China Unicom is considering the spin-off and separate listing of its Smart Connection Technology unit, onto a mainland China stock exchange. The spin-off would be taking place if approved under the rules of the Hong Kong Stock Exchange. To this end, the company will be submitting an application to that exchange as soon as possible. China Unicom has a stake of 69.2 percent in the unit, a specialist in the Internet of Vehicles, including smart connections, operations and applications. China Unicom would after the transaction remain the company’s controlling shareholder.
The company said a spin-off and listing will give more value to the unit, by strengthening Smart Connection Technology’s financing ability and operational flexibility, attracting better talent and strategic partners, improving competitiveness, accelerating business development and increasing returns. China Unicom added that it would continue with the company through a strategic cooperation, reaping the benefits of synergies and accelerating development for both parties.
Under the planned transaction, the shares will have a nominal value of CNY 1.0. The timing will be determined at a later date and the final amount of the offering in consultation with the lead underwriter. Pricing will be assessed with the help of professional institutional investors.
China Unicom lifts revenues, profit in H1, plans inaugural dividend
China Unicom also announced its results for the first half of the year, saying both revenue and profit increased. As a result, the company will distribute an inaugural interim dividend of CNY 0.120 per share this year, with plans to raise the full-year payout ratio. Revenues for the half rose by 9.2 percent from the year before to CNY 164.2 billion, with service revenue increasing by 7.5 percent to CNY 148.7 billion. The EBITDA was unchanged at CNY 49.5 billion while the profit attributable to shareholders lifted over 21 percent to CNY 9.17 billion. Capex amounted to CNY 14.3 billion and the free cash flow at CNY 36.4 billion.
Mobile service revenue advanced 7.3 percent to CNY 82.1 billion. The company added 4.65 million net mobile billing subscribers in the year, against a decline the year before of 8.95 million, taking the total to 310 million. Mobile billing subscriber ARPU reached CNY 44.4 , up 8.5 percent year-on-year. The number of 5G package subscribers reached 113 million, with the penetration rate of 5G package subscribers went to 36.5 percent.
Fixed-line service revenue advanced by 0.7 percent to CNY 22.0 billion. Net additions went up by 67.8 percent to 4.03 million, for a total of 90.12 million fixed-line broadband subscribers, with broadband access ARPU going to CNY 41.8 and penetration for integrated services among fixed-line broadband subscribers going to 67 percent, up 6 percentage points.
Revenue from the industry internet business climbed 23.6 percent to CNY 28.03 billion. China Unicom Cloud revenue jumped over 54 percent to CNY 7.69 billion.
