CHINA UNICOM Chairman Chen Zhongyue Steps Down to Chair Parent Company of CHINA MOBILE

The analyst rating for China Unicom (00762.HK) is maintained at "Overweight" for its A-shares and "Buy" for its H-shares due to several reasons: 1. Revenue and Profit Growth: The company recorded a slight increase in operating revenue (up 0.99% YoY) and a net profit attributable to the parent company that was in line with previous forecasts (up 5.2% YoY). This indicates stable financial performance. 2. Positive Outlook on CDSA Business: Huatai Securities believes that the revenue and profit from China Unicom's computing and digital smart applications (CDSA) business will improve further, driven by the development of domestic AI applications. 3. Projected Profit Growth: The broker projects net profits for the years 2025-2027 to increase, indicating confidence in the company's future earnings potential. 4. Target Price Justification: The target price for A-shares is set at RMB7.56 based on a 2025 price-to-book (PB) ratio of 1.31x, while the target price for H-shares is $15.57, reflecting a 2025 PB ratio of 1.15x. This suggests that the shares are expected to perform well relative to their book value. 5. Market Conditions: The report notes a discount for H-shares compared to A-shares due to external factors, but the overall outlook remains positive, justifying the "Buy" rating for H-shares. Overall, the combination of stable current performance, positive future projections, and a favorable outlook on specific business segments supports the analyst's ratings.

Morgan Stanley's Overweight rating for CHINA UNICOM is based on the company's stable service revenue, which remained flat year-over-year at RMB83 billion, aligning with expectations. Additionally, the significant growth in Unicom Cloud's revenue by 26% year-over-year to RMB15.3 billion and a 5.3% increase in net profit to RMB5.5 billion, attributed to reduced depreciation costs, further supports the positive outlook. The target price set at HKD9.5 reflects confidence in the company's performance and growth potential.

Citi Research rated CHINA UNICOM as a "Buy" based on the Sum-of-the-Parts (SOTP) valuation method, despite the company's 3Q25 revenue being flat and below market consensus. The target price set by Citi Research is $11.2.