China Communications Services (552) H2 2024 earnings summary

Executive summary

• Revenue reached RMB150 billion, up 0.9% YoY, and net profit was RMB3.6 billion, up 0.6%.

• Gross profit margin improved to 11.7% for the third consecutive year.

• Free cash flow rose 20.4% to RMB5.2 billion; ROE was 8.2%.

• Strategic emerging businesses and technological innovation, especially ACO, drove growth; overseas revenue rose 22.3%.

• Final dividend of RMB0.2187 per share proposed, with a payout ratio of 42%.

Financial highlights

• Service revenue grew 1.9% to RMB146,212M; total revenue RMB150,000M (+0.9% YoY); net profit RMB3,607M (+0.6% YoY); EPS RMB0.521 (+0.6% YoY).

• Gross profit: RMB17,596M; gross margin: 11.7% (+0.1pp YoY).

• Free cash flow: RMB5,214M (+20.4% YoY); operating cash flow: RMB6,221M (+16.1% YoY).

• Total assets: RMB136,618M; liabilities-to-assets ratio: 65.9%; equity attributable to shareholders: RMB45,436M.

• Gearing ratio: 1.5%; capital expenditure: RMB1,082M (0.7% of revenue, down 13.1%).

Outlook and guidance

• Focus on high-quality, value-driven growth, intelligent transformation, and technological innovation.

• Strategic emerging businesses, AI, digital infrastructure, and green transformation expected to drive growth.

• Continued expansion in overseas and lower-tier domestic markets.

• Plans to optimize traditional business quality and balance growth with risk management.