中国联通（0762） 更新报告

Investment Rating - The report maintains a "Buy" rating for China Unicom with a target price of HKD 10.0, representing a potential upside of 39% from the current price of HKD 7.3 [6][7]. Core Insights - Traditional communication services are under pressure, but cost reduction and efficiency improvements are mitigating the impact of VAT reforms. The company is transitioning from a traditional operator to a digital technology leader, entering a phase of high-quality development [7]. - The company reported a slight increase in revenue for 2025, with total revenue projected at RMB 392.2 billion, reflecting a year-on-year growth of 0.7%. Service revenue is expected to be RMB 347.7 billion, up 0.5% year-on-year [4][7]. - The company’s net profit for 2025 is projected at RMB 20.8 billion, a 1.0% increase from the previous year, with earnings per share (EPS) expected to be HKD 0.77 [4][7]. Financial Performance Summary - Revenue and profit growth are slowing, with operating income for 2025 expected to be RMB 392.2 billion, a modest increase from RMB 389.6 billion in 2024. The EBITDA margin is projected to remain stable around 25.3% [11][12]. - The company’s capital expenditure is planned to decrease to RMB 500 billion in 2026, with a focus on enhancing quality and efficiency, particularly in computing power investments [7][11]. - Free cash flow is expected to improve significantly, reaching RMB 360 billion in 2025, a year-on-year increase of 28.5% [7][11]. Business Segment Insights - The traditional core business is evolving towards scenario-based and value-added services, with a total connection scale exceeding 1.25 billion. The number of mobile and broadband users has surpassed 480 million [7]. - The company has made significant strides in its digital innovation business, with strategic emerging industries accounting for over 86% of revenue. AI revenue has grown over 140% year-on-year, becoming a core growth driver [7]. - International business revenue is projected to reach RMB 136 billion in 2025, reflecting a year-on-year growth of 9.2%, with multiple benchmark projects established in regions such as ASEAN, the Middle East, and Europe [7].