#1China unicom中国联通 Interim Results 2021 19 August 2021 www.chinaunicom.com.hk#2Forward-looking Statements Certain statements contained in this presentation may be viewed as "forward-looking statements". Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward looking statements. In addition, we do not intend to update these forward-looking statements. Neither the Company nor the directors, employees or agents of the Company assume any liabilities in the event that any of the forward-looking statements does not materialise or turns out to be incorrect. a China unicom中国联通 2021 Interim Results 2#3Management Present Mr. Wang Xiaochu Chairman & CEO Mr. Chen Zhongyue Executive Director & President Mr. Liang Baojun Senior Vice President a China unicom中国联通 2021 Interim Results 3#4Overall results Operating & Financial performance China unicom中国联通#5Highlights 1 2 Revenue & profit growth accelerated, backed by determined innovative transformation & in- depth mixed-ownership reform Accelerated increase in shareholder returns & strived to unlock the potential investment value of the Company 3 5G-led mobile business transformation & innovative development delivered remarkable success 4 Digital transformation empowered continuous robust growth in innovative businesses 5 Deepened network "co-build co-share" and effectively enhanced edges & returns 6 To seize new opportunities of the industry & endeavour to achieve high-quality development a China unicom中国联通 2021 Interim Results 5#6Revenue & Profit Growth Accelerated • Focus ⚫ Innovation Cooperation • Comprehensive Digital Transformation (RMB Mil) 1H2020 1H2021 Change YoY Operating Revenue 150,397 164,174 9.2% Service Revenue¹ 138,335 148,674 7.5% Industry Internet Revenue 22,673 28,030 23.6% EBITDA² 49,452 49,489 0.1% As % of Service Revenue 35.7% 33.3% -2.4pp Net Profit³ 7,569 9,167 21.1% Basic EPS (RMB) 0.247 0.300 21.1% Interim Dividend per Share (RMB) 0.120 N/A Note: Unless otherwise stated in this presentation, 1. Service revenue = operating revenue - sales of telecommunications products. 2. EBITDA = profit for the period before finance costs, interest income, share of net profit of associates, share of net profit of joint ventures, other income - net, income tax, depreciation & amortisation. 3. Net profit represented profit attributable to equity shareholders of the Company. a China unicom中国联通 2021 Interim Results 6#7Growth Quality & Return Continued to Improve Service revenue mix further optimised FCF >RMB170 Bil over the past years Note: 1. Industry Internet Revenue as % of Service Revenue 12.6% 18.9% 16.4% 1H2019 1H2020 1H2021 Cumulative Free Cash Flow¹ (RMB Bil) 42.9 Sustained favourable profit growth Net Profit (RMB Bil) 173.7 143.0 6.88 116.8 90.4 2017 2018 2019 2020 1H2021 10.1% 7.57 21.1% 9.17 1H2019 1H2020 1H2021 Calculated the cumulative free cash flow generated since 2017, and excluded the impact of the adoption of IFRS 16 on free cash flow in 2019, 2020 & 1H2021, i.e. free cash flow = operating cash flow - CAPEX- capital element of lease rentals paid 2021 Interim Results 7 a China unicom中国联通#8Accelerated Increase in Shareholder Returns Dividend per Share (RMB) 40% 40% 40% 0.134 10% 0.148 11% 2018 2019 0.164 2020 0.120 High regard for shareholder returns With due regard to the Company's robust business development & strong free cash flow, the Board decided to distribute an inaugural interim dividend of RMB 0.120 per share in 2021 Will raise 2021 full-year dividend payout ratio, with the magnitude to be decided by the Board in March next year taking into account such factors as the Company's profitability, cash flow, future capital requirements & dividend payout in the industry, etc. 2021E I Interim dividend per share (RMB) -Full-year dividend payout ratio 2021: DPS growth > EPS growth a China unicom中国联通 2021 Interim Results 8#9Strived to Unlock Potential Investment Value of the Company Note: 1. Endeavour to drive favourable growth in revenue, profit & dividend Market capitalisation (HK$ Bil) Market consensus Current share price: HK$4.45 136.2 67% target price¹ HK$7.44 Current (18 Aug 2021) Potential FY2021 market consensus forecast¹ 1H2021 actual Operating revenue (yoy) 15.4% 19.2% Net profit (yoy) 13.1% 21.1% Dividend per share (RMB) 0.195 0.120 Source: Bloomberg consensus data on 18 Aug 2021. There are more than 20 sell-side analysts in Bloomberg's coverage. The Company will not accept any responsibility for the market consensus data above. Investors are cautioned not to unduly rely on the data above. 