香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何 聲明，並明確表示概不對因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 CHINA UNICOM (HONG KONG) LIMITED 中國聯合網絡通信(香港)股份有限公司 （在香港註冊成立之有限公司） （股份代號：762） 2025 年第一季度主要財務及經營指標 中國聯通聚焦聯網通信1和算網數智2兩大主業，持續推進網絡向新、技術向新、服務向 新，高質量發展不斷取得新突破。 2025 年第一季度主要未經審核財務數據如下︰ — 本公司權益持有者應佔盈利達到人民幣 59.3 億元，同比增長 5.6%。 為便於股東、投資者和公眾人士進一步清楚瞭解本集團的運營狀況，中國聯合網絡通信(香港) 股份有限公司（「本公司」，與其各附屬公司合稱「本集團」）董事會（「董事會」）宣佈 本集團 2025 年第一季度未經審核的若干主要財務及經營指標。 1 — 營業收入達到人民幣 1,033.5 億元，同比增長 3.9%。 — 稅前利潤達到人民幣 76.0 億元。 財務數據（摘自按照香港財務報告準則編制 ...

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 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].

Financial Performance - Revenue for the first three quarters of 2024 reached RMB 290.12 billion, a year-on-year increase of 3.0%[1][3] - EBITDA for the first three quarters of 2024 was RMB 80.4 billion, up 2.0% year-on-year[1][3] - Net profit attributable to equity holders of the company was RMB 19.03 billion, a year-on-year increase of 10.3%[1][3] - The company aims to achieve steady revenue growth and double-digit profit growth for the full year[3] Subscriber Growth - Mobile subscribers reached 345 million, with a net increase of 11.23 million for the year, the highest in nearly six years[3] - 5G package subscribers reached 286 million, with a penetration rate of 83%[3] - IoT connections reached 594 million, with a net increase of nearly 100 million[3] - Fixed-line broadband subscribers reached 121 million, with a net increase of 7.12 million for the year[3] Cloud and Data Center Revenue - China Unicom Cloud revenue reached RMB 43.86 billion, a year-on-year increase of 19.5%[3] - Data center revenue reached RMB 19.69 billion, a year-on-year increase of 6.8%[3] Board of Directors - The company's board of directors consists of executive directors: Chen Zhongyue, Jian Qin, Wang Junzhi, and Li Yuzhuo, and independent non-executive directors: Zhang Yonglin, Zhong Ruiming, Luo Fanjiaofen, and Fan Junhua[6]

Revenue and Profit Growth - Service revenue reached RMB 175.7 billion, up 2.7% year-on-year[4] - Total revenue increased to RMB 197.3 billion, a 2.9% year-on-year growth[4] - Net profit attributable to equity holders rose to RMB 13.8 billion, an 11.3% year-on-year increase[4] - Revenue for the first half of 2024 reached RMB 197.34 billion, a year-on-year increase of 2.9%[14] - Net profit attributable to equity holders was RMB 13.79 billion, up 11.3% year-on-year[14] - Total operating revenue for the first half of 2024 reached RMB 197.34 billion, a year-on-year increase of 2.9%, with service revenue accounting for RMB 175.66 billion, up 2.7%[15] - Pre-tax profit for the first half of 2024 was RMB 16.92 billion, a 10.4% increase year-on-year, with net profit attributable to equity holders reaching RMB 13.79 billion, up 11.3%[22][24] - Revenue increased to RMB 197,341 million in the first half of 2024, up from RMB 191,833 million in the same period of 2023, representing a growth of 2.9%[28] - Net profit attributable to equity holders of the company rose to RMB 13,793 million in H1 2024, compared to RMB 12,391 million in H1 2023, an increase of 11.3%[28] - Basic earnings per share increased to RMB 0.45 in H1 2024 from RMB 0.40 in H1 2023, reflecting a 12.5% growth[28] - Total comprehensive income for the period rose to RMB 14,062 million in H1 2024, up from RMB 13,002 million in H1 2023[29] - Total comprehensive income for the first half of 2024 was RMB 14,062 million, compared to RMB 13,002 million in the same period of 2023[33] - Net profit attributable to equity holders of the company for the six months ended June 30, 2024, was RMB 13,793 million, an increase from RMB 12,391 million in the same period in 2023[62] - Basic/diluted earnings per share for the six months ended June 30, 2024, were RMB 0.45, up from RMB 0.40 in the same period in 2023[62] - The company reported a pre-tax profit of 16,919 million RMB in 2024, up