China Communications Services (552) H2 2024 earnings summary

Executive summary

• FY24 revenue was RMB150,000M (+0.9% YoY) and net profit RMB3,607M (+0.6%).

• Gross margin rose 0.1 percentage point to 11.7%, extending its improvement to three consecutive years.

• Free cash flow increased 20.4% to RMB5,214M; ROE was 8.2%.

• Strategic emerging businesses contributed over 37% of new contracts, with contract growth exceeding 30%; overseas revenue grew 22.3%.

• The Board proposed a final dividend of RMB0.2187 per share, representing a 42% payout ratio.

Financial highlights

• Service revenue increased 1.9% to RMB146,212M; gross profit rose 2.0% to RMB17,596M.

• Net profit margin was 2.4%; basic EPS was RMB0.521, up 0.6%.

• Operating cash flow reached RMB6,221M, up 16.1%; free cash flow was RMB5,214M, up 20.4%.

• Total assets were RMB136,618M; liabilities-to-assets ratio was 65.9%, and gearing ratio was 1.5%.

• Capital expenditure was RMB1,082M, down 13.1%.

Outlook and guidance

• Priorities include high-quality, value-driven growth, technological innovation, and optimizing traditional business quality while managing risk.

• Strategic emerging businesses, especially AI, digital infrastructure, and green transformation, are expected to remain key growth drivers.

• Plans include expanding overseas and lower-tier domestic markets, and advancing intelligent transformation and security capabilities.