Citic Telecom International Aktie

Dear friends, good afternoon. Welcome to CITIC Telecom International's 2025 Annual Results Announcement. I'm Curis, the MC. Today, we are going to use a hybrid mode. We also have online attendance. And I think before the event, you have received our PPT materials. If you haven't, please contact our [SBRG] colleagues. If members of the press or investors have questions, you can call into the Chinese line. We have with us Mr. Luo Xicheng, our Chairman; Mr. Wu Jun, our CEO; Mr. Vandy Poon, Executive VP and COO of CTM; Mr. Brook Wong, Vice President and CEO of CPC. Let's invite Mr. Wu to deliver his welcoming speech.

Dear members of the press and also investors, good afternoon. I'm grateful for your attendance out of your busy schedule to attend our 2025 annual results announcement by CITIC Telecom International.

In 2025, the global economic situation remains complex with cutting-edge innovations represented by AI and new generation information technology continuously breaking through, driving increasingly fierce competition in the information and communication industry. We confronted multiple challenges head on and by adhering to the development positioning of -- with the backing of Chinese Mainland establishing a foothold in Hong Kong, Macau and connecting to the world, we promoted international development and technological leadership. Aligning with Belt and Road initiative and the 1 country 2 systems, we continuously strengthened our core functions and enhance our core competitiveness.

Our overall operations have stabilized and improved, striving to become a leading digitalized and intelligent comprehensive telecom enterprise in Asia Pacific. In the year, the group achieved a very good revenue at HKD 9.567 billion. Profit attributable to equity shareholders, HKD 920 million, an increase of 1.1%. Basic earnings per share, HKD 0.249 per share, an increase of HKD 0.03 compared to 2024. Final dividend, HKD 0.13 per share, including interim dividend of HKD 0.06 per share. Full year dividend totaled HKD 0.19, representing year-on-year increase of HKD 0.02. Dividend payout ratio remained consistent. Our CTM business is very well established in Macau. Towards the end of the year in Macau, the market share has been stabilized at #1 and 100% penetration rate for 5G services.

We have launched the 5.5G private network applications. We launched upgraded eSIM services to enhance users' digital and intelligent experience. And we have also acquired 100% of Hutchison Macau, further stabilizing our leading position in Macau. We further enhanced our international foothold in Singapore, Malaysia, Thailand, et cetera. Our group has been depending on AI service platforms to provide better services to our consumers. We have launched a number of projects in relation to data security, retail and other areas. We also focus on AI-related services. We have been cultivating our growth engines. We have set up the City Hong Kong AI Innovation Center and it has commenced operations. We have completed our AI joint laboratory with local universities, integrating research resources with industry needs.

We also have AI-assisted programming, research assistance and intelligent assistance. Concerning data services, we've provided customized data center hosting solutions to our enterprise customers. We have joined the Trusted Data Space Alliance and collaborated with China Future Internet Engineering Center and the International Data Spaces Association to advance the cross-border trusted data space for the financial industry project. We passed qualification review and become a data merchant of the Shenzhen Data Exchange. And we have also completed commercialization of global mobile number authentication service on GSMA Open Gateway network as a service platform.

We continue to deepen our internationalization efforts and rapidly developed more markets along the Belt and Road areas so as to enhance our brand influence. We continue to leverage on our existing presence and strength and strive to gain greater market share, relying on our presence in Macau, we maintain our competitive edge and expand into emerging areas. We will continue to deep dive into AI capabilities so that we can provide better services covering different aspects so that we can continue to attract more support from the local enterprises and bring them towards their overseas expansions. And I will hand over to my colleague now to take you through some financial highlights, Mr. Wu Jun.

Dear investors and members of the press, good afternoon. Well, just now, our Chairman has already presented very briefly the overall situation. I would like to dive into greater details. Our total revenue, HKD 9.567 billion, profit attributable to shareholders, HKD 920 million. Basic earnings per share, HKD 0.249, up HKD 0.03. So the full year dividend, HKD 0.19 per share. Dividend payout ratio more than 76%, a relatively high level. Total debt, HKD 3.257 billion, down HKD 650 million. Net debt, HKD 1.312 billion, down HKD 984 million. Net gearing ratio decreased by 7 percentage points to 11%. So our financial situation is very solid. Now let's dive into more details. You can see our financial results overview for recent years.

