Good afternoon, ladies and gentlemen, investors and analysts. I am Investor Relations Department Managing Director, Mr. Wang Libin. Welcome all of you to come to China Telecom's 2025 interim results investor presentation. First of all, let me introduce the management present today. They are Mr. Ke Ruiwen, Executive Director, Chairman, and CEO. Mr. Liu Guiqing, Executive Director, President and COO. Mr. Tang Ke, Executive Director and Executive Vice President. Mr. Li Yinghui, ED, Executive Vice President, Financial CFO, and Corporate Secretary. Today's meeting will be divided into two parts, including the results presentation and Q&A. The meeting will be conducted in Mandarin and with simultaneous interpretation. During the meeting, please silence your handsets. Next, we'll please invite our Chairman, Ke Ruiwen, to introduce the 2025 interim results.
Ladies and gentlemen, good afternoon. Welcome to the company's 2025 interim results presentation.
Thank you for your continued attention and support to the company. Today's result presentation will be divided into two parts. First, I will introduce the company's overall results, and Mr. Liu Guiqing will introduce the company's business and financial performance. In the first half, the company's development highlights were mainly reflected in the following seven aspects. First, stable growth in operating results. Second, completed the construction of intelligent cloud system. Third, accelerate the building of leading scientific enterprise. Fourth, adhere to green and secure development. Fifth, deepen reform and open up to enhance governance capability. Sixth, continue to enhance shareholders' return. Sixth, comprehensive rate of clarification, digital transformation and AI-focused strategy.
The company sees the development of opportunity and vast potential brought by the new rounds of scientific revolution and industry transformation, fully embrace AI, gain strategic initiative, achieve stable growth in operating results, and make new achievements in new quality development. In the first half, the company's service revenue increased 1.2%, surpassed the industry average growth rate. Net profit increased by 5.5%, maintained a growth rate higher than that of revenue. EBITDA grew at 4.9%, with EBITDA margin lifting 1.2 percentage points, further enhanced profitability. ROE increased by 0.2 percentage points and shareholders' return continued to enhance. The company continued to promote the innovative integration, integrated development of the engine of fundamental business and industry digitization, with fundamental business achieving steady growth and strategic emerging business developed rapidly. In the first half, the company deepened value operation with high-value integrated subscriber reaching 63.54 million.
AI app and handset subscribers exceeding 100 million. 5G subscriber penetration, 65.2%. Gigabyte subscriber penetration, 30.5%. Revenue from strategic emerging key products maintained rapid growth, with China Telecom Cloud revenue CNY 57.3 billion. Intelligent revenue increased 89.4%. Security revenue increased 18.2%. IoT revenue increased 46.2%. Satellite revenue increased by 20.5%, and quantum revenue increased by 171.1%. With the first analogies as the core, the company has completed the construction of intelligent cloud system, leveraging cloud network integration, providing integrated intelligent cloud service comprising compute platform, data model, and application. In terms of compute as a service, the company provide heterogeneous compute power service covering general intelligence, super, and quantum computing, with a total proprietary and SS compute power reaching 77 EFLOPS. In terms of platform as a service, the company provides a one-stop compute power scheduling and AI development service to meet customers' needs in training and inferencing.
In terms of data as a service, deeply integrated proprietary dataset, open source datasets, and third-party datasets. In terms of model as a service, the company's open source full model, full service, and fully domestic large model, as well as a third-party foundation large model and various industry-specific large model met diverse need. In terms of application as a service, the company developed standard AI products, launched industry LLM agentic services for seeing needs, served smart living for individual and households, and empower digital and intelligent transformation of production and governance. China Telecom Cloud has fully entered into a new stage of development of intelligent cloud, providing comprehensive intelligent service to meet the diverse needs of the intelligent era, forming leading market advantage. The core of the intelligent cloud system is technology. The company focus on four major technology, network, cloud, and cloud network integration, AI, quantum, and security.
