The Company rode on the trend of socio-economic digital transformation, grasped new opportunities, embraced new changes and achieved new development. It has upgraded its corporate strategy to “Strengthen and Solidify, Preserve and Innovate, Integrate and Open” and positions itself as “the national team in the operation and service of digital information infrastructure, the key force in the establishment of Cyber Superpower, Digital China and Smart Society, and the frontline troop in the integration and innovation of digital technologies”. It focuses on five main responsibilities and main businesses, namely “Big Connectivity, Big Computing, Big Data, Big Application and Big Security”, steering on the main course of digital economy at full strength.
In the first half of 2022, the Company achieved service revenue of RMB161.0 billion, representing a year-on-year increase of 8.3%, which was a new high for the same period in recent years. Profitability improved steadily with remarkable results in quality and efficiency enhancement. Profit attributable to equity shareholders of the Company reached RMB11.0 billion, representing a year-on-year increase of 19.5%. EBITDA reached RMB51.4 billion, representing a year-on-year increase of 3.9%.
The Company unswervingly promoted the transformation of basic businesses from a market-driven model to a model dually driven by market and innovation. It strived to achieve breakthroughs in the scale and value of basic businesses. In line with the “5G-oriented, gigabit-oriented and integrated” development trend in the industry, and riding on the opportunity of “dual-gigabit” network upgrade, the Company strived to create an integrated and group-based development model, enhanced the experience and stability of Big Connectivity subscribers, and built a sustainable growth foundation for basic businesses. The Company further optimised the product structure of basic businesses, strengthened the supply of 5G digital smart life and smart home application products, and launched new products and services such as 5G New Calling and elderly exclusive service, vigorously leveraging the differentiated advantages driven by product innovation to accumulate momentum for the innovative transformation of basic businesses. In the first half of 2022, the Company achieved mobile service revenue of RMB84.9 billion, representing a year-on-year increase of 3.4%. The number of mobile billing subscribers reached 320 million. Within that, 5G package subscribers registered a net addition of 29.99 million, reaching a total of 184.92 million. The penetration rate of 5G package subscribers reached 58%, signifying further optimised subscriber structure. The Company’s fixed-line broadband business maintained the good momentum of rapid growth last year. In the first half of 2022, the Company achieved broadband access revenue of RMB23.0 billion, representing a year-on-year increase of 4.3%. The number of broadband access subscribers recorded a net addition of 4.40 million, reaching a total of 99.44 million. The subscriber net addition reached a new high for the same period in the past 10 years.
The Company proactively embraces the blue ocean of digital economy development. Innovative businesses represented by Industry Internet are prospering, and our new value in the new era is gradually emerging. With respect to IDC business, the Company optimised the “5 + 4 + 31 + X” resource deployment, focused on the key areas such as Beijing-Tianjin-Hebei, Yangtze River Delta, Greater Bay Area, Sichuan-Chongqing, Shandong-Henan-Shaanxi, and improved the quality and utilisation of computing power services. The number of IDC cabinets increased by 19,000 as compared to the end of last year, reaching a total of 329,000. With respect to cloud business, the Company continued to enrich product categories with more than 300 self-developed products. Its cloud native capabilities were granted two authoritative accreditations, namely “Trusted Cloud Accreditation for Superior Container Cloud Cluster Performance” and “Zero Trust Security Accreditation”, by China Academy of Information and Communications Technology. It served the construction of a number of digital government affairs clouds and the digital transformation of central state-owned enterprises. In respect of the Internet of Things (IoT) business, the Company accelerated the ubiquitous interconnection of people, devices and things and adhered to a business-network synergetic strategy with 5G as the driver. It enhanced proprietary Yanfei chip and module capabilities to promote the integration of industry components into scenarios and achieve breakthroughs. With respect to Big Data business, the Company leveraged its advantages in data governance and data security to develop a product portfolio focused on key areas such as digital government and digital finance. In the first half of 2022, the Company’s Industry Internet achieved revenue of RMB36.9 billion, representing an increase of 31.8% year-on-year. It contributed to over 70% of the Company’s incremental revenue, becoming the real “No. 1 driver” of business growth. The revenue of “Unicom Cloud” more than doubled to RMB18.7 billion, representing a year-on-year increase of 143.2%. 5G applications increasingly transitioned from “show flats” to “commodity flats”. In the first half of 2022, the value of 5G industry applications contracts signed amounted to nearly RMB4 billion. There were more than 8,000 5G industry applications on a cumulative basis. IDC revenue reached RMB12.4 billion, up by 13.3% year-on-year. IoT revenue was RMB4.3 billion, representing a year-on-year increase of 44.1%. For Big Data business, the Company maintained its leading position in the telecom industry. In the first half of 2022, Big Data revenue increased by 48.9% year-on-year to RMB1.9 billion.
