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China Unicom bets on turnaround as net profit plunges 85pc

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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.

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