Group 1 - The core point of the article is the announcement of a bidding project by Shandong Information Industry Service Co., Ltd., a wholly-owned subsidiary of China Communications Services, for comprehensive support technical services for its Jinan branch from 2025 to 2027, with a budget of 101.3695 million yuan [1] Group 2 - The bidding announcement was published on September 24, 2025, indicating the timeline for the project [1] - The budget for the project is specified as 101.3695 million yuan, highlighting the financial scale of the procurement [1] - The company involved is identified as a subsidiary of China Communications Services, emphasizing its connection to a larger corporate structure [1]

Core Viewpoint - China Communication Services' subsidiary, Shandong Information Industry Service Co., Ltd., announced a tender for a project related to the procurement of weak current intelligent equipment and system platform construction services, with a budget of 1.1892 million yuan [1] Company Summary - The project is titled "2025 Customer Department Weak Current Intelligent Equipment Procurement and System Platform Construction Service Project" [1] - The budget for the project is set at 1.1892 million yuan [1] - Shandong Information Industry Service Co., Ltd. is a wholly-owned subsidiary of China Communication Services [1]

建筑+通信：从通信服务业务看中通服投资机会 20250915 运营商资本开支的未来趋势如何？ 运营商的资本开支主要跟通信代际的投资周期密切相关，通常一个通信代际 （如 3G、4G、5G）的投资周期约为 10 年。中国在 3G 和 4G 时代处于追赶 阶段，分别在 2008 年和 2013 年发牌，导致这两个代际合计投了 10 年的资本 开支。自 2019 年 5G 发牌以来，中国已进入与海外市场同步甚至领先的状态。 2020 年至 2022 年是 5G 资本开支高峰期，未来几年预计整体资本开支将稳中 有降，总降幅约为大个位数至 10 个点左右，并保持平稳下降态势。同时，在 传统通信投资压缩的背景下，AI 相关算力投资持续增加。 如何看待中通服后续的发展？ 中通服业务与运营商的 CAPEX 和 OPEX 均有关系。在 CAPEX 方面，中通服在 基站建设及算力基础设施建设领域表现出较强韧性，即使运营商资本开支下降， 三大运营商 2025 年上半年资本开支同比下降，降幅分别为 8.8%、27.5%、15.5%，但全年预算未调整，预计下半年开支可能提 速，有助于公司业绩增长。 中兴福利现金流表现优异，截至 2024 ...

近日，军队采购网发布关于对山东省信息产业服务有限公司暂停处理公告。 经调查，山东省信息产业服务有限公司在参加项目编号：无采购活动中，涉嫌存在违规失信行为。 根据军队供应商管理相关规定，自2025年09月11日起暂停其参加空军范围物资工程服务采购活动资格。 新闻热线电话0531-85193242 公开信息显示，山东省信息产业服务有限公司成立于2012年01月10日，法定代表人张志华，股东为中国通信服务股份有限公司 （中国通信服务 00552.HK）。 ...

[Summary](index=4&type=section&id=Summary) This summary outlines the company's H1 2025 operating performance, showing growth in both revenue and net profit, with a slight decrease in gross profit margin. The company actively addresses market challenges, seizes digital economy and AI opportunities, and drives steady development across its three business segments and three customer markets, with non-telecom operator enterprise and overseas markets' revenue share exceeding half for the first time H1 2025 Key Financial Data | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Operating Revenue | 76,939 | 74,412 | 3.4% | | Gross Profit | 7,888 | 8,116 | -2.8% | | Profit Attributable to Equity Holders of the Company | 2,129 | 2,125 | 0.2% | | Basic Earnings Per Share (RMB) | 0.307 | 0.307 | 0.2% | | Free Cash Flow | (7,627) | (2,165) | – | - The Group's operating performance showed steady progress, with operating revenue increasing by **3.4% year-over-year** and net profit by **0.2% year-over-year**. The gross profit margin was **10.3%**, and the net profit margin was **2.8%**[7](index=7&type=chunk) - The Group's three major customer markets developed steadily, with combined revenue from domestic non-telecommunications operator enterprise customers and overseas markets exceeding **half of operating revenue** for the first time[7](index=7&type=chunk) - The Group's three business segments achieved comprehensive growth, with deepening AI application scenarios and accelerated digital transformation driving the continuous rapid development of applications, content, and other services, becoming the core driver of revenue growth[7](index=7&type=chunk) [Chairman's Report](index=5&type=section&id=Chairman's%20Report) The Chairman's Report outlines the company's strategic positioning as a 'new-generation integrated smart service provider' in H1 2025, emphasizing stable operating performance growth through technological innovation, market expansion, and strategic emerging business cultivation amidst the rapid evolution of the digital economy and AI technologies. The report also covers the company's ESG practices and future outlook [Operating Performance and Financial Results](index=5&type=section&id=Operating%20Performance%20and%20Financial%20Results) The company maintained steady growth in operating revenue and net profit in H1, with service revenue increasing by **2.9% year-over-year**. Despite a decline in gross profit margin, the company achieved comprehensive growth across its three business segments and steady development in its three customer markets by transitioning old and new drivers and seizing digital intelligence opportunities - H1 operating revenue reached **RMB 76,939 million**, a **3.4% year-over-year increase**; service revenue was **RMB 74,981 million**, a **2.9% year-over-year increase**[9](index=9&type=chunk) - Operating gross profit was **RMB 7,888 million**, a **2.8% year-over-year decrease**; gross profit margin was **10.3%**, down **0.6 percentage points year-over-year**[9](index=9&type=chunk) - Net profit was **RMB 2,129 million**, a **0.2% year-over-year increase**; net profit margin was **2.8%**, down **0.1 percentage points year-over-year**[9](index=9&type=chunk) [Business Segment Performance](index=5&type=section&id=Business%20Segment%20Performance) All three of the company's business segments maintained a positive trend. Revenue from applications, content, and other services increased by **11.7% year-over-year**, accounting for **21.2%** of total revenue, and has been the core driver of revenue growth for several consecutive years, benefiting from deepening AI applications and accelerated digital transformation across various industries H1 2025 Business Segment Revenue | Business Segment | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 38,272 | 1.6% | | Business Process Outsourcing Services | 22,383 | 1.0% | | Applications, Content and Other Services | 16,284 | 11.7% | - Revenue from applications, content, and other services continuously increased its share to **21.2%**, serving as the core driver of revenue growth for several consecutive years[10](index=10&type=chunk) [Customer Market Performance](index=6&type=section&id=Customer%20Market%20Performance) The company's three major customer markets developed steadily. Domestic non-telecommunications operator enterprise customer market revenue grew by **12.9% year-over-year**, strongly supporting overall revenue growth; overseas market revenue grew by **8.7% year-over-year**; domestic telecommunications operator market revenue decreased by **4.6% year-over-year**, but the company maintained resilience through its 'CAPEX+OPEX+Smart Applications' strategy H1 2025 Customer Market Revenue | Customer Market | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Domestic Telecommunications Operators | 38,203 | -4.6% | | Domestic Non-Telecommunications Operator Enterprise Customers | 36,585 | 12.9% | | Overseas Market | 2,151 | 8.7% | - The domestic non-telecommunications operator enterprise customer market achieved **double-digit growth**, primarily benefiting from opportunities in computing infrastructure construction and integrated service capabilities[13](index=13&type=chunk) - The overseas market integrated into the 'Belt and Road' initiative, expanded high-value projects, and extended into new sectors such as industrial digitalization and new energy services[13](index=13&type=chunk) [Strategic Emerging Business Development](index=7&type=section&id=Strategic%20Emerging%20Business%20Development) The company's strategic emerging businesses showed strong momentum in H1, with new contract value accounting for over **40% of total new contract value**. The company deeply cultivates digital infrastructure, green and low-carbon, smart city, and emergency safety sectors, focusing on key industries like government, energy, and transportation, to create benchmark projects and facilitate industrial upgrading through technological innovation and full-chain service capabilities - Strategic emerging businesses maintained rapid growth in H1, with new contract value from this segment accounting for over **40% of total new contract value**[15](index=15&type=chunk) [Digital Infrastructure Sector](index=7&type=section&id=Digital%20Infrastructure%20Sector) The company seized the computing power market opportunities brought by AI technological transformation, undertaking smart computing center construction, data center renovation, and cloud platform/5G+ projects in multiple locations, providing intelligent, agile, green, energy-efficient, secure, and controllable integrated digital infrastructure construction and service assurance for government, internet, finance, energy, and other industry clients - Seized the computing power market opportunities driven by AI technological transformation, undertaking smart computing center construction, data center renovation, cloud platform, and 5G+ projects in multiple