Incidents. On the evening of April 19, the company disclosed its 2024 quarterly report. The company's revenue reached 99.496 billion yuan, an increase of 2.3% year on year, and net profit without return to mother during the same period reached 2,238 billion yuan, an increase of 11.0% year on year.
24Q1 achieved double-digit growth after deducting non-net profit, and the share of digital intelligence revenue of the Internet steadily increased. 2024Q1 achieved main business revenue of 89.043 billion yuan, an increase of 3.4% over the previous year. Among them, networked communications revenue was 62.304 billion yuan, accounting for 62.6% of revenue; networked digital intelligence revenue was 23.215 billion yuan, accounting for 23.3% of revenue. Computing power networks and the digital economy are important business development directions for the company on the revenue side and capital expenditure side this year.
2024Q1's Unicom Cloud (Unicom Cloud revenue is revenue from cloud resources, cloud platforms, cloud services, cloud integration, cloud interconnection, cloud security, etc. generated by integrating innovative solutions) reached 16.7 billion yuan, an increase of 30.3% year on year; data center revenue reached 6.6 billion yuan, up 4.1% year on year. The 24Q1 ROE of the company was 1.52%, with year-on-month increases. The company's current gross margin was 24.54%, which also achieved year-on-month growth. The company's expenses during the same period were 14.9%. Except for the R&D rate of 1.4%, compared with +0.2pct in the same period last year, the remaining cost rates were stable or declined. In 24Q1, the company's accounts receivable increased 36.6% year on year, mainly due to factors affecting the continuous increase in the revenue share of the computing network digital intelligence business, long project implementation cycles, and complicated acceptance processes. The company spent 15.56 billion yuan on cash purchases and intangible assets during the same period, down 7.3% year on year, in line with the company's annual Capex forecast downward trend. We believe that the company will continue to improve the quality of operations by reducing internal costs, cutting marketing expenses, and reducing capital expenses, driven by the 24-year performance target of “striving to achieve steady growth in annual revenue and double-digit profit growth”.
The company continues to promote digital intelligence upgrades, and the Beijing Unicom Artificial Intelligence Computing Power Center was lit up. On April 13, the Beijing Unicom Independent Innovation Artificial Intelligence Computing Power Center was held in the Mentougou district of Beijing. As the country's first “government+operator” intelligent computing center and the only nationally produced independent innovation computing power center in Beijing, the Beijing Unicom Independent Innovation Artificial Intelligence Computing Power Center can provide 300P public computing power of the country's basic software and hardware. After the addition, the cumulative computing power of Jingxi Zhigu has reached 500P, which can serve more than 200 small and medium-sized enterprises and units.
While building artificial intelligence infrastructure, the company combines Unicom Cloud with an intelligent computing center. Unicom Cloud mainly provides end-to-end solutions, including various aspects such as computing, storage, networking, and security.
Operating data was released in March, and mobile and fixed line users continued to grow. The company released 24Q1 operating data on the same day. The number of mobile users reached 337 million, compared to 23Q4 (+1.2%), of which 269 million 5G package users, and 23Q4 (+3.6%), the 5G package penetration rate increased to 80%. The number of IoT connections reached 529 million, a net increase of 34.6 million; fixed broadband users reached 115 million, compared to 23Q4 (+1.8%), with a net increase of 2.11 million gigabit users, and the gigabit broadband penetration rate increased to 23% (+6.4%).
Investment advice: In recent years, the company has continued to achieve remarkable overall results in promoting high-quality development. We expect the company's net profit to be 92.98/103.81/11.95 billion yuan in 2024/2025/2026, respectively, corresponding to PE 17/15/13 times, respectively, maintaining the “recommended” rating.
Risk warning: In 2024, the company's digital intelligence business revenue contributed less than expected, and the decline in the company's capital expenditure in 2024 fell short of expectations.