2021 Interim Results 9 a China unicom中国联通#10Delivered Remarkable Success in Transformation & Innovative Development of Mobile Business a China unicom中国联通 Mobile service revenue YoY change 0.2% 1H 2021 5G package subscriber 5G package subscriber market share Mobile billing subscriber Mobile ARPU 113 Mil (60% vs 12.2020) 7.3% 2019 2020 1H2021 -5.3% 22.9% (>overall mobile market share of 19.2%) 310 Mil (↑ 0.3% yoy) RMB 44.4 (↑ 8.5% yoy) • • • • 5G led quality & profitable growth in scale Insisted on rational & orderly competition to deepen value- oriented operation while promoting high-quality & coordinated industry development Continued to strengthen digital transformation & differentiated innovative integrated operation Focused on enhancing subscriber quality & value 2021 Interim Results 10 10#11Continuous Robust Growth in Innovative Businesses Industry Internet Revenue (RMB Bil) 12.6% 16.7 1H2019 36% 16.4% 22.7 1H2020 24% 18.9% 28.0 • • • • Formed Unicom Digital Technology Co., Ltd. (Unicom Digital Technology) to create integrated & differentiated edges of 5G+ABCDE (AI, blockchain, cloud computing, Big Data, edge computing) Actively nurtured & promoted innovative 5G + vertical applications Promoted the integrated sales model ("cloud computing + smart networks + smart applications"), focusing on key industry application products Deepened business cooperation with strategic investors & industry leaders, with a number of JVs established, creating powerful alliance & synergising edges To expand margin progressively by enhancing proprietary capabilities in platform development, R&D centralisation, product standardisation, proprietary integration & delivery To spin off selected subordinate companies in an orderly manner 1H2021 • As % of service revenue 2021 Interim Results 11 a China unicom中国联通#12Proposed Inaugural Spin-off of a Subordinate Company in A-share Market ao China unicom中国联通 CUSC China Unicom Smart Connection Technology Limited A subsidiary specialised in Internet-of-Vehicles (loV) operation (69% shareholding) Offers lov total life cycle management of smart connection 8 Successfully implemented mixed-ownership reform in 2019, introducing FAW, Dongfeng, GAC, etc. as strategic investors FY2020 operating revenue: ≈RMB 420 mil¹; net profit: RMB 67 mil 1 a China unicom中国联通 products & specialised smart operation services, as well as smart applications such as smart transportation with vehicle & roadside coordination, fleet management & intelligent cockpits based on next-generation technology such as 5G, MEC, C-V2X, etc. TO CUSC: will strengthen financing capability & operation flexibility to better attract talents & strategic partners as a listed company post spin-off, enhancing competitiveness and accelerating business growth & returns to unlock value will remain as the controlling shareholder of CUSC and benefit from its future growth and value-unlocking post spin-off Accelerate to enhance & unlock value To China Unicom: Strategic cooperation Note: 1. between China Unicom & CUSC can create strong alliance with synergetic advantages to promote mutual growth Data was unaudited. Discrepancies may arise with the audited financial data of CUSC upon listing and the audited financial data to be disclosed in the prospectus of CUSC shall prevail. Investors are cautioned about such investment risks. 