from 15,320 million RMB in 2023, reflecting improved profitability[57] EBITDA and Financial Performance - EBITDA stood at RMB 55 billion, up 2.7% year-on-year[4] - EBITDA for the first half of 2024 was RMB 55.01 billion, a 2.7% increase year-on-year, with the EBITDA-to-service revenue ratio remaining stable at 31.3%[25] User and Connectivity Growth - Mobile users increased by over 6 million, reaching a total of 340 million[5] - IoT connections exceeded 560 million, with broadband users reaching 117 million[5] - 5G package user penetration surpassed 80%, and gigabit broadband user penetration exceeded 25%[5] Cloud and Data Services - Unicom Cloud revenue grew 24.3% year-on-year to RMB 31.7 billion[6] - Data service revenue rose 8.6% year-on-year to RMB 3.2 billion, with strong growth in government and enterprise data platforms[7] - Internet communication business revenue grew to RMB 125.06 billion, a 2.1% increase year-on-year, while computing and digital intelligence business revenue rose to RMB 43.54 billion, up 6.6%[17] - Data and internet application services revenue increased to RMB 51.971 billion for the six months ended June 30, 2024, up from RMB 47.752 billion in the same period in 2023[44] International Business - International business revenue increased by 8.4% to RMB 6 billion, driven by IoT and roaming services[8] R&D and Innovation - R&D investment increased by 13% year-on-year in the first half of the year, focusing on network, data, and intelligence innovations[10] - The company achieved 10 EFLOPS of AI computing power and deployed over 20 large-scale computing center parks[11] - Research and development expenses tax deductions amounted to 731 million RMB in 2024, up from 610 million RMB in 2023, supporting innovation efforts[57] Network Infrastructure - 5G mid-frequency base stations exceeded 1.31 million, and low-frequency base stations reached 780,000 in the first half of the year[11] - Fixed asset investment in the first half of the year was RMB 23.9 billion, with a total planned investment of no more than RMB 65 billion for the year[13] - Capital expenditures for the first half of 2024 totaled RMB 23.9 billion, with free cash flow after capital expenditures reaching RMB 5.39 billion[26] - Total capital commitments for telecommunications network construction amounted to RMB 76.427 billion as of June 30, 2024, slightly down from RMB 77.404 billion as of December 31, 2023[119] Environmental and Social Responsibility - The company reduced greenhouse gas emissions by approximately 6.78 million tons in the first half of the year[12] - The energy consumption per unit of telecom business decreased by 6% year-on-year[12] - The digital village platform now covers over 250,000 administrative villages[12] Financial Position and Assets - Total assets as of June 30, 2024, increased to RMB 667.74 billion, while total liabilities decreased to RMB 303.67 billion, resulting in a debt-to-capital ratio of 10.8%, down from 11.6% at the end of 2023[27] - Total assets grew to RMB 667,740 million as of June 30, 2024, up from RMB 661,051 million at the end of 2023[30] - Fixed assets decreased to RMB 348,616 million as of June 30, 2024, compared to RMB 355,995 million at the end of 2023[30] - Cash and cash equivalents stood at RMB 45,839 million as of June 30, 2024, down from RMB 47,733 million at the end of 2023[30] - Total equity increased to RMB 364,071 million as of June 30, 2024, up from RMB 353,898 million at the end of 2023[31] - Total liabilities decreased to RMB 303,669 million as of June 30, 2024, compared to RMB 307,153 million at the end of 2023[32] - Total equity increased to RMB 364,071 million as of June 30, 2024, up from RMB 353,898 million at the beginning of the year[33] - Cash and cash equivalents decreased by RMB 1,917 million in the first half of 2024, ending at RMB 45,839 million[34] - Total assets minus current liabilities increased