Tianfeng Securities·2024-08-22 02:38Investment Rating - The investment rating for the company is "Accumulate" with a target price of 6.18 CNY [6] Core Views - The company has implemented the "cloud transformation" strategy, resulting in a year-on-year improvement in profitability [1] - The company is focused on enhancing shareholder returns, with a commitment to increase cash dividends to over 75% of the annual profit attributable to shareholders within three years [4] - The company is expected to maintain steady growth in revenue and net profit over the next few years, with projected net profits of 330.6 billion CNY, 355.5 billion CNY, and 377.7 billion CNY for 2024-2026 [4] Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 266 billion CNY, a year-on-year increase of 2.8%, with service revenue reaching 246.2 billion CNY, up 4.3% [1] - The net profit attributable to shareholders was 21.8 billion CNY, reflecting an 8.2% increase year-on-year, while the non-recurring net profit was 21.7 billion CNY, up 6.0% [1] Business Segments - Mobile communication services generated 105.2 billion CNY in revenue, a 3.6% increase, with mobile value-added services growing by 17.1% [2] - Fixed-line and smart home services reported revenue of 64 billion CNY, up 3.2%, with smart home services increasing by 14.4% [2] - The industrial digitalization segment achieved revenue of 73.7 billion CNY, a 7.2% increase, with Tianyi Cloud revenue reaching 55.2 billion CNY, up 20.4% [2] Capital Expenditure and Infrastructure - The company completed capital expenditures of 47.2 billion CNY in H1 2024, with a focus on 5G network coverage and industrial digitalization [3] - The company has established a leading liquid-cooled computing infrastructure in key regions, enhancing its AI application capabilities [3] Shareholder Returns - The board has decided to distribute an interim dividend of 0.1671 CNY per share, a 16.7% increase year-on-year, with plans to increase the cash distribution ratio to over 75% in the next three years [4]