2021 Interim Results 12#135G Network Deployment Maintain focused deployment while saving substantial investments & costs through "co-build co-share" Dynamic investment with due Achieve 5G industry-leading regard to technology advancement, value chain maturity, market & business demand, etc. network speed, while network 5G coverage comparable with the leading operator • 2020-2022 expected to be the peak 5G investment period • 2021 5G CAPEX budget: RMB 35.0 bil, no. of 5G BTS in use by end of 2021: 700k, net add of 5G BTS: =320k • Net add of 5G BTS in 1H2021: =80k, reaching >460k Coverage • Sped up in-depth & indoor coverage in city urban areas & coverage of major counties & affluent towns, fully leveraging the hybrid deployment of 2.1GHz & 3.5GHz bands 2.1GHz band: mainly used for wide coverage & general indoor coverage to lower TCO Capability • SA network fully compatible; introduced key technology of R16 to enhanced support for 2B Strong push for network slicing, uRLLC, 5G private networks, MEC & VONR commercialisation a China unicom中国联通 2021 Interim Results 13#14Deepened Co-build Co-share 1 3 5G Effectively sharpened edges & returns with win-win 2 • Built the largest "co-build co-share" 5G network in the world with China Telecom (>460k base stations) • • Cumulative savings in CAPEX: >RMB86.0 Bil for the two operators combined Substantial savings in network costs including tower usage fee, network maintenance costs & utility charges for both parties <...> 4G Shared a cumulative of 460k 4G BTS (↑ 240k vs 12.2020) with substantial improvement in coverage & network experience; no. of sites 14%; mobile customer real time satisfaction rate increased by 10% in 1H2021 Cumulative savings in CAPEX: >RMB24.0 Bil for the two operators combined Strengthened network merging adjustment in co-located sites with low utilisation to lower operating costs ** Infrastructure 4 • Continued to promote "co-build, co-share & co- maintain" of transmission resources such as fibres, pole lines, pipelines, etc. • New Model Engage in "co-build co-share" cooperation with cable, power, high-speed railway, oil industries, etc. to maximise investment efficiency a China unicom中国联通 2021 Interim Results 14#15Strive to Build an Exceptional China Unicom • • Fully expedite digital transformation to empower smart operation & forge new edges Better satisfy the nationwide service needs of government & enterprise customers Better satisfy the mobility needs of individual customers Better satisfy the information consumption upgrade needs of household customers Centralised & Unified IT services Basically established core capability of 5 middle platforms (consumer, government & enterprise, network, data, management) Accumulated 42 centres + 6 platforms + 9 capabilities Implemented in 7 provinces Efficiently-Centralised & Integrated Innovation System To complete establishment of full capability of 5 middle platforms (consumer, government & enterprise, network, data, management) To accumulate 48 centres + 6 platforms + 9 capabilities To complete implementation across 31 provinces Jun 2021 a China unicom中国联通 Dec 2021 2021 Interim Results 15#16Endeavour to Achieve High-quality Development An Exceptional China Unicom A Smarter China Unicom A Brighter China Unicom Firmly implement the strategy of focus, innovation & cooperation Accelerate comprehensive digital transformation Strengthen intelligent operation & services • Deepen mixed-ownership reform Continuously expand network "co-build, co-share • & co-maintain" • Key Targets Continue to step up revenue & profit growth Achieve significant enhancement in service quality Forge differentiated advantages by digital transformation Continue to improve corporate governance efficiency a China unicom中国联通 2021 Interim Results 16#17Overall results Operating & Financial performance a China unicom中国联通#18Quality & Profitable Growth in Scale of Mobile Services Led by 5G a China unicom中国联通 Mobile Service Revenue (RMB Bil) 7.3% 82.1 80.2 76.5 44.4 43.3 40.9 1H2020 2H2020 1H2021 Mobile Billing Sub ARPU (RMB) Sustained mobile ARPU & revenue growth • • • 1H2021: 