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China Unicom equity incentive demands: 4 years total profits to be increased by 43 times

via:博客园     time:2017/8/22 12:01:56     readed:814

The evening of August 20, China Unicom announced the first phase of the stock incentive program to grant the program, to be targeted to the incentive to grant no more than 847.8 million shares of restricted shares. 7550 middle managers, core management personnel and professionals will be awarded 76310 million shares, about 3% of the employees are included in the incentive category, 10.1 million shares per capita, awarded the price of 3.79 yuan / year, share.

At present, the grant price has been less than half of the stock price. August 21, China Unicom A shares daily limit, the closing price of 8.22 yuan / share, and to keep rising expectations. Unicom Hong Kong stocks rose 3.52%, the closing price of HK $ 12.36 / share (about 10.53 yuan / share).

The program is valid for 60 months, of which the limit period is 24 months and the subsequent unlock period is 36 months. However, in accordance with the provisions of the unlock conditions, China Unicom 2018 main business income at least to reach 26.29 billion yuan, the total profit will have reached 8.768 billion yuan.

In contrast, in 2016, China Unicom's main business income of 240.98 billion yuan, total profit of 581 million yuan, has been for many years of income, profits increased or even a loss of China Unicom, to achieve profit growth within two years 14 times.

Completion of the unlock period 4 years to increase profits 4 times

2018 income, profit is the first unlock period of the unlock conditions, to meet the conditions can be unlocked 40% of the restricted stock. The remaining 60% will be unlocked in the second unlock period, the third unlock period, respectively, unlock 30%.

However, according to the unlocking conditions, the second unlock period requires 2019 main business income of not less than 281.3 billion yuan, the total profit of not less than 17.218 billion yuan, profits than 2016 growth of 28.6 times. The third unlock period requires 2020 income of not less than 304.46 billion yuan, the total profit of not less than 25.35 billion yuan, up 42.6 times over 2016.

In 2013, China Unicom to 264.3 billion yuan to create the highest in recent years, the main business income. Then in 2014, China Mobile to build 4G network, and China Unicom in 3G, 4G hesitant, hoping to upgrade the 3G network and mobile 4G to compete, but this strategy is not good, China Unicom into the decline in the channel, The next few years no longer more than 2013 income.

In 2014, due to the Ministry of Industry to adjust the network settlement policy, the SASAC asked the operator to drop marketing costs, the two policies to China Unicom to bring massive dividends, 2014, China Unicom network settlement, sales costs, terminal subsidies to save costs 115.6 Billion, this year, China Unicom total profit of 15.8 billion.

2015, thanks to the establishment of the tower, China Unicom due to the sale of one-time assets of the assets of 9.25 billion yuan. Excluding the proceeds of accounting, China Unicom's total profit of 4.62 billion yuan, down 66.3% over 2013, 2016, China Unicom's total profit of 581 million yuan, continuing to decline 85%.

And now, China Unicom face mobile in a comprehensive disadvantage. According to the latest earnings data, the first half of 2017, China Unicom has 4G base stations 770,000, 4G users 138 million, 4G users ARPU value (monthly consumption) 66 yuan. While China Mobile has 4G base stations with 165 million, 4G users 594 million, 4G users ARPU value of 71.2 yuan.

Moreover, China Mobile has entered a fixed market, increased the Unicom, the competitive pressure of telecommunications. At the same time, national policies continue to encourage operators to speed down costs, making the average consumer 4G tariffs continue to decrease. 2017 government work report also requires operators to significantly reduce the small and medium enterprises Internet access tariffs, green business has been the highest profit margins business, small and medium-sized business line costs similar to ordinary broadband, but the price is the latter 4 times the above. This policy of nearly 10 million small and medium enterprises will further reduce the profits of operators.

Most importantly, before the arrival of 5G in 2020, the three operators of 4G competition has begun to enter the price war, and competition is more intense than the 3G era. 2009-2013 3G era, the user ARPU value from the highest 141 yuan all the way down to 70 yuan.

Tragic market environment, relying on the main business income growth to achieve profits turned 40 times, has been more difficult.

Cost reduction efficiency

One of the possible paths is to significantly reduce costs.

In the first half of 2017, China Unicom's main business income of 124.11 billion yuan, an increase of 3.2%, total profit of 3.31 billion yuan, an increase of 92%. Attributable to parent company net profit of 780 million yuan, an increase of 74.3%.

However, profit growth is mainly due to cost pressure drop. 2017 in the first half, China Unicom sales costs from 17.31 billion yuan last year dropped to 16.1 billion yuan, saving 1 billion yuan cost. At the same time, China Unicom terminal sales costs from 21.73 billion yuan to 14.44 billion yuan, a significant decline of 32.7%, cost savings of 7.115 billion yuan. However, because the terminal sales decline, the terminal sales contribution income from 20 billion to 14.05 billion, revenue decreased by 5.95 billion yuan.

A number of North China Unicom told reporters: "This year, marketing costs fell sharply, channel subsidies, operating room costs are substantially reduced." "Hebei Unicom employees told reporters:" Previously approved the various costs of the business hall are cut this year, in addition to posters leaflets, the other did not; the social channel policy are basically cut. "The result of this policy adjustment is that the traditional sales channel business volume of the fall," business hall, social channels, business volume decline. & Rdquo;

In 2017, China Unicom's largest increase in business from the Internet.

At the end of November 2016, China Unicom announced the launch of Wang card with Tencent, the card fee is very low, and for Tencent application flow-free. 2017 May, China Unicom announced data, China Unicom and Tencent cooperation launched King card, Wang card, in six months time to increase the number of users more than 20 million. At the same time, Alibaba and China Unicom launched the ant treasure card, but also the development of more than 3 million users, China Unicom and Alibaba cooperation in December 2016 announced. The first half of 2017, China Unicom added a total of 34 million 3G users, of which 18 million new quarter.

"Next, you may have to continue to reduce costs." "More than one Unicom analysis. From the current cost structure analysis, in order to compete with rivals, China Unicom will continue to build 4G base stations to enhance network services, equipment depreciation, operation and maintenance support two costs will continue to rise, the largest cost of the total cost of the operators close to 50 %.

The third largest cost is labor costs. Over the past few years, China Unicom labor costs continue to rise, from 2012 per capita annual income of 100,000 yuan in 2016 to 13.64 million yuan. In contrast, China Mobile has not changed for more than 10 years, its 2016 per capita income of 150,000, unchanged from 2006.

"Several reorganization, to bring a lot of staff Burden burden. "A North China Unicom told reporters that in 2016, Beijing Unicom net profit of 5.5 billion, while the company profits of 600 million or so.

In addition, the need to point out that the introduction of a large number of Unicom mixed funds, may be able to save a lot of financial costs for China Unicom, the first half of 2017, China Unicom due to financing led to rising interest expenses, financial costs of 2.39 billion yuan, an increase of 17.9%.

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