China Unicom(SH:600050) HTSC·2024-08-18 06:03Investment Rating - The report maintains a "Buy" rating for H shares and an "Overweight" rating for A shares [5][9][12]. Core Views - The company is expected to achieve double-digit profit growth in 1H24, with A-share revenue reaching 197.34 billion RMB (up 3% YoY) and net profit attributable to shareholders at 6.04 billion RMB (up 11% YoY) [5][9]. - The company is well-positioned for growth in the context of digital transformation in China, with projected BPS for A shares at 5.41/5.77/6.17 RMB and for H shares at 12.12/12.82/13.60 RMB from 2024 to 2026 [5][9]. - The target price for A shares is set at 6.49 RMB (1.2x 2024 PB) and for H shares at 8.04 HKD (0.61x 2024 PB) [5][9][12]. Revenue and Profitability - In 1H24, the company's revenue from connected communication services was 125.1 billion RMB, a 2.1% increase YoY, with mobile internet users reaching 339 million, adding 6.09 million users [4]. - The cloud business showed significant growth, with revenue increasing by 24.3% YoY to 31.7 billion RMB [4]. - The company's gross margin improved to 26.01%, up 0.92 percentage points YoY, and net margin increased to 3.06%, up 0.22 percentage points YoY [5][9]. Financial Projections - The report forecasts A-share net profit attributable to shareholders to be 9.08 billion RMB in 2024, 10.05 billion RMB in 2025, and 11.12 billion RMB in 2026 [9][18]. - Revenue projections for the company are 395.9 billion RMB in 2024, 418.83 billion RMB in 2025, and 440.07 billion RMB in 2026, reflecting growth rates of 6.25%, 5.79%, and 5.07% respectively [8][18].