China Unicom(SH:600050) ZHESHANG SECURITIES·2024-08-16 01:23Investment Rating - Maintain "Buy" rating [6][7] Core Views - Net profit attributable to parent company increased by 10.9% YoY, exceeding market expectations [1] - Two main businesses (connected communication and computing-network-intelligence) showed solid growth, with both scale and value improving [2] - Cost control was effective, with operating cost ratio decreasing by 0.6pp [3] - Capital expenditure decreased significantly by 13.4%, and cash flow is expected to improve [4] - Interim dividend increased by 22%, with a full-year payout ratio guidance of 55% [5] Financial Performance - Revenue reached 197.3 billion yuan, up 2.9% YoY [1] - Service revenue was 175.7 billion yuan, up 2.7% YoY [1] - EBITDA was 55 billion yuan, up 2.7% YoY [1] - Net profit attributable to parent company was 6 billion yuan, up 10.9% YoY [1] - ROE improved to 3.74%, up 0.26pp YoY [1] - Net profit margin increased to 6.97%, up 0.47pp YoY [1] Business Segments - Connected communication business revenue was 125.1 billion yuan, up 2.1% YoY, accounting for 74.2% of total revenue [2] - Mobile users increased by 6.09 million to 339 million [2] - 5G package users reached 280 million, with penetration rate exceeding 80% [2] - Fixed broadband users increased by 3.52 million to 117 million [2] - ARPU for integrated packages reached 103 yuan [2] - Computing-network-intelligence business revenue was 43.5 billion yuan, up 6.6% YoY, accounting for 25.8% of total revenue [2] - China Unicom Cloud revenue was 31.7 billion yuan, up 24.3% YoY [2] - Data service revenue was 3.2 billion yuan, up 8.6% YoY [2] - Intelligent application revenue was 3.7 billion yuan, up 13.5% YoY [2] - Network security revenue was 1.4 billion yuan, up 58.2% YoY [2] Cost Control - Operating costs increased by 2.2% YoY, with cost ratio decreasing by 0.6pp [3] - Network operation and support costs were 30.45 billion yuan, up 4.4% YoY [3] - Depreciation and amortization were 42.36 billion yuan, down 0.1% YoY [3] - Employee compensation and benefits were 28.71 billion yuan, down 11.0% YoY [3] Capital Expenditure and Cash Flow - Capital expenditure was 23.9 billion yuan, down 13.4% YoY [4] - Full-year capital expenditure guidance is 65 billion yuan, down 12% YoY [4] - Operating cash flow was 30.14 billion yuan, down 23.2% YoY [4] Shareholder Returns - Interim dividend per share for H-shares was 0.2481 yuan, up 22.2% YoY [5] - Interim dividend per share for A-shares was 0.0959 yuan, up 20.5% YoY [5] - Full-year payout ratio guidance for H-shares is 55% [5] Valuation and Forecast - Revenue growth forecast for 2024-2026 is 4.7%, 4.5%, and 4.5% respectively [6] - Net profit attributable to parent company growth forecast for 2024-2026 is 10.7%, 10.2%, and 10.1% respectively [6] - PE ratio for 2024-2026 is 15.9x, 14.4x, and 13.1x respectively [6] Market Data - Closing price: 4.53 yuan [8] - Market capitalization: 144.06 billion yuan [8] - Total shares outstanding: 31.8 billion [8]