Comprehensive to promote technology innovation for AI from underlying infrastructure to upper layer application. The company continued breakthrough in the core technologies, strengthened high-quality technological supply, and achieved breakthroughs in key technologies such as compute power, integrated scheduling, and training inferencing acceleration. It innovatively proposed the chartless architecture, realizing the triple decoupling of resources, framework, and tools. The company continued to upgrade the foundation large model, innovatively built an AI flow technology system, breakthrough the performance, breakthrough of joint compute power for tens of billions of massive data, tackle key technology for high-quality dataset construction governance. It also have to launch the PRC first open source model functionality security guard, where for protections capability reaching industry level. The company continue to promote intelligent transformation and upgrade economy and society through sci-tech improvement empowerment. The company deeply promote AI+ action, transforming sci-tech achievement into AI+ products.
Starting the internal application, it has developed over 160 AI applications across 21 key areas, including customer service, channel operation, and counter operation to facilitate cost reduction, enhancement, and quality and efficiency for the enterprise. Based on internal applications, the company accelerate external empowerment of AI applications to fully integrate into open scenes of government ministries and SOEs. Accumulatively create over 80 industry large models and more than 30 AI agent applications, empowering over 20,000 industry customers, including numerous central SOEs. In the first half, intelligent revenue reached CNY 6.3 billion, maintaining rapid growth. In terms of data elements, the company's Xinghu data core platform fully integrate AI capabilities, providing comprehensive technical support for data element circulation, intelligent data processing, and data security.
The Xinghu Big Data series products deeply integrated company's proprietary data with public data and industry data, accelerating the release of data element value and assisting various enterprise in building high-quality datasets and promoting efficient circulation of data elements throughout the society. The company has deeply promoted Quantum+, gained control of QuantumCTek, deployed upstream quantum information technology, aggregate industry chain partners, continuously enrich the Quantum+ product supply, accelerate application implementation, and promote the high-quality development of quantum technology and industry. In view of quantum communications, the business scale quantum encryption core and quantum intercom has expanded with number of quantum communication subscriber exceed 6 million, serving over 3,000 industry customers. In view of quantum computing, the company serve the research and development of superconducting quantum computing chip, providing quantum computing service and quantum discipline teaching and research service for industries and central enterprises.
The Tianyan Quantum Computing cloud platform record over 13 million times of visits, covering users in more than 60 countries and regions. In terms of quantum measurement, quantum precision measurement technology products are accelerating their application. The demand for typical business applications such as low-altitude detection exploration is flourishing. Adhere to the principle of network as foundation, cloud as the core, the company fully leverage the edge of cloud network integration, grabs the directions of intelligent development in pursuit to adapt the traffic and flow requirement of the network in the new AI era, and accelerate the intelligent upgrade of digital information infrastructure, providing solid foundation for AI development. In the first half, the company's CapEx was CNY 34.2 billion, and its percentage of revenue continued to decline. Facing the intelligent cloud system, on one hand, we would moderately advance the development of compute infrastructure.
Based on the 10,000 GPU cluster in Beijing, Tianjin, Hebei, and the Yangtze River Delta, will be a super node shaped cluster at the north node in the Greater Bay Area, reaching 43 EFLOPS of proprietary intelligent compute and widely access partners' compute, accelerating the upgrade of AI to AIDC. On the other hand, we comprehensively deepened co-building or co-sharing, strengthen the capability of fundamental connectivity network. We built a high-quality network with high, mid, low band coordination and 4G, 5G integration, continuously promote the upgrade of 5G and network capability, and officially commercialized nationwide. By promoting the co-building or co-sharing of the broadband industry, we enjoyed more CapEx savings.
The company proactively implement the concept of green development, accelerate green transformation of digital information infrastructure, carry out green renovation of facilities rooms, and green upgrades of base stations, deepen the innovative application of energy-saving technologies such as AI through promoting transformation of energy consumption structure. Green electricity consumption can exceed 1.4 billion kWh. The company innovatively promote the coordinated development of compute and electricity. In the first half, greenhouse emission per unit of total volume of telecom service achieve double-digit decline. At the same time, the company strengthen the empowerment of green products and service, promote the expansion of key products such as environmental protection cloud platform and green lighting and its green ICT service over multiple fields such as environmental monitoring and smart manufacturing.
