China Unicom resolutely shouldered the mission and responsibility of building a Cyber Superpower, Digital China, Smart Society, and Technological Innovation. The Company 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 2023, the Company’s revenue and profit scale once again reached new highs since listing. Operating revenue reached RMB 191.8 billion, up by 8.8% year-on-year. Service revenue reached RMB 171.0 billion, up by 6.3% year-on-year. EBITDA reached RMB 53.6 billion, up by 4.1% year-on-year. The profit attributable to equity shareholders of the Company reached RMB 12.4 billion, representing a year-on-year increase of 13.1% and a double-digit growth for the seventh consecutive year. In the first half of the year, the Company’s return on equity reached 3.6%. The foundation of the Company’s high-quality steady and long-term development was further strengthened.
In the first half of 2023, the Company’s Big Connectivity subscribers reached 928 million, with a net addition of over 66 million. Mobile business achieved dual improvement in both scale and value. The number of mobile subscribers exceeded 328 million, with a net addition of 5.34 million in the first half of the year, which was a new high during the same period in four years. 5G package subscriber penetration exceeded 70%, as subscriber structure was further optimised. The Company strengthened product supply capability. The number of active subscribers of Personal Digital Smart Living products, such as Video Ringtone, Unicom Assistant and Unicom Cloud Drive, exceeded 87 million, and revenue thereof increased by 90% year-on-year, driving mobile ARPU to increase. The innovative growth of broadband business further accelerated. The Company took advantage of “dual-gigabit” network upgrade to drive integrated development of subscribers. The number of fixed-line broadband billing subscribers reached 108 million. Net addition exceeded 4 million in the first half consecutively, with the integration penetration rate reaching 75%. In particular, the Company accelerated the promotion and application of Fibre to the Room (“FTTR”) which unleashed new potential for the sustainable growth and value enhancement of broadband business. IoT business revenue reached RMB 5.4 billion, representing a year-on-year growth rate of 24%, which instilled new vitality into Big Connectivity development. High-, mid- and low-speed access scenarios were all covered with integrated development of “terminals, network, cloud, AI and security”. The Company leveraged Gewu platform to empower industry breakthroughs, effectively driving faster development in industrial Internet, smart city, and ecological environmental protection.
The Company’s in-house R&D capabilities continued to improve. It has established a brand image of “secure, digital and intelligent cloud”, and developed the unique edges of “security and reliability, cloud-network integration, Big Data and AI integration, tailored customisation, and multi-cloud collaboration”. The Company continuously iterated and upgraded technological innovation, industrial empowerment, and ecological cooperation, so as to instil new momentum into the development of the digital economy. The Company continuously upgraded the foundational architecture of Unicom Cloud, and achieved a multi-modal cloud with a unified architecture. Based on China Unicom’s multi-year experience in penetrating vertical industry markets, we have developed rich variety of scenario specific solutions based on seven scenario clouds to fully empower the digital transformation of industries. In the first half of 2023, Unicom Cloud achieved revenue of RMB 25.5 billion, up by 36% year-on-year. It is expected to exceed RMB 50.0 billion for the full year.
The Company fully leveraged its first-mover advantage in the industry in centralising data and unifying operations, combined with artificial intelligence and blockchain technology, to establish a comprehensive Big Data capability system. Based on 400 PB of hyperscale data processing and trillion-grade real-time data processing capabilities, and with a view to unleashing the value of data factors, the Company deeply penetrated sectors such as digital government affairs, digital finance, smart tourism, industrial Internet, etc. Focusing on scenario demand, we enriched key industry applications to promote the deep integration of the digital and real economies, establishing the brand of “Unicom Service” for digital government affairs. In the first half of the year, the Company’s Big Data business achieved revenue of RMB 2.9 billion, up by 54% year-on-year, with market share of over 50% for consecutive years.
The Company actively promoted the deep integration of next-generation digital technologies and the real economy. The cumulative number of 5G industry application projects exceeded 20,000, comprehensively covering 60 categories of the national economy. We promoted the transition of 5G applications from “show flats” to “commercial properties”. The cumulative number of customers served by 5G virtual private networks exceeded 5,800 and the contract value of 5G industry applications reached RMB 6.2 billion. The Company continued to iterate 5G private network PLUS product system and carried out core technological research to tackle key problems. The number of 5G factories exceeded 2,600 as 5G applications deepened. We completed trial verification of full-spectrum 5G RedCap in 8 major sectors, including manufacturing and power, which effectively promoted the integrated innovation of 5G and vertical industries, and led 5G applications in “lightweight”.
The Company focused on the key directions such as network security, data security and information security, and strengthened the deployment of security business. We accelerated the scale replication of the “platform + product + service” model, and launched more than 80 products in the security cloud market to widely meet the security needs of the digital economy. Big Security revenue grew 178% year-on-year in the first half of the year, boosting the scale development of security business.
The co-build co-share with China Telecom has been deepening. In addition to adding 150,000 5G co-build co-share base stations in the first half of 2023, the Company promoted a single 4G mid-band network, with the number of shared base stations exceeding 2 million and a sharing ratio of over 90%. We also actively promoted cross-sector co-build co-share of infrastructure such as poles and pipelines and made good progress.
The Company accelerated the construction of four premium networks, namely 5G, broadband, government and enterprise, and computing power, which provided a solid network foundation for the high-quality development of the Company. In the first half of 2023, the number of 5G mid-band base stations exceeded 1.15 million, with the scale and coverage on par with the industry. Our broadband networks in cities, counties and towns are fully gigabit-ready. Our government and enterprise premium network fully covered 335 local networks in the country. The Company made great efforts to build a computing power base with abundant computing power, sufficient capacity, multi-cloud synergy and computing-network integration, and built a new IDC system to comprehensively undertake the national “Eastern Data and Western Computing” project. The number of cabinets exceeded 380,000. Unicom Cloud pool covered more than 200 cities. The average backbone network latency remained leading in the industry.
In the first half of 2023, the Company’s capital expenditure reached RMB 27.6 billion. The Company will further step up investment. For the full year of 2023, capital expenditure will reach RMB 76.9 billion, of which computing power network investment will account for more than 19% and grow by over 20% year-on-year, in an effort to solidify the digital base.
The Company attached great importance to shareholders’ return. After due consideration of the Company’s robust business development, the Board resolved to distribute an interim dividend of RMB 0.203 per share (pre-tax) for the year 2023, up by 23% year-on-year, which is significantly higher than the 13% growth in basic earnings per share. Shareholders’ return continues to enhance.
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.