42.5 mil net add of 5G package users, with an industry-leading penetration rate of 37%; mobile billing sub net add of 4.65 mil Launched innovative China Unicom APP, forming an ecology & drawing traffic through omni-channels & touchpoints, with monthly active users (MAU) >100 mil Leveraged privileges, content & financial tools to improve product value while strengthening pan-integration service Utilised Big Data analytics to precisely drive existing customers upgrade Accelerated scale development of broadband & mobile integration via the "three gigabit-network" Unlocking 5G customers' value through coordinated development of terminal, network & business, while enriching 5G innovative applications 2021 Interim Results 18#19Fixed-line Services Maintained Solid Growth Momentum Fixed-line Service Revenue (RMB Bil) Broadband access & smart home products +2% 65.3 60.6 7.9% 1H2020 1H2021 38% 1H2021 fixed-line service revenue 36% IDC, IT services & cloud computing 21% 14% 11% Voice & others Leased line service 3% 6% Grasped the boosted demand for digitisation, cyberisation & intelligent transformation of the economy & society Pan-integrated development of innovative and fundamental businesses for mutual promotion Actively leveraged proprietary resources & edges to empower government & enterprise customers and enhance Smart Family customer experience & value • • • "3 gigabit-network" resources (gigabit 5G, broadband, Wi-Fi 6) "Cloud + networks + applications" integrated servicing capability Differentiated service capabilities underpinned by intelligent network products (premium network, cloud networking, SD-WAN & etc.) Nationwide efficiently-centralised innovative product offerings & localised operation service capabilities Better customer insights brought by the long-term & well- established relationship with government & enterprise customers Mixed-ownership reform advantages & synergies a China unicom中国联通 2021 Interim Results 19#20Integrated Development of Broadband & Mobile Led by Digitalisation 61% 2.7 13.4% 67% 3.1 21.9 0.7% 22.0 1H2020 1H2021 Smart home products revenue (RMB Bil) Broadband access revenue (RMB Bil) - Broadband & mobile integration penetration • Northern China: leveraged broadband to expand mobile & promoted mutual growth dynamics; achieved ultimate integration with high-quality services; drove paradigm shift with multi-SIM & full-home smarts under one household Southern China: expanded broadband to boost mobile & effective integration; focused on key areas & customers, with an appropriate increase of broadband investment to achieve focused coverage & spot transcendence Continued to strengthen core capabilities of smart community & Smart WoHome platforms, fully pushing forward the development of broadband & mobile integration via the "three gigabit-network" • • Smart Community: Provided the community with property management platform + property information management services and the users with home solutions Smart WoHome: Offered one-stop household information consumption services integrating terminal-network-service-data-cloud to satisfy the information consumption upgrade demand of household customers, while focusing on home network deployment & integrated video services Digital Village: Promoted digital village service cloud platform, offering rural market development solutions of "platform + network + X", hence driving the development of mobile, broadband & innovative services a China unicom中国联通 2021 Interim Results 20#215G Industry Applications Well Positioned for Growth Actively push forward the integrated & innovative development of 5G+ industry vertical applications to capture the huge revenue growth potential Innovated 5G application product system leveraging 5 major components, network (5G industry private network), MEC, industry platform, customised service & terminal, to support 15+ industry applications Successfully commercialised a number of 5G lighthouse projects in key areas e.g. industrial