Ladies and gentlemen, good afternoon. Welcome to China Mobile's 2026 Interim Results Presentation. I will begin by presenting our overall results for the first half of 2026. Mr. Chen Yangfan will then review our operating performance, followed by Mr. Li Ronghua, who will present our financial performance. The first half of 2026 brought its fair share of external headwinds and multifaceted challenges. In response, we proactively identified, adapted to, and drove changes. We made positive progress across all key initiatives, and our achievements are mainly manifested in four areas. First, we demonstrated resilience in business operations and development. Second, we continuously enhanced our network capabilities. Third, we fostered innovation in management systems and practices. Fourth, we fully safeguarded shareholder returns. Key performance indicators for the first half of 2026 are set out in the presentation materials for your reference. First, we demonstrated resilience in business operations and development.
In the first half of 2026, operating revenue amounted to CNY 538 billion, down 1.1% year-on-year. Net profit was CNY 78.9 billion, down 6.3% year-on-year. On a comparable basis, both operating revenue and net profit recorded positive growth. Free cash flow amounted to CNY 53.9 billion, representing a 111.6% year-on-year increase. More and more customers trust China Mobile's quality and subscribe to our services, and we continue to maintain industry-leading profitability among global telecommunications operators. We enhanced full-stack offerings of communications, computing, and AI services using a systematic approach, striving to further increase business value.
In the first half of the year, affected by factors such as the transition from conventional to new growth drivers, market environment, and policy adjustments to the scope of VAT items, as well as our proactive operations and increased data allowances for service plans, communications services revenue navigated a period of business pressure amounting to CNY 350.4 billion, down 5.7% year-on-year. During the first half of the year, mobile customers reached 1.01 billion, with a net addition of 5.88 million. Broadband customers reached 340 million, with a net addition of 7.7 million. IoT card connections reached 1.51 billion, with a net addition of 29.58 million. Growth in handset data traffic doubled over the same period last year. We maintained a solid customer base and data traffic business delivered tangible results. We remained committed to strengthening the China Mobile Cloud brand and expanding our intelligent computing business scale.
In the first half of the year, computing services demonstrated strong growth momentum, with revenue reaching CNY 52.9 billion, up 14% year-on-year. Data center revenue increased by 13.2%, of which AIDC revenue grew by 486%. Growth in AIDC contracted capacity doubled. Cloud computing service revenue increased by 18%, of which intelligent computing service revenue increased by 130%. The contract value from newly assigned intelligent computing projects roughly exceeded CNY 20 billion. Cloud computing application revenue increased by 5.9%, of which China Mobile Cloud Drive revenue increased by 14.1%. The company continued to leverage digital and intelligent technology to empower a wide array of industries and households. In the first half of the year, AI services continued to build capability and momentum, with revenue reaching CNY 49.3 billion, up 0.9% year-on-year. Data algorithm revenue grew by 6.9%, with more than 50 industry-specific large models being introduced.
Digital and intelligent culture revenue increased by 12.5% year-on-year, with cumulative views of Migu AI Smart Match reaching 360 million during the FIFA World Cup. China Mobile Tiangong Industrial Internet platform served more than 300,000 business entities. Second, we continuously enhanced network capabilities. We continued to deploy capabilities and technological innovations across the communications networks, computing networks, and AI networks, continuing to strengthen smart digitalization infrastructure. We will adopt a flexible CapEx mechanism, taking a measured ahead-of-curve approach to plan our AI infrastructure and scaling up CapEx for computing and AI networks based on business needs. In the first half of the year, CapEx reached CNY 61 billion, up 4.5% year-on-year. Of which investments in computing networks and AI networks rose by 71% and 85%, respectively. R&D expenditure totaled CNY 13.8 billion in the first half of the year, representing a 6.5% year-on-year increase.
We have placed a focus on strategic, emerging, and future industries including 6G, AI, industrial internet, and embodied intelligence. Our scientific and innovation achievements have won wide recognition. As of the first half of the year, the cumulative number of 5G base stations has reached 2.94 million, and gigabit network coverage has reached 560 million households and enterprises. We ranked among the top tier of global telecom operators in the number of approved 6G international standardization projects, and our communications networks maintained its leadership. The total intelligent computing capacity exceeded 110,000 PFLOPS, with utilization rate of in-service resources exceeding 90%. Our computing network brain was fully deployed across national-level, hub-level, and regional-level computing platforms, and our computing networks continued to strengthen. We launched the Jiutian 4.1 secure and trusted multimodal model, aggregating high-quality datasets exceeding 4,000 TB.
