[Company Profile](index=8&type=section&id=Company%20Profile) [Company Profile](index=8&type=section&id=Company%20Profile) China Unicom (Hong Kong) is a major integrated telecom operator in China, offering comprehensive services and serving approximately 318 million mobile subscribers by 2019-end Subscriber Scale as of End 2019 | Subscriber Type | Quantity | | :--- | :--- | | Total Mobile Billing Subscribers | Approx. 318 million | | Of which: 4G Subscribers | Approx. 254 million | | Fixed-line Broadband Subscribers | Approx. 83 million | | Fixed-line Local Telephone Subscribers | Approx. 54 million | - The ultimate parent company, China United Network Communications Group Co., Ltd. (Unicom Group), beneficially owns **52.1%** of the company's shares through its subsidiaries, with the remaining shares held by strategic investors, employees, and public shareholders[17](index=17&type=chunk) [Financial and Operational Highlights](index=10&type=section&id=Financial%20and%20Operational%20Highlights) [Key Financial and Operational Indicators](index=10&type=section&id=Key%20Financial%20and%20Operational%20Indicators) In 2019, operating revenue was stable, service revenue slightly increased, and net profit grew 11.1%, driven by cost control and industrial internet business 2019 Key Financial Indicators | Key Financial Indicator | 2019 | 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB billion) | 290.51 | 290.88 | -0.1% | | Of which: Service Revenue | 264.39 | 263.68 | 0.3% | | EBITDA (RMB billion) | 94.36 | 84.91 | 11.1% | | Net Profit (RMB billion) | 11.33 | 10.20 | 11.1% | | Basic Earnings Per Share (RMB) | 0.370 | 0.333 | 11.1% | | Free Cash Flow (RMB billion) | 26.4 | 47.5 | -44.5% | - Revenue from industrial internet business continuously increased its proportion of total service revenue from **6.4%** in 2017 and **8.7%** in 2018 to **12.4%** in 2019, becoming a significant driver for stable service revenue[22](index=22&type=chunk) [2019 Milestones](index=12&type=section&id=2019%20Milestones) In 2019, the company advanced mixed-ownership reform and 5G strategic deployment, including strategic investments in subsidiaries and a 5G network co-build agreement - Vehicle networking subsidiary Unicom Smart Network Technology introduced 9 strategic investors including FAW, Dongfeng, and GAC; Big Data company Smart Footprint introduced JD Digital Technology as a strategic investor[27](index=27&type=chunk) - Signed a 5G network co-build and share agreement with China Telecom to jointly build a 5G access network nationwide[28](index=28&type=chunk) - Yunnan Unicom expanded socialized operation cooperation to the entire province, marking the official implementation phase of provincial-level mixed-ownership reform[30](index=30&type=chunk) [Chairman's Report](index=14&type=section&id=Chairman%27s%20Report) [Overall Performance](index=15&type=section&id=Overall%20Performance) Despite challenges, the company rapidly improved profitability in 2019, with service revenue growing 0.3% and net profit 11.1%, maintaining strong financials 2019 Overall Performance Summary | Indicator | Amount (RMB) | Year-on-Year Change | | :--- | :--- | :--- | | Service Revenue | 264.4 billion | +0.3% | | EBITDA | 94.4 billion | +11.1% | | Net Profit | 11.3 billion | +11.1% | | Capital Expenditure | 56.4 billion | - | | Free Cash Flow | 26.4 billion | - | | Proposed Final Dividend | 0.148 per share | +10.4% | - The company's asset-liability ratio decreased to **39.3%**, a 2.5 percentage point reduction year-on-year, indicating a more robust financial position[32](index=32&type=chunk) [Business Development](index=15&type=section&id=Business%20Development) The company shifted mobile business focus to quality, saw fixed-line revenue grow 9.7%, and achieved significant growth in innovative businesses - Mobile business development shifted from "quantity growth" to "quality improvement," with mobile service revenue decreasing by **5.3%** to **RMB 156.4 billion**, and 4G users reaching **254 million**, accounting for **80%** of total mobile billing users[32](index=32&type=chunk)[34](index=34&type=chunk) - Fixed-line broadband users increased by **2.6 million**, totaling **83.48 million**, with integrated service