Internet, smart medical, smart mining, smart cities, etc. 1H2021: Cumulative contract value of 5G industry applications >RMB1.3 bil Industry-leading 5G private network products (hybrid private network, virtual private network, etc.) with edges in product capabilities, collaborative capabilities, delivery & operating services, etc. Actively explored business models: charging based on different metrics, e.g. data usage, bandwidth, network slicing; private network & MEC platform charging based on resources & capabilities deployment; charging on the system integration & maintenance service for 5G network & applications Strengthen "China Unicom 5G Application Innovation Alliance" & power up customers by open cooperation, ecology expansion, integrated innovation 300 5G lighthouse customers nationwide >1,000 5G Application Innovation Alliance members 2021 Interim Results a China unicom中国联通 21#22Innovative Businesses Gaining Momentum Accelerated the building of proprietary innovation platform capabilities & key products to enhance competitiveness & business value • 29 • • IT Services Focusing on smart cities, digital government, industrial Internet, healthcare, etc. with proprietary research capabilities progressively improved & scale expanded rapidly Launched hundred-million-RMB level products like smart city foundation, government hotlines, integrated governance platforms, smart river & lake managers, and scenic integrated management platforms RMB10.0 Bil (↑ 33% yoy) Revenue LOT Connections reached 270 mil, mil; Yanfei Smart platform share reached 46% (12pp vs 12.2020) Equipment management platform: support 40+ products, 100+ object models & Open API Proprietary Yanfei 5G module priced at RMB499 RMB3.0 Bil (↑38% yoy) Revenue Big Data Industry-leading market share • Added 6 new components including R&D data quality management • platform & large-scale mission scheduling platform Launched more than 20 proprietary products such as public affairs Big Data platform, digital intelligence industry & finance platform, and smart travel-cultural tourism Big Data platform RMB1.3 Bil (↑ 43% yoy) Revenue a China unicom中国联通 2021 Interim Results 22#23China Unicom Cloud Poised to Thrive Note: 1. a China unicom中国联通 China Unicom Cloud Revenue¹ (RMB Bil) 4.99 54.1% 7.69 1H2020 1H2021 • China Unicom Cloud is the base for digital transformation & integrated innovation; focusing on security & reliability, cloud-network integration, dedicated customisation & multi-cloud collaboration; providing customers with integrated innovative solutions including cloud resources, cloud platform, cloud service, cloud integration, cloud interconnection, cloud security Aggregate laaS base leveraging virtualization and cloud native dual stack Public Cloud: Facing medium-sized enterprises and small & micro enterprises with deepened cooperation with strategic investors, while exceling in the packaged marketing of "cloud network + X" products Private Cloud: Consolidating resources to focus on building PaaS with fully integrated capability; offering secure & trusted private cloud services to government and enterprise customers leveraging information technology innovation cloud & multi-cloud management capabilities Industry Cloud: Deploying nationwide backbone cloud pools, aggregating innovation capabilities such as Big Data & Al, with the focus on the development of key industries such as government affairs, medical, education & industrial China Unicom Cloud revenue included revenue of cloud resources, cloud platforms, cloud services, cloud integration, cloud interconnection, cloud security, etc., generated from integrated innovative solutions. 2021 Interim Results 23#24IDC Business - Capture "New Infrastructure" Strategic Opportunities China a unicom中国联通 IDC Revenue¹ (RMB Bil) 10.1 9.0% 1H2020 No. of cabinets (Thousand) Note: 1. 