In the first half of this year, China Unicom's revenue scale is still stable and rising, but the growth rate has slowed down compared to the past few years. The three networks of Internet, Computing and Data are the focus of investment for China Unicom in the first half of this year. Chairman Chen Zhongyue said that looking at the whole year, there is confidence that fixed asset investment will remain within 65 billion yuan.
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After the market closed today, China Unicom (600050.SH)'s 2024 interim report was released. In the first half of the year, its revenue scale is still stable and rising, but similar to China Mobile (600941.SH), the revenue growth rate has slowed down compared to the past few years. However, in terms of profits, the company's net profit has achieved double-digit growth for eight consecutive years.
The financial report shows that China Unicom achieved revenue of 197.341 billion yuan in the first half of the year, a year-on-year increase of 2.9%; EBITDA reached 54.9 billion yuan, a year-on-year increase of 2.7%; achieved a net profit attributable to the parent company of 6.039 billion yuan, a year-on-year increase of 10.9%.
In response to the slowdown in revenue growth in the first half of the year, a reporter from Cailian Press asked questions at the company's mid-year performance presentation today, but China Unicom did not respond.
However, according to recent public statements by China Mobile's chairman Yang Jie, the slowdown in revenue growth is mainly due to the transmission effect of many external environmental changes, such as insufficient effective demand in the domestic economy, and the cultivation of new production forces is still in the transitional period from old to new. At the same time, he also said that the information service market is also undergoing some new changes, traditional communication needs tend to be saturated, new potential information service needs need to be further tapped and stimulated, traditional revenue growth momentum has weakened, and the cultivation of new AI momentum still needs time.
It is worth noting that China Unicom's capital expenditure in the first half of the year was 23.9 billion yuan, a year-on-year decrease of 13.4%.
According to previous research by Cailian Press reporters, China Unicom's capital expenditure in 2022 was 74.2 billion yuan; last year's capital expenditure was 73.87 billion yuan, of which 5G completed investment of 37.37 billion yuan, and network investment showed a turning point. In March of this year, the company revealed that the total amount of fixed asset investment for the year will be controlled at around 65 billion yuan, among which the investment in algorithmic network intelligence will continue to be slightly ahead and strengthen its layout.
Today, China Unicom Chairman Chen Zhongyue responded to reporters from Cailian News at the performance briefing, saying, "Looking at the whole year, we are confident that fixed asset investment will remain within 65 billion yuan." In addition, he said that in the first half of the year, the company's capital structure continued to be optimized, and interest-bearing debts decreased by 3.8% to 3 billion yuan from the end of last year, and the asset-liability ratio decreased to a healthy level of 44.9%.
On the business side, China Unicom defined two major businesses, network connection and algorithmic network intelligence, based on the development trend of the industry last year.
With regard to network connection business, the revenue in the first half of the year reached 125.1 billion yuan, a year-on-year increase of 2.1%, accounting for three-quarters of the main operating income. It is the basic operating aspect with a net increase of nearly 80 million connections in the first half of the year, and the total scale exceeded 1 billion. The algorithmic network intelligence business achieved revenue of 43.5 billion yuan in the first half of the year, a year-on-year increase of 6.6%.
Looking at the specific subdivisions, in terms of computing power business, Unicom Cloud's revenue in the first half of the year reached 31.7 billion yuan, a year-on-year increase of 24.3%. In fact, the cloud growth rates of the three operators are all showing a downward trend.
According to Chen Zhongyue, the Internet, computing power network, and data network are the key investment areas for China Unicom in the first half of this year.
Among them, in terms of the Internet, Unicom's 5G intermediate frequency base stations exceeded 1.31 million in the first half of the year, and low-frequency base stations reached 780,000, and 4G intermediate frequency base stations exceeded 2 million. In addition, more than one hundred cities have commercial deployments of key technologies such as RedCap and carrier aggregation. In terms of algorithmic network intelligence, it is improving the integrated layout of cloud networks and edges, constructing Wanka Zhisuan centers such as Shanghai Lingang and Hohhot, and the overall network intelligence computing power has reached 10EFLOPS; the layout of more than 20 large-scale computing power center parks fully covers key nodes of "Eastern Digital, Western Computing."
In terms of data services, the company achieved revenue of 3.2 billion yuan in the first half of the year, a year-on-year increase of 8.6%. Chen Zhongyue said that in the first half of the year, China Unicom created government big data platforms and economic operation platforms for multiple provinces and cities, and actively cooperated with multiple local data exchanges and big data companies and other units.
In addition, the reporter noticed that the income growth rate of the company's network security business in the first half of the year was relatively fast, with a year-on-year increase of 58.2%.
It is worth mentioning that the company launched the Yuanjing Model 1.0 version in February this year and officially released the Yuanjing 2.0 version in July. Jin Qin, the general manager of the company, said at the performance briefing that based on Yuanjing 2.0, the company will focus on promoting two aspects of work: one is to deepen application scenarios and form 35 industry models and more than 100 benchmark applications; the other is to build feature capabilities, specifically including solid foundation capabilities and building open platforms.