to RMB 403,850 million as of June 30, 2024, from RMB 397,399 million at the end of 2023[32] - The company's total equity attributable to equity holders increased to RMB 361,590 million as of June 30, 2024, from RMB 351,474 million at the beginning of the year[33] - Fixed assets increased to RMB 1,010,454 million as of June 30, 2024, compared to RMB 996,440 million at the beginning of the period[63] - Right-of-use assets increased by RMB 4.929 billion for the six months ended June 30, 2024, compared to RMB 5.418 billion in the same period in 2023[66] - Financial assets measured at fair value totaled RMB 23,348 million as of June 30, 2024, down from RMB 29,645 million as of December 31, 2023[67] - Accounts receivable increased to RMB 83,492 million as of June 30, 2024, from RMB 57,349 million as of December 31, 2023[71] - Credit loss allowance for accounts receivable increased to RMB 25,920 million as of June 30, 2024, from RMB 18,657 million as of December 31, 2023[71] - Intangible assets decreased to RMB 16,995 million as of June 30, 2024, from RMB 18,265 million as of December 31, 2023[70] - Prepaid transmission line and circuit usage fees decreased to RMB 1,240 million as of June 30, 2024, from RMB 1,601 million as of December 31, 2023[70] - Other assets totaled RMB 21,026 million as of June 30, 2024, down from RMB 22,535 million as of December 31, 2023[70] - Accounts receivable increased significantly from RMB 38,692 million as of December 31, 2023, to RMB 57,572 million as of June 30, 2024, with the largest increase in the "over three months to one year" category, rising from RMB 15,024 million to RMB 22,442 million[72] - Prepaid expenses and other current assets decreased from RMB 26,208 million as of December 31, 2023, to RMB 20,635 million as of June 30, 2024, with a notable reduction in buyback financial assets from RMB 5,005 million to zero[74][75] - The company's total financial assets as of June 30, 2024, were RMB 160.349 billion, slightly down from RMB 161.279 billion as of December 31, 2023[86] - The fair value of equity investments measured at fair value through other comprehensive income (non-reversible) was RMB 2,138 million in Level 1 and RMB 98 million in Level 3, totaling RMB 2,236 million[95] - The fair value of financial assets measured at fair value through profit or loss was RMB 2,816 million in Level 1 and RMB 1,257 million in Level 3, totaling RMB 4,073 million[95] - The fair value of debt investments measured at fair value through other comprehensive income (reversible) was RMB 17,039 million, all in Level 1[95] - The total fair value of financial assets measured at fair value was RMB 23,348 million, with RMB 21,993 million in Level 1 and RMB 1,355 million in Level 3[95] - The fair value of equity investments measured at fair value through other comprehensive income (non-reversible) decreased to RMB 1,929 million in Level 1 and increased to RMB 113 million in Level 3, totaling RMB 2,042 million[96] - The fair value of financial assets measured at fair value through profit or loss decreased to RMB 2,443 million in Level 1 and RMB 1,270 million in Level 3, totaling RMB 3,766 million[96] - The fair value of debt investments measured at fair value through other comprehensive income (reversible) increased to RMB 23,837 million, all in Level 1[96] - The total fair value of financial assets measured at fair value increased to RMB 29,645 million, with RMB 28,209 million in Level 1 and RMB 1,383 million in Level 3[96] - The fair value of long-term bank loans and amounts due to the ultimate holding company was RMB 1,177 million and RMB 855 million, respectively, as of June 30, 2024[100] Costs and Expenses - Operating costs for the first half of 2024 were RMB 184.69 billion, a 2.2% increase year-on-year, with the cost-to-revenue ratio decreasing from 94.2% to 93.6%[18][19] - Network, operation, and support costs for the six months ended