Concerning our telecom services and also handset and equipment sales, all the trends are very stable. We have seen some slight movements for 2 segments. But if you look at profit attributable to our shareholders, after a rather difficult time in 2024, last year, we have been able to stop the following trend. And our profit level has gone up slightly. From EBITDA, CapEx and liquidity, you can see our EBITDA has gone down slightly. But with lower cost levels, we have been maintaining a very good profit level. CapEx, HKD 360 million, cash and deposits, a very healthy level towards the end of the year, HKD 1.945 billion. Total debt, HKD 3.25 billion, net debt, HKD 1.31 billion; net gearing ratio, 11%.

Earnings and dividends per share. After a sharp decline in 2024, we've gone up in 2025 to HKD 0.249 per share -- dividends per share, HKD 0.19, showcasing our principle to create good return to our shareholders. If you look at the gearing situation, net gearing ratio is standing at only 11%, which is a relatively low level. If you look at interest rate and currency risk, we have optimized our financial structure, reduced our fixed rate borrowing by HKD 3.48 billion. Now 89% of our debt portfolio is at a variable rate, which is very conducive to better risk control.

At the moment, we expect the interest rate will remain at a relatively low level. We effectively managed currency risk exposure because our transactions are in Hong Kong dollars, U.S. dollars and also in MOP and the 3 are packed among themselves. So we are facing very low currency risk. At the same time, we have done some cross-currency swap and forward contracts to reduce our currency risk exposure. If you look at our operational performance, you can see the revenue breakdown by business sector. You can see that among our different segments, we are looking at certain growth and certain declines. Overall speaking, things are very stable. For mobile services, revenue increased 6.3% to HKD 1.159 billion. Internet Services decreased by 4.2% to HKD 1.436 billion. International Telecom services increased by 5.2% to HKD 2.489 billion.

Enterprise Solutions decreased by 7.2% to HKD 2.745 billion. Fixed line services decreased by 8.3% to HKD 122 million. Sales of handsets and equipment increased by 5.8% to 1.616 billion. So you can see some rises, some declines. But overall speaking, things are quite stable. Now let's look at mobile services with very satisfactory results. CTM is now moving towards 5.5G era. Penetration has already reached 100%. Number of users exceeded 110,000. Concerning our 5G stand-alone network, we have achieved some new developments. Internet services, we are accelerating the adoption of gigabit broadband. More than half of our users have been upgraded to gigabit level services. Our market share in Macau is an absolutely leading position. We will continue to accelerate the deployment of 50G PON, Wi-Fi 7, and we are going to service the 15th national game in Macau with the upgraded communications solutions.

In Europe, we have already completed our deployment of 100 gigabyte international Internet outbound bandwidth. International telecom services, we have DataMall [indiscernible] is moving along very well. So we are deepening the exploration of IoT and IoV opportunities with our high level of services, we further stabilize international voice business growth. Enterprise Solutions, we improved our global network presence and deepened the deployment of AI plus cloud network security strategies. We've added 2 new network POPs, upgraded 4 international network POPs, 6 new backbone network lines in Chinese Mainland were established and capacity increased on 10 international lines.

We've launched hybrid cloud platform service. And we also have this AI SOC, which is a security operations center driven by AI. This is the most -- among the top 3 most trusted SOC service providers. We also harness the power of AI. We have launched AI Pentest assistant and guardrail, further enhancing innovative advantage. We have the City Digital Economy Macau Innovation Center, co-built with Baidu, providing diversified AI applications and big data analysis. We have also empowered the Service One IT platform for diversified industry supporting more than 90 clients at the moment. Fixed line services, as we have mentioned previously, the overall trend is a decreasing one because of the decline in residential and business faced lines. The revenue level has dropped to HKD 122 million.

Now let's take a look at our major projects. In March '25, the CITIC Hong Kong AI Innovation Center constructed by the group has commenced operations. We jointly established the interdisciplinary mathematical digital AI joint lab. In the same month, we have fully redeemed the USD 450 million guaranteed bonds. Our capital structure has been optimized, reducing financing costs. In June, CTM has successfully decommissioned the 3G network, enhanced telecom network infrastructure capabilities in Macau. In July, the group has signed a strategic cooperation framework with China Mobile International, strengthening bilateral cooperation in international telecom services, integrated telecom services in Guangdong-Hong Kong-Macao Greater Bay Area and corporate communication services.

