occurrences
On March 19, 2024, the company released its 2023 annual report. The company achieved operating revenue of 372.6 billion yuan, an increase of 5% over the previous year; of these, the main business revenue reached 335.2 billion yuan, an increase of 5% over the previous year. EBITDA996 billion yuan. Net profit to mother was 8.2 billion yuan, up 12.0% year on year, achieving a double-digit increase for 7 consecutive years. Return on net assets 5.1%. On April 19, 2024, the company released its first quarter report, achieving 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; realized total profit of 7.169 billion yuan, up 10.0% year on year.
reviews
1. The company's revenue grew steadily, and the share of the computing network digital intelligence business continued to increase. In 2023, the company's net mobile network users increased by 10.6 million, totaling 333 million. The net increase in users increased by 90% year-on-year, and the net increase in broadband users was 9.79 million, totaling 113 million households, and the penetration rate of broadband integration was 76%. The company's 5G users accounted for 78% (up 12pp year on year), and the penetration rate of gigabit broadband users was 22% (up 6pp year on year). In 2023, the Internet Digital Intelligence business achieved revenue of 75.2 billion yuan, accounting for 1/4 of the total revenue of the two main businesses. Among them, Unicom Cloud generated revenue of 51 billion yuan, up 41.60% year on year, data service revenue of 5.3 billion yuan, up 32% year on year, digital intelligence application revenue of 5.6 billion yuan, up 17.50% year on year, and Internet Communications security revenue of 1.7 billion yuan, up 120% year on year.
2. Capital expenditure declined in 24, and computing power investments were actively deployed. In 2023, the company completed a total capital expenditure of 73.87 billion yuan, of which 5G invested 37.370 billion yuan. According to the company's guidelines, capital expenditure of 65 billion yuan is expected to be completed in 2024, of which Computing Network Digital Intelligence Investment will continue to be moderately ahead of schedule and speed up the layout.
3. The company's operations were steady, moderate and positive in the first quarter of this year. 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 Cloud's revenue reached 16.7 billion yuan, up 30.30% year on year; data center revenue was 6.6 billion yuan, up 4.10% year on year. The company has 337 million mobile users, including 269 million 5G package users, and the 5G package penetration rate has increased to 80%. The company had 529 million IoT connections, a net increase of 34.6 million; 115 million fixed-line broadband users, including a net increase of 2.11 million gigabit users, and the gigabit broadband penetration rate increased to 23%.
4. We expect the company's net profit to be 92.82, 104.03, and 11.859 billion yuan respectively, up 13.57%, 12.08%, and 14.00% year-on-year, corresponding to the current stock price PE of 15, 14, and 12 times, respectively, covered for the first time, and gave it a “buy” rating.
Risk warning:
The company's revenue growth rate falls short of expectations; capital expenditure is once again increasing the risk; the revenue growth rate of the Internet Digital Intelligence is declining, etc.