Investment Rating - The report assigns a "Buy" rating to China Unicom (0762.HK) [4][6] Core Viewpoints - China Unicom is positioned as a leading integrated information service operator, with a focus on digital information services and cloud business as a second growth curve [1][3] - The company achieved revenue of 389.6 billion RMB in 2024, a year-on-year increase of 4.6%, and a net profit of 20.6 billion RMB, up 10.1% year-on-year [1][5] - The company has a robust dividend yield averaging over 6% over the past five years, indicating strong defensive attributes [4] Summary by Sections Company Overview - China Unicom was established in 1994 and operates in 31 provinces in China and several countries worldwide, ranking 279th in the 2024 Fortune Global 500 [1][13] Business Segments - The company focuses on two core business areas: "Connected Communication" and "Intelligent Computing" [2][3] - The Connected Communication segment generated revenue of 261.3 billion RMB in 2024, growing by 1.5% year-on-year, with mobile and broadband user numbers reaching 470 million [2][45] - The Intelligent Computing segment, which includes Unicom Cloud, generated revenue of 68.6 billion RMB in 2024, a 17.1% increase year-on-year, and is expected to become a key growth driver [2][3] Financial Performance - The company forecasts net profits of 21.7 billion RMB, 23.2 billion RMB, and 25.1 billion RMB for 2025, 2026, and 2027 respectively [4][5] - The average P/E ratios for 2025 and 2026 are projected at 12x and 11x, respectively, which are below the average for comparable companies [4] Industry Environment - The telecommunications industry in China is experiencing a slowdown, with overall revenue growth of 3.2% in 2024, but emerging businesses like cloud computing and big data are growing steadily [26][29] - New business revenue accounted for 25% of total telecommunications revenue in 2024, with cloud computing and big data revenues increasing by 13.2% and 69.2% respectively [29][40] Strategic Initiatives - China Unicom is enhancing its cloud capabilities through the integration of AI technologies, aiming to transform its business model from resource leasing to AI-enabled services [40][41] - The company has established over 300 integrated training and inference computing resource pools, with a total computing power exceeding 17 EFLOPS [47]

2024中期业绩 中国联合网络通信（香港）股份有限公司 762.HK 预测性陈述 本推介材料中所包含的某些陈述可能被视为"预测性陈述" 。这些预测性 陈述涉及已知和未知的风险、不确定性及其他因素，可能导致本公司的实 际表现、财务状况和经营业绩与预测性陈述中所暗示的将来表现、财务状 况和经营业绩有重大出入。此外，我们将不会更新这些预测性陈述。本公 司及其董事、雇员和代理均不会承担倘因任何预测性陈述不能实现或变得 不正确而引致的任何责任。 2 2023 年 度 业 绩 总体业绩 经营发展稳中有进 收入规模稳健增长 1H 2023 1H 2024 营业收入 （亿元人民币） 1,918 1,973 +2.9% 盈利能力持续提升 1H 2023 1H 2024 153 169 +10.4% 1,710 1,757 1H2023 1H2024 服务收入 （亿元人民币） +2.7% 税前利润 （亿元人民币） 4 2023 年 度 业 绩 推进"三个向新" 网络向新 技术向新 服务向新 5 6 网络向新CAPEX（亿元人民币） 技术向新 服务向新 CAPEX（亿元人民币） 739 650 276 239 2023 2024E ...

China Unicom (Hong Kong) Limited 762.HK Forward-Looking Statements 2024 Annual Results 18 March 2025 3 2023 年 度 业 绩 Overall Results Results Summary—New Breakthroughs in High-quality Development Certain statements contained in this presentation may be viewed as "forward-looking statements". Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially ...

中国联合网络通信（香港）股份有限公司 股票代码：762.HK www.chinaunicom.com.hk China Unicom (Hong Kong) Limited Stock code: 762.HK www.chinaunicom.com.hk Forward-Looking Statements Certain statements contained in this presentation may be viewed as "forward-looking statements". Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance ...

China Unicom (Hong Kong) Limited Stock code: 762.HK www.chinaunicom.com.hk Revenue growth at a 9-year high A Good Start of the New Strategy Forward-looking Statements Certain statements contained in this presentation may be viewed as "forward-looking statements". Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future ...

China Unicom (Hong Kong) Limited 762.HK Overall Results | Steady growth in revenue | | | | Rapidly improving profitability | | | Significantly enhanced investment returns | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Operating revenue | | | | Net profit1 | | | ROE | | | | 372.6 RMB | bil |  | 5.0% |  RMB 11.8% | 18.7 | bil | 5.4 recent years | % | Record high in | 3 2023 年度业绩 Note: 1. Net profit refers to the profit attributable to equity shareholders of the Company Main Responsibi ...