locations domestically and internationally[16](index=16&type=chunk) - New contract value from this sector maintained rapid growth in H1[16](index=16&type=chunk) [Green and Low-Carbon Sector](index=7&type=section&id=Green%20and%20Low-Carbon%20Sector) The company actively engaged in the green and low-carbon industry, adopting a 'green energy + energy-saving technology' dual-driven model to create benchmark projects such as low-carbon smart computing centers and 5G green base stations, and participated in drafting the first national standard for green data center evaluation, demonstrating its industry influence - Adopted a 'green energy + energy-saving technology' dual-driven model to create a series of benchmark projects, including low-carbon smart computing centers, 5G green base stations, green and low-carbon parks, and virtual power plant platforms[17](index=17&type=chunk) - Participated in drafting the first national standard for green data center evaluation, 'Green Data Center Evaluation,' demonstrating cutting-edge technological wisdom and industry influence[17](index=17&type=chunk) [Smart City Sector](index=8&type=section&id=Smart%20City%20Sector) The company seized opportunities in new urban infrastructure construction, leveraging its 'planning + design + implementation + delivery + operation' full-chain service capabilities, deeply integrating digital technologies such as AI, IoT, and big data, achieving rapid growth in new contract value in digital government, smart education, and smart water conservancy sectors - Leveraged 'planning + design + implementation + delivery + operation' full-chain service capabilities, deeply integrating digital technologies such as AI, IoT, and big data[19](index=19&type=chunk) - In H1, new contract value in digital government, smart education, smart water conservancy, smart cultural tourism, smart healthcare, and enterprise digital transformation sectors all achieved rapid growth[19](index=19&type=chunk) [Emergency Safety Sector](index=8&type=section&id=Emergency%20Safety%20Sector) The company assists in building a modern emergency management system, leveraging AI large models to empower industry applications and enhance disaster prevention, mitigation, and relief capabilities. In cybersecurity, it developed multiple independently controllable products, undertook major national cybersecurity projects, and provided integrated security services - Leveraged AI large models to empower industry applications, assisting clients in key sectors such as mining, chemical, water conservancy, and fire protection to achieve intelligent transformation of emergency management[20](index=20&type=chunk) - Developed multiple independently controllable cybersecurity products, undertook major national cybersecurity projects, and provided integrated security services covering cybersecurity planning, design, implementation, integration, delivery, and operation and maintenance[20](index=20&type=chunk) [Technological Innovation and New Productive Forces](index=9&type=section&id=Technological%20Innovation%20and%20New%20Productive%20Forces) The company strengthened technology-driven innovation in H1, increasing R&D investment in cutting-edge fields like AI, developing nearly a hundred innovative products, and fully implementing the 'AI+' initiative to strategically deploy AI businesses and build core competitiveness. Concurrently, it activated new development momentum through scientific and technological innovation system reforms - Focused on cutting-edge fields to strengthen technological innovation, centralized R&D efforts, built differentiated core competitiveness, deepened industrial cooperation, and promoted deep integration of technological and industrial innovation[22](index=22&type=chunk) [Technological Innovation Leadership](index=9&type=section&id=Technological%20Innovation%20Leadership) The company adheres to self-reliance in technological innovation, increasing R&D investment in core areas, forming nearly a hundred innovative products for emerging technologies such as AI, security, and low-carbon. It has accumulated over **4,100 authorized patents**, over **10,900 software copyrights**, and participated in **48 national standards** - Formed a product innovation library with nearly a hundred products for emerging technologies such as AI, security, and low-carbon[23](index=23&type=chunk) - Accumulated over **4,100 authorized patents**, over **10,900 software copyrights**, and participated in **48 national standards**[23](index=23&type=chunk) [AI Business Layout](index=9&type=section&id=AI%20Business%20Layout) The company fully implemented the 'AI+' initiative, strategically deploying AI businesses from three aspects: integrated innovation, deep scenario cultivation, and ecological collaboration, with an AI delivery team of over **1,400 people**. In H1, new contract value in the AI sector exceeded **RMB 1.3 billion**, covering over **200 clients** - Fully implemented the 'AI+' initiative, strategically deploying AI businesses from three aspects: integrated innovation, deep scenario cultivation, and ecological collaboration[24](index=24&type=chunk) - Possesses an AI delivery team of over **1,400 people**, providing customized services such as smart computing infrastructure construction and operation, data governance, and scenario-based application R&D[24](index=24&type=chunk) - In H1, new contract value in the AI sector exceeded **RMB 1.3 billion**, covering over **200 clients**[24](index=24&type=chunk) [Scientific and Technological Innovation System Reform](index=9&type=section&id=Scientific%20and%20Technological%20Innovation%20System%20Reform) The company continuously deepened its scientific and technological innovation system reform, optimizing R&D intensive operation and promotion mechanisms and achievement transformation mechanisms to improve R&D resource utilization efficiency, and perfecting mechanisms for cultivating, introducing, and selecting scientific and technological innovation experts to stimulate innovation and development vitality - Optimized R&D intensive operation and promotion mechanisms and achievement transformation mechanisms, improving R&D resource utilization efficiency[25](index=25&type=chunk) - Perfected mechanisms for cultivating, introducing, and selecting scientific and technological innovation experts, adopting multi-dimensional incentive methods to stimulate innovation and development vitality[25](index=25&type=chunk) [Environmental, Social, and Governance (ESG)](index=10&type=section&id=Environmental,%20Social,%20and%20Governance%20(ESG)) The company actively fulfills its environmental and social responsibilities, implements the 'dual carbon' strategy, promotes green and low-carbon development, and actively participates in social welfare activities such as emergency rescue and rural revitalization. In corporate governance, the company continuously enhances governance capabilities, improves its risk and internal control management system, and has received multiple capital market awards - Implemented the national 'dual carbon' strategy, steadily executed green and low-carbon development plans, established an energy-saving and emission-reduction assessment and reward/punishment mechanism, and reduced total energy consumption[27](index=27&type=chunk) - Completed construction and communication assurance tasks related to emergency rescue, major events, and rural revitalization, becoming a strong support for emergency relief and livelihood protection[28](index=28&type=chunk) - Received honors such as 'Most Respected Company,' 'Best CFO,' 'Best Investor Relations Company,' 'Best ESG,' and 'Best Company Board' in the Extel 'Asia's Best Management Team 2025' awards[29](index=29&type=chunk) [Future Outlook](index=11&type=section&id=Future%20Outlook) Looking ahead, the company will firmly adhere to its positioning as a 'new-generation integrated smart service provider,' fully embrace AI, deeply advance the 'AI+' initiative, and build a distinctive technology-driven enterprise with AI at its core. The company will continuously enhance its full-chain, integrated delivery capabilities, actively deploy in emerging markets such as smart computing centers, smart operations and maintenance, and new energy, to achieve high-quality development and high-level security - Firmly adhered to the positioning as a 'new-generation integrated smart service provider,' continuously enhancing the 'four capabilities,' strengthening technological innovation leadership, and fully embracing AI[31](index=31&type=chunk) - Deeply advanced the 'AI+' initiative, internally empowering corporate governance and externally strengthening service capabilities, to build a distinctive technology-driven enterprise with AI at its core, driving comprehensive smart services[31](index=31&type=chunk) - Actively deployed in emerging markets, focusing on areas such as smart computing centers, smart operations and maintenance, and new energy, continuously innovating business models, and creating industry-leading