Our MoMA platform achieved a notable improvement in token invocation performance, and our AI networks continued innovation and exploration. Third, we fostered innovation in management systems and practices. We drove organizational optimization. We established Token Office to drive full-stack token innovation. We also set up Office of Computing Power, refined the positioning of the cloud company, and strengthened the top-level design of our computing networks, centralizing construction and operations. We integrated and established the Department of Digital Intelligence and accelerated the full integration of IT, DT, and AI capabilities. We also strengthened digital and intelligent empowerment. We promoted the deep integration of AI across our various business functions, including production, operations, and management. The number of active digital and intelligent employees exceeded 90,000. Focusing on six major resources, namely network, business operations, human resources, finance, technical capabilities, and supply chain, we systematically built a lean and quality management system.
We place great importance on sustainable development and actively fulfill ESG responsibility by deepening green development, fulfilling social responsibility, and bettering corporate governance. Our outstanding ESG performance has earned wide recognition from all sectors of society. To align with the Company's RMB-denominated accounting system while accommodating the currency needs of different investors' accounts, the Company has further optimized its shareholder return arrangements. Starting from the 2026 interim dividend, dividends will be denominated and declared in RMB and paid to holders of A shares in RMB, and be paid to holders of Hong Kong shares in Hong Kong dollars or RMB. Holders of Hong Kong shares may elect to receive dividends in Hong Kong dollars or RMB. After giving full consideration to the Company's profitability, cash flow position, and future development needs, the Company declares an interim dividend of CNY 2.51 per share for 2026, representing an increase of 0.3% year-on-year.
The dividend amount in Hong Kong dollars is HKD 2.9003 per share, representing an increase of 5.5% year-on-year. The Company fully safeguards shareholders' interests and expects the dividend payout ratio for the full year of 2026 to be stable to rising. Looking ahead, we will anchor our vision of becoming a world-class sci-tech service enterprise and fully implement the strategy of strengthening network foundation, driving full-stack innovation. We will strive to strengthen, optimize, and expand communication services, computing services, and AI services. Adhering to the principles of AI first, cloud fast, mobile best, we will accelerate capacity building, introduce new mechanisms, and go all out to improve quality and efficiency so as to deliver greater value to shareholders and customers. That concludes my presentation. I will now hand over to Mr. Chen Yangfan, who will walk you through the operational performance. Thank you, Mr. Chen.
Next, I will walk you through our operating performance for the first half of 2026. First, we made steadfast efforts to enhance customer management. For the mass customer group, we strengthened integrated operations for both existing and new customers, focusing on more thoroughly retaining customers, boosting usage, and stabilizing value. The numbers of mobile internet customers reached 895 million, with a net addition of 11.45 million. The number of gigabit broadband customers reached 117 million, with a net addition of 8.41 million. Mobile ARPU stood at CNY 45.1, and household customer blended ARPU reached CNY 46.8. For government and enterprise customer group, we strengthened industry-focused expansion and precision operations. The number of government and enterprise customers served reached 33.82 million, of which the number of key accounts served reached 808,000. We continued to enhance the integration of customer groups.
The integration rate between mobile and broadband customers reached 96.3%, and family network members exceeded 380 million, while the number of member customers within our government and enterprise customer base reached 215 million. Second, we made steady progress in product innovation. We continued to put customer needs first, strengthened end-to-end product commercialization, and built an agile, efficient decision-making framework for strategic products. We also implemented full cost accounting for products and focused on developing flagship products. These efforts have yielded tangible results in product innovation. The communications channel was launched on the China Mobile APP, fully integrating services such as calling, family network, and AI functions. We upgraded our AI intelligent assistant Lingxi smart agent, with monthly active users exceeding 130 million.
We actively promoted integrated hardware and software AI products, with the number of video IoT connections reaching 114 million and cumulative sales of AI customized devices reaching 2.30 million units. We also built benchmark cloud network infrastructure platforms, and our medical insurance imaging cloud covered more than 90 million insured persons. Third, our token operations continued to gain momentum. We seized new opportunities in token development and continued to follow the development approach of high-efficiency production, high-standard distribution, and high-value utilization, striving to become a leading mobile intelligence service provider. On the delivery side, we coordinated the optimization of models, computing and AIDC resources to build a token factory with leading scale and efficiency.
