According to a research report released by Morgan Stanley, China Unicom (00762)'s first-quarter results were in line with expectations. Service revenue increased 3.4% year on year. Among them, the revenue from the Internet ICT business and the Internet Digital Intelligence business both grew steadily, and Unicom's cloud revenue increased 30% year over year. The company's net profit for the first quarter was over RMB 5.6 billion, up 8.9% year on year. Although it was in line with Damo's expectations, it was slightly lower than the company's full-year double-digit growth guide. Damo generally kept its profit forecast unchanged. The investment rating is still “increase in holdings”, with a target price of HK$6.5.