products[31](index=31&type=chunk) [Financial Overview](index=12&type=section&id=Financial%20Overview) This financial overview provides a detailed analysis of the company's H1 2025 financial performance, including operating revenue, operating costs, gross profit, selling and administrative expenses, profit attributable to shareholders, cash flow, and asset-liability status. The report indicates stable revenue growth but a decline in gross profit margin due to reduced customer capital expenditure, while emphasizing the importance of cost control and working capital management [Operating Revenue Analysis](index=12&type=section&id=Operating%20Revenue%20Analysis) The company's H1 2025 operating revenue was **RMB 76,939 million**, a **3.4% year-over-year increase**, with service revenue growing by **2.9% year-over-year**. Revenue from applications, content, and other services maintained rapid growth, domestic non-operator enterprise customer market revenue achieved faster growth, and overseas market revenue grew steadily - H1 2025 operating revenue reached **RMB 76,939 million**, a **3.4% increase** compared to H1 2024; service revenue reached **RMB 74,981 million**, a **2.9% increase** compared to H1 2024[34](index=34&type=chunk) H1 2025 Revenue by Business Segment | Business Type | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 38,272 | 1.6% | | Business Process Outsourcing Services | 22,383 | 1.0% | | Applications, Content and Other Services | 16,284 | 11.7% | H1 2025 Revenue by Market | Market Type | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Domestic Telecommunications Operators | 38,203 | -4.6% | | Domestic Non-Telecommunications Operator Enterprise Customers | 36,585 | 12.9% | | Overseas Market | 2,151 | 8.7% | [Operating Costs Analysis](index=13&type=section&id=Operating%20Costs%20Analysis) H1 2025 operating costs increased by **4.2% year-over-year**. Subcontracting costs rose by **4.1%**, and material costs increased by **8.1%**, primarily driven by large projects undertaken under the general contracting model. Direct employee costs decreased by **2.6%**, reflecting the company's reasonable control over total employment and optimization of employment structure - H1 2025 operating costs were **RMB 69,051 million**, a **4.2% year-over-year increase**[38](index=38&type=chunk) - Direct employee costs decreased by **2.6%**, subcontracting costs increased by **4.1%**, and material costs grew by **8.1%**[38](index=38&type=chunk) - The company will further strengthen subcontracting management, enhance independent delivery capabilities, and reinforce general contracting project management and material cost control[38](index=38&type=chunk) [Gross Profit Analysis](index=13&type=section&id=Gross%20Profit%20Analysis) H1 2025 gross profit was **RMB 7,888 million**, a **2.8% year-over-year decrease**, with a gross profit margin of **10.3%**, down **0.6 percentage points year-over-year**, primarily affected by reduced customer capital expenditure. The company is improving its gross profit margin by selecting high-margin projects, increasing the proportion of high-value businesses, and strengthening cost control - H1 2025 gross profit was **RMB 7,888 million**, a **2.8% year-over-year decrease**; gross profit margin was **10.3%**, down **0.6 percentage points year-over-year**[39](index=39&type=chunk) - The change in gross profit margin was primarily influenced by factors such as reduced customer capital expenditure[39](index=39&type=chunk) - The company, through performance assessments, guides subsidiaries to select and expand high-margin projects, increase the proportion of high-value businesses, and optimize R&D mechanisms, expecting a positive trend in overall gross profit margin[39](index=39&type=chunk) [Selling, General and Administrative Expenses Analysis](index=14&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20Analysis) H1 2025 selling, general and administrative expenses were **RMB 6,182 million**, a **5.5% year-over-year decrease**, accounting for **8.0% of operating revenue**, down **0.8 percentage points year-over-year**. This was due to the company's active cost control, strict implementation of quality and efficiency improvement measures, and precise investment of R&D resources in AI and digital infrastructure - H1 2025 selling, general and administrative expenses were **RMB 6,182 million**, a **5.5% year-over-year decrease**[41](index=41&type=chunk) - Selling, general and administrative expenses accounted for **8.0% of operating revenue**, a **0.8 percentage point decrease** from the same period last year[41](index=41&type=chunk) - The company actively controlled expenses, strictly implemented quality and efficiency improvement measures, and precisely invested R&D resources, focusing on cultivating capabilities related to AI and digital infrastructure[41](index=41&type=chunk) [Profit Attributable to Equity Holders of the Company](index=14&type=section&id=Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) In H1 2025, profit attributable to equity holders of the company was **RMB 2,129 million**, a **0.2% increase** compared to **RMB 2,125 million** in H1 2024 - In H1 2025, profit attributable to equity holders of the company was **RMB 2,129 million**, a **0.2% increase** compared to H1 2024[42](index=42&type=chunk) [Cash Flow Analysis](index=14&type=section&id=Cash%20Flow%20Analysis) In H1 2025, the company's net cash outflow was **RMB 8,073 million**, an improvement compared to the **RMB 9,123 million** outflow in H1 2024. The company continues to prioritize working capital management to maintain healthy cash flow levels - In H1 2025, the Group's net cash outflow was **RMB 8,073 million**, compared to a net cash outflow of **RMB 9,123 million** in H1 2024[43](index=43&type=chunk) - The company consistently prioritizes working capital management and will continue to strengthen related efforts to maintain healthy cash flow levels[43](index=43&type=chunk) [Assets and Liabilities Status](index=14&type=section&id=Assets%20and%20Liabilities%20Status) As of June 30, 2025, the company's financial position remained stable. Total assets were **RMB 138,248 million**, total liabilities were **RMB 90,598 million**, and the asset-liability ratio was **65.5%**, a slight decrease from the end of 2024 Key Assets and Liabilities Data | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Assets | 138,248 | 136,618 | | Total Liabilities | 90,598 | 90,004 | | Asset-Liability Ratio | 65.5% | Slightly decreased | [Interim Financial Report Review Report](index=15&type=section&id=Interim%20Financial%20Report%20Review%20Report) KPMG reviewed the company's interim financial report for the six months ended June 30, 2025. Based on the review, no matters were identified that indicate the interim financial report was not prepared in all material respects in accordance with International Accounting Standard 34 'Interim Financial Reporting' - KPMG has reviewed the interim financial report in accordance with International Standard on Review Engagements 2410[48](index=48&type=chunk) - Review conclusion: Nothing has come to our attention that causes us to believe that the interim financial report as at June 30, 2025, is not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[49](index=49&type=chunk) [Consolidated Income Statement](index=16&type=section&id=Consolidated%20Income%20Statement) This consolidated income statement presents the company's financial performance for the six months ended June 30, 2025. Operating revenue increased by **3.4% year-over-year** to **RMB 76,939 million**, and gross profit decreased by **2.8% year-over-year** to **RMB 7,888 million**. Profit for the period attributable to equity holders of the company was **RMB 2,129 million**, with basic earnings per share of **RMB 0.307** Consolidated Income Statement (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Operating Revenue | 76,939,251 | 74,411,953 | | Operating Costs | (69,051,641) | (66,296,374) | | Gross Profit | 7,887,610 | 8,115,579 | | Other Income | 839,173 | 879,847 | | Selling, General and Administrative Expenses | (6,181,999) | (6,541,835) | | Other Expenses | (104,888) | (56,832) | | Finance Costs | (43,911) | (59,026) | | Share of Profits of Associates and Joint Ventures | 44,741 | 67,372 | | Profit Before Tax | 2,440,726 | 2,405,105 | | Income Tax | (234,123) | (207,155) | | Profit for the Period | 2,206,603 | 2,197,950 | | Profit for the Period Attributable to Equity Holders of the Company | 2,128,715 | 2,124,984 | | Basic/Diluted Earnings Per Share (RMB) | 0.307 | 0.307 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This consolidated statement of profit or loss and other comprehensive income presents the company's comprehensive income for the six months ended June 30, 2025. Profit for the period was **RMB 2,206,603 thousand**, and total other comprehensive income was **RMB 410,871 thousand**, primarily comprising net fair value changes of equity instruments measured at fair value through other comprehensive