Event: The company announced its 2023 results, achieving operating income of 372.6 billion yuan, an increase of 5.0% year on year; EBITDA of 99.6 billion yuan; net profit to mother of 8.2 billion yuan, an increase of 12.0% year on year, achieving a double digit increase for 7 consecutive years. The return on net assets reached 5.1%, the best level in recent years.
Here are our reviews:
Efforts are being made to promote the coordinated development of the two main businesses, achieve effective improvement in quality and reasonable volume growth, and the network communication business is progressing steadily and maintaining the basic market for steady operation. In 23 years, networked communication services (mobile networking, broadband networking, television networking, dedicated line networking, information services, and communications services) achieved revenue of 244.6 billion yuan, accounting for 3/4 of the two main types of business revenue. Among them, 1) The quantity and quality of mobile networks increased. At the end of 23, the number of mobile users reached 333 million, a net increase of 10.6 million for the whole year, and the net increase in users increased 90% year on year. Of these, the number of 5G package users reached 259.64 million, accounting for 78%, an increase of 12 percentage points over the previous year. 2) In terms of broadband networking, fixed broadband users reached 113 million at the end of '23, a net increase of 9.79 million for the whole year. The net increase reached a ten-year high. The integrated penetration rate of broadband users reached 76%, and the penetration rate of gigabit broadband users reached 22%, an increase of 6 percentage points over the previous year. 3) Information business revenue in '23 was 10.7 billion yuan, an increase of 16.2% over the previous year. Among paid users, personal digital smart life reached 99.23 million, and Unicom's smart home business was 10.2.96 million.
The computing network digital intelligence business is improving, broadening the growth pole for innovation and transformation. In 23 years, the digital computing business (Unicom cloud, data center, mathematical integration, data services, digital intelligence applications, Internet communication security) achieved revenue of 75.2 billion yuan, accounting for about 1/4 of the revenue of the two main businesses. Among them, 1) Unicom Cloud achieved revenue of 51 billion yuan, an increase of 41.6% over the previous year; focusing on leveraging the differentiated advantages of integrated computing networks, computing power resource reserves increased significantly. The company's cloud resource sales exceeded one million cores, an increase of 186% over the previous year, and the coverage of cloud resources exceeded 230 cities. 2) In terms of data services, the company seized policy opportunities such as the construction of “Digital China” and the “Data Element X” three-year action plan, focusing on strengthening the supply of data products and capabilities, enabling all-round digital transformation of the economy and society, and achieving revenue of 5.3 billion yuan, an increase of 32% over the previous year. 3) Digital intelligence application revenue was 5.6 billion yuan, up 17.5% year on year; 4) Internet communication security revenue was 1.7 billion yuan, up 120% year on year.
Network capabilities continue to increase, focusing on technological innovation to accelerate the development of new quality productivity 5G intermediate frequency base stations with more than 1.21 million 5G intermediate frequency base stations, 900M base stations reached 680,000 stations, and mobile network coverage continued to improve; 220,000 new 5G intermediate frequency base stations were added, and more than 2 million 4G shared base stations were added. Through the “5+4+31+X” new data center layout, efforts are being made to build a green intensive, safe and reliable computing power infrastructure; actively respond to the transformation and upgrading of intelligent computing power needs, promote the “1+N+X” overall intelligent computing planning layout, and promote hierarchical layout and implementation around the developed regions of the eastern intelligent computing industry and regions with abundant resources in the western region. Take artificial intelligence as an important strategic direction and accelerate the deployment of emerging artificial intelligence industries. Further accelerate the overall layout of satellite communications, and actively promote the industrialization and systematic development of integrated communication between heaven and earth.
Continued to give back to shareholders, capital expenditure network investment showed an inflection point. After actively considering the company's good business development, the board of directors proposed paying a final dividend of 0.0524 yuan (tax included) per share. Together with the interim dividend already paid, the total annual dividend of 0.132 yuan per share, an increase of 21.1% over the previous year, significantly higher than the 11.5% increase in basic profit per share, and the level of cash dividends reached a record high.
As 5G network coverage improves, the company's investment focus is shifting from a stable network communication business to a high-growth network digital intelligence business. The capital expenditure in 2023 was 73.9 billion yuan, and network investment showed an inflection point.
Looking forward to the future, the company is confident that it will continue to maintain steady growth in revenue and double-digit growth in total profit in '24; fixed asset investment was controlled at about 65 billion yuan in '24, of which Digital Smart Investment will continue to be moderately ahead of schedule and accelerate the layout.
Profit forecasting and investment suggestions: The company focuses on the two main businesses of networked communications and computing and digital intelligence. The company's business development is steady and progressive, basic capabilities are being strengthened rapidly, and its characteristic advantages continue to expand, and innovation and transformation are deepening and practical, laying a more solid foundation for the long-term development of the enterprise and optimistic about the company's future development. Considering the uncertainty about the profitability of innovative businesses, the company's net profit for 24-26 is estimated to be 90.93, 100.49, and 11.075 billion yuan (original value of 94.39/10.474 billion yuan in 24-25), maintaining the “gain” rating.
Risk warning: industry competition intensifies, innovative business progress falls short of expectations, cost growth exceeds expectations, etc.