China's Unicom Hong Kong H1 profit falls on VAT, employee benefit expense

China Unicom Hong Kong

18/08/2026 09:46

Overview
China telecom operator's H1 operating revenue rose 0.6% yr/yr amid industry challenges
Net profit for H1 fell 34.6% yr/yr due to VAT and employee benefit expense timing
Company reported improved net operating cash flow, up 13.6% yr/yr to RMB32.9 bln

Outlook
Company expects full-year profit contraction to narrow significantly
Employee benefit expenses are expected to remain stable for the full year
Company continues to focus on computing power and network efficiency investments

Result Drivers
VAT AND EMPLOYEE BENEFIT EXPENSES - Co said net profit decline was mainly due to value-added tax and timing of employee benefit expense spending
COMPUTING POWER REVENUE - Co reported computing power revenue rose 13% yr/yr to RMB41.9 bln, with IDC and computing service revenue also up
IMPROVED CASH FLOW - Co said net operating cash flow rose 13.6% yr/yr to RMB32.9 bln, setting a new record in recent years

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
H1 Operating Revenue
 
RMB 201.40 bln
 
H1 Net Income Attributable
 
RMB 9.50 bln
 

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 3 "hold" and 2 "sell" or "strong sell"
The average consensus recommendation for the wireless telecommunications services peer group is "buy"
Wall Street's median 12-month price target for China Unicom Hong Kong Ltd is HK$8.15, about 28.8% above its August 17 closing price of HK$6.33
The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 9 three months ago

Reuters Recommended Reads
Aug 17 - China's WeTouch Technology H1 revenue rises on automotive, medical segment growth
Aug 17 - China's Shanghai Conant Optical H1 revenue rises, helped by XR business growth
Aug 17 - Nvidia to provide up to $105 billion guarantee for OpenAI's Ohio data center

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)