income. Total comprehensive income for the period was **RMB 2,617,474 thousand** Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 2,206,603 | 2,197,950 | | Other Comprehensive Income for the Period (After tax) | | | | Equity instruments measured at fair value through other comprehensive income: Net change in fair value reserve | 394,782 | 501,997 | | Exchange differences on translation of financial statements of subsidiaries outside mainland China | 16,089 | (14,030) | | Total Other Comprehensive Income for the Period | 410,871 | 487,967 | | Total Comprehensive Income for the Period | 2,617,474 | 2,685,917 | | Total Comprehensive Income for the Period Attributable to Equity Holders of the Company | 2,539,573 | 2,612,916 | [Consolidated Statement of Financial Position](index=18&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This consolidated statement of financial position presents the company's assets, liabilities, and equity as of June 30, 2025. Total assets were **RMB 138,248,212 thousand**, an increase from the end of 2024. Term deposits with financial institutions for over one year significantly increased within non-current assets. Net current assets were **RMB 14,791,857 thousand**, total liabilities were **RMB 90,598,314 thousand**, and equity attributable to equity holders of the company was **RMB 46,460,941 thousand** Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Property, Plant and Equipment, Net | 5,986,579 | 5,910,252 | | Term deposits with financial institutions for over one year | 15,163,324 | 12,170,901 | | Total Non-Current Assets | 35,007,293 | 31,944,591 | | **Current Assets** | | | | Inventories | 2,110,075 | 1,183,231 | | Trade and Bills Receivables, Net | 29,588,202 | 25,296,205 | | Contract Assets, Net | 42,559,871 | 37,767,809 | | Cash and Cash Equivalents | 11,580,258 | 19,638,036 | | Total Current Assets | 103,240,919 | 104,672,985 | | **Total Assets** | 138,248,212 | 136,617,576 | | **Current Liabilities** | | | | Trade and Bills Payables | 67,577,549 | 65,894,889 | | Contract Liabilities | 7,147,578 | 9,190,050 | | Total Current Liabilities | 88,449,062 | 87,954,679 | | **Total Liabilities** | 90,598,314 | 90,004,424 | | **Equity Attributable to Equity Holders of the Company** | 46,460,941 | 45,435,871 | | **Total Equity** | 47,649,898 | 46,613,152 | [Consolidated Statement of Changes in Equity](index=20&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This consolidated statement of changes in equity presents the company's equity movements for the six months ended June 30, 2025. Equity attributable to equity holders of the company increased from **RMB 45,435,871 thousand** at the beginning of the period to **RMB 46,460,941 thousand** at the end, primarily due to contributions from profit for the period and total other comprehensive income for the period, as well as the impact of dividend distribution Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | January 1, 2025 (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Equity Holders of the Company | 45,435,871 | 46,460,941 | | Non-Controlling Interests | 1,177,281 | 1,188,957 | | Total Equity | 46,613,152 | 47,649,898 | | Profit for the Period Attributable to Equity Holders of the Company | 2,128,715 | | | Other Comprehensive Income for the Period Attributable to Equity Holders of the Company | 410,858 | | | Dividend Distribution | (1,514,720) | | [Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This condensed consolidated statement of cash flows presents the company's cash flows for the six months ended June 30, 2025. Net cash used in operating activities was **RMB (7,565,828) thousand**, net cash used in investing activities was **RMB (241,440) thousand**, and net cash used in financing activities was **RMB (266,107) thousand**. Cash and cash equivalents at the end of the period were **RMB 11,580,258 thousand** Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (7,565,828) | (2,406,974) | | Net Cash Used in Investing Activities | (241,440) | (6,454,076) | | Net Cash Used in Financing Activities | (266,107) | (262,125) | | Net Decrease in Cash and Cash Equivalents | (8,073,375) | (9,123,175) | | Cash and Cash Equivalents at End of Period | 11,580,258 | 13,807,171 | [Notes to the Unaudited Interim Financial Report](index=22&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) These notes provide detailed supplementary information to the unaudited interim financial report, covering the company's principal activities, basis of preparation, changes in accounting policies, segment reporting, specific composition and changes of various financial statement items, and significant related party transactions. These notes are crucial for understanding the specific details and context of the company's financial statements [Principal Activities](index=22&type=section&id=Principal%20Activities) The company and its subsidiaries are leading service providers in China, offering integrated smart solutions for informatization and digitalization, including telecommunications infrastructure services, business process outsourcing services, and applications, content, and other services - The Group provides integrated smart solutions for informatization and digitalization[59](index=59&type=chunk) - Principal activities include telecommunications infrastructure services, business process outsourcing services, and applications, content, and other services[59](index=59&type=chunk) [Basis of Preparation](index=22&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and complies with the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The report is unaudited but has been reviewed by KPMG - This interim financial report is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and complies with the disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[60](index=60&type=chunk) - The interim financial report is unaudited but has been reviewed by KPMG in accordance with International Standard on Review Engagements 2410[60](index=60&type=chunk) [Changes in Accounting Policies](index=22&type=section&id=Changes%20in%20Accounting%20Policies) During this interim period, the company first applied the amended International Accounting Standard 21 'The Effects of Changes in Foreign Exchange Rates 'Lack of Exchangeability'', but this amendment had no significant impact on the Group's interim financial report - The amendment to International Accounting Standard 21 'The Effects of Changes in Foreign Exchange Rates 'Lack of Exchangeability'' was first applied during this interim period[61](index=61&type=chunk) - The adoption of the above amendment had no significant impact on the Group's interim financial report[61](index=61&type=chunk) [Segment Reporting](index=23&type=section&id=Segment%20Reporting) The company primarily has one business segment, which is providing integrated smart solutions for informatization and digitalization, thus no other segment information is disclosed. Information regarding major customers and operating regions can be found in Note 5 - The Group primarily has one business segment, which is providing integrated smart solutions for informatization and digitalization[63](index=63&type=chunk) - No other segment information is disclosed; information regarding major customers and operating regions can be found in Note 5[63](index=63&type=chunk) [Operating Revenue](index=23&type=section&id=Operating%20Revenue) The company's operating revenue is derived from providing integrated smart solutions. In H1 2025, revenue from telecommunications infrastructure services was **RMB 38,272,609 thousand**, business process outsourcing services revenue was **RMB 22,382,937 thousand**, and applications, content, and other services revenue was **RMB 16,283,705 thousand**. Operating revenue from regions outside mainland China was **RMB 2,151 million** Operating Revenue by Nature of Business (For the six months ended June 30) | Nature of Business | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services Revenue | 38,272,609 | 37,666,188 | | Business Process Outsourcing Services Revenue | 22,382,937 | 22,162,474 | | Applications, Content and Other Services Revenue | 16,283,705 | 14,583,291 | | Total | 76,939,251 | 74,411,953 | - Revenue from China Telecom Group accounted for **33.6% of total operating revenue**, and revenue from China Mobile Communications Group accounted for **8.3%**[65](index=65&type=chunk) - Operating revenue from regions outside mainland China was **RMB 2,151 million**[65](index=65&type=chunk) [Operating Costs](index=24&type=section&id=Operating%20Costs) H1 2025 total operating costs were **RMB 69,051,641 thousand**. Of this, subcontracting costs were **RMB 42,932,050 thousand**, material costs were **RMB 13,341,575 thousand**, and direct employee costs were **RMB 3,707,393 thousand** Composition of Operating Costs (For the six months ended June 30) | Cost Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Subcontracting Costs | 42,932,050 | 41,233,277 | | Material Costs | 13,341,575 | 12,336,999 | | Direct