China Unicom (600050): Double-factor improvement in performance in line with expectations in the second half

China Unicom (600050): Double-factor improvement in performance in line with expectations in the second half

Performance summary: The company achieved operating income of 1449 in the first half of 2019.

500 million, down 2 every year.

8%; net profit attributable to mother is 30.

20,000 yuan, an increase of 16 in ten years.


Performance was in line with expectations, and innovation business became the main driving force.

The company’s performance in the first half of 2019 decreased slightly, mainly due to factors such as speed increase and fee reduction, market saturation and other factors, which led to a decrease in mobile main business revenue6.


At the same time, the company’s 4G users have a net increase of 19.01 million, and the market share of 4G users has increased by 0.

In the eight quarters, the three major operators recently canceled the “unlimited package”. The mobile business performance in the second half of the year is expected to stabilize and recover. From July, the company’s mobile main business income increased by 1 from the previous month.


In addition, the company’s industrial Internet business revenue increased by 43% each year (IDC and cloud computing business revenue reached US $ 9.3 billion, an annual increase of 27%; the Internet of Things business and big data business revenue reached 1.4 billion and 500 million US dollars, respectively, an annual growth of 43%And 128%), accounting for 13% of the overall main business revenue, and the 5G era will be the battlefield of the Industrial Internet. The company ‘s existing institutional settings and business strategies are gradually optimized to lay a solid foundation for future innovative business.

Reinforcing 4G network capabilities, 5G construction is advancing rapidly.

The company’s H1 capital expenditure in 2019 continued to be effectively controlled, with a total of 220 trillion, of which 4G base stations reached 1.35 million, achieving 4G deep coverage and rural wide coverage significantly improved.

At the same time, the company expects that the annual budgeted capital expenditure will remain unchanged at 58 billion, and that it will be used for 5G expansion to 8 billion. It plans to build 40,000 5G base stations in 2019, and promote 5G commercialization in key cities in September, achieving 14 consecutive citiescover.

In the future, the company will seek co-construction and sharing with other operators’ 5G networks. This will effectively control the expansion of capital while achieving rapid coverage of 5G networks and the improvement of network utilization efficiency, which is beneficial to the business development of operators.

Mixed reform promotes significant internal changes, and innovation is on the way.

After 2017, China Unicom, as a benchmark for mixed reform of state-owned enterprises, has shown profound changes in terms of strategy, business model, and endogenous performance. With 5G empowerment, the company is expected to become an incubator and creator of applications.Or, go 北京会所体验网 further in the value chain and realize value revaluation.

Earnings forecasts and investment advice.

It is expected that the company’s net profit for 2019-2021 will be 60.

8.8 billion, 78.

1.4 billion, 93.

4.5 billion, corresponding to 28-20, 22- and 18-fold PE in 2019-2021, and 1 in PB.


11 and 1.

06 times, taking into account the company’s historical estimates and expectations, and maintain a “Buy” rating.

Risk warning: the competition in the telecommunications operation market is intensifying, innovative business may be less than expected, and mobile and fixed-line broadband users may be less than expected.

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