China United Network Communications (00762) released its interim results, with a profit attributable to shareholders of 9.5 billion yuan, a year-on-year decrease of 34.6%. Operating cash flow reached a recent high.

China United Network Communications (00762) released its mid-year performance announcement for 2026, indicating stable performance and potential for growth. In the first half of the year, revenue demonstrated resilience. Despite challenges in overall industry growth, operating revenue reached RMB 201.4 billion, an increase of 0.6% year-on-year; service revenue was RMB 178 billion, a slight decline of 0.2% year-on-year. Profitability faced short-term pressure, with pre-tax profit at RMB 11.3 billion and profit attributable to equity holders of the company at RMB 9.5 billion, a decrease of 34.6% year-on-year. This cyclical fluctuation in profitability was influenced by multiple factors, with changes in the pace of labor cost investment being a significant reason, alongside value-added tax. It is expected that annual labor costs will remain stable, and the profit decline will significantly narrow. Cash flow is healthy and improving, with net operating cash inflow of RMB 32.9 billion, an increase of 13.6% year-on-year, achieving a recent high, and the growth rate of accounts receivable has notably slowed compared to the same period last year. Structural improvements are underway. The value of connections has stabilized and improved, with the value of new users exceeding that of existing users. The penetration rate of integration has surpassed 78%, and the ARPU of integrated packages remains above RMB 100. The release of computing power is accelerating, with computing revenue reaching RMB 41.9 billion, a year-on-year increase of 13%; revenue from intelligent computing centers grew by 11% year-on-year, and revenue from intelligent computing increased by 9%. The internationalization process is accelerating comprehensively, creating new growth drivers, with international business revenue amounting to RMB 7.7 billion, a year-on-year increase of 14%. Resource allocation is precise and efficient. The company adheres to lean management, continuously enhancing output efficiency, with capital expenditures in the first half of the year totaling RMB 24.1 billion. It has implemented the deployment of the "six networks," strengthening the computing network and the new generation of communication networks, with computing investment accounting for 37% and investment amount increasing by over 80% year-on-year. The company is deepening network co-construction and sharing, promoting intelligent network operations and effectively controlling costs while the scale of the network continues to grow, with single-site energy consumption improving by 4.8% year-on-year.