China Unicom, the smaller of the nation's two mobile phone operators, said last year's net profit more than doubled due to an increase in its tax rebate and a smaller accounting loss from a fair value adjustment on convertible notes issued to SK Telecom. Unicom booked a net profit of 3.732 billion yuan in 2006, suggesting that earnings for last year were at least 7.464 billion yuan. It did not give other financial details. Analysts estimate the firm's profit at between seven billion yuan and 7.2 billion yuan before a one-off item last year, against 6.1 billion yuan in 2006. The loss from the changed value of its bonds shrank because SK Telecom converted its holdings into about 6 per cent of Unicom shares in August. Under mainland accounting rules, the company has to book the difference between its share price and the conversion price of the bonds into its profit-and-loss account. Unicom booked 2.4 billion yuan of such loss in 2006 and 1.64 billion yuan in the first half of last year. The company also said it reaped a gain from the tax refund that it was entitled to receive for the capitalisation of a mainland subsidiary. 'The company did not give any details of the reason for such a tax refund. It might be just a one-time item,' said Marvin Lo, a telecommunications analyst at Daiwa Institute of Research. Mr Lo expected profit from the core mobile business to grow 23 per cent to about HK$7 billion yuan. 'Unicom's core business might have performed better than market expectations, but it was mainly due to cost cutting,' he said. Total revenue could grow only 4 per cent, he added. Shares of Unicom rose 1.69 per cent yesterday to close at HK$18.