China Unicom (600050): Profitability continues to improve 5G cycle expected value revaluation

China Unicom (600050): Profitability continues to improve 5G cycle expected value revaluation

China Unicom (600050): Profitability continues to improve 5G cycle expected value revaluation

Performance summary: The company’s service revenue for the first quarter of 2019 was 668.

0.2 million yuan, up by 0 every year.

3%; realize net profit attributable to shareholders of listed companies.

25 ppm, an increase of 24 in ten years.


Short-term revenue pressure, and profitability continued to improve significantly.

In the first quarter of 2019, due to the rapid growth of innovative business, fixed-line main business revenue reached 269.

1.9 billion, an increase of 9 over the same period last year.

4%; Affected by the cancellation of mobile phone roaming charges and intensified market competition implemented in July 2018, the company’s mobile business revenue decreased by 5 compared with the same period last year.

2%, it is expected that under the same market environment in the second half of the year, and the company actively promotes basic business innovation and differentiated management measures, mobile business revenue is expected to pick up.

The company’s cost reduction and efficiency enhancement effects are significant. The company’s depreciation and amortization in the first quarter of 2019 decreased by 8 compared with the same period last year.

6%, mainly due to good control of capital expenditure in recent years; financial expenses decreased by 118 compared with the same period last year.

2%, mainly due to the substantial reduction in abundant cash flow and the extension of interest-bearing debt last year; network operation and support costs decreased slightly compared to the same period last year1.

1%, mainly due to effective management and control of related costs.

In the first quarter of 2019, the company’s EBITDA was 250.

870,000 yuan, an increase of 4 in ten years.

4%; net profit attributable to parent company is RMB 16.

2.5 billion, an increase of 24 over the same period last year.


The release of the new 5G logo ushered in a new cycle of value revaluation.

At the Global Industry Chain Partner Conference, the company officially released a brand new 5G 杭州桑拿 brand identity and 5G network deployment, and established a “5G Application Innovation Alliance” in cooperation with merged companies.

The “7 + 33 + n” 5G network deployment released by the company, that is, continuous coverage in 7 urban areas of Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing, Hangzhou, Xiong’an, significant regional coverage in 33 cities, and n citiesCustomize the 5G network secondary network, build various industry application scenarios, provide various test scenarios, and promote 5G application incubation and industrial upgrading.

The company also plans to invest 6 billion to 8 billion US dollars in 5G construction in 2019, and organize 10 billion funds to incubate 5G projects, build 200 + 5G demonstration projects, establish 50 + 5G open laboratories, and incubate 100 + 5G Innovative application products, 杭州夜网 formulate 20 + 5G application standards.

The 5G era is approaching. Operators can take advantage of 5G network open capabilities, deepen vertical fields, provide business platform incubation, and not only serve 2C customers. It will bring more 2B customer cooperation and revenue increase.More adapted to the exploration of new business models, it is expected to usher in a revaluation of value.

Profit forecast and rating.

It is expected that EPS for 2019-2021 will be 0.

20 yuan, 0.

26 yuan, 0.

32 yuan, optimistic about the company’s continued increase in revenue, cost reduction and efficiency, and new performance in the 5G cycle, maintaining the “overweight” level.

Risk warning: the competition in the telecommunications market is intensifying, innovative businesses may be less than expected, and user development may be less than expected.