In September, CTM and Macau government entered into a supplemental agreement to the concession agreement. The group will continue to strengthen its operations in Macau, deepen communication with the government and positively respond to market opening and enhance service quality and competitiveness. I think that is a rather major event in relation to concession agreement, which ensures stability and continuity of our services. In January this year, CTM acquired 100% equity interest in Hutchison Telephone Macau Company Limited. That means another monthly fee-paying customer up to 100,000, further consolidating our leading position in Macau. In 2025, we have been recognized by diverse stakeholders. And here, we have listed a number of examples. We have established collaboration with China Unicom and some awards we have received.

CTM in terms of serving the city. It's done a lot including support to the 15th national games. It has also received from [AI Data] Innovation Awards. CPC in 2025 won the Hong Kong Sustainable Development Innovation and Technology Awards. And we also one of the top 3 AOC, as I mentioned earlier. Next page. You can see we showed the social responsibilities and set a benchmark for sustainable development. First of all, we deepen AI applications and safety management because data security is a huge topic for everyone. So concerning this direction, we have done some strengthening work. We leveraged AI to help us with management and operations. For important communication missions, we have excelled and our various systems have been running in a stable manner in terms of data privacy were also well recognized by the Hong Kong government.

We strengthened the organization by building a robust talent pipeline. We implemented the ideology of strengthening the enterprise through talent and launched a management trainee program to cultivate leading technological talents. We cultivate innovative teams focusing on AI computing power and data elements. In terms of social responsibilities, we have actively responded to Macau government's telecom reform policies. We launched inclusive telecom service fee reduction measures for all customers. After the fire incident in Hong Kong, we activated emergency assistance mechanism and organized charitable donations. Concerning our corporate governance efforts, we continue to maintain high level of corporate governance, improve our compliance management system, optimize internal control to protect the interest of our shareholders.

We have been awarded a number of prices as well. Looking forward, to sum up, we will enhance service capabilities by AI focused on information security, user network connectivity as a link to provide one-stop IT services for Chinese enterprises to go global and provide full process support for Chinese software products going global. We continue to rely on our conventional business, especially in Macau market. And we will continue to strengthen our capability in the region. We will provide cross-border data support to our customers. We will strengthen communication and collaboration with other operators so as to sustain stable growth. We will deeply cultivate AI and build a highland of innovation. That is going to take the lead of the next phase of our development.

Concerning the use of AI and big data, we are going to promote development of AI Macau. We have done a lot of groundwork already, and we'll continue along this pathway and direction. We have set up the Hong Kong AI Innovation Center. We have set up an AI department so that we can leverage AI to drive our digital transformation. Internally, we also need to allow AI empowerment, so we have promoted intelligent internal operations within the group, and we have developed AI agents. We will deepen market strategic layout and strengthen market coverage in order to better service our customers or enterprises customers. We will bring international players to the local market and help local enterprises to go abroad. We will provide one-stop IT services, including AI services in this process. That is going to be an important area of development.

We'll continue to enhance our AI plus cloud network security solution capabilities and deeply develop in enterprise market. We will strengthen our international coverage as well. Thank you very much.

Thank you for the sharing by our management. We'll now take questions. We'll first invite questions on site. [Operator Instructions] Can we have the first on-site question?

Can you hear me?

Yes.

[indiscernible]. Recently, I saw some news about you in Macau, acquiring Hutchison. I would like to gain some understanding how much is the expansion of your customer base? Any impacts on your business layout? And then I also want to ask you want to do more about cross-boundary data. Now we are seeing a lot of geopolitical tension. Are you having some different plans? Do you have any new measures looking ahead? Any breakthroughs anticipated?

Thank you. Mr. Poon and Mr. Wong will take your questions.

Cross-boundary data. Thank you for your question. I will answer in Cantonese. Concerning Hutchison, a number of days ago, they have already made the announcement we have acquired 100% of their shares. Previously, Hutchison has been actively looking for a buyer. We met and they wanted to make sure that while they exit the market, they want their customers to be well taken care of, receiving the best services. That's why the deal was a good match. You shouldn't pay too much attention to the consideration. The seller and the buyer of this deal both feel comforted and assured. Our customers and our resources are well aligned and integrated. Hutchison did not submit their bid for the 5G license. So their existing customers, how can they receive 5G services. That is the most important and pressing matter.

