CHINA UNICOM(00762)2025-05-13 11:18Investment Rating - The report assigns a "Buy" rating to China Unicom (0762.HK) [4][6] Core Viewpoints - China Unicom is positioned as a leading integrated information service operator, with a focus on digital information services and cloud business as a second growth curve [1][3] - The company achieved revenue of 389.6 billion RMB in 2024, a year-on-year increase of 4.6%, and a net profit of 20.6 billion RMB, up 10.1% year-on-year [1][5] - The company has a robust dividend yield averaging over 6% over the past five years, indicating strong defensive attributes [4] Summary by Sections Company Overview - China Unicom was established in 1994 and operates in 31 provinces in China and several countries worldwide, ranking 279th in the 2024 Fortune Global 500 [1][13] Business Segments - The company focuses on two core business areas: "Connected Communication" and "Intelligent Computing" [2][3] - The Connected Communication segment generated revenue of 261.3 billion RMB in 2024, growing by 1.5% year-on-year, with mobile and broadband user numbers reaching 470 million [2][45] - The Intelligent Computing segment, which includes Unicom Cloud, generated revenue of 68.6 billion RMB in 2024, a 17.1% increase year-on-year, and is expected to become a key growth driver [2][3] Financial Performance - The company forecasts net profits of 21.7 billion RMB, 23.2 billion RMB, and 25.1 billion RMB for 2025, 2026, and 2027 respectively [4][5] - The average P/E ratios for 2025 and 2026 are projected at 12x and 11x, respectively, which are below the average for comparable companies [4] Industry Environment - The telecommunications industry in China is experiencing a slowdown, with overall revenue growth of 3.2% in 2024, but emerging businesses like cloud computing and big data are growing steadily [26][29] - New business revenue accounted for 25% of total telecommunications revenue in 2024, with cloud computing and big data revenues increasing by 13.2% and 69.2% respectively [29][40] Strategic Initiatives - China Unicom is enhancing its cloud capabilities through the integration of AI technologies, aiming to transform its business model from resource leasing to AI-enabled services [40][41] - The company has established over 300 integrated training and inference computing resource pools, with a total computing power exceeding 17 EFLOPS [47]