China Unicom(SH:600050) Huachuang Securities·2024-03-21 16:00Investment Rating - The report maintains a "Recommendation" rating for China Unicom, indicating an expectation to outperform the benchmark index by 10%-20% over the next six months [2][14]. Core Insights - China Unicom reported a revenue of 372.6 billion yuan in 2023, a year-on-year increase of 4.97%, and a net profit attributable to shareholders of 8.17 billion yuan, up 11.96% year-on-year, achieving double-digit growth for seven consecutive years [2][3]. - The company aims for steady revenue growth in 2024, targeting double-digit growth in total profit [2]. - The capital expenditure for 2023 was 73.87 billion yuan, slightly down from 74.20 billion yuan in 2022, with a focus on high-growth intelligent network services [4]. Summary by Sections Financial Performance - In 2023, China Unicom's gross margin was 24.52%, an increase of 0.27 percentage points year-on-year, while the net margin was 5.02%, up 0.33 percentage points year-on-year [2]. - The return on equity (ROE) reached a recent high of 5.1% [2]. User Growth and Business Segments - The mobile user base increased by 10.6 million, a 90% year-on-year rise, with a 5G package penetration rate of 78%, up 12 percentage points year-on-year [3]. - Broadband users grew by 9.79 million, the highest in nearly a decade, with a fusion penetration rate of 76% and a gigabit user penetration rate of 22%, up 6 percentage points year-on-year [3]. - The intelligent network services segment generated 75.2 billion yuan in revenue, accounting for about 25% of total revenue, and contributed over half of the new income [3]. Capital Expenditure and Shareholder Returns - The capital expenditure for 2024 is projected to be around 65 billion yuan, with a continued focus on intelligent network investments [4]. - The dividend payout ratio for 2023 is set to increase to 50.5%, with a cash dividend level reaching a historical high of approximately 0.132 yuan per share, a 21.1% increase year-on-year [4]. Future Projections - Revenue forecasts for 2024, 2025, and 2026 are 395.14 billion yuan, 414.81 billion yuan, and 432.97 billion yuan, respectively, with net profits projected at 9.05 billion yuan, 9.99 billion yuan, and 11.05 billion yuan [4][10].