Of course, we will ensure that if they're able to use 5G or our resources that will be best. we can achieve better synergy. Ultimately, it will be the customers who will benefit. As for our staff concerning their arrangements, well, we have taken over all the staff members. We are operating normally. For future arrangements, we are talking about 2 different licenses under the government. So we will handle this. And we are sure that the government will support us because we are facing the market and we are facing the consumers. There is still competition in Macau. There are still other operators in the Macau market. So future competition will continue to be fierce.

We will do well our work. So we will do our best to win. How many customers, how many staff members are you going to keep the brand? The agreement is that for the time being, we will continue to use that brand for quite some time. because we hope to offer seamless services to the customers during the transitional period. But for the longer term -- to be practical for the longer term, we should not continue to use that brand. But of course, we want to give some time to the market and the customers to get used to this. It should not be a major problem. I would like to confirm with you.

The second question. You mean previously, we have announced that in Macau, we are going to do something about cross-boundary data services, yes. Because your network is quite big. Do you have any plans or some new ideas because of geopolitical situation is rather serious, do you have any new plans, new layouts?

First of all, the press has mentioned that in Macau, with another entity from Guangxi, we have signed this agreement. We are prepared to establish Macau, this data service platform. I would like to take you through some background information. There is this application center at a national level concerning AI collaboration. And in terms of external collaboration, other than algorithm, we're talking about data, and it involves between China, ASEAN countries when data is exchanged, whether that is compliant with the laws and regulations. Together with this group in Guangxi, when we communicated, they put forth this request because there's a lack of standardization when it comes to connecting data among different countries.

So in Macau, the government would like to move ahead and Macau enjoys this special system. So after negotiation, we are planning to, in Macau, rely on the CTM's capabilities and influence to construct this cross-boundary data servicing platform. We would like to set up some standards so that China and ASEAN countries will enjoy the benefits first and then start to expand it to other countries. In terms of AI collaboration, we want to create this compliant channel to transmit data. It may not seem directly related to our existing network. We'd like to facilitate AI application algorithm in Chinese Mainland so that it will act as a fundamental service platform and people want to be connected with international players.

In the market, we'd like to be a service provider concerning AI capabilities. We will continue to propel forward along this direction. So we have reached some initial agreement concerning this data center, and we are prepared to continuously move forward. Do we have another question?

Congratulations about a very solid performance, especially since in 2024, we have seen some great challenges. Just now you talked about September announcement concerning the supplementary agreement with the Macau government. Can you elaborate more about that? What do you think about this supplemental agreement? How is that going to carry your business forward? Do you think that is going to create a good buffer moving forward? What do you think about this?

What language should I use? Well, I think that is a technical term. It's a supplemental agreement. It's a contract renewal in essence. the previous contract has expired. So if you want to extend it, you need to sign this supplement agreement. Undeniably, the Macau government over the years wanted to modernize the telecom sector in terms of rules and regulations, CTM or CITIC Group has been supporting that over the years. Macau government needed time and it has examined different models. Last year, they approached us. And this year, we have signed this agreement so that we can work together better moving ahead. Concerning the overall arrangement for Macau, it will allow sufficient time for both parties.

Just now Mr. Wu has already reported this contract renewal is good news to us because our initial intention is to stabilize the market so that we can continue to be the service provider. In fact, I'm confident that the Macau government is inclined towards this role as the underwriter if we are permitted to use the commissioned assets, we will enjoy clear advantage. So we have negotiated with the government concerning some concessions to the citizens. I'm sure that in the near future, we'll continue to leverage on this opportunity to do well our business. And also the impact from AI reshuffling in the industry to further expand our foothold other than doing well telecom services.

We also have high tech and new tech developments. I think CTM can shoulder more responsibilities on this front. Thank you.

Do we have other on-site questions?

I would like to ask about any acquisition plans in Macau or elsewhere? Any enterprises are concerned about AI? During your presentation, you also talked about AI business direction. So I want to ask you what will be your focus? What about 2026? The AI contribution to your revenue, what is the expected level?

