China Unicom: The new strategy leads to innovation and change, and digital transformation highlights are numerous

Author l stock speculation gang

Thanks to Unicom! Friends who often brush vibrato should be familiar with this famous "Unicom Terrier". A telecom operator, which is considered to be very traditional, has actually played with traffic passwords on the latest social media, not only leading the trend, but also achieving business growth, which is indeed a bit of a refreshment.

On Friday, China Unicom (stock code: 600050. SH, 0762.HK) released its 2021 annual results report, and the strong business growth is once again eye-catching. The telecommunications giant is taking on a new lease of life and growth, becoming more and more "new" and "stronger". The following is the author's interpretation of its annual report, interested friends may wish to pay attention to it together:

1. Financial report highlights: Revenue growth rate hit a new high in 8 years, and the scale of profitability accelerated

Let's start with the financial data: Overall, in 2021, China Unicom's operating performance grew steadily, its profitability increased rapidly, and it achieved a good start to the "14th Five-Year Plan" with high-quality growth.

Revenue growth rate hit a new 8-year high: annual operating income reached RMB327.9 billion, an increase of 7.9% year-on-year, revenue growth rate hit a new high since 2014; main business income reached RMB296.2 billion, an increase of 7.4% year-on-year, an increase of 3.1 percentage points over the whole of 2020.

Acceleration of profit scale: Total profit for the whole year reached RMB17.8 billion, net profit attributable to the parent company reached RMB6.31 billion, an increase of 14.2% year-on-year; EBITDA (Profit Before Tax, Depreciation and Amortization) reached RMB96.1 billion, an increase of 2.3% over last year, and the scale of profit increased rapidly.

The full-year dividend return increased by 30%: In view of the good operating development and strong free cash flow, the board of directors of Unicom A shares recommended the payment of a final dividend of RMB0.0391 per share, together with the interim dividend of RMB0.0488 per share paid, for the total dividend of RMB0.0879 per share, an increase of 31.4% year-on-year.

2, business highlights: 5G leads the business upgrade, the industrial Internet performance is outstanding

From the perspective of operation, in 2021, China Unicom's operating trend is stable and improving, and in terms of basic business, mobile operation and fixed-line broadband have both improved; in emerging services, the industrial Internet has maintained rapid growth and the proportion of revenue has continued to increase.

l5G leads the promotion of basic services: The "speed up and fee reduction" policy of the communications industry has come to an end, and China Unicom has seized the development trend of 5G consumption digitization, onlineization and integration, and led by 5G, driving the value and scale of mobile services to increase. According to the annual report, in 2021, the main business income of China Unicom Mobile reached RMB164.1 billion, an increase of 4.8% year-on-year; the user value continued to be optimized, and the mobile user ARPU (average monthly revenue per outgoing user) reached RMB43.9, an increase of 4.3% year-on-year; the 5G business accelerated development, the company's 5G package users reached 155 million households, and the penetration rate of 5G package users exceeded the industry average, reaching 49%.

In 2021, in the face of the "three gigabit" upgrade opportunity period of 5G, broadband and Wi-Fi, China Unicom took "full-network integration" as the main line of strategy, and achieved a year-on-year increase of 5.2% in fixed-line broadband access revenue to REACH RMB44.8 billion. The net increase in fixed-line broadband subscribers in the whole year was 8.95 million, reaching a total of 95.05 million, a record increase in the scale of net subscribers in the whole year, and the broadband access ARPU remained basically stable at RMB41.3, showing the effectiveness of scale-based value operation. The penetration rate of converged services among fixed-line broadband subscribers reached 72%, an increase of 7 percentage points year-on-year.

Industrial Internet performance: Driven by innovation in 2021, emerging businesses such as cloud computing, IDC (Internet data center), and Internet of Things continued to expand rapidly, and the revenue of industrial Internet business reached RMB54.8 billion, an increase of 28.2% year-on-year, accounting for 18.5% of the main business income, compared with 2019 and 2020.

3, business highlights: 5G+, East and West, meta-universe, business is becoming more and more "new"

Specific to the various business levels, in the past year, Unicom's innovative business has been full of highlights and momentum. The author believes that whether it is in the popular 5G+, cloud computing track, or the current fire in the field of Eastern And Western Computing and Meta-Universe, China Unicom, as the most powerful basic operator, is basically in the leading echelon.

l "Unicom Cloud" into a new journey: Judging from the financial report data, the "Unicom Cloud" business that has just undergone brand renewal at the end of 2021 has performed quite brightly, launching seven major scenario clouds, and achieving revenue of 16.3 billion yuan in the whole year, an increase of 46.3% year-on-year. According to the "China Public Cloud Service Market Tracking Report" released by the market consulting agency, the revenue growth rate of Unicom Cloud Public Cloud IaaS+PaaS in the third quarter of 2021 reached 296.35% year-on-year, and the market share increased by 167.67% year-on-year, ranking first among all manufacturers.

