China Unicom's 2025 revenue and profit saw modest growth, AI income surged by 140%, and free cash flow improved significantly | Earnings report insights
```
China Unicom delivers its "14th Five-Year Plan" closing report card, with steady revenue, significantly improved cash flow, and its artificial intelligence business becoming the brightest growth area.
On Thursday, China Unicom released its full-year 2025 results, with operating revenue increasing 0.7% year-on-year to RMB 392.2 billion, and pre-tax profit rising slightly by 0.8% to RMB 25.5 billion. Free cash flow soared by 28.5% year-on-year to RMB 36 billion, marking the most notable cash improvement in recent years, highlighting the company’s continued improvement in operational efficiency while controlling capital expenditure.
Regarding shareholder returns, the board recommends a final dividend of RMB 0.1329 per share (inclusive of tax). Combined with the distributed interim dividend, the total annual dividend will be RMB 0.417 per share, up 3.1% year-on-year, and the payout ratio has increased to 61.3%.
The company also disclosed that capital expenditure in 2026 is estimated at RMB 50 billion, with computing power investment accounting for over 35%, reflecting the company’s accelerated transition to AI infrastructure.
AI revenue up over 140% year-on-year, computing power becomes key growth driver
In the financial report, AI-related business is the fastest-growing segment. The company revealed that AI revenue grew by more than 140% year-on-year, computing power business accounts for over 15% of service revenue, up 1.1 percentage points from last year. Data center revenue reached RMB 28.1 billion, up 8.5% year-on-year.
In terms of infrastructure construction, the company’s standard rack scale exceeds 1.1 million racks, intelligent computing scale reaches 45 EFLOPS, and seven 100-megawatt-level AIDC parks have been built.
Focusing on AI applications, the company launched the Yuanyang MaaS platform, Yuanyang Wanwu Intelligent Agent Platform, and Yuanyang Wanxiang Data Engineering Platform, accumulating over 400TB of high-quality datasets, offering more than 140 mainstream models, and bringing together over ten thousand developers.
Regarding Unicom Cloud, the company is accelerating migration to AI cloud, with revenue up 5.2% year-on-year, supporting over 180 provincial and municipal government cloud projects, and enabling nearly 400,000 enterprise customers in their digital transformation.
Cash flow reaches new highs, computing power investment exceeds 35%
Free cash flow increased by 28.5% year-on-year to RMB 36 billion, a core highlight of this performance. The improvement mainly reflects effective capital expenditure control: full-year capital expenditure in 2025 was RMB 54.15 billion, with capital expenditure as a proportion of service revenue dropping to 16% from previous levels.
At the same time, the company achieved annualized savings of RMB 1.35 billion in operating expenses (OPEX) through deepened co-construction and co-sharing, and network simplification. Depreciation and amortization decreased by 3.1% year-on-year to RMB 80.83 billion, partly benefiting from adjustments to the depreciation period of 4G wireless equipment.
Looking ahead to 2026, the company expects capital expenditure to be about RMB 50 billion, further reduction from 2025, with computing power investment accounting for over 35%, signaling that traditional network infrastructure investment will further give way to intelligent computing.
Connectivity business remains cornerstone, user base exceeds 1.2 billion
Connectivity business continues to form the foundation of the company’s revenue and profit. By the end of 2025, the company’s total user base exceeded 1.2 billion, up 110 million from last year. Among them, mobile network billing users surpassed 357 million, with a net increase of 13.32 million; broadband users exceeded 129 million, with a net increase of 7.61 million.
In integrated business, integration penetration rate rose to 78.3%, and integrated package ARPU remained above RMB 100. Number of IoT connections reached 720 million, adding nearly 98.33 million; 5G private network revenue achieved RMB 12.3 billion, up over 50% year-on-year. Over 330 cities have deployed 5G-A base stations, and 10-gigabit optical networks are piloted for commercial use in more than 100 cities.
In international business, revenue hit RMB 13.6 billion, up over 9% year-on-year, landing benchmark projects such as ASEAN smart manufacturing, Middle East smart warehousing, and African smart mining.
Profit structure is robust, tax rate drop supports net profit growth
Net profit attributable to equity holders was RMB 20.82 billion, up 1.0% year-on-year, with basic earnings per share at RMB 0.68. EBITDA reached RMB 99.42 billion, with an EBITDA-to-service revenue ratio of 28.6%.
Operating profit increased by 16.0% year-on-year to RMB 18.59 billion, significantly outpacing revenue growth, mainly benefiting from decreased depreciation and effective expense control. The effective tax rate was 17.8%, with some subsidiaries eligible for the preferential 15% tax rate.
On the balance sheet, as of December 31, 2025, the asset-liability ratio stood at 44.6%, down 1.2 percentage points from the end of last year; interest-bearing borrowings amounted to only RMB 5.48 billion, net debt-to-capital ratio was as low as 2.2%, and financial structure remains stable.
VAT adjustment is an uncertainty for 2026
The company disclosed a potential impact in its earnings announcement: According to the notice issued by the Ministry of Finance and State Administration of Taxation in January 2026, from January 1, 2026, the value-added tax rate for mobile data services, SMS/MMS, and internet broadband access services will be raised from 6% to 9%, and the applicable tax category will shift from value-added telecom services to basic telecom services.
The company stated that this tax adjustment will affect revenue and profit, but the announcement did not disclose specific quantitative impacts.
This policy change will be a key variable for investors to monitor when evaluating China Unicom's 2026 earnings outlook. The shareholders’ annual meeting is scheduled for May 26, 2026, and the final dividend is expected to be paid on June 24, 2026.
Risk Warning and DisclaimerThe market has risks, investment requires caution. This article does not constitute personal investment advice, nor does it take into account the individual investment objectives, financial situation, or needs of particular users. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific circumstances. Investments based on this are at the investor's own risk. ```