Good afternoon, ladies and gentlemen. I am Huang Liping, Managing Director of Investor Relations Department. Welcome to the company's 2026 interim results presentation. First, let me introduce management present today. Mr. Ke Ruiwen, Chairman and CEO. Mr. Liu Guiqing, COO and President. Mr. Tang Ke, ED and EVP. Mr. Li Yinghui, ED, EVP, CFO and Board Secretary. Madam Liu Ying, EVP. Mr. Li Yunzhuang, Deputy General Manager. Today's presentation will be divided into two parts. It will be introduction and Q&A. We will have simultaneous translation. Please switch your phone into silent mode. First, we will have Chairman Ke to present the results.
Ladies and gentlemen, good afternoon. Welcome to the company's 2026 interim results presentation. Thank you for your long-term care and support for the company. Today's presentation will be divided into two parts.
First, I will introduce company overview. I will invite Mr. Liu Guiqing to introduce the company's business and financial performance. In the first half, the company's key development areas are primarily referred in the following four areas. Company's operation maintained stable with new growth momentum drivers gaining momentum and structure continuing to improve. Continuously deepen the intelligent cloud system and proactively promote token operation. Accelerate the construction of new digital information infrastructure and solidify AI development foundation. Deepen reform with AI reform as a core, and enhance corporate governance capabilities on all fronts. This page sets out the key KPIs of the first half of the year. In the first half, the company's overall results remained stable. Proactively explore new avenues for value growth. Revenue reached CNY 244.1 billion, remaining relatively stable on a comparable basis. Net profit reached CNY 19.6 billion. Favorable growth on a comparable basis.
Free cash flow reached CNY 28.9 billion, increased 121%. Communication service enhanced in quality and efficiency, with mobile and wireline communication revenue maintained stable on comparable basis. Intelligent business grew rapidly. Revenue reached CNY 31.1 billion, increased 7.1%, accounted for 12.8% of total revenue, increased 1.1 percentage point. Intelligent compute, AIDC, intelligent applications all achieved rapid growth. China Telecom Cloud revenue reached CNY 61.8 billion, increased 7.8%, with growth rate continuing to rebound. The company's development momentum is shifting towards new drivers and its structure is optimizing, demonstrating strong resilience and advantage of strategic layout continuing to become apparent, laying a solid foundation for steady and sustainable high-quality development. In the first half, the company continued to deepen the construction of intelligent cloud system, promote further enhancement of its development as service-oriented, technology-oriented and secure company.
On IaaS layer, we built elastic, agile, and efficient compute network, forming compute power service advantage. We have built a mega-sized cluster within compute nodes. PaaS Xirang compute interconnection scheduling platform was upgraded. Total scale of the intelligent compute exceeded 118.8 EFLOPS. On DaaS layer, over 20 trillion token corpus data has been aggregated. Two sets of data selected as typical achievements for SASAC program. The construction of Xinghai Trusted Data Space has been continuously strengthened, promoting the marketization of data elements. On MaaS layer, continue to strengthen Xingchen large model system, build new generation of ultra-large parameter foundation model. Xingchen TokenHub platform launched in April, so it can match models and compute power according to customer needs and scenes. It can now access 142 mainstream models, establishing integrated token comprehensive operational service capabilities across terminal service and scenes.
Together with Xirang, the compute scheduling platform, forming a dual platform foundation, achieving compute aggregation and scheduling. Intelligent compute invocation and token distribution and operation support the establishment of cities token operation center. SaaS layer, the company begins to recognize that AI agent is rapidly becoming new form of implementing and application of large models. Company took the lead in the industry to launch Xingchen Super AI Tele-Agents, performing AI empowerment to various applications in thousands of industries, forming Five-in-One closed loop token operation, promoting scaling of AI application. The company is anchored to go building the leading science enterprise, intensifying efforts in key core technology breakthroughs, focusing enhancing its science tech innovation capabilities, promoting the deep integration of science tech innovation with industrial innovation.
