Earnings First Take: 1Q22 net profit increased by 20.6% y-o-y, higher than market expectations
- Net profit increased by 20.6% y-o-y to Rmb4.6bn in 1Q22, higher than market expectations
- Service revenue up by 9.8% y-o-y to Rmb81bn with strong expansion in Industry Internet business
- EBITDA increased by 5.9% y-o-y to Rmb25bn in 1Q22, with EBITDA margin contracting 1.1ppts to 32.2%
- Expect positive share price reaction
What’s New
– China Unicom (762 HK) announced its 1Q22 results on 21 Apr 2022 after market close.
– Revenue increased by 8.2% y-o-y to Rmb89bn in 1Q22. Service revenue grew by 9.8% y-o-y to Rmb81bn.
– Revenue from Industry Internet expanded 34.8% y-o-y to Rmb19bn in 1Q22, accounting for 23.9% of total service revenue (up by 4.4ppts from 1Q21).
– EBITDA increased by 5.9% y-o-y to Rmb25bn in 1Q22, with EBITDA margin contracting 1.1ppts to 30.8%.
– Net profit increased by 20.6% y-o-y to Rm4.6bn in 1Q22, higher than market expectations due to strong Industry Internet business expansion.
Our View:
– We expect positive share price reaction as 1Q22 earnings is higher than market expectations.
– We currently rate BUY on the counter; TP of HK$7.6.