11.0 1H2021 310 290 277 41% 38% 38% 12.2020 6.2021 12.2021E Tier-1 cities IDC revenue included IDC outbound bandwidth revenue. Competitive advantages • Layout of "5+2+31+X" & 583 IDCs nationwide coverage; average utilisation rate >60% in 1H2021 • • Focus investment on high-demand & high-value areas such as Beijing- Tianjin-Hebei region, Yangtze River Delta & Greater Bay Area, while actively engaging in private capital cooperation. 2021E CAPEX: RMB2.7 bil Adhere to green & sustainable development, IDC & cloud resource pool are deployed in a unified fashion, building a multi-cloud intelligent network to provide customers with superior experience, high-speed interconnection & all-round integrated solutions Leverage efficiently-centralised operation & the Group's extensive resources and capabilities to capture Internet sector customers, while optimising customer mix by actively expanding customers in financial & government sectors Strive for enhancing both return & scale 2021 Interim Results 24#25Synergistically Advanced Reform & Comprehensive Digital Transformation a China unicom中国联通 Raise vibrancy, promote growth & enhance efficiency Smart living "New Ecology" China Unicom APP integrated communications, lifestyle, entertainment & financial services, with MAU >100 mil, as well as 100% coverage on fundamental services "One Family" product enabled cross- region integrated services delivery Continued to strengthen Internet- oriented operations & 212C marketing model innovation (Tencent King card, Alibaba Xiaobo card, Mi fans King card...) Digital intelligence "New Operation" Systemically promoted reform of six professional functions (marketing, government & enterprise business, network, IT, technology innovation & capital management) Whole network SDN-enabled, the only operator that supported automatic activation of multi-cloud networks Leading in Big Data monetisation, revenue market share ranking 1st in the industry Cloudified IT resources with new systems 100% on cloud; 84% resource cloudified nationwide In-depth Reform "New Vitality" Continued to deepen mixed-ownership reform; formed Union Digital Technology; CUSC, China Information Technology Design & Consulting Institute Co. Ltd. and China Unicom Yunnan Branch further reformed Effectively stimulated the vitality of frontline staff, as they were empowered with strengthened IT tools/ data Special zone for innovative talents; digital talents continued to contribute increasing mix Aligned high growth with high incentives to unleash business vitality 2021 Interim Results 25#26Key Financial Information (RMB Mil) Operating Revenue Operating Expenses Operating Profit Finance Costs 1H2020 1H2021 Change YoY 150,397 164,174 9.2% (142,257) (156,061) 9.7% 8,140 8,113 -0.3% (859) (645) -24.9% Interest Income 682 471 -30.9% Share of Net Profit of Associates¹ 732 1,101 50.4% Share of Net Profit of Joint Ventures² 257 720 180.2% Other Income - Net 784 1,529 95.0% Income Tax Net Profit (2,138) (2,081) -2.7% 7,569 9,167 21.1% Note: 1. Share of net profit of associates mainly included share of net profit of China Tower Corporation Limited. 2. Share of net profit of joint ventures mainly included share of net profit of Merchants Union Consumer Finance. a China unicom中国联通 2021 Interim Results 26#27Increased Initiative to Promote Sustainable Growth in Future (RMB Mil) Operating Expenses 1H2020 1H2021 Change YoY (142,257) (156,061) 9.7% Slightly higher than the operating revenue growth, mainly due to the higher initiatives in resources & talents for 5G & innovative businesses, driving sustainable future growth Interconnection Charges (5,094) (5,247) 3.0% Depreciation & Amortisation (41,312) (41,376) 0.2% Mainly benefited from good control of CAPEX in recent years & network "co-build co-share" Network, Operation & Support¹ (22,220) (25,107) 13.0% Mainly due to growth in charges for the use of equipment & premises, and energy cost Employee Benefit (27,503) (30,991) 12.7% Mainly due to the ongoing effort in incentive mechanism reform to strengthen performance-based compensation & drawing of innovative talents In line with 29% increase in sales of telecommunications products Costs of Telecommunications Products Sold (11,603) (14,808) 27.6% • Selling & Marketing (14,879) (15,565) 4.6% G&A & Others (19,646) (22,967) 16.9% • See next slide for details Note: 1. 