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 AI and digital transformation.

• 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 digital infrastructure, green and low-carbon, and smart city, showed strong momentum and contributed over 40% of 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% increase year-on-year; net profit margin was 2.8%, down 0.1 percentage points.

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

• Operating profit rose 8.4% year-on-year to RMB1,706 million; operating margin at 2.1%.

• Free cash flow was negative at RMB-7,627 million, down from RMB-2,165 million in 1H2024.

Outlook and guidance

• Focus on digital infrastructure, AI, smart services, and green technologies to drive high-quality growth and expand into intelligent computing centers, smart operations, and new energy sectors.

• Plans to further diversify revenue sources, strengthen recurrent revenue streams, and expand in domestic non-operator and overseas markets.

• Emphasis on balancing quality growth with security, improved governance, and enhanced shareholder returns.