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China Unicom delivers its &#34;14th Five-Year Plan&#34; closing report, with stable revenue, significant improvement in cash flow, and artificial intelligence business becoming the most prominent growth driver.
China Unicom released its full-year performance for 2025 on Thursday, reporting a year-on-year revenue increase of 0.7% to CNY 392.2 billion, and a slight increase in pre-tax profit of 0.8% to CNY 25.5 billion. Free cash flow surged by 28.5% year-on-year to CNY 36 billion, marking the most significant cash improvement in recent years, highlighting the company's continuous improvement in operational efficiency while controlling capital expenditures.
In terms of shareholder returns, the board of directors proposed a final dividend of CNY 0.1329 per share (tax included), combined with the interim dividend already distributed, bringing the total annual dividend to CNY 0.417 per share, an increase of 3.1% year-on-year, with the payout ratio rising to 61.3%.
The company also disclosed that capital expenditures for 2026 are expected to be approximately CNY 50 billion, with over 35% allocated to computing power investments, reflecting the company's acceleration towards AI infrastructure transformation.
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<h2>AI revenue grows over 140% year-on-year, computing power becomes the core growth engine</h2>
In the performance report, the artificial intelligence-related business is the fastest-growing segment. The company disclosed that AI revenue increased by over 140% year-on-year, with computing power business revenue accounting for more than 15% of service revenue, an increase of 1.1 percentage points from the previous year. Data center revenue reached CNY 28.1 billion, up 8.5% year-on-year.
In terms of infrastructure construction, the company has over 1.1 million standard racks, and its intelligent computing scale has reached 45 EFLOPS, with seven 100-megawatt AIDC parks already established.
Regarding AI applications, the company launched the Yuanjing MaaS platform, Yuanjing Wanyu intelligent agent platform, and Yuanjing Wanxiang data engineering platform, accumulating over 400TB of high-quality datasets and providing more than 140 mainstream models, gathering over 10,000 developers.
In terms of Unicom Cloud, the company is accelerating its evolution towards AI cloud, with revenue increasing by 5.2% year-on-year, supporting the construction of over 180 provincial and municipal government clouds, empowering nearly 400,000 enterprise customers in their digital transformation.
<h2>Cash flow reaches a new high in recent years, computing power investment exceeds 35%</h2>
Free cash flow increased by 28.5% year-on-year to CNY 36 billion, making it one of the core highlights of this performance. This improvement is mainly attributed to the effectiveness of capital expenditure control: total capital expenditures for 2025 were CNY 54.15 billion, with the capital expenditure to service revenue ratio declining from previous levels to 16%.
At the same time, the company achieved an annualized savings of CNY 1.35 billion in operating expenses (OPEX) through deepening co-construction and sharing, and creating a simplified network. Depreciation and amortization decreased by 3.1% year-on-year to CNY 80.83 billion, partly benefiting from adjustments to the depreciation period of 4G wireless-related equipment
Looking ahead to 2026, the company expects capital expenditures of approximately RMB 50 billion, further contracting compared to 2025, with over 35% of this investment allocated to computing power, indicating that traditional network infrastructure investments will further give way to intelligent computing fields.
<h2>Connectivity business maintains a stabilizing role, user base surpasses 1.2 billion</h2>
The connectivity business continues to form the foundation of the company's revenue and profits. By the end of 2025, the total number of users is expected to exceed 1.2 billion, an increase of 110 million from the previous year. Among them, mobile network billing users exceed 357 million, with a net increase of 13.32 million; broadband users exceed 129 million, with a net increase of 7.61 million.
In terms of integrated services, the penetration rate of integration has increased to 78.3%, and the ARPU of integrated packages remains above RMB 100. The number of IoT connections reached 720 million, with nearly 98.33 million added; revenue from 5G private networks reached RMB 12.3 billion, a year-on-year increase of over 50%. The deployment of 5G-A base stations has exceeded 330 cities, and the 10G optical network is piloting commercial use in over 100 cities.
In terms of international business, revenue reached RMB 13.6 billion, a year-on-year increase of over 9%, with benchmark projects landing in ASEAN smart manufacturing, Middle East smart warehousing, and African smart mining.
<h2>Profit structure remains robust, declining tax rate supports net profit growth</h2>
The profit attributable to equity holders of the company was RMB 20.82 billion, a year-on-year increase of 1.0%, with basic earnings per share of RMB 0.68. EBITDA was RMB 99.42 billion, with EBITDA accounting for 28.6% of service revenue.
Operating profit increased by 16.0% year-on-year to RMB 18.59 billion, significantly outpacing revenue growth, mainly benefiting from reduced depreciation and cost control. The effective tax rate was 17.8%, with some subsidiaries applying a preferential tax rate of 15%.
In terms of the balance sheet, as of December 31, 2025, the debt-to-asset ratio was 44.6%, a decrease of 1.2 percentage points from the end of the previous year; interest-bearing loans were only RMB 5.48 billion, with a net debt-to-capital ratio as low as 2.2%, maintaining a robust financial structure.
<h2>Adjustment of VAT categories poses uncertainties for 2026</h2>
The company disclosed a potential impact in its earnings announcement: according to an announcement by the Ministry of Finance and the State Administration of Taxation released in January 2026, starting from January 1, 2026, the VAT rate for mobile data services, SMS and MMS, and internet broadband access services will be raised from 6% to 9%, with the applicable tax category adjusted from value-added telecommunications services to basic telecommunications services.
The company stated that this adjustment will impact revenue and profits, but the announcement did not disclose specific quantitative effects.
This policy change will be a key variable for investors to focus on when assessing China Unicom's performance outlook for 2026. The company's annual shareholder meeting is scheduled for May 26, 2026, with the final dividend expected to be paid on June 24, 2026

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China Unicom's revenue in 2025 is expected to be stable, with free cash flow increasing by 28.5% year-on-year, and the annual dividend payout ratio rising to 61.3%. The AI business has transformed into the "strongest engine," with revenue increasing by over 140%. Against the backdrop of overall capital expenditure contraction, the proportion of investment in computing power exceeds 35%, accelerating the bet on AI infrastructure

- China Unicom reported steady revenue and significant cash flow improvement for 2025, driven by a 140% increase in AI-related business.  
- The company anticipates capital expenditures of approximately RMB 50 billion for 2026, with over 35% allocated to computing power investments, indicating a shift towards AI infrastructure.  
- Despite potential impacts from a VAT increase on telecommunication services starting in 2026, the company maintains a solid financial structure with a debt ratio of 44.6%.

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China Unicom's revenue and profit will see slight growth in 2025, with AI revenue increasing by 140% and significant improvement in free cash flow | Financial Report Insights