So acquisition plans. For Macau, there aren't too many targets for acquisitions. To our company, previously, you have seen our high payout ratio because we do not have very good investment directions. So we decided to return the benefits to our investors. But we have heard that to facilitate future development, we need to do more in terms of investments. By identifying new targets of acquisition, not just locally in Macau, but also around the world. But of course, we'll continue to uphold our obligations towards our investors. We need to consider the security of investments and future development. We will do more in terms of such explorations. That is to answer your first question.

Secondly, you talked about AI development directions. I would like to say, first of all, to the entire industry, and changes in our society, AI will create huge impacts to a telecom business like us. Undoubtedly, we will seek new development opportunities around AI, and that is a certain option. In terms of development directions, I would like to share with you some thinking from the management. First of all, there are a number of major directions for AI, IDC or algorithm platforms or chip manufacturing. So that will require a lot of CapEx investment. If we are to do that, we will identify investment directions concerning computing power centers or algorithm power centers.

Secondly, large model, I don't think we are well positioned for that. So we'll start collaboration with other large model players. AI applications. And there are many players doing very well in the market. [OpenClaw] platform and also scenario-based customized application. Again, this is not our strength. We can't compare ourselves with open source communities or large LLM players. So we can do some R&D for certain specific scenarios for applications. We have set up this AI center so that we can collaborate more closely with tertiary institutions in Hong Kong and research institutes so that we can use their capabilities and our market position so that concerning vertical AI use, we can achieve some breakthroughs. That is definitely one major direction.

On top of that, as we can all see, AI will create great demand for open cloud services. We are now considering also AI security, data security, which are great challenges when it comes to data security and connectivity, these are traditional service segments for CPC operations. So when it comes to public cloud services, how do we strengthen our capability and leverage such services so that we can continue to attract new customers and also expand our customer base. We will make greater efforts on this front. We have been talking about AI, cloud network security. So we may use AI means to empower ourselves and at the same time, identify new market opportunities.

Your third question is about the expected revenue brought forth by AI. It's very difficult to quantify that unless I focus on AI dedicated projects. At the moment, we would like to rely on existing services and customer base, and incorporate our new challenges into the original AI plus cloud network security capabilities so that we can enjoy a higher level of efficiency. So I can't carve out how much contribution will come from AI. We will invest into algorithm, centers. But at the moment, the investment is still quite limited. And for LLMs, in relation to AI, that is not our existing strength. And when it comes to AI applications, we are still negotiating with external scientific institutions.

We will continue to rely on our AI cloud network security system. So I can't tell you how much will be brought forth by AI because everything is well integrated into the system. Thank you.

Do we have any more on-site questions? Now we will take online questions. [Operator Instructions]

I have 2 questions. First about the Data Center.

Mr. [indiscernible] Thank you for your concern about the data center. For enterprises, we provide integrated ICT services. So data center development is very important to us. We have 2 data centers in Hong Kong. We have 2,300-odd cabinets, rental level or the ratio of them being leased out 70%. At the moment, we are liaising with large enterprises to explore collaboration. So the utilization will continue to rise.

And looking forward, do we have any plans to establish other data centers?

Well, in Macau, because of local development, we are now planning to set up this super center for computing. We will continue to focus our efforts on this.

The sound quality is very poor. Can we ask you to repeat your question? Sorry, the interpreter is not able to decipher the question. Is that about dividend payout? We can't hear the question clearly. It is not clear. You are breaking up. Perhaps you can send a written question.

Yes, certainly. Thank you.

The signal is not very good. Do I have any other questions online?

Dividend payout direction. I will take that. Concerning dividend payout, all along, we've had a rather high level of payout. We attach great importance to the return to our shareholders. So when we do not have better investment channels, unpaid profit will first go to our shareholders as dividends. But if there are better investment channels, I trust that our investors and also friends of the media, you will understand if you are a growing enterprise, you need to continuously invest using up a lot of funds and capital. So money available for dividend payout will be of a smaller amount. But for a mature enterprise, the payout level is normally higher because CapEx investments is normally less.