June 30, 2024, were RMB 30.448 billion, with network, housing, equipment, and facility usage fees accounting for RMB 11.333 billion[46] - Employee compensation and benefits expenses for the six months ended June 30, 2024, were RMB 28.711 billion, with wages and salaries accounting for RMB 20.053 billion[48] - The cost of sales for communication products for the six months ended June 30, 2024, was RMB 21.153 billion, with mobile phones and other communication products accounting for RMB 20.822 billion[49] - Expected credit loss impairment increased to 7,235 million RMB in 2024 from 3,244 million RMB in 2023, reflecting a significant rise in credit risk[51] - Service technology support costs rose to 27,474 million RMB in 2024, up from 25,828 million RMB in 2023, indicating higher operational expenses[51] - Total financial expenses decreased to 907 million RMB in 2024 from 1,005 million RMB in 2023, primarily due to lower interest expenses[52] - Government subsidies increased to 661 million RMB in 2024 from 344 million RMB in 2023, reflecting higher support from authorities[53] - Income tax expense rose to 3,083 million RMB in 2024 from 2,820 million RMB in 2023, driven by higher taxable profits[56] - Deferred tax assets increased to 2,667 million RMB in 2024 from 1,505 million RMB in 2023, indicating higher future tax benefits[59] - The company's subsidiaries in Mainland China enjoy a preferential tax rate of 15% for high-tech enterprises, contributing to tax savings[58] - Unrecognized deferred tax assets for financial assets measured at fair value through other comprehensive income amounted to 9,517 million RMB in 2024[58] Cash Flow and Financing - Net cash inflow from operating activities was RMB 29,289 million for the first half of 2024, down from RMB 38,287 million in the same period of 2023[34] - Net cash outflow from investing activities was RMB 22,754 million in the first half of 2024, compared to RMB 35,257 million in the same period of 2023[34] - Net cash outflow from financing activities was RMB 8,452 million in the first half of 2024, up from RMB 6,176 million in the same period of 2023[34] - The company proposed an interim dividend of RMB 7,591 million for 2024, compared to no interim dividend in 2023[31] - The company declared an interim dividend of RMB 0.2481 per share for 2024, totaling approximately RMB 7.591 billion, compared to RMB 0.203 per share and RMB 6.211 billion for the same period in 2023[79] - Long-term bank borrowings decreased from RMB 1,606 million as of December 31, 2023, to RMB 1,468 million as of June 30, 2024, with a reduction in the portion due within one year from RMB 354 million to RMB 351 million[80][81] - Short-term bank borrowings increased slightly from RMB 681 million as of December 31, 2023, to RMB 691 million as of June 30, 2024, with interest rates ranging from 1.45% to 1.55%[83] - The company's financial assets measured at fair value through other comprehensive income increased by approximately RMB 165 million in the six months ending June 30, 2024, compared to an increase of RMB 266 million in the same period in 2023[87] - The fair value of financial assets measured at fair value through other comprehensive income was approximately RMB 1.948 billion as of June 30, 2024, up from RMB 1.783 billion as of December 31, 2023[87] - The company recognized share-based payment expenses and other reserves of RMB 141 million for the six months ending June 30, 2024, under the second phase of the restricted A-share incentive plan, compared to RMB 142 million in the same period in 2023[91] - A total of 3,411,000 restricted shares under the second phase of the restricted A-share incentive plan were deemed forfeited during the six months ending June 30, 2024, compared to none in the same period in 2023[91] - The company's financial transactions with China Unicom Group and its subsidiaries included RMB 5,400 million in loans