penetration reaching **59%**, an 8 percentage point increase year-on-year[34](index=34&type=chunk) Innovation and Fixed-line Business Revenue | Business Segment | Revenue (RMB billion) | Year-on-Year Growth | | :--- | :--- | :--- | | Industrial Internet | 32.9 | 43% | | Fixed-line Services | 105.7 | 9.7% | [Network Construction](index=16&type=section&id=Network%20Construction) The company innovatively collaborated on 5G network co-building, saving capital expenditure and doubling capacity, while advancing 4G and fixed-line networks - Co-built and shared 5G network with China Telecom, activating **50,000** shared 5G base stations, saving approximately **RMB 10 billion** in investment costs, and doubling network coverage, bandwidth, capacity, and speed[37](index=37&type=chunk) - Total 4G base stations reached **1.41 million**, including **240,000** LTE 900MHz base stations, enhancing deep and rural coverage capabilities[38](index=38&type=chunk) - FTTH users accounted for **85%** of fixed-line broadband users[38](index=38&type=chunk) [Mixed-Ownership Reform](index=17&type=section&id=Mixed-Ownership%20Reform) The company deepened mixed-ownership reform, enhancing strategic investor collaborations and internal mechanism reforms, boosting vitality and efficiency - Continued cooperation with Alibaba, Tencent, Baidu in public cloud and cloud networking; jointly established a smart cultural tourism company with Tencent; joint venture Smart Footprint successfully introduced investment from JD Digital Technology[39](index=39&type=chunk) - Deepened institutional and mechanism reforms, with **24,000** "small CEOs" appointed and over **7,000** talents introduced in innovative fields[40](index=40&type=chunk) - Subsidiary mixed-ownership reform progressed, with Smart Network Technology successfully introducing 9 strategic investors including FAW, Dongfeng Motor, and GAC[40](index=40&type=chunk) [Social Responsibility and Corporate Governance](index=18&type=section&id=Social%20Responsibility%20and%20Corporate%20Governance) The company actively fulfills social responsibilities, implements national strategies, promotes 5G, and improves governance, earning multiple accolades - In response to the COVID-19 pandemic, the company utilized big data, AI, and 5G technologies for precise prevention and control, and accelerated its internet-based operational transformation[40](index=40&type=chunk) - Corporate governance received market recognition, winning awards such as "Asia's Best Managed Telecom Company" by FinanceAsia and "Asia's Most Admired Telecom Company" by Institutional Investor[40](index=40&type=chunk) [Future Outlook](index=19&type=section&id=Future%20Outlook) For 2020, despite challenges, the company will focus on innovation, internet-based operations, and mixed-ownership reform for high-quality development - The company will adhere to its innovation and cooperation strategy, steadily advance comprehensive internet-based operations, and deepen mixed-ownership reform[42](index=42&type=chunk) - Development goals are "enhance value, seek development, strengthen foundation, and foster passion," focusing on improving basic services, innovative businesses, network competitiveness, and IT support capabilities[42](index=42&type=chunk) [Business Overview](index=20&type=section&id=Business%20Overview) [Mobile Business](index=20&type=section&id=Mobile%20Business) In 2019, the company deepened its focus strategy and promoted internet-based market operations, with mobile billing subscribers reaching 320 million and mobile internet traffic growing 46% year-on-year 2019 Mobile Business Key Data | Indicator | Value | | :--- | :--- | | Total Billing Subscribers | 320 million | | 4G Billing Subscribers | 250 million | | User ARPU | RMB 40.4 | | Mobile Internet Traffic | 30.16 million TB | | Mobile Internet Traffic Year-on-Year Growth | 46% | [Fixed-line Broadband](index=21&type=section&id=Fixed-line%20Broadband) The company strengthened fixed-line broadband integration; despite a full-year revenue decline, Q4 revenue and ARPU rebounded, with users reaching 83.48 million 2019 Fixed-line Broadband Key Data | Indicator | Value | | :--- | :--- | | Total Broadband Subscribers | 83.48 million | | Net Increase