Employee Costs | 3,707,393 | 3,807,665 | | Direct Costs of Goods Distributed | 1,560,609 | 1,098,458 | | Short-Term Leases and Leases of Low-Value Assets Expenses | 609,940 | 604,986 | | Depreciation and Amortization | 498,208 | 505,257 | | Others | 6,401,866 | 6,709,732 | | Total | 69,051,641 | 66,296,374 | [Other Income](index=24&type=section&id=Other%20Income) H1 2025 total other income was **RMB 839,173 thousand**. This primarily included interest income of **RMB 270,299 thousand**, dividend income from equity instruments measured at fair value through other comprehensive income of **RMB 211,712 thousand**, and management fee income of **RMB 166,948 thousand** Composition of Other Income (For the six months ended June 30) | Income Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Income | 270,299 | 325,641 | | Dividend Income | 211,712 | 191,435 | | Management Fee Income | 166,948 | 165,747 | | Government Grants | 93,034 | 87,807 | | Write-off of Debts Not Required to be Paid | 27,869 | 11,116 | | Gains on Disposal of Property, Plant and Equipment, etc | 9,840 | 7,688 | | Additional Deduction for Input VAT | 2,750 | 29,241 | | Others | 56,721 | 61,172 | | Total | 839,173 | 879,847 | [Finance Costs](index=25&type=section&id=Finance%20Costs) H1 2025 total finance costs were **RMB 43,911 thousand**, a decrease from **RMB 59,026 thousand** in H1 2024. The main components were interest on bank and other loans and interest on lease liabilities Composition of Finance Costs (For the six months ended June 30) | Expense Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Bank and Other Loans | 20,419 | 31,503 | | Interest on Lease Liabilities | 23,492 | 27,523 | | Total | 43,911 | 59,026 | [Profit Before Tax](index=25&type=section&id=Profit%20Before%20Tax) H1 2025 profit before tax was **RMB 2,440,726 thousand**. Of this, total employee costs were **RMB 7,987,519 thousand**, amortization was **RMB 99,633 thousand**, depreciation was **RMB 709,824 thousand**, and net impairment losses on trade receivables and others were **RMB 161,577 thousand** Deductions from Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 6,833,056 | 7,308,835 | | Contributions to Defined Contribution Retirement Benefit Plans | 1,154,463 | 1,108,808 | | Total Employee Costs | 7,987,519 | 8,417,643 | | Amortization | 99,633 | 98,587 | | Depreciation | 709,824 | 729,391 | | Net Impairment Losses and Reversals on Inventories | 27,729 | 18,604 | | Net Impairment Losses and Reversals on Trade Receivables, Other Receivables, Contract Assets and Others | 161,577 | 118,914 | [Income Tax](index=26&type=section&id=Income%20Tax) H1 2025 total income tax was **RMB 234,123 thousand**. The actual tax expense differed from the estimated income tax expense calculated at the statutory tax rate of **25%**, primarily due to factors such as subsidiary tax rate concessions, non-taxable income, and additional deductions for R&D expenses Composition of Income Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 244,762 | 296,994 | | Deferred Tax | (10,639) | (89,839) | | Total Income Tax | 234,123 | 207,155 | - The actual tax expense differed from the estimated income tax expense calculated at the statutory tax rate of **25%**, primarily due to factors such as subsidiary tax rate concessions, non-taxable income, and additional deductions for R&D expenses[70](index=70&type=chunk) - Entities qualified as high-tech enterprises, those in the Western Development region, and small low-profit enterprises may calculate income tax at preferential rates of **15%**, **15%**, and **20%**, respectively[70](index=70&type=chunk) [Earnings Per Share](index=27&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were **RMB 0.307**. As there were no potentially dilutive ordinary shares issued during either period, diluted earnings per share were the same as basic earnings per share - Basic earnings per share for the six months ended June 30, 2025, were **RMB 0.307**[71](index=71&type=chunk) - As there were no potentially dilutive ordinary shares issued during either period, diluted earnings per share were the same as basic earnings per share[72](index=72&type=chunk) [Other Comprehensive Income](index=27&type=section&id=Other%20Comprehensive%20Income) H1 2025 total other comprehensive income was **RMB 410,871 thousand**. This primarily included fair value changes of equity instruments measured at fair value through other comprehensive income recognized during the period of **RMB 526,396 thousand**, and exchange differences on financial statements of **RMB 16,089 thousand** Composition of Other Comprehensive Income (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair value changes of equity instruments measured at fair value through other comprehensive income recognized during the period | 526,396 | 670,820 | | Net deferred tax recognized in other comprehensive income | (131,614) | (168,823) | | Exchange differences on financial statements | 16,089 | (14,030) | | Total Other Comprehensive Income for the Period | 410,871 | 487,967 | [Dividends](index=27&type=section&id=Dividends) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025. The final dividend pertaining to the previous financial year and approved during this period was **RMB 0.2187 per share**, totaling **RMB 1,514,720 thousand** - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[74](index=74&type=chunk) Approved Final Dividends (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final dividend pertaining to the previous financial year, approved during the period (RMB 0.2187 per share) | 1,514,720 | 1,505,716 | [Other Non-Current Assets](index=28&type=section&id=Other%20Non-Current%20Assets) As of June 30, 2025, total other non-current assets were **RMB 824,323 thousand**, primarily comprising long-term receivables of **RMB 505,086 thousand** and other items of **RMB 319,237 thousand** Composition of Other Non-Current Assets | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Long-Term Receivables | 505,086 | 521,668 | | Others | 319,237 | 318,344 | | Total | 824,323 | 840,012 | [Trade and Bills Receivables, Net](index=28&type=section&id=Trade%20and%20Bills%20Receivables,%20Net) As of June 30, 2025, trade and bills receivables, net, amounted to **RMB 29,588,202 thousand**. Of this, trade receivables were **RMB 31,479,179 thousand**, and bills receivables were **RMB 869,866 thousand**. The aging analysis shows that trade and bills receivables within one year accounted for the largest proportion Composition of Trade and Bills Receivables, Net | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bills Receivables | 869,866 | 1,410,736 | | Trade Receivables | 31,479,179 | 26,509,784 | | Less: Provision for Credit Losses | (2,760,843) | (2,624,315) | | Net Amount | 29,588,202 | 25,296,205 | Aging Analysis of Trade and Bills Receivables (Net of credit loss provision) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current | 2,301,124 | 2,089,253 | | Within 1 Year | 23,185,072 | 19,334,238 | | Over 1 Year but Less Than 2 Years | 2,995,918 | 2,900,914 | | Over 2 Years but Less Than 3 Years | 843,399 | 718,462 | | Over 3 Years but Less Than 4 Years | 163,930 | 161,188 | | Over 4 Years but Less Than 5 Years | 49,564 | 43,676 | | Over 5 Years | 49,195 | 48,474 | | Total | 29,588,202 | 25,296,205 | [Contract Assets, Net](index=29&type=section&id=Contract%20Assets,%20Net) As of June 30, 2025, contract assets, net, amounted to **RMB 42,559,871 thousand**, primarily from telecommunications infrastructure services. Contract assets represent unbilled amounts receivable by the company for construction, design, and other services provided, where the right to receive payment is conditional on future performance reaching specific milestones Composition of Contract Assets, Net | Service Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 36,472,255 | 32,552,493 | | Business Process Outsourcing Services | 1,610,953 | 1,469,655 | | Applications, Content and Other Services | 5,015,331 | 4,271,528 | | Less: Provision for Credit Losses | (538,668) | (525,867) | | Net Amount | 42,559,871 | 37,767,809 | - Contract assets represent unbilled amounts receivable by the Group for construction, design, and other services provided, where the right to receive payment is conditional on the Group's future performance not yet reaching specific milestones[79](index=79&type=chunk) [Cash and Cash Equivalents](index=29&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, total cash and cash equivalents were **RMB 11,580,258 thousand**, comprising bank balances and cash of **RMB 7,534,055 thousand** and deposits with China Telecom Group Finance Co., Ltd. of **RMB 4,046,203 thousand** Composition of Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Balances and Cash | 7,534,055 | 15,634,788 | | Deposits with China Telecom Group Finance Co., Ltd. | 4,046,203 | 4,003,248 | | Total | 11,580,258 | 19,638,036 | [Interest-Bearing Loans](index=30&type=section&id=Interest-Bearing%20Loans) As of June 30, 2025, total short-term interest-bearing