So a growing stock, payout ratio is low, but stock price may be performing better. For mature type, payout ratio is high, but the stock price may be more flat or stable. As I've said, the management we attach great importance to our returns to our shareholders. So concerning our shareholders, a company is valuable when it makes the right investments. You need to have good operations, develop the company well so as to guarantee better return in the future, then we can repay our shareholders properly. So ultimately, I would like to say if we have better investment options, we do not rule out the possibility of lowering to a certain level of the payout ratio. But we have this image of high payout ratio.

So I would like to assure you, even if we are to invest more, our payout ratio will still be kept at a relatively high level through bank loans and other financing channels from the capital market, we will support the development of our enterprise. We hope with the concerted efforts of the Board and the management, our company can develop for a second round and identify suitable opportunities through M&A or by using AI to do capital investment or are possible.

Do we have other questions? [Operator Instructions] Do we have other questions on site? No? Then we will conclude the Q&A session. Thank you very much for your participation. This is the end of today's presentation. Thank you for your support again.

Investors, good afternoon. Welcome to CITIC Telecom International Holdings Limited 2025 Interim Results Announcement Investor Session. I am [ Karis ]. In today's investor presentation, we are using a hybrid mode. So those investors on the phone, before the start of event, should have received the presentation PPT. If you haven't received it, please contact our team. So the English line is only for listening. [Operator Instructions]

So now let me introduce our management. Mr. Luo Xicheng, Chairman; Mr. Wu Jun, Chief Executive Officer; Mr. Luan Zhenjun, Chief Financial Officer; Executive Vice President of the company and Chief Executive Officer of CTM, Mr. Vandy Poon; Vice President of the Company and Chief Executive Officer of CITIC Telecom CPC, Mr. Brook Wong.

Now may I ask Chairman Luo to make opening welcome remarks, please.

Investors, friends, good afternoon. Thank you for spending time with us. Thank you for attending CITIC Telecom International Holdings Limited's 2025 Interim Results Announcement Investor Session. In the first half 2025, in face of international economy and industrial technology iteration and various challenges, well, we united our effort, and we seized the opportunity from new round of tech reform and industrial transformation. So concerning cloud network, computing power, AI and other related technologies, we deepened core technology development, and we accelerated our development of new quality productive force so as to promote stable development of our core businesses.

In first half 2025, our total revenue was HKD 4.807 billion. Profit attributable to equity holders amounted to HKD 461 million. Basic earnings per share was HKD 0.125 per share. We attach importance to shareholder return. The Board announced to pay interim dividend for 2025 at HKD 0.060 per share, so aligned with first half of 2024.

For CTM, well, it digs deep into the Macau market. As of 2025 30th June, CTM in the Macau mobile market has market share being #1 in the market. And 5G subscribers amounted to 800,000. Penetration rate is almost 100%. In first half 2025, CTM incorporated and integrated the 5.5G technology. So for business and government customers, they provided 5.5G private network service.

In face of digital intelligence integration trend, we expedited digital transformation and also deployment of emerging businesses. In first half 2025, together with Macau, we introduced -- we took the lead to introduce F5.5G optic broadband Internet service. So we are in the first 10-gigabit neighborhood in Macau, helping to forge the development of smart city. So for broadband penetration or market rate -- market share, Macau is #1 -- we are #1 in Macau. So we expanded our effort to develop overseas business.

In first half 2025, our new net nodes in Sichuan. We have new net -- new nodes in Sichuan, and we have built Beijing-Guangzhou hybrid cloud platform. And then also the bandwidth of the backbone network in Vietnam and Indonesia was upgraded. In Southeast Asia, service exceeded 90G. And then in the Philippines, we also signed Internet service agreement with local customers. In Malaysia, we actually worked with local renowned chain stores to collaborate on network collaboration projects. So our overseas layout has been deepened.

What is worth mentioning is that in tech innovation area, we have achieved very notable results and rich progress. So for smart tourism projects in 2025, in the world mobile Internet or mobile telecommunication conference, we got the third rate award, so the #3 award.

Looking into the future in face of new situations, we will continue to deepen our innovation and transformation. We will expedite digital transformation. We will actively make deployment in strategically emerging industries. We will strengthen organizational process, and we'll bring in digital operation. We'll deepen the use of digital tools. So on an all-round basis, we will promote efficiency enhancement on the front end and back end.

