seen slowing after strong 2009

* Q4 profit 1.27 billion yuan versus forecast 1.26 bln yuan

* Exports accounted for half of total revenue

* Reduced 3G spending in home China market damps outlook

* Analysts see 20 pct rev growth in 2010, vs 36 pct in 2009 (Adds details)

By Doug Young

HONG KONG, April 8 (Reuters) - ZTE Corp (0763.HK), China's No.2 telecoms equipment maker, on Thursday said its quarterly profit rose 50 percent on booming exports, in line with expectations, as industry watchers forecast a slowdown in its breakneck growth as spending slows in its home market.

ZTE and crosstown rival Huawei Technologies [HWT.UL] were the prime beneficiaries of a telecoms spending binge in China last year, after the long-awaited awarding of third-generation (3G) mobile licenses to the country's three mobile carriers.

Last December, China's telecoms regulator said domestic investment in 3G systems reached $21 billion in 2009.

Strong 3G spending is expected to continue into this year, but recent plans from China's three major telephone operators have been lower than expected, prompting observers to lower their outlook for ZTE this year.

Macquarie estimated that overall capital expenditure by the three carriers would fall 22 percent this year from 2009 levels, more sharply than its own forecast for a 15 percent decline.

ZTE's revenue jumped 36 percent in 2009 to 60.3 billion yuan, ($8.8 billion) following a 3G spending binge in China. Daiwa analyst Joseph Ho said the market is expecting a more moderate 20 percent growth rate this year.

"Last year China had a burst of spending, so you had an exceptionally strong year," Ho said. "This year we won't see a significant slowdown, but an expected slowdown ... We're comfortable with continued growth this year."

For its part, ZTE said it would continue its strong focus on foreign markets in 2010.

"The company has a strategy of deepening its internationalisation," it said in a statement to the Shenzhen Stock Exchange. "In the process of competing it will maintain its sense of crisis to expand its position of strength."

ZTE (000063.SZ) reported a fourth-quarter profit of 1.27 billion yuan, compared with 844 million yuan a year earlier, based on Reuters calculations using data filed to the Shenzhen stock exchange.

Profit for the full year rose 48 percent to 2.46 billion yuan from 1.66 billion yuan a year earlier.

Analysts had expected the company to report a fourth-quarter profit of 1.26 billion yuan, and a full-year profit of 2.45 billion yuan, according to the average of 20 analysts polled by Thomson Reuters I/B/E/S.

ZTE's shares tumbled 12 percent in early March after the weak spending plans for this year started coming out, but have recouped some of those losses since then. ZTE shares are down about 2 percent this year, roughly in line with the broader market .HSI.

Internationally, ZTE said its exports rose 11.3 percent last to 29.9 billion yuan, accounting for just under half of its total revenue, as it continued to boost its sales into overseas markets.

Last week, Huawei reported that its profit more than doubled last year and forecast 20 percent sales growth this year, also banking on its broad export drive and strong 3G spending at home. [ID:nTOE62U00R]