In the first half of 2022, the Company continued to work closely with China Telecom and added 180,000 new 5G base stations, with the two parties’ total number of 5G base stations reaching 870,000. Indoor coverage was significantly enhanced. The two companies added 90,000 new 5G distributed antenna systems (DAS), bringing the total number of 5G DASs to 200,000. The two companies have built the world’s largest co-built and co-shared 5G network. The Company accelerated the promotion of a single 4G network with China Telecom and made further breakthroughs in the scale of 4G network sharing. In the first half of 2022, 210,000 new shared 4G base stations were added, and the total number of shared 4G base stations reached 870,000. Through the co-build co-share of 4G/5G networks, the Company actively supported the goals of “carbon peaking and carbon neutrality”. Cumulative carbon dioxide emission savings exceeded 6 million tonnes and cumulative capital expenditure savings for both parties combined amounted to RMB240 billion. In addition, RMB25.5 billion of operating expenses can be saved each year.
The Company strived to build new digital information infrastructure capabilities and technological competitive advantages, deepened network innovation and strengthened network support capabilities. The average latency of its backbone network remained industry-leading. It enhanced its multi-cloud ecosystem, enabling automatic connection of the China Unicom Industrial Internet with Unicom Cloud and MEC cloud network. It launched the CUBE-Net 3.0 network system to actively build next-generation digital infrastructure featuring “connectivity + sensing + computing + intelligence”. In 2021, the capital expenditure was RMB69.0 billion.
In 2022, the Company will continue to build premium 5G network, gigabit broadband network, government-enterprise network and computing power network, and promote intelligent network operation, further solidifying the cornerstone of its high-quality development. The CAPEX growth for 2022 is expected to be in line with revenue growth.
The Company attaches great importance to shareholders’ return. After due consideration of the Company’s sound business development, the Board has resolved to declare an interim dividend of RMB0.165 per share in 2022, representing a year-on-year increase of 37.5%. Going forward, the Company will continue to strive to enhance its profitability and shareholders’ returns.
The objective of the dividend policy of the Company is to achieve a long-term, sustainable and steadily increasing dividend, with a view to maximising the shareholders’ value. The declaration and payment of future dividends will depend upon, among other things, financial condition, business prospects, future earnings, cash flow, liquidity level and cost of capital. The Company believes such policy will provide the shareholders with a stable return in the long term along with the growth of the Company. Pursuant to the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and the Company’s articles of association, the Company may only pay dividends out of profits available for distribution.
Pursuant to the former U.S. President's executive order and the requirements of the New York Stock Exchange LLC (the "NYSE"), the delisting of the Company's American Depositary Shares ("ADSs") took effect on 18 May 2021, and the ADSs Program was terminated on 18 October 2021. Holders of ADSs had the right until the termination date to exchange their ADSs into ordinary shares of the Company in accordance with the terms and conditions of the deposit agreement. The Company's ordinary shares are traded on The Stock Exchange of Hong Kong Limited.
The Bank of New York Mellon, as the depository for the Company’s ADSs, had commenced the sale of ordinary shares of the Company represented by the remaining ADSs after the Termination Date, and would pay the net cash proceeds, after deducting applicable fees and expenses, to the holders of such remaining ADSs.
The contact details of the Bank of New York Mellon are as follows:
Shareholder Services, P.O. Box 505000, Louisville, KY 40233–5000