Incident: The company released its 2024 semi-annual report. 24H1's revenue was 197.3 billion yuan, up 2.9% year on year, including main business revenue of 175.7 billion yuan, up 2.7% year on year, EBITDA reached 54.9 billion yuan, up 2.7% year on year, total profit 16.8 billion yuan, up 10.2% year on year, net profit to mother of 6 billion yuan, up 10.9% year on year. Profitability increased year by year. .
Here are our reviews:
The network communication service stabilized and improved, and the network digital intelligence business expanded and increased the efficiency of the network communication service 24H1. Revenue of 24H1 was 125.1 billion yuan, an increase of 2.1% over the previous year. The scale and value of the company's online users achieved a “double increase”. First, there was a steady increase in the number of connections, with a net increase of nearly 80 million in the first half of the year, and the total scale exceeded 1 billion. Among them, the net increase in mobile users exceeded 6 million, and the total number of users reached 0.34 billion, a record high for the same period in the past five years; the number of Internet of Things connections exceeded 0.56 billion; and broadband users continued to grow steadily, reaching 0.117 billion, of which the number of integrated users exceeded 80 million. Second, the user structure was further optimized. The 5G package user penetration rate exceeded 80%, and the gigabit broadband user penetration rate exceeded 25%; value management results were shown, and the ARPU for integrated users reached 103 yuan.
Computing Network Digital Intelligence Business 24H1 revenue was 43.5 billion yuan, an increase of 6.6% over the previous year. Among them ① the computing power business is growing rapidly. 24H1 Unicom's cloud revenue reached 31.7 billion yuan, an increase of 24.3% over the previous year. It achieved breakthroughs in computing power scale and product capabilities, maintained the industry's leading level, and built a number of government cloud, enterprise cloud, and medical cloud benchmark projects. Fully launch the intelligent transformation of data centers to drive rapid growth of AIDC's business, leading the industry in IDC's business revenue growth rate. ② Leading the data service industry. 24H1's revenue was 3.2 billion yuan, up 8.6% year over year. Based on large-scale data governance and service practices, it actively exploits the multiplier effect of data elements to build government big data platforms and economic operation platforms for many provinces and cities; actively participate in market-based reform of data elements and promote innovation in public data operation models. ③ Go deep into the industry scenario, integrate into the customer ecosystem, and promote the double-digit growth of digital intelligence applications. 24H1's revenue was 3.7 billion yuan, up 13.5% year over year. Actively helping new industrialization, we have built more than 5,800 5G factories, served more than 0.012 million 5G private network customers, implemented more than 0.038 million commercialization projects, enhanced Unicom's 5G+ industrial Internet brand influence; actively promoted the Internet of Everything; and maintained its dominant position in the front-mounted connectivity market. ④ Give full play to the role of chain leaders and promote the strong growth of the Internet communication security business. 24H1's revenue was 1.4 billion yuan, up 58.2% year over year. Continuously enrich the supply of products and play a driving role in integration.
Accelerating international business
The number of Chinese enterprises going overseas and outbound tourists has increased dramatically in recent years, bringing valuable opportunities for the company to improve its operating standards in the global market. 24H1's international business revenue was 6 billion yuan, up 8.4% year on year, mainly due to the high growth rate of overseas roaming and overseas mobile phone business revenue, and rapid growth in revenue from major products such as global intelligent networking, high-bandwidth dedicated lines, Unicom Cloud, and the Internet of Things. In particular, the Internet of Things achieved a breakthrough in overseas connectivity, and revenue increased 93.4% year over year.
We attach great importance to shareholder returns. The year-on-year dividend growth rate per share is higher than the year-on-year growth rate of profit per share. Hong Kong Red Chip Companies/A shares plan to pay an interim dividend of 0.2481 yuan/0.0959 yuan (tax included) per share, an increase of 22.2%/20.5% year-on-year. The annual dividend payout ratio of Hong Kong stock red chip companies for 20-23 was 40%/46%/50%/55%. We expect this trend to continue in the future and continue to enhance shareholder returns.
Establish a foundation for a high-quality development network, and the year-round outlook shows confidence
The company continues to strengthen the construction of new infrastructure, focusing on the “Internet, computing power network, and data network”, and adhering to network industry collaboration and accurate investment. It completed a fixed asset investment of 23.9 billion yuan in the first half of the year (estimated to be within 65 billion yuan for the whole year). The investment scale declined steadily, down 13.4% year-on-year, and investment efficiency continued to improve, laying a solid foundation for the company's high-quality development. The company looks forward to steady revenue growth and double-digit profit growth throughout the year, demonstrating confidence in development.
Profit forecasts and investment suggestions:
The company's network communication business is progressing steadily. In order to maintain the basic market for steady operation, the computing network digital intelligence business is improving, broadening the growth pole for innovation and transformation, and optimistic about the company's future development. The company's net profit for 24-26 is estimated to be 9.093, 10.049, and 11.075 billion yuan, maintaining an “increase in holdings” rating.
Risk warning: industry competition intensifies, innovative business progress falls short of expectations, cost growth exceeds expectations, etc.