for the Year | 2.6 million | | Broadband User Access ARPU | RMB 41.6 | | FTTH User Penetration | 85% | - Despite a **1.7%** year-on-year decrease in full-year fixed-line broadband revenue, fourth-quarter broadband access revenue and ARPU showed a rebound[45](index=45&type=chunk) [Industrial Internet](index=21&type=section&id=Industrial%20Internet) Industrial internet business achieved high-speed growth, becoming a significant revenue driver, with cloud computing and big data showing strong increases 2019 Industrial Internet Revenue and Growth by Segment | Business Segment | Revenue (RMB billion) | Year-on-Year Growth | | :--- | :--- | :--- | | Cloud Computing | 2.36 | 147% | | Big Data | 1.23 | 103% | | IoT | 3.04 | 46% | | IT Services | 10.0 | 78% | - IoT connections approached **190 million**[45](index=45&type=chunk) [Network Capability and Capital Expenditure](index=21&type=section&id=Network%20Capability%20and%20Capital%20Expenditure) The company built high-quality networks, with 4G base stations reaching 1.41 million and 5G base stations exceeding 60,000, with planned 2020 capex of RMB 70 billion - By the end of 2019, 4G base stations reached **1.41 million**, and 4G population coverage reached **93%**[45](index=45&type=chunk) - Total capital expenditure in 2019 was approximately **RMB 56.4 billion**; estimated capital expenditure for 2020 is approximately **RMB 70 billion**, with approximately **RMB 35 billion** allocated to 5G network capital expenditure[46](index=46&type=chunk)[47](index=47&type=chunk) [Marketing and Customer Service](index=22&type=section&id=Marketing%20and%20Customer%20Service) The company reshaped its brand, launched 5G branding, and improved customer service reputation with a 50% decrease in effective complaints - Launched the 5G brand logo "5Gn" and slogan "Let the Future Grow" to enhance brand recognition[47](index=47&type=chunk) - Customer service reputation continuously improved, with mobile network customer NPS increasing by **7.2 points** and fixed-line by **8.1 points** in Q4 year-on-year; effective complaint rate to MIIT decreased by **50%** year-on-year[49](index=49&type=chunk) [Financial Overview](index=24&type=section&id=Financial%20Overview) [Financial Summary](index=24&type=section&id=Financial%20Summary) In 2019, operating revenue slightly decreased, service revenue slightly increased, and net profit grew to RMB 11.33 billion, impacted by IFRS 16 adoption 2019 Financial Data Overview | Indicator | Amount (RMB billion) | | :--- | :--- | | Operating Revenue | 290.51 | | Service Revenue | 264.39 | | Net Profit | 11.33 | | Net Cash Flow from Operating Activities | 93.68 | | Capital Expenditure | 56.42 | | Asset-Liability Ratio | 43.0% | - The company adopted International Financial Reporting Standard 16 (IFRS 16) from January 1, 2019, leading to an increase in depreciation and amortization and finance costs, while lease expenses within network, operation, and support costs decreased accordingly[50](index=50&type=chunk) [Operating Revenue Composition](index=24&type=section&id=Operating%20Revenue%20Composition) In 2019, service revenue grew 0.3%, with revenue structure optimizing as non-voice business revenue increased to 85.07% of total 2019 Service Revenue Composition | Revenue Type | Amount (RMB billion) | Percentage of Service Revenue | 2018 Percentage | | :--- | :--- | :--- | :--- | | **Total Service Revenue** | **264.39** | **100.00%** | **100.00%** | | Voice Business | 39.48 | 14.93% | 17.47% | | Non-Voice Business | 224.91 | 85.07% | 82.53% | [Cost and Expense Analysis](index=26&type=section&id=Cost%20and%20Expense%20Analysis) In 2019, total costs slightly decreased, with depreciation increasing due to new leasing standards, while network costs decreased and other expenses rose 2019 Key Cost and Expense Items | Cost and Expense Item | 2019 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | | **Total Costs and Expenses** | **276.35** | **-0.5%** | | Depreciation and Amortization | 83.08 | +9.6% | | Network, Operation and Support Costs | 43.24 | -21.5% | | Employee Compensation and Benefits | 50.52 | +4.9% | | Selling Expenses | 33.54 | -4.6% | | Other Operating and Administrative Expenses | 30.95 | +12.9% | - The increase in