1H2021 tower usage fee was RMB 5,429 mil, relatively flat yoy. Excluding the impact of the adoption of IFRS 16, 1H2021 tower usage fee was RMB 9.5 bil, up 2% yoy. The data is for illustration purpose only and investors are cautioned not to rely on the data. a China unicom中国联通 2021 Interim Results 27#28Appropriately Stepped up Initiatives to Fuel Rapid Development of Innovative Businesses Capitalise on the opportunities of digital transformation to enhance capabilities & promote scale development G&A & Other Operating Expenses (RMB Bil) 22.96 Technical support Rapid growth of Industry Internet RMB 19.65 16.9% RMB revenue 5.4 Bil expense 5.57 2.7 Bil YOY 4.89 Cost of IT services YOY 8.07 6.12 Enhanced capabilities Sustainable growth in the future RMB RMB 9.32 8.64 Cost of 2.0 Bil IT services 2.5 Bil IT services revenue YOY YOY 1H2021 1H2020 Technical support expense I Cost of IT services Administrative expenses & others China a unicom中国联通 2021 Interim Results 28#29Meticulous Management of Network Operation Expenses • Mounting pressure on network operation & support expenses as business & network scale continue to grow Co-share & cooperation Continued to expand network "co- build, co-share & co-maintain" with China Telecom Further private capital cooperation in broadband deployment * Streamlining network Streamlined 2G base stations 3G base station of single carrier frequency >99% • • • Insourcing operation Insourced network maintenance, optimisation & repair, saving RMB490 mil Improved the core competence of network personnel Meticulous management A P&L for each tower & online energy consumption management for the entire network, enabling data comparison & auditing Better leveraged the favourable new infrastructure policies for 5G & IDC in different regions Al application Promoted Al to push systematic smart operation Intelligent operation & maintenance robots were introduced nationwide & achieved a cumulative economic benefit of RMB150 mil Energy conservation & emission reduction Announced "China Unicom's 14th Five- Year Plan on Peak Carbon-emission & Carbon-neutrality" Actively promoted 4G/5G collaborative intelligent energy-saving management with proprietary R&D Ⓒ FY2021 Target: Stable network operation & support expenses as a percentage of revenue a China unicom中国联通 2021 Interim Results 29#30Focus & Cooperation Fostered High Investment Efficiency CAPEX Structure 42% 1H2021: RMB14.3 Bil 31% 18% 26% 2021E: RMB70.0 Bil ■Mobile network 32% 51% Fixed-line broadband & data Note: ■Infrastructure, transmission & others 1. Enhancing network edges to drive profitable & fast business growth • • • Focus on the deployment of premium 5G, gigabit fibre network & innovative business investments, e.g. IDC, cloud computing, Big Data & IoT, etc. Focus on enhancing the coverage of commercial buildings and government & enterprise premium network Focus on key city clusters, such as Beijing-Tianjin-Hebei, Yangtze River Delta & Greater Bay Area, key cities & major venues Strengthen & extend "co-build, co-share & co-maintain" as well as private capital cooperation to accelerate growth Overall customer satisfaction & the rate of complaints improved remarkably; scored 79.4¹ on 5G customer satisfaction, ranking No.1 in the industry Source: MIIT 5G Satisfaction Analysis 2021 Q1-Q2 a China unicom中国联通 2021 Interim Results 30#31Strong Cash Flow & Financial Strengths Accumulated strong free cash flow¹ 2017-1H2021: >RMB170 Bil Note 1. ՄՌ $ $$ $$$ $$$$ Liabilities-to-Assets Ratio 1 12.2016: 62.9% 6.2021: 38.8% The data above excluded the impact of the adoption of IFRS 16 Well positioned to support new opportunities such as 5G to create new values Boost long-term sustainable development Accelerate increase in shareholder returns Enhance ability to counter risks a