On the scheduling side, we upgraded the Mobile Model Management Platform, MoMA, and built a dedicated MoMA computing resource pool, enabling one-click access to a wide range of models with smart selection, universal availability, and trusted security. On the operations side, we focused on the diverse AI service needs of both mass market and government enterprise use cases, enriched our Token product portfolio and explored AI-native applications, launching pilot projects in multiple regions. Fourth, we saw accelerated expansion in the international market. We continued to deepen integration between the domestic and international markets, accelerating the global expansion of capabilities at scale, and fostering a collaborative ecosystem supporting overseas expansion across the industrial chain. In the first half of the year, international market revenue reached CNY 18.2 billion, representing year-on-year growth of 30.1%.
Inbound roaming traffic volume increased by 59.9%, and the cumulative number of Chinese enterprises served for going global increased by 19.6%. Fifth, we consistently strengthened brand services. We have built a comprehensive service system and strengthened the supply of high-quality service offerings, further elevating our service standards. The China Mobile APP had 340 million monthly active users, up 25.5% year-on-year. We further developed and managed China Mobile's strategic brand architecture while stepping up efforts to communicate our brand promise of quality network, a caring brand, and smart products. China Mobile's brand value remained in the top rank among global telecom operators. In the second half of the year, the company will adopt a more proactive approach to operations, more pragmatic and prudent management, and more efficient and thorough execution.
We will focus on six key areas, striving to achieve stable and healthy revenue growth and coordinated profit growth on a comparable basis. Our key full-year targets have been set out in the materials for your reference. Next, Mr. Li Ronghua will present the company's financial performance.
Thank you, Mr. Chen. Now, I would like to present our 2026 interim financial performance to you. In the first half of 2026, we faced various challenges amid a complex operating environment. Revenue and profit faced certain headwinds. Operating revenue reached CNY 538 billion, decreased by 1.1% year-on-year. Of which, principal business revenue was CNY 452.7 billion, down 3.1%, while revenue from other businesses, including mobile handset sales, reached CNY 85.4 billion, up 11.2% year-on-year. We continued to optimize resource allocation and maintained investment intensity in key areas, with operating expenses increasing by 1.4% year-on-year.
Benefiting from changes in market interest rates and enhanced capital management, interest and other income increased by 36.4% year-on-year. Driven by improved performance of investee companies, income from investments accounted for using the equity method increased by 9.4% year-on-year. As a result, the company achieved a net profit of CNY 78.9 billion, down 6.3% year-on-year, while recording positive growth on a comparable basis. From the revenue breakdown by items and businesses as presented in the financial statements, revenue from wireless data traffic, voice, and SMS and MMS services declined year-on-year. Revenue from wireline broadband, applications and information services, as well as computing services and AI services continued strong growth. Basic communications business faced pressure, with growth drivers gradually shifting. The company faced pressure on cost control, but ongoing efforts to deepen lean and quality management kept overall costs under control.
While ensuring investments in transformation, the company strictly controlled outsourcing expenses and strengthened the application of in-house capabilities. Network operation and support expenses were CNY 140.6 billion, up 0.5%. Depreciation and amortization was CNY 95.4 billion, remaining broadly stable year-on-year. Further reinforcing a value-driven orientation, employee benefit and related expenses were CNY 75.2 billion, down 2.8%. The company enhanced targeted resource allocation and optimized the online and offline resource allocation structure, with selling expenses amounting to CNY 28.3 billion, down 1.6%.
We strengthened the classification and management of accounts receivable, enhanced the in-house development of R&D capabilities, and strictly controlled administrative costs, leading to a 2.5% decrease in other operating expenses to CNY 36.1 billion. Net profit was CNY 78.9 billion, down 6.3%, and EBITDA was CNY 173.6 billion, down 6.6%. However, our profitability remained strong, with EBITDA accounting for 38.4% of principal business revenue. The company maintained healthy and sufficient cash flow.
Net cash generated from operating activities was CNY 114.9 billion, up 37%. Free cash flow was CNY 53.9 billion, up 112%. The company's capital structure remained stable and healthy. The corporate credit ratings continued to be equivalent to China's sovereign ratings. In the second half of the year, the company will further advance quality-driven efficiency improvement, lean and quality management, and risk prevention and control. It will continuously enhance value creation capacity and drive the company's high quality and sustainable development. This is the end of our presentation and analysis on our 2026 Interim Results. Thank you.