CHINA UNICOM (00762) delivered a disappointing performance in the second half of last year, with total service revenue and net profit falling by 0.6% and 7.2% year-on-year, respectively. The decline was mainly attributed to decreases in connection and communication revenue, coupled with only modest growth in computing and intelligent digital application revenue. The firm has lowered its net profit forecasts for CHINA UNICOM by 11% for both this year and next. Reflecting weaker revenue growth prospects, the target price has been reduced from HK$11 to HK$8.8, while the stock retains its Outperform rating. The company has ceased disclosing its revenue breakdown and is strictly executing its transition from "scale expansion" to "quality growth." For the full year, CHINA UNICOM paid a dividend of 41.7 RMB cents per share, representing a dividend payout ratio of approximately 6%. The company expects capital expenditure in 2026 to decrease by 8% compared to the previous year, which is anticipated to support profit improvement and higher dividends, although the pace of dividend growth may slow.