provided and RMB 3,400 million in repayments received during the six months ended June 30, 2024[103] - Accounts receivable from China Unicom Group increased to RMB 6.6 billion as of June 30, 2024, up from RMB 4.6 billion as of December 31, 2023[106] - Accounts payable to China Unicom Group and its subsidiaries reached RMB 7.698 billion as of June 30, 2024, with deposit interest rates ranging from 0.42% to 2.75%[107] - Engineering design and construction services expenses with China Unicom Group's associates and joint ventures increased to RMB 1.532 billion in the first half of 2024, up from RMB 1.140 billion in the same period of 2023[110] - Telecommunications value-added services revenue from associates and joint ventures rose to RMB 402 million in the first half of 2024, compared to RMB 190 million in the same period of 2023[113] - The company recognized RMB 2.005 billion in new right-of-use assets for tower assets in the first half of 2024, down from RMB 3.032 billion in the same period of 2023[115] - Accounts payable to tower companies (excluding lease liabilities) decreased to RMB 13.003 billion as of June 30, 2024, from RMB 13.794 billion as of December 31, 2023[117] Corporate Governance and Compliance - The unaudited condensed consolidated interim financial statements were approved by the board of directors on August 15, 2024[121] - Deloitte reviewed the condensed consolidated interim financial statements and found no material misstatements, confirming compliance with Hong Kong Accounting Standard 34[124] - No share options were granted under the 2014 Share Option Plan from its adoption until June 30, 2024, and the plan expired on

Investment Rating - The report maintains a "Buy" rating for China Unicom with a target price of HKD 7.6, representing a potential upside of 17% from the current stock price of HKD 6.5 [1][3]. Core Insights - China Unicom has achieved double-digit profit growth for eight consecutive years, with a dividend payout ratio increased to 55% [1]. - The company's revenue for the first half of 2024 reached RMB 197.3 billion, a year-on-year increase of 2.9%, while service revenue was RMB 175.7 billion, up 2.7% year-on-year [1]. - The EBITDA for the same period was RMB 55 billion, reflecting a 2.7% year-on-year growth, and the net profit attributable to shareholders was RMB 13.8 billion, marking an 11.3% increase year-on-year [1]. Summary by Sections Financial Performance - In the first half of 2024, China Unicom's operating income was RMB 197.3 billion, with a year-on-year growth of 2.9%. The service revenue was RMB 175.7 billion, growing by 2.7% year-on-year. EBITDA reached RMB 55 billion, also up by 2.7% year-on-year, while net profit attributable to shareholders was RMB 13.8 billion, reflecting an 11.3% increase year-on-year [1][6]. - The company reported a return on equity of 3.7%, an increase of 0.26% year-on-year, and a debt-to-asset ratio of 45.5%, down by 1% year-on-year [1]. Business Segments - The internet communication service revenue for the first half of 2024 was RMB 125.1 billion, a year-on-year increase of 2.1%, accounting for three-quarters of the main business. The mobile user base reached 340 million, with a net addition of 6 million users, and the penetration rate of 5G packages exceeded 80% [1]. - The smart network business saw rapid growth, with revenue of RMB 43.5 billion, up 6.6% year-on-year, contributing over 60% of the new service revenue. Cloud revenue was RMB 31.7 billion, growing by 24.3% year-on-year [1]. Future Outlook - The report anticipates a gradual increase in the dividend payout ratio to 70% in the future, despite a downward adjustment in revenue growth expectations for 2024-2026 to 3.8%, 3.7%, and 3.6% respectively [1][4]. - The target price of HKD 7.6 is based on a 10x earnings multiple for 2024 profits, reflecting the company's solid fundamentals and potential for increased dividends [1].