In cloud and cloud network integration, participate in Pengcheng Cloud Brain mega-size domestic intelligent computing system projects, and award first prize of the National Science and Technology Progress Award. On network side, key technologies and applications of ultra-long-span optical communications in extreme environmental projects award second prize of State Technological Invention Award. On AI, innovative construction AI front network system received highest award at WAIC, the SAIL Awards and Best Academic Paper. In quantum and security area, the distributed cryptographic system integrated QKD and PQC select one of the top 10 landmark achievement of central SOEs as source of original technology. In the first half, the R&D expense, CNY 5.21 billion, increased by 8.9%. in March this year, China Telecom was the first to propose token operation. The first after period of practice further deepened our understanding that Five-in-One intelligent cloud system is the token operation system.
The essence of token operation is to provide AI service to customers, bring new intelligent service experience to thousand of households, and empower digital and intelligent transformation. Since the proposal of token operation in March, company's token consumption has increased rapidly, and token operation has achieved initial results with vast growth potential in future. Targeting mass-market customers, the company is dedicated to developing AI native products and continuously promoting the AI upgrade of traditional products like e-Surfing Smart Ringtone, panel cam, and smart frame phone continuously continue to enrich. Scale of AI applications and device continue to expand. Targeting government and enterprise customers, we strengthen the supply of AI plus industry application, developing over 420 industry AI agents, 102 industry SKUs, and digital employees across 82 industries, serving 39,000 clients with penetration of 96% among central SOEs.
The Xingchen Super Agent, TeleAgent, launched in July, is powered with China Telecom's proprietary models and China Telecom Cloud, developed the first type of AI native products. It positioned as a general purpose self-service AI agent, initially target AI and mobile phone office scenes while continuously expanding to a range of applications. Seamlessly integrate end-to-end into production and organization workflows across diverse settings, offering operator-grade security capabilities and supporting private deployment. Currently, the user subscribers exceed 600,000, further promoting implementation of AI application. The company actively collaborate with various parties to promote the construction of innovative operating models of smart cloud in cities, in various province and cities. Xingchen TokenHub cooperate with SIRA in leveraging AI Store as the portal, offering compute, model, data token, and standardized AI application services to customers. The company build city-level AI service infrastructure and successfully implement smart cloud cities projects across 30 cities.
Shenzhen Xingchen TokenHub daily call volume exceed 1 trillion, significantly driving the widespread adoption of AI application. The company will continue to focus on token operation as a mainline, explore innovation, deeply advance AI action, build itself to become a leading AI service provider. The company continue to strengthen internal AI empowerment, building 300 internal AI applications across five areas: smart operation, services, sales and marketing, R&D, and management. It deploys 12 types of digital employee at scale, promoting the integration AI into core enterprise production process, resulting in a total quality and efficiency enhancement exceeding CNY 1.4 billion, generate a wealth of internal AI application cases and experience, forming scene-based reserve for empowering external clients and continuously implementing internal application, external expansion strategy.
The company is fully committed to building secure enterprise, continuously promoting two-way empowerment of AI security, establishing 1+N+1 full-stack security capabilities, and improving the security protection system. The company has solidified a cloud network foundation defense system. The cloud and anti-DDoS market share remains number one. The cloud, WAF, and [Zero Trust SaaS ] continuously maintain top three leading position in China, steadily enhancing its independence and controllable security protection capabilities. The company has optimized the ChangeMore security database, upgrade the Xingchen security large model, strengthen AI power security operation. It also research, develop, and launch numerous products such as AI agent, security posture awareness platform, and other products, improving AI security governance capabilities. The company full-stack security capabilities provide carrier-grade security safeguards, such as operating traceability, high-risk action interception, and open source core security for TeleAgent.
