China Unicom bets on turnaround as net profit plunges 85pc
China Unicom, the country’s second-largest wireless network operator, yesterday said its turnaround effort “was on track as planned” this year, despite posting an 85 per cent year-on-year decline in net profit during the first quarter.
The company, which issued a profit warning on Monday, saw its shares rise to an intraday high of HK$9.65 in early trading, showing investor confidence in that plan. The stock closed up 1.06 per cent to HK$9.55 yesterday.
Nomura analyst Huang Leping said in a research note that the company’s first-quarter earnings result was “in line with its expectations”.
“We expect China Unicom’s service revenue to recover in the first half of this year, followed by a profit recovery in the second half,” Huang said.
Unicom said in a regulatory filing yesterday that its first-quarter net profit stood at 480 million yuan (HK$575.68 million), down from 3.16 billion yuan in the same period a year ago. It attributed the profit decline to higher expenses during the quarter.