depreciation and amortization and finance costs, and the decrease in network, operation, and support costs, are primarily due to the implementation of the new leasing standard[58](index=58&type=chunk) [Profitability, Capital Expenditure, and Cash Flow](index=28&type=section&id=Profitability%2C%20Capital%20Expenditure%2C%20and%20Cash%20Flow) Profitability improved, with EBITDA growing 11.1% and net profit reaching RMB 11.33 billion, while capital expenditure was RMB 56.42 billion 2019 Profitability and Cash Flow | Indicator | Amount (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | | EBITDA | 94.36 | +11.1% | | Pre-tax Profit | 14.17 | +8.3% | | Net Profit | 11.33 | +11.1% | | Net Cash Flow from Operating Activities | 93.68 | - | | Free Cash Flow | 37.26 | - | 2019 Capital Expenditure Composition | Capital Expenditure Item | Amount (RMB billion) | Percentage | | :--- | :--- | :--- | | **Total** | **56.42** | **100.00%** | | Mobile Network | 29.65 | 52.54% | | Broadband and Data | 8.43 | 14.94% | | Infrastructure and Transmission Network | 11.42 | 20.23% | | Other | 6.92 | 12.29% | [Asset and Liability Status](index=29&type=section&id=Asset%20and%20Liability%20Status) As of 2019-end, total assets increased 4.1%, total liabilities 6.9%, and total equity 2.1%, maintaining a robust financial position despite IFRS 16 impact - Due to the implementation of the new leasing standard, the asset-liability ratio changed from **41.8%** to **43.0%**, and the debt-to-capital ratio changed from **11.3%** to **15.2%**[61](index=61&type=chunk) - As of the end of 2019, the net debt-to-capital ratio was **5.9%**[61](index=61&type=chunk) [Directors and Senior Management](index=30&type=section&id=Directors%20and%20Senior%20Management) [Directors and Senior Management Profiles](index=30&type=section&id=Directors%20and%20Senior%20Management%20Profiles) This section details the background of the company's board members and senior management, highlighting their extensive industry experience - Mr. Wang Xiaochu, aged 61, has served as the company's Chairman and CEO since September 2015, possessing extensive management and telecommunications industry experience[63](index=63&type=chunk) - Mr. Zhu Kebing, aged 45, has served as the company's Executive Director and CFO since August 2018, possessing rich experience in corporate finance and investment management[69](index=69&type=chunk) [Corporate Governance Report](index=43&type=section&id=Corporate%20Governance%20Report) [Board of Directors](index=45&type=section&id=Board%20of%20Directors) The Board maintains high corporate governance standards with a diverse composition, regularly reviews significant matters, and earned multiple international accolades in 2019 - The Board of Directors consists of **9** members, including **4** executive directors, **1** non-executive director, and **4** independent non-executive directors, with diverse backgrounds[87](index=87&type=chunk) - In 2019, the company received multiple governance awards, including "Asia's Most Admired Telecom Company No. 1" by Institutional Investor and "Asia's Best Managed Telecom Company No. 1" by FinanceAsia[86](index=86&type=chunk) - In 2019, the Board held **four** meetings and completed one written resolution, discussing important matters such as annual results, budget, and continuing connected transactions[93](index=93&type=chunk) [Board Committees](index=51&type=section&id=Board%20Committees) The Board has Audit, Remuneration, and Nomination Committees, all chaired by independent non-executive directors, which oversee financial reporting, remuneration policies, and board structure, effectively supporting board decisions [Audit Committee](index=51&type=section&id=Audit%20Committee) The Audit Committee oversees independent auditors, reviews financial statements, and discusses risk management and internal control systems, ensuring financial report integrity - The Audit Committee is composed of **four** independent non-executive directors, responsible for overseeing independent auditors, reviewing financial statements, risk management, and internal control systems[97](index=97&type=chunk)[98](index=98&type=chunk) [Remuneration Committee](index=52&type=section&id=Remuneration%20Committee) The