China Unicom stumbles as profit misses forecast

Shares in China Unicom, the nation's No2 mobile operator, had their biggest drop in value in more than three years yesterday after the company's third-quarter profit missed market estimates.

The stock closed down 7.6 per cent to end the day at HK$12.72 in Hong Kong trading, on a day the benchmark Hang Seng Index lost 1.2 per cent.

China Unicom has lost 22 per cent so far this year while the Hang Seng Index has gained 17 per cent.

The state-owned company registered 2.02 billion yuan (HK$24.9 billion) in net profit in the third quarter, or 27 per cent year-on-year growth. That compares with a forecast of 2.2 billion yuan in a Reuters poll and 2.21 billion yuan in a Bloomberg poll.

China Unicom said it faced "keen market competition" in raising the pace of user growth. As a result, marketing expenses increased 23 per cent to 25.4 billion yuan in the first nine months of the year, it said.

The company, along with mainland rivals China Mobile and China Telecom, are courting users with 3G networks that allow faster internet access.