l5G+ deeply rooted in digital transformation: In the past year, China Unicom has deeply cultivated digital transformation and continued to make efforts to 5G track. As of December 2021, China Unicom has built more than 300 "lighthouse projects" and more than 3,000 key projects such as 5G+ industrial Internet, 5G+ education, 5G+ medical care, and 5G+ transportation, empowering 25 key industries such as industrial Internet and smart city. According to the annual report, through sharing and co-construction, China Unicom and China Telecom have cooperated to build the world's first, largest and fastest 5G co-construction and sharing network, sharing 690,000 5G base stations. At the recent Beijing Winter Olympics, China Unicom, as a communication support partner, supported by the 5G network as the base, provided a strong impetus for the "Smart Winter Olympics".

New infrastructure is still the highlight: 2022 is considered to be the key year for the large-scale development of 5G applications, and it is also the starting year of the construction of the hub node of "East Number West Calculation", and China Unicom recently said that the construction of new digital infrastructure (that is, new infrastructure) is still the focus of layout investment. Wanlian Securities Research Report pointed out that with the gradual advancement of 5G construction and the sustained rapid growth of cloud computing construction scale, the fundamentals of the communications industry in 2022 or will continue to improve. The author believes that this will bring new growth momentum and value revaluation opportunities for China Unicom.

l "Meta-universe" fire, "An Weixi" exploration: It is worth mentioning that with the popularity of the concept of "meta-universe", China Unicom has also entered a new track. In October 2021, Unicom Wo Music relied on digital human technology to launch a hyper-realistic digital person - "An Weixi". It is believed that the company will produce more forms of intelligent hyper-realistic digital people in the future, which will be applied to a wider range of industries and scenes. In fact, the author believes that in terms of supporting the landing of the meta-universe, Unicom, Telecom and other basic network operators with "superpowers" such as 5G, gigabit optical fiber broadband, big data, and cloud computing are closer and more advantageous than Internet companies.

l "East number west calculation" is one step ahead, the computing power network has begun to take shape: as the earliest advocate of the concept of "computing power network" in China, the first to release the "white paper on computing power network" and the first operator to propose to build the computing power network as the "first computing engine", the "pole, soft, intelligent and simple" computing power network proposed by China Unicom has been practiced in Beijing, Hebei, Shandong and Guangdong and has achieved phased results, which also makes China Unicom one step ahead in the development of computing power network. According to the annual report, in the future, China Unicom will further optimize the "5+4+31+X" resource layout around the eight major computing hub nodes of the national "East Number West Computing", form a multi-level computing facility system of digital network collaboration, digital cloud collaboration, cloud-side collaboration, and green intelligence, support the comprehensive and diverse digital needs of different dimensions and different levels, and create the "first computing power engine" for the digital economy.

4, the development of the point of view: the five main responsibilities of the main business, the "national team" pattern is getting more and more "big"

In addition to the above points of view, the author noted that in this annual report disclosure, the management of China Unicom made a clear description of the company's development plan during the "14th Five-Year Plan" period, and in the future, China Unicom, as a "national team", is expected to assume missions in more fields, which will further open up the business development pattern and imagination space.

Liu Liehong, chairman of China Unicom, said in the report of the board of directors that 2022 is the starting year for China Unicom to fully implement the new strategic plan. China Unicom will continue to fully implement the new development concept, serve to build a new development pattern, promote high-quality development, focus on the construction of 'network power, digital China, and smart society', implement the company's '1+8+2' strategic planning system as the main line of work, focus on the five main businesses, and create greater value for shareholders, customers and society." ”

Not long ago, China Unicom released a new strategy for the company's new positioning, the company is positioned as "the national team of digital information infrastructure operation and service, the main force of digital China's smart society construction of a network power, and the vanguard of digital technology integration and innovation", the strategy is upgraded to "strong foundation, integrity innovation, integration and opening up", with the five major businesses of "big connection, big computing, big data, big application, and big security" as the main business, comprehensively exerting efforts on the main channel of the digital economy, comprehensively laying out the strategic business of big computing, and coordinating the promotion of data centers. The deep integration of cloud computing and networking, to build a reasonable layout, advanced network, cloud network collaboration of the computer network integration system.

That is to say, in the future, China Unicom will not only have a larger business scale and business field, but also a larger business pattern. China Unicom has always been the darling of institutional investors in A-shares and Hong Kong stocks, and the author believes that with the further opening of the company's strategic pattern and the continuous advancement of innovation and transformation, China Unicom will be more promising in the future!