The company continues to promote the accelerate industrialization and implementation of quantum technology, deeply cultivate scene-based application to build collaborative development ecosystem. On quantum communication, continue to build quantum-secured infrastructure and accelerate expansion of quantum integrated application scenes. The subscriber number users reached 7.2 million. On quantum computing, Tianyan Quantum Computing Cloud Platform become the world's first simultaneous to offer quantum supremacy service capability across both photonic and superconducting technologies routes. In comprehensive capabilities ranked amongst world's top tier. Cumulative visits exceed 50 million, serving over 60 countries and regions worldwide. On quantum precision management, products such as single photon imaging and cold atom gravimetric continuously achieve breakthroughs, asserting applications in different scenes. On ecosystem, the company established high-level quantum talent innovation space for central enterprise. Over 70 members units in the Quantum Technology Innovation Consortium initiate establishment of quantum industry funds.
Recently, the states proposed the planning and construction of six networks, including compute and new generation communication networks. In the first half, the company leveraged the first-move advantage in existing layout and operationally advanced the construction of new generation communication and computing network. CapEx amounts CNY 32.4 billion. CapEx in computing network increased by 97%. Proportion of the total CapEx rose by 24.6 percentage points, continuously optimizing the CapEx structure. On new generation communication network, the company continuously promote network evolution and upgrades, leading the new quality improvement of new infrastructure. And comprehensively accelerates the strengthen of foundation expansion of capacity of new infrastructure, improving user networking perception, solidified leading advantage in cloud network integration and saving resources investment. On compute network, continue to strengthen forward-looking planning and deploy AIDC. Build a domestic chip training, domestic model intelligence compute cluster.
Achieve breakthroughs in key technologies for large model training and evolution in domestic computing environment. Achieve an intelligent computing utilization of 94%. Leveraging CRAN Platform 2.0, we enable visible, available, and controllable compute across entire domain, assisting client efficiently centralize, manage their own resources, and convenient invocation of public computing power. The company continues to accelerate the construction of new generation AIDC. The current scale of AIDC exceed 900, with 1,600 MW hub nodes capable of support nearly 8 GW of power. Land reserve has been doubled. Multiple cutting-edge technologies in areas such as energy and cooling has been introduced. Integrated delivery capability continue to strengthen. In the first half of the year, 14 new high-power projects were added. AIDC revenue reached CNY 20.1 billion, representing increase of 9.3%.
The company simultaneously advanced the professional operation reform of AIDC, establishing a nationwide integrated AIDC operation hub, constructing AIDC construction and operation system with market focus and competitiveness, enhancing end-to-end process efficiency of demand, planning, construction, maintenance, and operation. Strengthen its rapid response to AIDC market in the AI era. Following its fiber upgrade and Cloudification, the company, with AI reform as the core, will further comprehensively deepen reform and opening up, accelerate the establishment of new production relations, adapt to AI development, fully unleash the company's capability and advantage in technology resources and talent, promote scaling of AI application. Company promoting upgrades of cloud core platform to an AI core platform, building main process with the AI core platform as a whole. Deepening reform in areas such as government and enterprise, cloud network operation, and AIDC construction operation continuously enhancing the multi-factor organizational or allocation capabilities across all elements.
We accelerate the building of a smart and beneficial engineering team, systematically enhancing customer-oriented capabilities in demand site, self-service, and continuous operation. We continue to increase efforts in cultivating and introducing scientific talents, further improving the flying goose program of our scientific talents, transforming and upgrading the structure of our employee team. The company adhere to the concept of open up and co-sharing, enhanced level of systematic open cooperation, continuously promoting industry-academia research collaboration, continuously deepening business open cooperation, further strengthen capital empowerment, accelerating investment layout in key AI areas, advancing the new rounds of strategic investor introduction for professional companies such as AI, e-Surfing, which should create win-win situation through cooperation. The company proactively fulfill social responsibility, complete communication assurance for important events, utilize technologies such as AI Flow and Tiantong satellites, establish communication lifeline in emergency rescue operation.