At present, the market is very complicated and changes fast. There are both development opportunities and challenges. So in critical areas, we will step up our strategic layout. We will build digital industrial ecosystem. At the same time, we will also enhance international operation level. We will dig deep into the market and seize the business opportunities from the Belt and Road and overseas emerging market, hoping to be the first choice digitalization working partner of various enterprises.

Besides, we will enhance our risk management capability. We will strengthen information network, data security work. So given the complex environment, we can still achieve high-quality development targets. So we will adhere firmly to our safety and security bottom line.

Now I would like to introduce to you Mr. Wu Jun, our new CEO. He has rich experience in technology, R&D, and he is also very creative and has a team spirit. So he has achieved a lot in the fintech area. The Board has a lot of confidence in him, hoping that he will lead the group to a new chapter.

Now I will invite Mr. Luan Zhenjun, CFO, to report to you in greater detail our interim results for 2025. Thank you.

Investors, ladies and gentlemen, good afternoon. I can see some familiar faces, and I indeed feel very excited and emotional. I am happy to take this opportunity to report to you our 2025 first half operations. In the first half 2025, our total revenue was HKD 4.807 billion, down 1.7% year-on-year. Revenue from telecommunications services was HKD 4.072 billion, down 2.1% year-on-year. Profit attributable to equity holders of the company amounted to HKD 461 million, an increase of 1.3% year-on-year. Basic earnings per share increased by HKD 0.002, reaching HKD 0.125 per share. Interim dividend is HKD 0.06 per share, aligned with the first half of last year.

As of 30th June this year, our total debt amounted to HKD 3.452 billion. Net debt was HKD 1.738 billion. Net gearing ratio was 14%. So from these numbers, you can see that, at the end of 2024, comparing with the end of 2024, we achieved quite significant decrease.

So on this slide, you can see our total revenue and profit attributable to equity shareholders in the past few years. So you can see our numbers from 2021 to 2025. So here, you can see our total revenue during these years. In first half 2024, there was quite a big decline. However, in the first half this year, comparing with first half last year, the decline has narrowed a lot. And if you look at profit attributable to equity shareholders, in first half last year, it's HKD 455 million and this year, HKD 461 million, so there's a slight increase.

So on this slide, you can see a number of major indicators: EBITDA, CapEx and liquidity. If you look at EBITDA in 2025 first half, our EBITDA was HKD 961 million. On a year-on-year basis, we are down by HKD 77 million. And if you look at CapEx, in the first half of the year, CapEx was HKD 127 million. Comparing with same period last year, we are down HKD 22 million. For cash in hand and also bank deposits as of 30th of June, we have a balance of HKD 1.714 billion. Comparing with the end of last year, there's an increase by slightly more than HKD 100 million.

Total debt as of 31st December last year compared to 31st December last year, there is quite a big decline by HKD 455 million. And then for net debt, we declined further from HKD 2.3 billion at the end of last year to this year at 30th June, HKD 1.738 billion, so we are down by HKD 558 million. And then if you look at net gearing ratio at the end of last year, net gearing ratio was 18%. And on 30th June this year, it's 14%. So we are down by 4 percentage points.

Then on this slide, we would like to report to you our basic earnings per share and dividends per share in the past few years. In first half last year, our basic earnings per share was HKD 0.123. This year, in the first half, it's HKD 0.125, so there is a slight increase. And then if you look at dividends per share, comparing with first half last year, we are flat.

And then on this slide, it shows our gearing and debt levels in the past few years and the changes in these indicators. In 2020, you can see that our gearing ratio was rather high, 31%. But now our net gearing ratio already declined to 14%. So if you look at total debt, in 2020, it is almost HKD 4.4 billion. Now it's only HKD 1.738 billion, so there is a big decline. And then for interest rates and exchange rate, as of 30th June this year, our total debt amounted to HKD 3.45 billion and most of the debt, almost 90% of the debt are variable debt -- variable rate debt or borrowings.

So from the perspective of control of exchange risk, well, our group's business is mainly denominated in Hong Kong dollar, USD and MOP. These are our transaction currencies. As you know, Hong Kong dollar is pegged to the U.S. dollar. MOP is pegged to the Hong Kong dollar. So there is no significant foreign currency risk between Hong Kong dollar, USD and MOP. Besides, we have some -- a small number of transactions denominated in RMB, Singapore dollar and euro. So in this process, basically, we make use of same currency debt and same currency assets to achieve natural hedging. But of course, there is some gap still, so we closely monitor factors that may affect exposure to exchange risk.

