Citigroup: China United Network Communications (00762) fourth quarter net profit significantly lower than expected, indicating a nearly 8% decrease in capital expenditure for the year.

Citigroup released a research report stating that China United Network Communications (00762) last year's revenue and EBITDA both fell below market expectations, while net profit was lower than that expected by the bank and the market. Revenue in the fourth quarter of last year was 3% lower than market expectations, service revenue was 4% lower than market expectations, EBITDA in the fourth quarter exceeded market expectations by 1.6%, and net profit fell sharply by 48.5% to 820 million yuan, far below market expectations of 49.5%. Citigroup maintained its target price at 11.2 Hong Kong dollars and rated it as a "buy". Overall, the company's capital expenditure for the full year of last year fell by 11.4% year-on-year to 54.2 billion yuan, slightly below the original guidance of 55 billion yuan. The company's total capital expenditure guidance for this year is approximately 50 billion yuan, a year-on-year decrease of around 7.7%, and it is expected that this year's revenue, profit, and return on net assets (ROE) will continue to grow steadily. The company will continue to focus on its four major core strategic directions: connectivity, computing power, services, and security.