Financial Performance - The company's operating revenue for the first half of 2024 reached RMB 197.3 billion, a year-on-year increase of 2.9%[3] - EBITDA for the same period was RMB 55 billion, reflecting a 2.7% year-on-year growth, while total profit amounted to RMB 16.9 billion, up 10.4% year-on-year[3] - The profit attributable to equity holders was RMB 13.8 billion, marking an 11.3% increase year-on-year, achieving double-digit growth for eight consecutive years[3] - The interim dividend declared was RMB 0.2481 per share (pre-tax), representing a 22.2% increase year-on-year, significantly higher than the growth rate of basic earnings per share[3] - Total comprehensive income for the period was RMB 14,062 million, compared to RMB 13,002 million in the same period of 2023, marking a growth of 8.1%[17] - The company's total revenue for the first half of 2024 was RMB 197.34 billion, representing a year-on-year growth of 2.9%[37] - Service revenue accounted for RMB 175.66 billion, with a year-on-year increase of 2.7%[38] - Net profit for the period was RMB 13,836 million, compared to RMB 12,500 million in the previous year, reflecting an increase of approximately 10.7%[17] - Basic and diluted earnings per share for the period were both RMB 0.45, up from RMB 0.40 in the same period last year, indicating a 12.5% increase[16] Revenue Breakdown - The service revenue reached RMB 175.7 billion, an increase of 2.7% year-on-year, with the internet communication business generating RMB 125.1 billion, up 2.1% year-on-year[5] - The cloud computing revenue reached RMB 31.7 billion, a significant year-on-year increase of 24.3%, showcasing the company's leading position in the industry[6] - International business revenue was RMB 6 billion, reflecting an 8.4% year-on-year growth, driven by increased roaming and overseas mobile service revenues[7] - Total service revenue for the six months ended June 30, 2024, was RMB 175,656 million, an increase from RMB 171,045 million for the same period in 2023, representing a growth of approximately 3.8%[28] - Sales of communication products for the six months ended June 30, 2024, amounted to RMB 21,685 million, compared to RMB 20,788 million for the same period in 2023, reflecting an increase of about 4.3%[28] Investment and Expenditures - Capital expenditures were effectively controlled at RMB 23.9 billion, a decrease of 13.4% compared to the previous year[3] - The company completed fixed asset investments of RMB 23.9 billion in the first half of the year, with a stable investment scale and continuous improvement in investment efficiency[10] - The company aims for stable revenue growth and double-digit profit growth for the full year, with fixed asset investments expected to remain within RMB 65 billion[13] Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 667,740 million, an increase from RMB 661,051 million at the end of 2023[18] - Current liabilities totaled RMB 263,890 million, slightly up from RMB 263,652 million at the end of 2023, indicating a stable liability management[20] - The company's total liabilities to total assets ratio was 45.5% as of June 30, 2024, indicating a stable financial position[37] - The company's non-current assets decreased to RMB 493,899 million from RMB 502,950 million at the end of 2023, indicating a reduction of 1.9%[18] - The company’s total equity increased to RMB 364,071 million from RMB 353,898 million at the end of 2023, reflecting a growth of 2.4%[19] Operational Efficiency - The operating costs for the first half of 2024 were RMB 184.69 billion, reflecting a year-on-year increase of 2.2%[41] - The company’s network, operation, and support costs rose to RMB 30.45 billion, a 4.4% increase year-on-year[44] - The company’s employee compensation and benefits expenses decreased to RMB 28.71 billion, down from RMB 32.25 billion in the previous year[41] - In the first half of 2024, employee compensation and benefits expenses amounted to RMB 28.71 billion, a decrease of 11.0% year-on-year, representing 14.5% of operating revenue, down from 16.8% in the same period last year[45] - Sales expenses increased by 2.4% year-on-year to RMB 17.73 billion, maintaining a stable proportion of 9.0% of operating revenue compared to the same period last year[47] - Management expenses decreased by 3.4% year-on-year to RMB 2.29 billion, remaining stable at 1.2% of operating revenue[48] - Other operating expenses rose by 16.7% year-on-year to RMB 36.52 billion, increasing its share of operating revenue from 16.3% to 18.5%[48] Research and Development - R&D investment increased by 13% year-on-year in the first half of the year, focusing on original and leading technological breakthroughs[8] - The company launched an artificial