Lyon: Lower China United Network Communications (00762) target price to 8.8 Hong Kong dollars, disappointing performance in the second half of last year.

Lyon has released a research report stating that China United Network Communications (00762) performed disappointingly in the second half of last year, with total service revenue and net profit falling by 0.6% and 7.2% respectively compared to the previous year. This was mainly due to a decline in connectivity and communication revenue, as well as a moderate increase in computing and intelligent digital application revenue. The bank has lowered its net profit forecast for Unicom for this year and next year by 11%, with the target price lowered from 11 Hong Kong dollars to 8.8 Hong Kong dollars, reflecting weak revenue growth and an outperform rating. The bank pointed out that the company has stopped disclosing its revenue composition and is strictly implementing the transformation from "expansion in scale" to "quality growth". Unicom distributed a dividend of 41.7 cents per share in RMB for the full year of last year, with a payout ratio of approximately 6%. The company expects capital expenditure to decrease by 8% year-on-year in 2026, which will help improve profits and increase dividends, but the rate of dividend growth may slow down.