loans were **RMB 763,847 thousand**, primarily unsecured bank loans. RMB loans had annual interest rates ranging from **2.50%-3.10%**, and other bank loans had annual interest rates ranging from **4.44%-6.96%**. All loans are repayable within one year Composition of Short-Term Interest-Bearing Loans | Loan Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | RMB Bank Loans (Unsecured) | 90,800 | 82,050 | | USD Bank Loans (Unsecured) | – | 178,991 | | Other Bank Loans (Unsecured) | 666,588 | 437,046 | | Interest Payable | 6,459 | 8,162 | | Total | 763,847 | 706,249 | Annual Interest Rates for Short-Term Loans | Loan Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | RMB Bank Loans (Unsecured) | 2.50%-3.10% | 3.40%-3.70% | | Other Bank Loans (Unsecured) | 4.44%-6.96% | 6.91%-7.12% | - All short-term loans are repayable within one year[82](index=82&type=chunk) [Trade and Bills Payables](index=31&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables were **RMB 67,577,549 thousand**. Of this, trade payables were **RMB 62,688,302 thousand**, and bills payables were **RMB 4,889,247 thousand**. The aging analysis shows that trade and bills payables within one year accounted for the largest proportion Composition of Trade and Bills Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 62,688,302 | 59,837,140 | | Bills Payables | 4,889,247 | 6,057,749 | | Total | 67,577,549 | 65,894,889 | Aging Analysis of Trade and Bills Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 Year | 64,920,272 | 63,309,727 | | Over 1 Year but Less Than 2 Years | 1,449,837 | 1,319,642 | | Over 2 Years but Less Than 3 Years | 439,340 | 492,037 | | Over 3 Years | 768,100 | 773,483 | | Total | 67,577,549 | 65,894,889 | [Contract Liabilities](index=32&type=section&id=Contract%20Liabilities) As of June 30, 2025, total contract liabilities were **RMB 7,147,578 thousand**, primarily from telecommunications infrastructure services and other services. Contract liabilities represent customer prepayments received by the company before fulfilling performance obligations Composition of Contract Liabilities | Service Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 4,951,610 | 6,700,059 | | Other Services | 2,195,968 | 2,489,991 | | Total | 7,147,578 | 9,190,050 | - Contract liabilities represent customer prepayments received by the Group before fulfilling performance obligations, until the relevant contractual performance obligations are completed[84](index=84&type=chunk) [Accruals and Other Payables](index=32&type=section&id=Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables were **RMB 12,279,640 thousand**. This primarily included deposits and guarantees, salaries and welfare payable, output VAT to be transferred, and amounts payable to China Telecom Group and other related parties Composition of Accruals and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Deposits and Guarantees | 2,196,229 | 2,559,838 | | Salaries and Welfare Payable | 1,992,991 | 1,648,393 | | Output VAT to be Transferred | 1,380,924 | 1,335,552 | | Amounts Payable to China Telecom Group and Other Related Parties | 1,315,784 | 563,047 | | Dividends Payable | 781,206 | 4,761 | | Other Taxes Payable Apart from Income Tax | 688,871 | 897,915 | | Lease Prepayments | 30,114 | 35,740 | | Payables Related to Construction and Acquisition of Property, Plant and Equipment | 3,498 | 2,756 | | Others | 3,890,023 | 4,372,955 | | Total | 12,279,640 | 11,420,957 | [Other Non-Current Liabilities](index=32&type=section&id=Other%20Non-Current%20Liabilities) Other non-current liabilities primarily refer to deferred income from government grants and termination benefits - Other non-current liabilities primarily refer to deferred income from government grants and termination benefits[86](index=86&type=chunk) [Share Capital](index=33&type=section&id=Share%20Capital) As of June 30, 2025, the company's total registered, issued, and paid-up share capital was **RMB 6,926,018 thousand**, comprising **4,534,598,160 domestic shares** and **2,391,420,240 H shares**, each with a par value of **RMB 1.00** Composition of Share Capital | Share Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Domestic Shares (4,534,598,160 shares) | 4,534,598 | 4,534,598 | | H Shares (2,391,420,240 shares) | 2,391,420 | 2,391,420 | | Total | 6,926,018 | 6,926,018 | [Capital Commitments and Contingent Liabilities](index=33&type=section&id=Capital%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2025, the company's contracted but unexecuted capital commitments for the purchase and construction of property, plant, and equipment and other non-current assets amounted to **RMB 56,863 thousand**. The company had no significant contingent liabilities or provided significant financial guarantees - As of June 30, 2025, the Group's contracted but unexecuted capital commitments for the purchase and construction of property, plant, and equipment and other non-current assets amounted to **RMB 56,863 thousand**[88](index=88&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities or provided significant financial guarantees[89](index=89&type=chunk) [Fair Value Measurement of Financial Instruments](index=34&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The company uses a three-level classification for fair value measurement of financial instruments. As of June 30, 2025, equity instruments measured at fair value through other comprehensive income were **RMB 5,027,214 thousand**, and equity instruments measured at fair value through profit or loss were **RMB 416,345 thousand**. The fair value of Level 3 financial instruments is determined based on discounted cash flows Fair Value Measurement of Financial Assets (June 30, 2025) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Equity instruments measured at fair value through other comprehensive income | 5,026,161 | – | 1,053 | 5,027,214 | | Equity instruments measured at fair value through profit or loss | – | – | 416,345 | 416,345 | - Level 3 investee entities are non-public interest entities, and their fair values are determined based on discounted cash flows[91](index=91&type=chunk) Reconciliation of Level 3 Fair Value Measurements (For the six months ended June 30) | Item | Equity instruments measured at fair value through other comprehensive income (RMB thousand) | Equity instruments measured at fair value through profit or loss (RMB thousand) | | :--- | :--- | :--- | | As of January 1, 2025 | 1,053 | 385,070 | | Purchases | – | 16,162 | | Gains – in profit or loss | – | 15,113 | | As of June 30, 2025 | 1,053 | 416,345 | [Related Party Transactions](index=36&type=section&id=Related%20Party%20Transactions) This note details significant related party transactions between the company and China Telecom Group, the Group's associates/joint ventures, China Telecom Group's associates/joint ventures, and other state-owned enterprises, including various service revenues, expenses, and related receivable and payable balances [Transactions with China Telecom Group](index=36&type=section&id=Transactions%20with%20China%20Telecom%20Group) The company conducts several major transactions with China Telecom Group in its normal operations, including telecommunications infrastructure service revenue of **RMB 8,873,056 thousand**, IT application service revenue of **RMB 4,027,013 thousand**, and last-mile telecommunications service revenue of **RMB 9,483,198 thousand**. As of June 30, 2025, total amounts receivable from China Telecom Group were **RMB 37,355,614 thousand**, and total amounts payable to China Telecom Group were **RMB 5,287,312 thousand** Major Transactions with China Telecom Group (For the six months ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services Revenue | 8,873,056 | 10,859,686 | | IT Application Services Revenue | 4,027,013 | 3,318,436 | | Last-Mile Telecommunications Services Revenue | 9,483,198 | 9,193,971 | | Logistics Services Revenue | 2,055,761 | 2,074,889 | | Material Procurement Services Revenue | 1,309,231 | 1,553,999 | | Property Leasing Services Revenue | 77,332 | 80,548 | | Management Fee Income | 166,948 | 165,747 | | Property Leasing Services Expenses | 51,628 | 46,579 | | IT Application Services Expenses | 421,654 | 162,913 | | Logistics Services Expenses | 620,120 | 703,312 | | Material Procurement Services Expenses | 1,897,974 | 1,704,146 | | Interest Expenses | 12,612 | 11,663 | | Interest Income from Deposits with China Telecom Finance Co., Ltd. | 57,741 | 67,583 | Receivables/Payables with China Telecom Group (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Amounts Receivable from China Telecom Group | 37,355,614 | 37,482,178 | | Total Amounts Payable to China Telecom Group | 5,287,312 | 3,139,364 | [Transactions with Associates, Joint Ventures and Other Related Parties](index=39&type=section&id=Transactions%20with%20Associates,%20Joint%20Ventures%20and%20Other%20Related%20Parties) The company engaged in multiple transactions with the Group's and China Telecom Group's associates, joint ventures, and other related