Remuneration Committee advises the Board on remuneration policies for directors and senior management, and reviews and approves management's remuneration proposals - The Remuneration Committee is composed of **three** independent non-executive directors, responsible for advising the Board on remuneration policies and structures for directors and senior management[98](index=98&type=chunk)[99](index=99&type=chunk) [Nomination Committee](index=53&type=section&id=Nomination%20Committee) The Nomination Committee reviews board structure, identifies suitable director candidates, and recommends appointments, ensuring board composition and independence - The Nomination Committee is responsible for reviewing the Board's structure, identifying director candidates, and implementing the Board diversity policy[99](index=99&type=chunk)[101](index=101&type=chunk) [Risk Management and Internal Control](index=55&type=section&id=Risk%20Management%20and%20Internal%20Control) The company maintains a group-wide risk management and internal control system, with the Board responsible for its effectiveness, addressing key risks - The company has established a comprehensive risk management and internal control system comprising the Board of Directors, Internal Control and Risk Management Committee, integrated management departments, and various professional functional departments[104](index=104&type=chunk) - Significant risks identified in 2019 include: macroeconomic and market competition risks, industry regulatory policy change risks, technology upgrade risks, and interest and exchange rate risks[107](index=107&type=chunk) - The Board of Directors has conducted an annual review of the risk management and internal control system for the financial year ended December 31, 2019, and deemed it effective and adequate[110](index=110&type=chunk) [Corporate Transparency and Investor Relations](index=61&type=section&id=Corporate%20Transparency%20and%20Investor%20Relations) To enhance transparency, the company provides quarterly financial and monthly operational data, maintaining active communication with the capital market - The company discloses unaudited financial information quarterly and key operational data monthly to enhance information transparency[112](index=112&type=chunk) - In 2019, the company actively participated in over **30** investor conferences organized by investment banks such as UBS, Morgan Stanley, and Credit Suisse[114](index=114&type=chunk) - Investor relations work received recognition, winning awards such as "Best Company in Telecommunications Sector" and "Best Senior Management Team" at the "2019 IR Magazine Greater China Awards"[115](index=115&type=chunk) [Directors' Report](index=67&type=section&id=Directors%27%20Report) [Performance and Dividends](index=67&type=section&id=Performance%20and%20Dividends) The Board reported 2019 operating results and recommended a final dividend of RMB 0.148 per share, totaling approximately RMB 4.529 billion - The Board of Directors recommended a final dividend of **RMB 0.148 per share**, totaling approximately **RMB 4.529 billion**, for the year ended December 31, 2019[121](index=121&type=chunk) [Share Option Scheme and Major Shareholders](index=69&type=section&id=Share%20Option%20Scheme%20and%20Major%20Shareholders) The company adopted a 10-year share option scheme in 2014 for talent retention, with no options granted; Unicom Group is the ultimate controlling shareholder - The company adopted a share option scheme in 2014, valid until April 22, 2024; no share options have been granted since its adoption[124](index=124&type=chunk)[126](index=126&type=chunk) - The ultimate controlling shareholder, Unicom Group, indirectly holds **24,683,896,309** ordinary shares of the company, representing **80.67%** of the issued share capital[130](index=130&type=chunk) [Continuing Connected Transactions](index=76&type=section&id=Continuing%20Connected%20Transactions) The report details continuing connected transactions with Unicom Group, based on a comprehensive service agreement, confirmed by independent directors and auditors - The company entered into a 2017-2019 comprehensive service agreement with its controlling shareholder, Unicom