China Unicom triples profit across 2017

China Unicom has released its financials for 2017 and it is looking like a money making machine again. Revenues were up marginally, profit tripled and free cash flow grew 1628% compared to the previous 12 months.

Total revenues for the years stood at $43.488 billion, a marginal 0.2% increase, with mobile service revenue increasing by 7.9%. The winner for improvement here though was net profit, standing at roughly $289 million, a 192% increase from 2016. This number may well have been higher if not for a one-off asset write off of 2.9 billion Yuan, roughly $460 million. Investors might want to see a higher margin, but at least trends are heading in the right direction.

“Looking ahead, the Company is embarking on a new historic journey and will seize firmly the brand new opportunities brought by global technological and industrial reform, China’s economic development model reform and mixed-ownership reform, aiming to instil into China Unicom new DNA, new governance, new operation, new energy and new ecology,” said Wang Xiaochu, CEO of China Unicom.

While the company has attributed some of the increased profits to increased subscriber numbers as well as a significant reduction in the CAPEX across the year, it certainly is a good sign for a company which is undergoing some pretty notable changes. The Chinese government is using China Unicom as a testbed for a new ownership structure. Following a private placement earlier this year, Alibaba, Tencent, Baidu and JD.com have become new shareholders and board members of China Unicom’s parent company China United Network Communications.

The team has pointed towards leveraging external resources and capabilities as one of the key aspects of the successful year, which is a promising sign for the industry in China moving forward. That said, a lot of corporate jargon was including in the statement, which could end up meaning very little in the long-run.