China Communications Services (552) H1 2025 earnings summary

Executive summary

• Achieved total revenues of RMB76,939 million in 1H 2025, up 3.4% year-on-year, with net profit of RMB2,129 million, up 0.2% year-on-year, despite external challenges and reduced operator capex, leveraging digital intelligence and AI for business expansion.

• All three major business segments—TIS, BPO, and ACO—recorded growth, with ACO services as the core revenue driver, up 11.7% year-on-year.

• Strategic emerging businesses, especially in AI, digital infrastructure, green and low-carbon, and smart city sectors, showed strong momentum, with new contracts in these areas exceeding RMB42 billion and accounting for over 40% of total new contracts.

• Revenue from domestic non-operator and overseas markets together exceeded 50% of total revenues for the first time.

• Proactively responded to market changes, leveraging technological innovation and diversified business models to enhance resilience.

Financial highlights

• Total revenue reached RMB76,939 million, up 3.4% year-on-year; service revenue was RMB74,981 million, up 2.9% year-on-year.

• Net profit was RMB2,129 million, a 0.2% year-on-year increase; net profit margin was 2.8%, down 0.1 percentage points year-on-year.

• Gross profit was RMB7,888 million, down 2.8% year-on-year; gross profit margin was 10.3%, down 0.6 percentage points year-on-year.

• Operating profit rose 8.4% year-on-year to RMB1,706 million; operating profit margin improved.

• Free cash flow was negative at RMB-7,627 million, and net cash outflow was RMB8,073 million, improved from RMB9,123 million in the prior year period.

Outlook and guidance

• Plans to further leverage AI and digital transformation, focusing on intelligent computing, super computing, 5G-Advanced, 6G, and new energy sectors.

• Will deepen presence in key industries and expand into new overseas regions, targeting sustainable and high-quality long-term development.

• Intends to enhance profit stability by optimizing business model, broadening customer base, and strengthening recurrent revenue streams through operation and maintenance services.

• Emphasis on balancing quality growth with security and corporate governance.

• Sees vast opportunities in AI, digital infrastructure, green and low-carbon sectors, and smart city markets.