Group, covering nine categories of continuing connected transactions, including telecommunications resource leasing, property leasing, material procurement, engineering services, and financial services[138](index=138&type=chunk) 2019 Major Continuing Connected Transaction Amounts | Transaction Type | Expenditure/Revenue (RMB billion) | | :--- | :--- | | Terminal Telecom Services Expenditure | 2.417 | | Engineering Design and Construction Services Expenditure | 1.537 | | Comprehensive Services Expenditure | 1.052 | | Short-term Property Lease and Related Services Expenditure | 0.989 | - Independent non-executive directors and independent auditors confirmed that all continuing connected transactions were conducted in the ordinary course of business on fair and reasonable commercial terms, in the overall interest of shareholders, and did not exceed the annual caps[146](index=146&type=chunk) [Human Resources Development](index=85&type=section&id=Human%20Resources%20Development) [Human Resources Development](index=85&type=section&id=Human%20Resources%20Development) The company deepened human resource reforms focusing on flexible management, achieving RMB 1.05 million per person in labor productivity in 2019 - In 2019, labor productivity reached **RMB 1.05 million per person**[157](index=157&type=chunk) - Strengthened talent pipeline development, establishing a four-tier talent pool of leaders, experts, key personnel, and new recruits totaling **15,000**; the total number of technical talents in innovative fields such as IT and government/enterprise reached **21,000**, an increase of **5,000** from the end of 2018[157](index=157&type=chunk) [Social Responsibility](index=87&type=section&id=Social%20Responsibility) [Social Responsibility](index=87&type=section&id=Social%20Responsibility) The company integrates its development with social responsibility, actively implementing national strategies as a pioneer in SOE reform and a main force in network infrastructure - As the first group-wide mixed-ownership reform enterprise, it deepens the implementation of the mixed-ownership reform policy of "improving governance, strengthening incentives, focusing on main business, and enhancing efficiency"[161](index=161&type=chunk) - Actively engaged in social welfare, vigorously carrying out emergency communication support, targeted poverty alleviation, charitable donations, and fully supporting COVID-19 epidemic prevention and control efforts[161](index=161&type=chunk) - In 2019, **RMB 104 million** was invested in special funds for energy conservation and emission reduction, promoting low-carbon technologies, with energy-saving technology coverage exceeding **70%**[164](index=164&type=chunk) [Consolidated Financial Statements](index=92&type=section&id=Consolidated%20Financial%20Statements) [Independent Auditor's Report](index=92&type=section&id=Independent%20Auditor%27s%20Report) KPMG issued an unqualified opinion on the 2019 consolidated financial statements, confirming fair reflection under IFRS and HKFRS, with key audit matters identified - The auditor issued an unqualified opinion, stating that the consolidated financial statements fairly and truly reflect the Group's financial position and operating results in accordance with applicable accounting standards[172](index=172&type=chunk) - Key audit matters were "revenue recognition" and "carrying amount of property, plant and equipment," primarily due to complex billing systems, significant management judgment, and their materiality to the financial statements[174](index=174&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) [Consolidated Income Statement](index=97&type=section&id=Consolidated%20Income%20Statement) In 2019, operating revenue slightly decreased, while pre-tax profit grew 8.3% and net profit attributable to equity holders increased 11.1% 2019 Consolidated Income Statement Summary | Item (RMB million) | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 290,515 | 290,877 | | Pre-tax Profit | 14,167 | 13,081 | | Profit for the Year | 11,372 | 10,257 | | Profit Attributable to Equity Holders of the Company | 11,330 | 10,197 | | Basic Earnings Per Share (RMB) | 0.37 | 0.33 | [Consolidated Statement of Financial