The company continue to build differentiated intelligent cloud security service, constantly strengthen its security protection system comprised of a secured infrastructure network, high-quality security data warehouse, security operation platform, and security product and service covering cloud, network, edge, and terminal. In first half, security revenue reached CNY 9.1 billion, representing increase of 18.2%. The company continuously explores the integrative innovation of security and AI, empowering each other, creates the change more security products, continuously iterates the Jianwei Xingchen Security Large Model using AI technology, enhancing critical infrastructure protection capabilities, and accelerate the intelligent upgrade of security service. To address common security issues arising from the development of AI industry, we build a security guardrail for large model foundation, strengthen AI security governance, and promote more secure, reliable, and controllable AI. The company focus on the intelligent cloud system.
Further comprehensively different reform continuously expands open up and cooperation, perfects the governance system, enhances governance capabilities. We comprehensively enhance meta open cooperation capabilities, promote deep-level open cooperation in technology, digital information, infrastructure, capital, data, and talent. Introduce high-quality external resources into the enterprise, integrate internal high-quality resources externally, and build a fortress cooperative ecosystem. At the same time, we deepen the system and mechanism reform in areas such as sci-tech innovation, strategic emerging business, talent development, and market-oriented operation, accelerate the establishment of production relations that adapt to new quality productive forces. We proactively foster the favorable environment for a wide range of talent to pursue their career and entrepreneurship, promoting modernization of corporate governance system and capabilities to continue to stimulate the motivation and vitality of the company's high-quality development.
The company proactively fulfilled its social responsibility, providing communication assurance for important events and building an integrated space-scale ground emergency communication system, effectively supporting rural modernization and universal services, continuing to bridge the urban-rural digital divide. It aggressively engages in public welfare, serving the wider public it cares for, employs, engaging individual development and growth, and is accredited with CSR awards for six years. The company's high-quality development is inseparable from long-term support from shareholders, analysts, and media. We will as usual work hand in hand with everyone to share the fruits of development. The board has resolved to distribute interim dividend for 2025, representing 72% of profit attributable to equity holders with DPS of CNY 0.1812, an increase of 8.4%. Profit to be distributed in cash as a percentage of the profit attributable to equity holders of the company in 2025 will further increase compared to 2024.
In recent years, the company has fully implemented the clarification of digital transformation strategy, continuously promoting its corporate transformation from traditional telco to service-oriented, technology-oriented, and secure enterprise. Constantly exploring new paths to telco operator transformation and developing China Telecom characteristics and taking other steps towards corporate high-quality development. At present, global sci-tech innovation has entered an unprecedentedly active period, with a new round of sci-tech revolution and industrial transformation represented by AI and quantum technology accelerating its development, and the company's development enters a critical stage. The company seeks the momentum and grasps direction and to upgrade the corporate strategy to cloudification, digital transformation, and AI for good, adhering to a complex customer-oriented approach driven by reform and open up with sci-tech innovation as the core, cloud-network integration at the foundation, green and secure development as a bedrock, a smart digital platform as a home, and team as a root.
It continues to promote high-quality development to achieve new results and constantly create new value for shareholders, customers, and society. My introduction ends here. Next, Mr. Liu Guiqing will present the company's business and financial performance. Thank you.
Thank you, Chairman Ke. Ladies and gentlemen, good afternoon. Next, I will introduce the company's business and financial performance for the first half. In the first half, the company's revenue across all business lines achieved steady growth. Operating expenses were effectively controlled, and profitability continued to enhance. Next, I will further introduce the development of various businesses. The company adhered to the customer-oriented approach, accelerating the intelligent integrated upgrade of fundamental business and continuously meeting customers' diverse scene-based AI demands.
The company launched its self-developed AI agent, Xingxing, to empower intelligent upgrades of terminals, accelerate the scale development and intelligent terminals such as AI smart display and further upgrade to the beautiful home product portfolio, allowing users to enjoy multi-scenes smart home applications such as safe home, healthy homes, entertainment homes, low-carbon homes, and smart homes, enriching new scenes for smart livings. In the first half, the company's mobile communication service revenue increased 1.3%. Wireless smart family service revenue increased by 0.2%. The value of mobile and broadband subscribers remains stable. The company has deeply cultivated the digital economy, digital society and digital government admin field with digital intelligence, promoting industry upgrades. In the first half, revenue from industry digitization reached CNY 74.9 billion. China Telecom Cloud served 5.14 million 2B customers.