Financial Performance - In Q1 2025, the company reported a net profit attributable to equity holders of RMB 5.93 billion, representing a year-on-year increase of 5.6%[4] - Total operating revenue reached RMB 103.35 billion, reflecting a year-on-year growth of 3.9%[5] - The company achieved a pre-tax profit of RMB 7.60 billion for the quarter[5] User Growth - Mobile users increased to 349 million, with a net addition of 4.78 million users[7] - Broadband users reached 124 million, with a net addition of 1.92 million users[7] - The IoT connections grew to 663 million, with a net increase of 38.4 million[7] Revenue Streams - Revenue from cloud services amounted to RMB 19.72 billion, contributing to the growth of the computing power business[7] - Data center revenue increased by 8.8% year-on-year to RMB 7.22 billion[7] Strategic Initiatives - The company plans to continue implementing its integration innovation strategy to enhance operational efficiency and brand image in 2025[9] - R&D expenses increased by 6.7% year-on-year, reflecting the company's commitment to innovation[8]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 13, representing a potential upside of 38% from the current price of HKD 9.6 [4][7]. Core Insights - The company's revenue and profit performance are in line with expectations, with a steady increase in the dividend payout ratio to 60%. For the fiscal year ending December 31, 2024, the company is projected to achieve a revenue of HKD 389.6 billion (+4.6% YoY) and a net profit of HKD 20.7 billion (+10.1% YoY) [3][7]. - The company is experiencing robust growth in its AIDC (Artificial Intelligence Data Center) orders, with a significant increase in its cloud and data center revenues driven by advancements in artificial intelligence [7]. - The capital expenditure structure is optimized, with a reduction in overall capital spending while maintaining growth in computing power investments [7]. Financial Summary - **Revenue Projections**: The company expects revenues to grow from HKD 372.6 billion in 2023 to HKD 389.6 billion in 2024, with a compound annual growth rate (CAGR) of approximately 4.6% over the next few years [3][12]. - **Net Profit**: The net profit is projected to increase from HKD 18.9 billion in 2023 to HKD 20.7 billion in 2024, reflecting a growth rate of 10.1% [3][12]. - **Earnings Per Share (EPS)**: EPS is expected to rise from HKD 0.65 in 2023 to HKD 0.72 in 2024, indicating a growth of 11.8% [3][12]. - **Dividend Growth**: The company has consistently increased its dividend per share, with a projected dividend of HKD 0.43 for 2024, up 20.1% YoY, and a target payout ratio increasing to over 75% in the coming years [7][12]. - **Capital Expenditure**: The capital expenditure is forecasted to decrease from HKD 613.7 billion in 2024 to HKD 550 billion in 2025, while investments in computing power are expected to grow by 28% [7][12]. Market Position - The company holds a strong position in the telecommunications sector, with significant growth in its IoT (Internet of Things) connections and a leading position in the automotive IoT market [7]. - The report highlights the company's strategic focus on AI and cloud services, which are anticipated to drive future revenue growth [7].

Financial Data and Key Metrics Changes - Operating revenue increased to JPY 386.89 billion, representing a 4.6% growth year-on-year [5] - Profitability reached JPY 20.6 billion, a 10.1% increase compared to the same period last year [5] - Return on equity rose by 5.8% [5] - Total mobile and broadband subscribers reached 470 million, with IoT connections exceeding 620 million [5] Business Line Data and Key Metrics Changes - Uni Unicom cloud revenue grew by 17.1% to JPY 68.6 billion [6] - Data center revenue increased by 7.4% to JPY 25.9 billion [6] - Net contract value of Intelligent Computing business exceeded JPY 1 billion [6] Market Data and Key Metrics Changes - International business revenue reached JPY 500 million, a 15.2% increase over the previous year [22] - The company established 40 global branches in countries like Saudi Arabia, Peru, UAE, and Uzbekistan [22] Company Strategy and Development Direction - Focus on connectivity communications, computing, and digital smart appliances, emphasizing innovation and breakthroughs [4] - Investment strategy aimed at building new infrastructure with a focus on intelligent operations [7] - Anticipated CapEx for 2025 is around JPY 55 billion, with a 28% year-on-year increase in computing power [25] - Commitment to enhancing innovation momentum and optimizing business structure [26] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and commitment to enhancing quality, efficiency, and revenue [25] - The company aims to create more value for society and investors while fulfilling corporate ESG responsibilities [23][26] Other Important Information - The company was included in the FTSE China A50 index, effective soon [24] - Dividend payout ratio increased by 5% points, with a 20.1% increase in dividend payout [24][25] Q&A Session Summary Question: What are the expectations for future growth? - Management indicated that they anticipate continued growth in both domestic and international markets, with a focus on innovation and infrastructure development [25] Question: How is the company addressing ESG responsibilities? - The company highlighted its efforts in energy efficiency, clean energy use, and serving rural areas through digital platforms [23] Question: What are the key areas of investment for the upcoming year? - Key areas of investment include computing power, AI projects, and infrastructure development, with a special budget allocated for these initiatives [25]