Position](index=99&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of 2019-end, total assets increased 4.1%, total liabilities 6.9%, and total equity 2.1%, maintaining a robust financial position 2019 Consolidated Statement of Financial Position Summary | Item (RMB million) | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Assets | 562,499 | 540,320 | | Total Liabilities | 241,744 | 226,034 | | Total Equity | 320,755 | 314,286 | | Net Current Liabilities | (121,595) | (139,001) | [Consolidated Cash Flow Statement](index=103&type=section&id=Consolidated%20Cash%20Flow%20Statement) In 2019, net cash inflow from operating activities was RMB 93.68 billion, with net cash outflows from investing and financing activities 2019 Consolidated Cash Flow Statement Summary | Item (RMB million) | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 93,678 | 92,387 | | Net Cash Outflow from Investing Activities | (59,053) | (61,179) | | Net Cash Outflow from Financing Activities | (29,765) | (34,058) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 4,860 | (2,850) | | Cash and Cash Equivalents at Year-End | 34,945 | 30,060 | [Financial Highlights](index=198&type=section&id=Financial%20Highlights) [Five-Year Financial Highlights](index=198&type=section&id=Five-Year%20Financial%20Highlights) This summary shows revenue stabilization post-2017, significant profitability improvement, stable total assets, and reduced liabilities post-2017 mixed-ownership reform 2015-2019 Key Financial Data Summary (RMB million) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 290,515 | 290,877 | 274,829 | 274,197 | 277,049 | | **Pre-tax Profit** | 14,167 | 13,081 | 2,593 | 784 | 14,035 | | **Profit Attributable to Equity Holders of the Company** | 11,330 | 10,197 | 1,828 | 625 | 10,562 | | **Total Assets** | 562,499 | 540,320 | 571,983 | 614,154 | 610,346 | | **Total Liabilities** | 241,744 | 226,034 | 267,636 | 386,472 | 379,130 | | **Total Equity** | 320,755 | 314,286 | 304,347 | 227,682 | 231,216 |

Financial Performance - In the first half of 2019, the company's service revenue reached RMB 133 billion, a year-on-year decrease of 1.1%[7] - EBITDA for the same period was RMB 49.5 billion, representing a year-on-year increase of 8.4%[7] - The company's pre-tax profit amounted to RMB 8.7 billion, with net profit attributable to equity holders reaching RMB 6.9 billion, up 16% year-on-year[7] - In the first half of 2019, the company achieved operating revenue of RMB 144.95 billion, a year-on-year decrease of 2.8%[20] - Service revenue for the same period was RMB 132.96 billion, down 1.1% year-on-year[20] - Net profit increased by RMB 0.97 billion to RMB 6.88 billion, representing a year-on-year growth[20] - The company's cash flow from operating activities was RMB 42.36 billion, with capital expenditures amounting to RMB 22.05 billion[20] - The company reported a total comprehensive income of RMB 6.84 billion for the first half of 2019, compared to RMB 5.47 billion in the same period last year[39] Subscriber and Revenue Trends - Mobile service revenue declined by 6.6% to RMB 78.7 billion, with a net increase of 9.32 million mobile subscribers, totaling 320 million[9] - The number of 4G subscribers increased by 19.01 million, reaching nearly 240 million, with a market share increase of 0.8 percentage points year-on-year[9] - Fixed broadband access revenue decreased by 4.1% to RMB 20.6 billion, with a net increase of 2.53 million broadband subscribers, totaling 83.41 million[10] - Innovative business revenue grew by 43% to RMB 16.7 billion, accounting for 13% of total service revenue[10] - Voice business revenue fell to RMB 20.41 billion, a decline of 14.9% year-on-year[24] - Non-voice business revenue grew to RMB 112.55 billion, an increase of 1.9% year-on-year[24] Capital Expenditure and Cash Flow - The company's capital expenditure was effectively controlled at RMB 22 billion, contributing to a strong free cash flow of RMB 20.3 billion[7] - The net cash flow from operating activities for the first half of 2019 was RMB 42.36 billion, with free cash flow after capital expenditures amounting to RMB 20.31 billion[34] - The company reported a net cash inflow from operating activities of RMB 42,355 million, compared