parties. In H1 2025, telecommunications infrastructure service revenue was **RMB 2,215,672 thousand**, and IT application service revenue was **RMB 236,908 thousand**. As of June 30, 2025, total receivables from these related parties were **RMB 3,407,696 thousand**, and total payables were **RMB 2,923,753 thousand** Transactions with Associates, Joint Ventures and Other Related Parties (For the six months ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services Revenue | 2,215,672 | 2,216,278 | | IT Application Services Revenue | 236,908 | 135,145 | | Last-Mile Telecommunications Services Revenue | 999,400 | 990,514 | | Logistics Services Revenue | 81,414 | 59,370 | | Material Procurement Services Revenue | 122,117 | 108,762 | | Property Leasing Services Revenue | 3,075 | 1,982 | | Property Leasing Services Expenses | 176 | 949 | | IT Application Services Expenses | 663,557 | 1,073,331 | | Logistics Services Expenses | 971,073 | 992,065 | | Material Procurement Services Expenses | 425,871 | 193,477 | | Interest Expenses | 5 | 5 | Receivables/Payables with Associates, Joint Ventures and Other Related Parties (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and Bills Receivables, Net | 828,943 | 644,618 | | Contract Assets, Net | 1,005,070 | 664,640 | | Prepayments and Other Current Assets | 1,573,683 | 1,286,523 | | Total Receivables | 3,407,696 | 2,595,781 | | Trade and Bills Payables | 2,638,540 | 3,091,262 | | Contract Liabilities | 160,014 | 219,777 | | Lease Liabilities | 160 | 210 | | Lease Liabilities Due Within One Year | 90 | 79 | | Accruals and Other Payables | 124,949 | 111,692 | | Total Payables | 2,923,753 | 3,423,020 | [Transactions with Other State-Owned Enterprises in China](index=41&type=section&id=Transactions%20with%20Other%20State-Owned%20Enterprises%20in%20China) As a government-related enterprise, the company conducts transactions with other state-owned enterprises in China in its ordinary course of business, on terms similar to those with non-government-related enterprises, including providing and receiving services, selling and purchasing goods, leasing assets, deposits and borrowings, and utilizing public utilities - The Group conducts transactions with other state-owned enterprises in China in its ordinary course of business, on terms similar to those with non-government-related enterprises[105](index=105&type=chunk) - Transactions include providing and receiving services, selling and purchasing goods, leasing assets, deposits and borrowings, and utilizing public utilities[107](index=107&type=chunk) [Transactions with Key Management Personnel](index=41&type=section&id=Transactions%20with%20Key%20Management%20Personnel) In H1 2025, total remuneration received by key management personnel was **RMB 12,658 thousand**, including salaries and other emoluments, retirement benefits, and discretionary bonuses Key Management Personnel Remuneration (For the six months ended June 30) | Remuneration Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries and Other Emoluments | 3,321 | 3,806 | | Share Appreciation Rights | – | 3,434 | | Retirement Benefits | 1,598 | 1,590 | | Discretionary Bonuses | 7,739 | 5,678 | | Total | 12,658 | 14,508 | [Other Information](index=42&type=section&id=Other%20Information) This section provides other important information regarding changes in the company's Board and Supervisory Committee personnel, Audit Committee work, compliance with the Corporate Governance Code, compliance with the Model Code for Securities Transactions by Directors, compliance with Appendix D2 of the Listing Rules, share interests of directors/supervisors/chief executive, substantial interests and short positions in company shares, and purchase/sale/redemption of listed securities, along with a cautionary note on forward-looking statements [Changes in Directors and Supervisors and Their Biographies](index=42&type=section&id=Changes%20in%20Directors%20and%20Supervisors%20and%20Their%20Biographies) The term of the company's Sixth Board of Directors expired, and all directors except Mr. Xiao Weiqiang were re-elected. Mr. Cheng Jianjun and Mr. Chen Li were newly appointed as non-executive directors, and Ms. Zhao Minhui was newly appointed as an independent non-executive director. Additionally, Mr. Tang Yongbo's position was adjusted - Mr. Xiao Weiqiang retired as an independent non-executive director upon expiry of his term, and the remaining directors were re-elected to continue serving as directors of the Seventh Board of Directors[108](index=108&type=chunk) - Mr. Cheng Jianjun and Mr. Chen Li were newly appointed as non-executive directors, and Ms. Zhao Minhui was newly appointed as an independent non-executive director[108](index=108&type=chunk) - Non-executive Director Mr. Tang Yongbo, due to work adjustments, no longer serves as Deputy General Manager of China Unicom Group Co., Ltd. and other positions, and resigned as a non-executive director of China Tower Corporation Limited[109](index=109&type=chunk) [Audit Committee](index=42&type=section&id=Audit%20Committee) The Audit Committee has reviewed the accounting principles and practices adopted by the company with management and discussed matters related to risk management, internal control, and financial reporting, including the review of this report - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management personnel and discussed matters related to the Group's risk management, internal control, and financial reporting, including the review of this report[110](index=110&type=chunk) [Compliance with Corporate Governance Code](index=42&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company confirms that it has complied with all code provisions set out in the Corporate Governance Code in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025 - The company has complied with all code provisions set out in the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[111](index=111&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=42&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and following specific enquiries, all directors and supervisors confirmed compliance with the Model Code for securities transactions of the company for the six months ended June 30, 2025 - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, to regulate securities transactions by its directors and supervisors[112](index=112&type=chunk) - All directors and supervisors confirmed compliance with the Model Code for securities transactions of the company for the six months ended June 30, 2025[112](index=112&type=chunk) [Compliance with Appendix D2 of Listing Rules](index=42&type=section&id=Compliance%20with%20Appendix%20D2%20of%20Listing%20Rules) The company confirms that, except as disclosed in this interim report, there have been no material changes to the existing company information regarding matters listed in paragraph 32 of Appendix D2 of the Listing Rules compared to the information disclosed in the company's 2024 annual report - The company confirms that there have been no material changes to the existing company information regarding matters listed in paragraph 32 of Appendix D2 of the Listing Rules compared to the information disclosed in the company's 2024 annual report[113](index=113&type=chunk) [Directors', Supervisors' and Chief Executive's Interests in Shares](index=43&type=section&id=Directors',%20Supervisors'%20and%20Chief%20Executive's%20Interests%20in%20Shares) As of June 30, 2025, none of the company's directors, supervisors, and chief executive had any registrable interests or short positions in the shares, underlying shares of equity derivatives, or debentures of the company or its associated corporations - As of June 30, 2025, none of the company's directors, supervisors, and chief executive had any registrable interests or short positions in the shares, underlying shares of equity derivatives, or debentures of the company or its associated corporations[114](index=114&type=chunk) [Substantial Interests and Short Positions in Shares of the Company](index=43&type=section&id=Substantial%20Interests%20and%20Short%20Positions%20in%20Shares%20of%20the%20Company) As of June 30, 2025, in accordance with the Securities and Futures Ordinance, China Telecom Group Co., Ltd., China Mobile Communications Group Co., Ltd., and China Unicom Group Co., Ltd. held substantial interests in the company's shares Substantial Interests and Short Positions in Shares of the Company (As of June 30, 2025) | Shareholder Name | Description of Shares | Capacity | Number of Shares | Percentage of Domestic/

截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國通信服務股份有限公司 FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 呈交日期: 2025年9月4日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | H | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00552 | 說明 | H股 | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 2,391,420,240 | RMB | | 1 RMB | | 2,391,420,240 | | 增加 / 減少 (-) | | | 0 | | | RMB | | | | 本月底結存 | | | 2,391,420,240 | RMB | ...

