Incident: The company released its report for the first quarter of 2024 on April 19. In the first quarter of 2024, the company achieved operating income of 99.496 billion yuan, up 2.3% year on year; realized net profit of 2,447 billion yuan, up 8.0% year on year; achieved total profit of 7.169 billion yuan, up 10.0% year on year, maintaining a double digit growth rate; and the company achieved EPS (basic) 0.078 yuan.
Revenue and performance increased steadily, and reform and innovation continued to advance. The company's Q1 revenue in 2024 reached 99.496 billion yuan, up 2.3% year on year, and main business revenue reached 89.043 billion yuan, up 3.4% year on year; net profit to mother reached 2,447 billion yuan, up 8.0% year on year; total profit reached 7.169 billion yuan, up 10.0% year on year, maintaining a double digit growth rate; in 2024, the company's networked communication business achieved revenue of 62.304 billion yuan; computing network digital intelligence business revenue reached 23.215 billion yuan, accounting for 26.1% of main business revenue , the revenue structure is constantly being optimized.
The company is rapidly developing the digital intelligence business of computing networks and accelerating the construction of digital information infrastructure. In terms of the computing network digital intelligence business, in 2024Q1, the company focused on improving the integrated differentiation capabilities of the computing network. Unicom's cloud revenue reached 16.7 billion yuan, an increase of 30.3% over the previous year; focused on consolidating the digital network's digital intelligence capability base, with data center revenue reaching 6.6 billion yuan, an increase of 4.1% over the previous year; focusing on empowering the deep integration of the digital economy and the real economy, and the cumulative number of virtual private networks in the 5G industry served 10,030 customers; and focused on leveraging the collaborative advantages of cloud networks and data resources. In terms of digital information infrastructure construction, the company's 5G intermediate frequency base stations reached 1.27 million, and the network coverage level continued to improve; deployed a “1+N+X” overall intelligent computing plan layout to promote the transformation and upgrading of intelligent computing power requirements; actively laid out emerging industries such as artificial intelligence, low-altitude economy, and digital intelligence applications to increase scientific and technological innovation and core technology research. The number of authorized patents reached 362 in the first quarter, increasing steadily.
The scale of the basic business continues to expand, and the user structure has improved significantly. The company's mobile users reached 337 million, including 269 million 5G package users, and 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, including a net increase of 2.11 million gigabit users, and the gigabit broadband penetration rate increased to 23%, and the user structure improved markedly.
Investment advice: The company adheres to high-quality development, focuses on network power and digital China, the basic business of networked communication is developing steadily, and the user structure has improved markedly. The company has thoroughly implemented nine key actions, including network communication development, integrated computing network development, digital intelligence application development, international development, big data innovation, artificial intelligence innovation, new digital infrastructure, high-quality services and Internet communication security, to accelerate the construction of a world-class technology service enterprise with global competitiveness. We maintain our profit forecast. We expect the company to achieve operating income of 4023.77/4305.29/ 456.365 billion yuan in 2024/25/26, up 8%/7%/6% year on year; net profit to mother of 91.5/101.44/11.175 billion yuan, up 12%/11%/10% year on year. Maintain a “Highly Recommended” investment rating.
Risk warning: industry regulatory policy risks, market competition intensifies risks, satellite Internet investment demand exceeds expectations