China Unicom H1 Net Profit Drops 34.6% YoY, Computing Power Revenue Up 13%
Nashnova编辑部
China Unicom's first-half net profit dropped 34.6% to RMB 9.5 billion, but computing-power revenue bucked the trend with 13% growth to RMB 41.9 billion — the company is taking a short-term profit hit to bet heavily on its computing transformation.
Why did net profit fall by more than a third?
H1 net profit came in at RMB 9.5 billion, down 34.6% year-on-year; total revenue was RMB 201.4 billion, up just 0.6%.
The company attributed the drop to VAT timing shifts and a front-loaded spike in labour costs.
This means → the profit slump is not a revenue collapse — it is cost-side bunching squeezing this half's bottom line.
Management expects full-year labour costs to stay flat, with the profit decline "narrowing significantly" — in other words, H1 is the ugliest stretch of the year.
Why did cash flow actually hit a record high?
Operating cash inflow reached RMB 32.9 billion, up 13.6%, a multi-year high.
Accounts-receivable growth slowed sharply versus the same period last year — collections are speeding up.
In plain terms = the income statement looks bad, but there is more actual cash in the till than a year ago — operating quality has not deteriorated alongside profit.
How fast is the computing business growing, and where is the money going?
Computing-power revenue hit RMB 41.9 billion, up 13%; within that, intelligent-computing-centre — data centres purpose-built for AI workloads — revenue rose 11%, and smart-computing revenue rose 9%.
Capex totalled RMB 24.1 billion; computing's share climbed to 37%, with computing investment up more than 80% year-on-year.
This means → Unicom is directing more than one in every three capex yuan into computing power, nearly doubling that bet.
This reflects a broader shift: telecom operators' growth engines are moving from "building base stations" to "building compute."
Can the legacy connectivity business still hold up?
Converged-service penetration exceeded 78%; converged-package ARPU — average revenue per user — stayed above RMB 100.
New subscribers are worth more than existing ones — the user mix is improving, not diluting.
International-business revenue reached RMB 7.7 billion, up 14%, one of the few segments still growing at double digits.
What is the single most important question for the second half?
Computing investment surged — capex share up to 37%, investment up over 80% — but whether that spend converts into revenue gains in H2 is the key test of whether full-year profits can narrow as promised.
In plain terms = H1 spent big and took a profit hit; if computing revenue does not accelerate in H2, the "full-year narrowing" promise risks falling short.
This reflects a classic "spend now, grow later" phase: short-term profits look poor because the company is betting on an explosion in computing demand.
Content is for reference only, not financial advice.