China Communications Services (552) investor relations material

Executive summary

• Revenue for H1 2026 was RMB74,480 million, down 3.2% year-over-year, with net profit at RMB1,970 million, a 7.5% decrease (3.2% on a comparable basis).

• AI+ (AIDC, AI applications) revenue grew 62%–63% year-over-year, now accounting for 10% of total revenue.

• New contracts in the “Six Major Growth Areas+” rose 11% year-over-year to RMB34.4 billion, contributing 34% of total new contracts.

• Dividend payout ratio is planned to increase steadily, targeting at least 46% by 2028.

• Maintained stable fundamentals and proactive governance amid a complex external environment.

Financial highlights

• Revenue: RMB74,480 million (down 3.2% year-over-year); net profit: RMB1,970 million (down 7.5%).

• Gross profit: RMB7,432 million (down 5.8%); gross margin at 10.0% (down 0.3pp year-over-year).

• Basic EPS: RMB0.284 (down from RMB0.307 year-over-year).

• Free cash flow: negative RMB7,706 million; net cash outflow improved to RMB6,813 million.

• Gearing ratio remained low at 1.4%; total assets: RMB139,214 million.

Outlook and guidance

• Focus on “Six Major Growth Areas+” and AI+ initiatives to drive new growth.

• Management targets stable revenues and new contract growth, with net profit and gross margin expected to broadly track revenue trends.

• Dividend payout ratio to rise to at least 46% by 2028.

• Emphasis on high-value projects, digital transformation, and improved cash flow.