We continuously injecting the digital and intelligent impulse into rural revitalization. Leveraging technology to empower anti-fraud safety net and the effectiveness of anti-fraud governance continue to improve. Company fully integrate green and low carbon concept into operation, accelerate green and low carbon transformation of digital information infrastructure, achieve total reduction of CO2 emission 1.46 million tons in the first half. Continue to expand green product service such as Environmental Protection Cloud and Green Lighting. The company attach great importance to market value management and shareholders return. The board decide to declare an interim dividend for 2026 equivalent to 75% of profit attributable to shareholders. This represent a dividend payout ratio increased by 3 percentage points. The DPS is CNY 0.1606. The high quality development of the company is inseparable from the long-term support of the shareholders and analysts.
We will, as always, move forward hand in hand with everyone to share the fruits of the development. 2026 is the first year of 15th Five-Year Plan. New round of scientific revolution and industrial transformation accelerate its breakthrough. Innovation in AI technology is entering an unprecedented period of activity, becoming new engines for economic growth and accelerate transformation of old and new growth drivers, and provide new vast potential. Company fully implement Cloudification, Digital Transformation and AI for Good strategy. Deepen construction its Five-in-One intelligent cloud system. Through thoroughly implement AI plus action, drive the development of new form of smart economy with token operation as mainline. Company focus of create original and leading science tech innovation and achievement. Strengthen inherent AI security capabilities, accelerating construction of new digital information, deepen reform and opening up. Fully enhance the corporate governance capabilities.
The company strive to achieve stable revenue growth, EBITDA and net profit growth on a comparable basis for 2026. Rapid growth in intelligence revenue. During 15th Five-Year Plan, company aim for a stable growth in revenue with intelligent revenue accounts for over 20% and net profit growth exceeding revenue growth. Elevating the construction of a service-oriented, territory-oriented, and secured enterprise to new level. This conclude my part, and next we'll invite Mr. Liu Guiqing to introduce the company's business and financial performance.
Thank you, Chairman Ke. Ladies and gentlemen, good afternoon. Next, I'll introduce the company's business and financial performance for the first half. In the first half, the company accelerate high-quality development, stabilize its foundation with communication, expand its growth in intelligence, effectively control OpEx, and maintain stable business operation. Next, I'll introduce the development of each business.
In the first half, the company promote upgrade of its communication business from communication channels to intelligent portals, accelerate the integration of AI into its communication businesses, expand new space for connection value, and maintained stable communication businesses. First, accelerate connectivity upgrade. On mobile network, we accelerate the scale commercial deployment and capability upgrade of 5G-A. 5G-A subscribers reach 4.68 million. Cumulative number of 5G industry application projects reach 58,000. Broadband network, we continue to promote gigabit plus FTTR upgrade. Gbps subscriber number reached 69.08 million. Net increase in enterprise all-fiber networking was 690,000 sets. FTTR revenue increased 37%. Accelerate the integrate upgrades of space air ground service, building an all domain connectivity advantage. Satellite revenue increased by 23%. Second, strengthen the customer management. We enhance customer perception, stabilize customer value. Number of integrates service user exceed 130 million. Scale of high-value integrated service customers steady expand.
ARPU reach CNY 128. Third, promote integration and mutual promotion across GBHC. Relying the platforms such as Smart Community, Digital Village and IoVT, we continue to create scene-based integrated applications such as store access, smart and beneficial education. The scale of Smart Community and Digital Village continue to grow, and industries digital delivery capability remains at leading level. The contract amount of ICT projects increased 9.2%. The company continued to deepen its Five-in-One intelligent cloud system, actively promotes token operation, and achieve rapid growth in scale breakthroughs in intelligent business, thereby accelerating the creation of a new growth pole for company's transformation and development.