intelligence shared dataset and a "trusted data resource space" platform to enhance data governance and security[9] - The blockchain TPS exceeded 100,000, ranking among the industry leaders[11] Environmental Commitment - The company reduced greenhouse gas emissions by approximately 6.78 million tons in the first half of the year, with a 6% decrease in energy consumption per unit of telecom business[12] Recognition and Awards - The company received multiple accolades, including ranking 279th in the 2024 Fortune Global 500 and being recognized as "Asia's Most Admired Telecom Company" for nine consecutive years[12] Corporate Governance - The board of directors includes four executive directors and four independent non-executive directors[64] - The group continues to operate under the assumption of going concern, with sufficient funds to meet operational commitments and anticipated capital expenditures[24]

Financial Performance - Revenue for 2023 reached RMB 3,726.0 billion, a 5.0% increase from RMB 3,549.4 billion in 2022[10] - Net profit for 2023 was RMB 187.3 billion, an 11.8% increase from RMB 167.4 billion in 2022[10] - EBITDA reached RMB 99.8 billion, while net profit attributable to equity holders was RMB 18.7 billion, reflecting an 11.8% year-on-year growth[13] - In 2023, the company achieved operating revenue of RMB 372.6 billion, a year-on-year increase of 5.0%[29] - The company reported a pre-tax profit of RMB 22.95 billion, showing an 11.5% year-on-year growth[42] - The company reported a total comprehensive income of RMB 19,038 million for the year ended December 31, 2023, compared to RMB 16,940 million in 2022, an increase of 12.3%[193] - The proposed final dividend for the year is RMB 4,088 million, up from RMB 3,335 million in the previous year, reflecting a growth of 22.6%[190] User Growth - The number of mobile users grew by 10.6 million, reaching 333 million[4] - The number of broadband users increased by 9.79 million, totaling 113 million[4] - The number of mobile internet users increased by 10.6 million, reaching a total of 333 million, with a 5G package penetration rate of 78%, up 12 percentage points year-on-year[14] - The broadband internet user base grew to 113 million, with a net increase of 9.79 million users, marking the highest growth in nearly a decade[14] Cloud and Data Services - Cloud revenue rose by 41.6% year-over-year, reaching RMB 51 billion[3] - Data service revenue grew by 32%[3] - The intelligent network and data services segment generated revenue of RMB 75.2 billion, with cloud services revenue reaching RMB 51.03 billion, a 41.6% increase year-on-year[15] - The company’s cloud computing revenue exceeded RMB 10 billion, driven by new information application products[25] Capital Expenditure and Financial Position - The company’s capital expenditure for 2023 was RMB 73.9 billion, with a focus on high-growth intelligent network and data services[13] - The company’s interest-bearing debt decreased by 19% to RMB 46.4 billion, maintaining a debt-to-asset ratio of 46.5%[13] - The asset-liability ratio stood at 46.5% by the end of 2023[29] - The company’s total assets increased from RMB 642.66 billion to RMB 661.05 billion, while total liabilities rose from RMB 299.13 billion to RMB 307.15 billion, maintaining a debt-to-asset ratio of 46.5%[46] Corporate Governance - The company emphasizes the importance of a healthy corporate culture as the core of good governance, focusing on innovation and integration to enhance competitiveness[61] - The company has adopted a corporate governance code that complies with all relevant regulations and best practices, confirming adherence to governance standards for the year ending December 31, 2023[65] - The board consists of seven members, including three executive directors and four independent non-executive directors, ensuring a diverse range of expertise[66] - The company has established mechanisms for independent non-executive directors to express their opinions openly and confidentially, enhancing governance quality[67] Risk Management - The company has established a comprehensive risk management system that combines routine comprehensive risk assessment with dynamic key risk management, ensuring effective operational management[97] - The company emphasizes the importance of network and information security, aligning with national laws and regulations to support the construction of a strong digital network[98] - In 2023, the company identified significant risks including network and information security, public opinion risk, and fixed asset investment risk, implementing appropriate countermeasures for each[98][99][101] Employee and Talent Management - The company emphasizes talent as the primary resource, with