China Unicom Profit Beats Estimates on 3G User Additions
China Unicom (Hong Kong) Ltd. (762), the nation’s second-largest mobile-phone company, posted third-quarter profit that beat analysts’ estimates as data sales to new subscribers rose.
Net income gained 51 percent to 3.06 billion yuan ($503 million), from 2.02 billion yuan a year earlier, based on figures derived from nine-month earnings the Beijing-based company reported yesterday. That compares with the 2.96 billion-yuan average of five analyst estimates compiled by Bloomberg.
Chairman Chang Xiaobing added almost 12 million users to the company’s third-generation wireless network during the period. Luring subscribers that pay more to download games and videos on their phones helped the company outperform larger China Mobile Ltd. (941), which earlier this week said profit fell 8.8 percent in the period, missing analysts’ estimates.
“Rapid 3G subscriber growth adds higher average-revenue-per-user customers to its low-end 2G user base,” Bertram Lai, a Hong Kong-based analyst with CIMB Securities Ltd. wrote in an Oct. 21 report.
Revenue rose 19 percent to 75.9 billion yuan in the third quarter, beating the 75.3 billion yuan average of three analyst estimates compiled by Bloomberg.
Unicom rose 1.7 percent to close at HK$12.22 in Hong Kong trading before the announcement. The shares have dropped 1.6 percent this year, compared with a 0.8 percent gain for the city’s benchmark Hang Seng Index.
Unicom had 111.6 million 3G subscribers at the end of the third quarter, compared with 169.5 million for market leader China Mobile, according to data the companies released this month. The smaller operator had a mobile customer base of 272.8 million, or 36 percent of China Mobile’s 755.2 million.
China Mobile, the world’s largest phone company by subscribers, on Oct. 21 posted the biggest profit decline in 14 years as costs to build its new network rose and users switched to third-party messaging apps. Net income fell to 28.4 billion yuan.
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