Citi has released a research report stating that CHINA UNICOM (00762) recorded third-quarter revenue of RMB 93.3 billion, representing a 1% year-on-year increase, which was broadly in line with the bank's expectation of a 1% rise and the market's expectation of flat growth, though it fell 5% on a quarterly basis; the bank maintains its "Buy" rating on China Unicom's H-shares with a target price of HK$7.
The bank noted that CHINA UNICOM's third-quarter EBITDA came in at RMB 22.8 billion, in line with both the bank's and the market's expectations, but declined 10% year-on-year and 1% quarter-on-quarter; the EBITDA margin fell 2.9 percentage points year-on-year to 24.4%, mainly dragged down by the impact of value-added tax.
Net profit stood at RMB 3.812 billion, missing the bank's estimate by 9% and the market's expectation by 5%, down 31% year-on-year and 17% quarter-on-quarter, with a net profit margin of 4.1%, down 1.9 percentage points year-on-year; the earnings miss was primarily due to lower-than-expected non-operating gains.
For the first nine months, revenue rose modestly by 0.6% year-on-year to RMB 294.6 billion amid a challenging telecommunications industry environment, with computing power and international business revenues growing 12.2% and 14.5% year-on-year respectively, reflecting the company's continued transition toward AI infrastructure services.
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