China Unicom(600050) 国金证券·2024-11-05 06:10Investment Rating - The report assigns a "Buy" rating for China Unicom (600050.SH) with a target price of 5.80 RMB, based on a 20x PE for 2024 [2][3]. Core Insights - China Unicom has maintained a double-digit growth in net profit, achieving a net profit of 8.173 billion RMB in 2023, a year-on-year increase of 12% [2][6]. - The company emphasizes high shareholder returns, with a dividend per share of 0.132 RMB in 2023, up 21.1% from the previous year, resulting in a dividend payout ratio of 50.54% [2][27]. - The company is transitioning its focus from traditional communication services to high-growth areas such as cloud computing and digital services, with revenue from its digital business reaching 75.2 billion RMB in 2023, accounting for 23.5% of total revenue [2][11]. Summary by Sections 1. Company Overview - China Unicom has been in operation for 30 years and has undergone significant reforms since 2018, focusing on mixed ownership and industrial internet development [2][18]. - The company has consistently outperformed its peers in net profit growth, particularly in the context of a slowing macroeconomic environment [2][28]. 2. Business Performance - The telecom business has shown steady growth, with total revenue reaching 1.68 trillion RMB in 2023, a 6.2% increase year-on-year [2][39]. - The mobile user base has grown to 340 million, with a net addition of over 6 million users in the first half of 2024, marking the highest growth in five years [2][6]. 3. Financial Projections - Revenue projections for 2024-2026 are 386.62 billion RMB (+3.76%), 400.95 billion RMB (+3.71%), and 415.46 billion RMB (+3.62%) respectively [2][5]. - Expected net profits for the same period are 9.069 billion RMB (+10.97%), 9.996 billion RMB (+10.23%), and 10.997 billion RMB (+10.01%) [2][5]. 4. Digital Business Growth - The digital business, including cloud services, has become a key growth driver, with cloud revenue reaching 51 billion RMB in 2023, a 41.6% increase [2][11]. - The company is investing in AI and data center capabilities, with a focus on enhancing its digital service offerings [2][11]. 5. Capital Expenditure Trends - Capital expenditures have entered a downward trend, with a focus on optimizing costs and enhancing profitability [2][44]. - In the first half of 2024, capital expenditures for China Unicom were 239 billion RMB, reflecting a decrease compared to previous years [2][44].