Investment Rating - The investment rating for China Communication Services is "Buy" and is maintained [9]. Core Views - The company reported a 3.4% year-on-year increase in operating revenue for the first half of 2025, amounting to RMB 76.939 billion, with a net profit of RMB 2.129 billion, reflecting a 0.2% growth [2][6]. - The gross margin is at 10.3%, while the net profit margin stands at 2.8% [2][6]. - Non-operator revenue has surpassed half of the total revenue for the first time, indicating stronger resilience in revenue performance [9]. - The company has effectively managed its SG&A expenses, resulting in a decrease in expense ratios, which has helped mitigate pressure on gross margins [9]. - Cash flow remains strong, and the dividend payout ratio has been steadily increasing, suggesting attractive current valuations [9]. Summary by Sections Financial Performance - In 2025H1, the revenue breakdown shows TIS business revenue at RMB 38.272 billion (up 1.6%), BPO business revenue at RMB 22.383 billion (up 1.0%), and ACO business revenue at RMB 16.284 billion (up 11.7%) [9]. - Operator revenue totaled RMB 38.203 billion, down 4.55%, while customer revenue reached RMB 36.585 billion, up 12.9% [9]. Business Development - New contracts signed in 2025H1 exceeded RMB 106 billion, a slight decline of about 2% year-on-year, with strategic emerging businesses contributing over RMB 42 billion, marking a growth of over 10% [9]. - The distribution of new contracts shows operators account for about 31%, while customer segments represent approximately 65% [9]. Market Outlook - The capital expenditure from major operators has been cautious, but there is an expectation for acceleration in the second half of the year, which could support further growth for the company [9]. - The first half of 2025 saw capital expenditures from China Mobile, China Telecom, and China Unicom at RMB 58.4 billion, RMB 34.2 billion, and RMB 20.2 billion, respectively, reflecting declines of 8.8%, 27.5%, and 15.5% year-on-year [9].

Core Viewpoint - Chongqing Communication Industry Service Co., Ltd., a wholly-owned subsidiary of China Communication Services, announced a tender for a public-private partnership (PPP) project related to urban infrastructure and public services in Yubei District, with a budget of 4.0828 million yuan [1] Group 1 - The project is named "Yubei - Undertaking Yubei District Airport New City Urban Infrastructure and Public Service PPP Project Huashi Middle School Landscape and Ancillary Works Project - Green Plant Procurement Inquiry Announcement" [1] - The budget for the project is set at 4.0828 million yuan [1] - The announcement was made on August 25, 2025 [1]

Core Viewpoint - The company reported a diversified revenue structure for the first half of 2025, with total revenue of 76.939 billion yuan, a year-on-year increase of 3.4%, while facing challenges in profitability due to reduced capital expenditure from clients and cost control measures [1][2]. Revenue Breakdown - Total revenue for 1H25 reached 76.939 billion yuan, with a diversified revenue structure where customer and overseas market revenues accounted for over half [1]. - Revenue from the operator market was 38.203 billion yuan, a year-on-year decrease of 4.6%, primarily due to reduced capital expenditure [2]. - Non-telecom customer market revenue was 36.585 billion yuan, showing a year-on-year increase of 12.9%, driven by AI-related infrastructure opportunities [2]. - Overseas market revenue was 2.151 billion yuan, reflecting a year-on-year growth of 8.7%, with successful expansions in Latin America and Africa [2]. Profitability Analysis - Operating gross profit for 1H25 was 7.888 billion yuan, a year-on-year decrease of 2.8%, with a gross margin of 10.3% [1]. - Net profit attributable to shareholders was 2.129 billion yuan, a slight year-on-year increase of 0.2%, with a net profit margin of 2.8% [1]. Business Segment Performance - Telecom Infrastructure Services (TIS) revenue was 38.272 billion yuan, a year-on-year increase of 1.6%, contributing 49.7% to total revenue [3]. - Business Process Outsourcing (BPO) revenue was 22.383 billion yuan, a year-on-year increase of 1.0%, contributing 29.1% to total revenue [3]. - Application, Content, and Other Services (ACO) revenue was 16.284 billion yuan, a year-on-year increase of 11.7%, contributing 21.2% to total revenue [3]. Strategic Business Development - The company’s strategic emerging businesses focused on smart cities, digital infrastructure, and green low-carbon initiatives, with new contract signings exceeding 42 billion yuan, a year-on-year increase of over 10% [4]. - New contracts in digital infrastructure surpassed 12 billion yuan, with a growth rate exceeding 20% [4]. - The company aims to expand its new business areas and customer base, particularly in AI-driven infrastructure and digital transformation [4]. Future Outlook - The company anticipates continued growth in AI-driven customer markets and strategic emerging businesses, adjusting net profit forecasts for 2025-2027 to 3.682 billion, 3.853 billion, and 4.027 billion yuan respectively, with corresponding EPS of 0.53, 0.56, and 0.58 yuan [4].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [7]. Core Insights - The company reported a revenue of 769.39 billion RMB for the first half of 2025, reflecting a year-on-year growth of 3.4%. The revenue structure is diversifying, with over half coming from the customer market and overseas markets. The gross profit for the same period was 78.88 billion RMB, with a gross margin of 10.3%, down 0.6 percentage points year-on-year [1]. - The AI-driven infrastructure and application deployment are significantly boosting the customer market and ACO (Application, Content, and Other Services) business growth. The non-telecom customer market revenue increased by 12.9% year-on-year, with ACO revenue growing by 13.6% [2][3]. - Strategic emerging businesses are enhancing the company's high-quality development momentum, with new contracts exceeding 420 billion RMB in the first half of 2025, representing over 40% of total new contracts [4]. Summary by Sections Financial Performance - In the first half of 2025, the company achieved a net profit of 21.29 billion RMB, a slight increase of 0.2% year-on-year, with a net profit margin of 2.8% [1]. - The company’s operating expenses decreased by 5.5% year-on-year to 61.82 billion RMB, accounting for 8% of total revenue [1]. Market Segments - The operator market revenue was 382.03 billion RMB, down 4.6% year-on-year, primarily due to reduced capital expenditures from clients. However, ACO revenue in this segment grew by 9% [2]. - The overseas market revenue reached 21.51 billion RMB, up 8.7% year-on-year, benefiting from the "Belt and Road" initiative [2]. Business Segments - The TIS (Telecom Infrastructure Services) revenue was 382.72 billion RMB, contributing 49.7% to total revenue, while BPO (Business Process Outsourcing) revenue was 223.83 billion RMB, contributing 29.1% [3]. - The ACO segment's revenue reached 162.84 billion RMB, marking an 11.7% increase year-on-year, driven by accelerated AI application deployment and digital transformation across various industries [3]. Future Outlook - The company is expected to continue leveraging opportunities in AI-driven infrastructure and digital transformation, with adjusted net profit forecasts for 2025-2027 being 36.82 billion RMB, 38.53 billion RMB, and 40.27 billion RMB, respectively [5].