Please ensure Javascript is enabled for purposes of website accessibility

Why China Unicom Stock Soared Today

By Evan Niu, CFA – Aug 13, 2020 at 1:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chinese telecommunications company reported results for the first half of 2020.

What happened

Shares of China Unicom (CHU) have soared today, up by 19% as of 12:15 p.m. EDT, after the company reported financial results for the first half of 2020. Its performance was mixed relative to analyst expectations.

So what

Revenue in the first half came in at 150.4 billion yuan ($21.7 billion), which was shy of the consensus estimate of 146.8 billion yuan ($21.1 billion). That translated into earnings per share of 0.25 yuan ($0.04), which topped analysts' forecast of 0.22 yuan ($0.03) per share. The Chinese telecommunications giant now has 309.5 million mobile subscribers, including 260.7 million 4G subscribers.

Woman looking at her smartphone and smiling

Image source: Getty Images.

"In the first half of 2020, facing the abrupt outbreak of COVID-19, the Company proactively responded to the challenges and took precise measures to prevent and control the pandemic," CEO Wang Xiaochu wrote in a letter to shareholders. "Through pushing forward the comprehensive digital transformation and innovating communications service offerings, the Company turned adversity into opportunities."

Now what

China Unicom is optimistic that new technologies around 5G and artificial intelligence (AI) will help bolster the business going forward. The company, which is controlled by the Chinese government, did not provide specific financial guidance.

"Looking forward to the second half of the year, the Company will continue to deepen the strategy of focus, innovation and cooperation," Xiaochu added. "It will assure stable development of the fundamental businesses, strengthen the core capabilities of government and enterprise business, and enhance the momentum of innovative business, thereby ensuring the steady growth of the Company."

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.