Investment Rating - The report maintains a rating of "Buy" for China Communication Services (0552.HK) [2] Core Insights - The company reported a revenue of 74.4 billion RMB for the first half of 2024, representing a year-on-year growth of 1.7% [2] - Gross profit reached 8.1 billion RMB, with a gross margin of 10.9%, an increase of 0.2 percentage points year-on-year, attributed to enhanced cost control [2] - Net profit attributable to shareholders was 2.1 billion RMB, reflecting a year-on-year increase of 4.4% [2] - The company has seen a significant improvement in new contracts for strategic emerging businesses, with a year-on-year increase of over 40% [2] Financial Performance Summary - Revenue for 1H24 was 74.4 billion RMB, with a gross profit of 8.1 billion RMB, leading to a net profit margin of 2.9% [2] - The operator market revenue was 40 billion RMB, showing a slight increase of 0.1% year-on-year, while non-operator market revenue reached 32.4 billion RMB, up 2.5% year-on-year [2] - The overseas market revenue was 2 billion RMB, marking a 26% increase year-on-year due to the easing of pandemic restrictions [2] Strategic Business Development - The company is focusing on digital infrastructure, green low-carbon initiatives, and smart city projects, with new contracts in these areas showing significant growth [2] - The strategic emerging business segment has become a key driver for revenue growth, with new contracts in digital infrastructure and green low-carbon services increasing by over 35% [2] - The company aims to leverage opportunities in AI computing and digital transformation, maintaining a strong focus on high-quality development in telecommunications and renewable energy sectors [2] Earnings Forecast and Valuation - The company’s effective cost control and improving gross margins are expected to continue, with net profit forecasts for 2024 and 2025 adjusted to 3.769 billion RMB and 3.978 billion RMB respectively [2] - The report anticipates a steady growth trajectory for the company, with EPS projected to reach 0.54 RMB in 2024 and 0.60 RMB in 2026 [3][4]
中国通信服务：2024年度中期业绩点评：业绩稳中有升，盈利持续向好，战略新兴业务新签合同提升明显