In the first half, the company focused on solidifying its digital information infrastructure foundation, expanding its intelligent cloud and high-quality data products, strengthening model capabilities and product supply, promoting large-scale implementation of AI applications, and continuously improving commercial closed-loop token operations around the production, delivery, and application of tokens. The company possesses a three-tier computing power architecture comprising central, regional, and edge nodes. The massive number of edge nodes can satisfy diverse demands such as low latency proximity service. The company also boasts integrated advantages in compute network integration, compute power scheduling, and model invocation. The Xingchen TokenHub and C-RAN platform form a dual foundation equipped with optimal computing power and model, achieving one-stop aggregation of token skills and various AI applications. The company has a vast customer base with GBHC linkage providing AI standard products and comprehensive AI solutions.
The Xingchen Super AI Tele-Agents drive dual growth in bytes and tokens through agent plus connectivity device and application. Targeting to C and to H customers, the company has launched a series of AI products with intelligent agents as their core capabilities, including smart panel, e-Surfing Smart Ringtone, and smart frame phone. Smart panel users exceed 2.5 million. Smart frame phone users surpass 7 million. Token consumption achieved multiple growth. Targeting to B and to G customers, the company has developed industry applications for sectors such as finance and civil aviation through intelligent agent plus model plus dataset over 10,000 AICT projects. The company leverages its dual foundation advantage to pioneer a new paradigm for intelligent cloud city development. Innovatively creating a one-stop AI service portal, AI Store, to provide a wide range of customers with convenient and high-quality integrated AI services comprising compute power, data, model, and AI applications.
The company's emerging platform-based businesses are developing rapidly with key businesses such as IoVT, IoT, low-altitude economy, digital platforms, and satellite communication achieving continuous breakthrough. We continue to deepen to cultivate the IoVT domain. The Security Smart Eye covering 20,000 governance institutes. Kitchen monitoring serving over 510,000 merchants, and the scale of IoVT terminal assets reaching 100 million level. The scale of IoVT connection exceeds 800 million. The company continues to expand into markets such as public utilities, livelihood services, and IoV. e-Surfing IoT's platform position leaders quadrant. The low-altitude economy continues to improve AI+ "1+1+4+N" capability system, comprehensively covering key aspects such as low altitude infrastructure, flight service, and security prevention and control. And strengthening the low altitude safety barrier, accelerating the expansion of application scenes, having cumulatively launched and operating over 1,500 application scenes.
The digital platform e-Surfing Smart Enterprise 2.0 centered on government enterprise integrated gateway, building the three major pillar new infrastructure application and operation. It serves over 330 industries, assisting SMEs in achieving efficient digital and AI transformation. The company pioneered in achieving integration, Tiantong and BeiDou communication and navigation. Satellite-based high precision positioning in the country. Satellite direct to vehicle surpassed 150,000. The construction of satellite network with two GEOs and one LEOs has commenced. Integrated space air ground communication service capability further enhanced. The company deepened its global resources and capability deployment and continuously expanded its international business. Revenue from transmission business such as ITC increased 18%. Revenue from government enterprise and major markets such as Asia and Europe increased 10%. New breakthroughs have been achieved in overseas expansion of strategic emerging business such as cloud token, IoVT and satellite. Cloud revenue reached CNY 800 million.
Token service was first launched in Hong Kong and Singapore. IoVT deepened strategic cooperation with overseas telcos, and satellite service integration launched in three South Asian countries. The company continued to strengthen the precision allocation and refined management of course resources, enhance AI empowerment and expand applications such as digital employee, smart customer service, operation maintenance, energy savings, and thereby improving resources utilization and operating efficiency, effectively supporting high quality development. In the first half, OpEx decreased by 2.2%. In the first half, the company's financial strength remained solid with operating cash flow increased by 29.7% year-on-year. The debt to asset ratio declined by 0.8 percentage point year-on-year. The corporate credit rating has highest triple A level. This will conclude our presentation. Thank you.