over 10,000 new hires in 2023 through campus and social recruitment[172] - Employee compensation and benefits expenses for the year ended December 31, 2023, were approximately RMB 62.94 billion, an increase from RMB 60.73 billion for the year ended December 31, 2022[143] - The group provides comprehensive welfare plans and career development opportunities for employees, including retirement benefits and training programs[143] Shareholder Communication and Investor Relations - The company has established a shareholder communication policy to ensure timely and balanced information is provided to shareholders, facilitating informed decision-making[114] - The company received multiple awards for its investor relations efforts, including recognition as the "Best Investor Relations Team (Telecom Sector) in Asia" at the 2023 Institutional Investor awards[114] - The company regularly holds analyst and investor meetings to provide detailed information and address inquiries regarding its performance and operations[111] Audit and Financial Reporting - Revenue recognition is identified as a key audit matter due to the complexity of the billing information system and the inherent risks associated with the accuracy of revenue recorded in the telecommunications industry[180] - The auditor's report provides reasonable assurance that the consolidated financial statements are free from material misstatement, but does not guarantee that all errors will be detected[185] - The financial statements and the auditor's report are prepared in accordance with the Hong Kong Financial Reporting Standards and the Companies Ordinance[177]

Investment Rating - The report maintains a "Buy" rating for China Unicom with a target price of HKD 7.66, corresponding to a P/E ratio of 10.2x/9.3x/8.5x for the fiscal years 2024-2026 and dividend yields of 6.0%/7.1%/8.3% for the same periods [1][2]. Core Insights - The first quarter of 2024 saw earnings slightly below expectations, but the company is expected to maintain double-digit profit growth for the full year. Service revenue and net profit for Q1 2024 were RMB 89.043 billion (up 3.4% year-on-year) and RMB 5.613 billion (up 8.9% year-on-year), respectively. The slight miss in profit growth was attributed to a decrease in net income from joint ventures and other income, while operating profit increased by 22.3% year-on-year [1][2]. - The company is expected to continue improving shareholder returns and maintain high dividend payouts, with a projected dividend yield of 6.2% for 2023 and expected yields of 7.6%, 9.0%, and 10.6% for 2024, 2025, and 2026, respectively [1][2]. Summary by Sections Financial Performance - In Q1 2024, China Unicom's service revenue was RMB 89.043 billion, reflecting a year-on-year growth of 3.4%, while net profit was RMB 5.613 billion, up 8.9% year-on-year. Operating profit showed a significant increase of 22.3% year-on-year [1][2]. Capital Expenditure and Efficiency - The company plans to reduce capital expenditure by 12% year-on-year to RMB 65 billion in 2024, which is expected to alleviate depreciation pressure. The depreciation and amortization expenses accounted for 23.7% of total operating expenses in 2023. Efforts to enhance operational efficiency are also underway, with good control over employee benefits and sales expenses [2]. Dividend Policy - The report anticipates that China Unicom will continue to enhance shareholder returns through increased dividends, with a projected payout ratio of approximately 60% for 2024, which is expected to rise in 2025 and 2026 [1][2].

Financial Performance - In Q1 2024, China Unicom reported operating revenue of RMB 99.496 billion, a year-on-year increase of 2.3%[1] - Service revenue reached RMB 89.043 billion, growing by 3.4% compared to the previous year[2] - Pre-tax profit was RMB 7.239 billion, reflecting a year-on-year growth of 10.6%[3] - Profit attributable to equity holders amounted to RMB 5.613 billion, an increase of 8.9% year-on-year[3] - The company aims for steady revenue growth and double-digit profit growth for the full year 2024[4] User and Connection Metrics - The number of mobile users reached 337 million, with 5G package users at 269 million, resulting in a penetration rate of 80%[3] - Internet of Things (IoT) connections totaled 529 million, with a net increase of 34.6 million[3] Cloud Business - Revenue from the cloud business (Unicom Cloud) was RMB 16.7 billion, marking a 30.3% year-on-year increase[3] Assets and Liabilities - Total assets as of March 31, 2024, were RMB 664.787 billion, while total liabilities were RMB 304.902 billion[2] Technological Innovation - The company authorized 362 patents in Q1 2024, indicating a steady increase in technological innovation[3]