The company continues to upgrade its digital platform capabilities, covering the key areas such as smart cities, social and people's livelihood, emergency safety, launching over 250 application scenes and 450 full-stack solutions, continuously empowering digital transformation for key industry customers and helping customers to enhance quality, reduce cost, and increase efficiency. The company accelerates the digital and intelligent transformation of thousands of industry by empowering them with integrated intelligent cloud services with compute platform, data model, and application. In terms of compute power and platform, we continue to optimize compute power supply to provide customers with secure, reliable, intelligent and agile, green and low-carbon computing training, influencing and other services. AIDC maintained good growth with revenue increased by 7.4%.
In terms of data, Xinghu data element platform has gathered 10 trillion tokens of model training data, forming high-quality data sets for 79 things in six industries, as well as 36 integrated data products in areas such as financial service, urban governance, and healthcare. In terms of models and application, the company launched smart terminals products such as AI handsets, AI smart displays, and AI OBU machines, and rich industry large models and agents, and joins more than 30 central SOEs to create benchmarks for AI+ applications, empowering the digital and intelligent transformation of production and governance for enterprise. The company continues to strengthen its security products and service capabilities with AI and quantum technologies, enhancing the intelligent level of data operation and protect through Security+ AI intelligence, and building mechanisms for large model security detection and risk screening to achieve intelligent security protection.
The company accelerates the construction of a nationwide integrated quantum security infrastructure, launching over 40+ Quantum+ products since. Solutions in government admin, political and legal affairs, education, industry, and other fields, creating a number of application demonstrations of integrated innovation between quantum technologies and industry. In the first half, the company's security products maintained rapid growth. The Cloud Dam revenue increased by 52.7%. Zero Mile revenue doubled year-over-year. Security Brain exceeds 530K lines, and quantum business revenue increased by 171%. The company's new generation information and communication business is rapidly expanding. The IoVT has built high-quality video big data, innovated the business model for video data governance, and formed full-link end-to-end security services with revenue increasing by 46.2%. IoT and AI deeply integrated based on the intelligent connected brain vertical model.
AIoT platform capabilities are upgraded and inject services for IOV, green energy saving, resilient cities and public service, and power intelligent connections of everything. Satellite communications service continued to expand, with over 22 million handsets direct to satellite devices. Direct-to-satellite vehicle service expands to six automakers. Aviation internet market share taking a leading position. Satellite business revenue increased by 20.5%. In low altitude economy field, the company has built one plus one plus three plus N capability system, empowering over 60 application scenes and implementing over 130 projects over more than 78 cities. The company continued to increase the global cloud network resources and eco deployment. Seizing opportunities for new strategic business to expand overseas. International business remained rapid development. Revenue reached CNY 9.5 billion in first half, representing an increase of 18%.
The company's strategic emerging business continued to make breakthroughs in overseas market, with overseas cloud revenue increase 62%, earning recognition as a leader in the global overseas cloud services. Handset's direct-to-satellite services has commercially launched officially in Laos, expanding services to Southeast Asian countries. The e-Surfing IoVT international platform was officially released, collaborating with the industry ecosystem to provide open and co-create intelligent video services for the global market. New progress has been made in overseas projects related to quantum security and IoT. The company strengthened AI empowerment and refined management, deepened digital empowerment to reduce costs and enhance efficiency, continuously increased resources utilization, with operating expense increase 0.9%, 0.4 pp lower than the growth rate of the operating revenues. In the first half, the company's financial strength continued to enhance, with net profit margin increase by 0.3 percentage points year-over-year and ROE increased by 0.2 percentage points year-over-year.
The capital structure remains sound and corporate credit rating was the highest triple A level. In the second half of the year, the company will fully implement the cloudification, digital transformation and AI for good strategy with development driven by innovation, comprehensively deepen reform, deepen AI+ action, and accelerate infrastructure upgrade to promote the high-quality corporate development. Establish and improve the five prompts market operation system. Maintain favorable growth in service revenues, EBITDA, and net profit for the full year. Achieve rapid growth in intelligent revenues. This concludes the presentation. Thank you.