Financial Performance - Operating revenue reached RMB 389.6 billion, a year-on-year increase of 4.6%; profit attributable to equity holders was RMB 20.6 billion, up 10.1% year-on-year[3]. - Total revenue for the year ended December 31, 2024, was RMB 389,589 million, an increase of 4.3% from RMB 372,597 million in 2023[24]. - Net profit for the year was RMB 20,733 million, representing a growth of 9.6% compared to RMB 18,922 million in 2023[24]. - Basic earnings per share increased to RMB 0.67 in 2024 from RMB 0.61 in 2023, reflecting a growth of 9.8%[24]. - Total comprehensive income for the year was RMB 20,996 million, up from RMB 19,241 million in 2023, marking an increase of 9.1%[25]. - Total service revenue for 2024 reached RMB 345.975 billion, an increase of 3.4% from RMB 335.170 billion in 2023[47]. - Revenue from communication product sales increased to RMB 43.614 billion in 2024, up 16.5% from RMB 37.427 billion in 2023[47]. - The company's internet communication business revenue was RMB 261.33 billion, reflecting a year-on-year growth of 1.5%[72]. - The smart network business revenue amounted to RMB 82.49 billion, marking a year-on-year increase of 9.6%[73]. Dividends - The proposed final dividend is RMB 0.1562 per share (before tax), with a total annual dividend of RMB 0.4043 per share (before tax), representing a year-on-year increase of 20.1%[3]. - The company declared an interim dividend of RMB 0.2481 per share for 2024, totaling approximately RMB 75.91 billion, compared to RMB 0.203 per share in 2023[58]. - The proposed final dividend for the year ending December 31, 2024, is RMB 0.1562 per share, amounting to approximately RMB 47.79 billion[57]. - The board proposed a final dividend of RMB 0.1562 per share, totaling approximately RMB 4.779 billion, subject to shareholder approval at the annual general meeting[98]. - The final dividend record date is set for June 6, 2025, with the payment expected around June 25, 2025, if approved[98]. User Growth and Engagement - Mobile and broadband user numbers reached 470 million, with a net increase of 19.52 million; IoT connections exceeded 620 million, with a net increase of 130 million[5]. - The number of cloud disk users exceeded 180 million, and ultra-clear users surpassed 50 million, indicating significant growth in user engagement[17]. - The total number of mobile internet users exceeded 340 million, with a net increase of 10.68 million users[1]. - The broadband internet user base surpassed 120 million, with a net increase of 8.84 million users[1]. Capital Expenditure and Investment - Capital expenditure for 2024 is RMB 61.37 billion, a decrease of 17% year-on-year, with computing power investment rising by 19%[3]. - The company aims for revenue, profit, and return on equity to achieve strong growth by 2025, with fixed asset investment projected at approximately RMB 55 billion, including a 28% year-on-year increase in computing power investment[21]. - Total capital expenditures for 2024 amounted to RMB 61.37 billion, with net cash flow from operating activities at RMB 89.40 billion, resulting in free cash flow of RMB 28.03 billion after capital expenditures[90]. Research and Development - R&D expenses increased by 9.1% year-on-year, with 42% of technology talent being innovation-focused[12]. - The company aims to enhance innovation and development, focusing on overcoming key technological bottlenecks and improving overall operational quality[62]. Operational Efficiency and Costs - The company’s operating costs were RMB 373.56 billion, up 4.5% year-on-year, with a cost-to-revenue ratio of 95.9%[75]. - The depreciation and amortization expenses were RMB 83.39 billion, down 1.7% year-on-year, reducing its share of operating revenue from 22.8% to 21.4%[77]. - In 2024, employee compensation and benefits expenses amounted to RMB 64.93 billion, a year-on-year increase of 3.2%, accounting for 16.7% of operating revenue, down from 16.9% in the previous year[79]. - Management expenses decreased by 7.4% year-on-year to RMB 5.12 billion, representing 1.3% of operating revenue, down from 1.5% in the previous year[82]. Corporate Governance and Compliance - The board of directors includes executive and independent non-executive members, ensuring diverse governance[106]. - The group has adopted revised Hong Kong Financial Reporting Standards, which do not significantly impact the financial position and performance as presented in the consolidated financial statements[41]. - The new Hong Kong Financial Reporting Standard 18, effective from January 1, 2027, will introduce new requirements for the presentation and disclosure of financial statements[44]. ESG and Social Responsibility - The company is actively pursuing ESG responsibilities, having established 22 national-level green data centers and promoting network energy conservation[20]. - The company has upgraded its "Unicom Rural" platform, serving 260,000 administrative villages and 280 million rural users, contributing to rural revitalization[20].