China unicom中国联通 2021 Interim Results 31#322H2021 Priorities Holistically shaping differentiated new development edges to strive for leapfrog in high-quality development To drive high-quality development with high goals To promote high-quality services through innovation capability improvement To boost high-efficiency collaboration by fostering integration and synergy To strengthen high-tech engines to empower smart operation To fuel high-vitality operation through persistence in deepening reform To create a high-quality open ecology by adhering to win-win co-operation Further improve market- oriented operation Further enhance systemic innovation abilities Further accelerate digital transformation a China unicom中国联通 2021 Interim Results 32#33Thank You! Asia's No.1 Most Honored Telecom Company Institutional Investor 2021 ASIA EXECUTIVE TEAM Asia's No.1 Best Telecommunications Company FinanceAsia ASIA'S BEST COMPANIES 2021 a China unicom中国联通#34Appendix I: Revenue Breakdown (RMB Mil) 1H2020 1H2021 Change YoY Mobile Service Revenue 76,516 82,092 7.3% Voice 12,839 12,952 0.9% Data Traffic 52,057 54,654 5.0% Others 11,620 14,486 24.7% Fixed-line Service Revenue 60,566 65,330 7.9% Voice 4,410 4,561 3.4% Broadband Access 21,874 22,025 0.7% Others¹ Other Service Revenue 34,282 38,744 13.0% 1,253 1,252 -0.1% Sales of Telecommunications Products Total 12,062 15,500 28.5% 150,397 164,174 9.2% Note: 1. Mainly included revenue from IDC, IT services, cloud computing & leased line services & others. a China unicom中国联通 2021 Interim Results 34#35Appendix II: Extracts from Unaudited Condensed Consolidated Statement of Financial Position a China unicom中国联通 As at (RMB Mil) 2020.12.31 As at 2021.6.30 Current Assets 108,636 120,861 Non-current Assets 471,980 450,406 Total Assets 580,616 571,267 Current Liabilities 222,028 214,915 Non-current Liabilities 31,068 24,312 Total Liabilities 253,096 239,227 Total Equity 327,520 332,040 2021 Interim Results 35#36Appendix III: Key Operating Metrics Unit 1H2020 1H2021 Billing Subscribers Billing Subscriber ARPU Mil 309.528 310.456 RMB 40.9 44.4 Mobile Business Total Handset Data Traffic Handset User DOU Handset User MOU Bil MB 18,025.6 22,984.3 GB 9.4 12.2 Mins 166.4 180.7 5G Package Subscribers Mil Nil 113.330 Fixed-line Broadband Business Subscribers Mil 85.878 90.123 Access ARPU RMB 43.0 Fixed-line Local Access Business Subscribers Mil 52.119 41.8 47.188 ARPU RMB 10.9 10.9 a China unicom中国联通 2021 Interim Results 36#37Appendix IV: Industry Internet Revenue Breakdown (RMB Bil) 1H2020 1H2021 Change YoY IDC 10.07 10.98 9.0% IT Services 7.55 10.00 32.5% Internet of Things 2.17 3.00 38.4% Cloud Computing 2.00 2.78 38.9% Big Data 0.89 1.27 43.0% Total 22.67 28.03 23.6% a China unicom中国联通 2021 Interim Results 37#38Appendix V: Deepened Cooperation with Strategic Investors Synergetic & powerful alliance to strengthen innovative development capability a China unicom中国联通 Tencent 腾讯 Baido 百度 JD. |京东 .COM Cloud computing Wo Cloud T Alibaba Group 阿里巴巴集团 Wo Cloud A, DingTalk products, co- build co-operate cloud resource pool Mobile payment, travel service, Smart wearable lov, travel service Digital supply chain, mobile payment Mobile payment, travel service, Smart wearable IoT 5G Touchpoint cooperation Payment & finance Content aggregation Smart home Telecom services Joint Venture 5G e-sports joint laboratory, 5G slicing 212C, Cloud connected network Credit guarantee, mobile charge withholding IPTV, mobile video Integrated home application Enhanced cooperation Yunjingwenlv (Smart culture & tourism) 5G+Al joint laboratory, autonomous driving 212C, Cloud connected network IPTV, mobile video 5G logistics, 5G slicing 212C 5G HD video 212C, Cloud connected network WO wallet Credit installment, WO wallet Integrated home application Enhanced cooperation Enhanced cooperation Smart Steps (Big Data) IPTV, mobile video Integrated home application Enhanced cooperation Yunlizhihui (Industry application solution) 2021 Interim Results 38