to RMB 50,905 million for the same period in 2018, representing a decrease of approximately 16.5%[51] Financial Position and Assets - The asset-liability ratio as of June 30, 2019, was 44.0%[20] - Total assets as of June 30, 2019, increased to RMB 565.13 billion from RMB 540.32 billion at the end of the previous year, while total liabilities rose to RMB 248.44 billion from RMB 226.03 billion[34] - The company's total fixed assets amounted to RMB 988,004 million, a decrease from RMB 1,018,447 million as of December 31, 2018, reflecting a reduction of approximately 3%[108] - The net book value of fixed assets at the end of the period was RMB 389,649 million, down from RMB 416,596 million at the beginning of the year, indicating a decline of about 6.5%[108] Debt and Liabilities - The company reported a total long-term bank borrowings of RMB 3,023 million as of June 30, 2019, down from RMB 3,173 million as of December 31, 2018, indicating a decrease of about 4.7%[124] - The total interest-bearing debt as of June 30, 2019, was RMB 76.502 billion, with total equity of RMB 313.212 billion[138] - The company’s long-term bank borrowings in RMB had a fixed interest rate range of 1.08% to 1.20% as of June 30, 2019, consistent with the previous period[124] 5G and Network Development - The company has launched its 5G brand "5Gn" and initiated user-friendly experiences in major cities, focusing on a network scale trial in 7+33+N cities[13] - The company aims to enhance its 5G ecosystem and unique competitive advantages by investing precisely in 5G construction according to market demands and industry competition[12] - The company has accumulated 200,000 NB-IoT base stations, significantly improving its IoT business capacity[11] - The company is actively exploring various cooperation models for 5G network sharing to enhance network capabilities and industry value[13] Corporate Governance and Social Responsibility - The company has been recognized as the "Best Managed Telecom Company in Asia" by FinanceAsia and as a model for corporate governance by Corporate Governance Asia in the first half of 2019[15] - The company is committed to social responsibility and has implemented various initiatives to support national strategic plans, including the "Belt and Road" initiative[15] - The company has adhered to the Corporate Governance Code as per the Listing Rules, with the Chairman and CEO roles held by the same individual to enhance decision-making efficiency[181] Accounting Standards and Financial Reporting - The financial data for the six months ended June 30, 2019, is prepared in accordance with International Financial Reporting Standards and has been reviewed by the audit committee[56] - The company adopted the new International Financial Reporting Standards/Hong Kong Financial Reporting Standards 16, "Leases," effective January 1, 2019, which introduces a single accounting model for lessees[61] - The adoption of the new lease standard is not expected to have a significant impact on the company's financial position or performance for the current reporting period[61] Shareholder Information and Equity - The company declared a final dividend of RMB 0.134 per share for the year ended December 31, 2018, totaling approximately RMB 4.1 billion, compared to RMB 0.052 per share totaling about RMB 1.59 billion for the previous year, marking an increase of approximately 157%[122] - The company plans to grant 848 million restricted A-shares to core employees under the equity incentive plan, with the first grant of 793,861,000 shares at a subscription price of RMB 3.79 per share[134] - The company issued a total of RMB 20 billion in bonds on June 19, 2019, with a coupon rate of 3.67%[127]

中國聯合網絡通信（香港）股份有限公司 中國聯合網絡通信（香港）股份有限公司 香港皇后大道中99號中環中心75樓 電話 : (852) 2126 2018 傳真 : (852) 2126 2016 www.chinaunicom.com.hk 設計、印刷及製作：所羅門財經印刷有限公司 GIVE 年 報 2018 年報 2018 ● O Q 9 ● O 017 2 - 1 � ● l 太 能 Q ● ● ● Har li IT ul UI I II ● ""WINDER " . l %同比 產業互聯網 收入 45 3,100萬 約 移動出賬 用戶數 % 99同比 雲計算服務 收入 卓越成就 179%同比 移動手機 數據流量 %同比 458 淨利潤* *本公司權益持有者應佔盈利 市場 嘉許 亞洲 No. 1 最佳管理 電信公司 白金獎 卓越管治、環境保護 及企業社會責任 亞洲 No. 1 最受尊崇 電信企業 卓越最佳 年報 亞洲最佳 企業管治典範 O 回報 競爭力 效益 聯通世界 積極發揮 智慧生活獨特優勢 新治理 新基因 新運營 新動能 新生態 ● 創享美好 ● ● 預測性陳述 本報告中所包含的某些陳述可能被視為 ...