China Unicom(SH:600050) Shanxi Securities·2024-11-05 12:41Investment Rating - The report maintains a "Buy-A" rating for China Unicom, indicating an expected price increase of over 15% relative to the benchmark index [2][4]. Core Views - China Unicom's performance in 2024 shows a steady revenue growth of 3.0% year-on-year, with total revenue reaching 290.12 billion yuan and a net profit of 8.34 billion yuan, reflecting a 10.0% increase [2][3]. - The company is focused on optimizing user structure and expanding its Internet of Things (IoT) connections, with mobile users reaching 345 million and 5G package users at 286 million, achieving an 83% penetration rate [3][4]. - The report anticipates a continued double-digit profit growth and a reduction in capital expenditures, targeting around 65 billion yuan for 2024, a decrease of 12% year-on-year [1][4]. Financial Performance Summary - For the fiscal years 2024 to 2026, the projected net profits are 9.13 billion yuan, 10.10 billion yuan, and 11.12 billion yuan, respectively, with year-on-year growth rates of 11.7%, 10.6%, and 10.1% [4][6]. - The earnings per share (EPS) are expected to be 0.29 yuan, 0.32 yuan, and 0.35 yuan for the same period, with corresponding price-to-earnings (P/E) ratios of 17.6, 15.9, and 14.4 [4][6]. - The gross margin is projected to improve slightly from 24.5% in 2023 to 24.7% in 2026, indicating effective cost management [4][6]. Market Position and Strategy - The company is enhancing its network infrastructure, with a focus on 5G and IoT services, aiming to create new revenue streams through product and service integration [3][4]. - China Unicom is also investing in AI and data center capabilities, with a projected 2,503 AI servers to be deployed in over 20 large-scale computing centers [3][4].