On this slide, we would like to show our revenue breakdown by business sector. At present, our businesses can be divided into these 6 categories. If you look at mobile services in the first half, revenue was HKD 548 million, up 7.5% year-on-year. And then the second category is Internet services. In the first half, revenue was HKD 754 million, up 2.3% year-on-year. International telecommunication services in the first half, revenue was HKD 1.343 billion, up 8.6% year-on-year. And then for sales of mobile handsets in the first half of the year, revenue was HKD 735 million, up almost 1%. Then enterprise solutions revenue in the first half amounted to HKD 1.364 billion. It came down quite a lot by 15.2%. And then for fixed line services, in the first half, revenue was HKD 63 million, down 7.4% year-on-year.

Then if you look at our various business segments, for mobile services, we achieved our 5G coverage targets, and we accelerated deployment of 5.5G and cross-border IPX services. In starting 5.5G application services, CTM secured a 5.5G private network service project from the Macau Printing Bureau and launched inbound 5G SA roaming services, further enhancing its brand influence in the 5G roaming market.

In June 2025, we successfully completed the 3G network retirement. And as of the end of June, CTM has over 800,000 5G users registered in Macau. We know that in Macau population is rather small, and there are only a population of 400,000-odd permanent residents. There are some outside laborers. And so if you look at mobile user penetration rate, it's close to 100%. We strengthened strategic partnerships and expanded cross-border IPX landscape in the first half of the year. And then we accelerated the transition from 4G to 5G roaming with existing strategic partners to expand the international IPX roaming market. We enhanced partnerships with China's 3 major telecommunications operators to continuously deliver a one-stop cross-border network coverage service.

Now in terms of Internet services, from 10-gigabit city to cross-border connectivity, we built comprehensive digital infrastructure. We entered the F5.5G era and created a dual 5.5G 10-gigabit digital infrastructure. CTM took the lead in launching 5.5G optical broadband Internet service, successfully completed 50G PON deployment and continued building new high-speed networks, including 5.5G, 50G PON, Wi-Fi 7 and FTTR, laying a dual 5.5G 10-gigabit digital infrastructure for Macau.

As at the end of June 2025, our broadband business in Macau continued to maintain a leading market share with nearly half of the users having upgraded to high-speed service plans of 1 Gbps or above. And then in launching 10 Gbps Internet services and expanding enterprise service market, we launched 10 Gbps Internet services in Hong Kong and facilitated the implementation of Internet projects. We actively developed the enterprise service market and assisted a new partner in implementing its first Internet service contract in Chinese Mainland.

And then regarding international telecommunications services, we promoted technological upgrades and market coverage for DataMall. We unlocked new growth for DataMall and consolidated competitive advantage. So we enhanced DataMall platform with global eSIM integration and expanded 5G coverage to boost cross-border service differentiation. And we leveraged strategies through tourism data analytics and ramped up roaming package promotions. We launched dedicated IoT eSIM platform to support growth in the IoT and IoV sectors.

We're committed to service excellence and continuous competitiveness enhancement. We maintained a stable customer base and high-quality international voice services by understanding customer needs and enhancing market competitiveness.

Then regarding enterprise solutions, we enhanced enterprise solutions business competitiveness through integrated cloud network security, AI and platform-based strategies. We enhanced global PoPs construction for efficient cross-border connectivity. We built new trusted and innovative hybrid cloud platforms in Beijing and Guangzhou. We added a new network PoP in Yibin, Sichuan and completed backbone network bandwidth upgrades in Vietnam and Indonesia. And then we constructed an integrated cloud network security defense system. We developed a proprietary security information and event management platform, baseline inspection tools, AI data bank and workflow plus services.

Our security operations center service was recognized among the top 3 in the Hong Kong market by IT PRO Corporate SOC Survey. On implementing multiple AI and IT service projects, we promoted the integration of AI and data to empower Macau's industrial upgrade, providing AI customer service and big data solutions to multiple departments of the Macau government. We deployed the ServiceONE customer service platform for Singapore University of Social Sciences' IT managed services, supporting over 90 institutions, serving more than 30,000 end users.

And then on fixed line services, because residential and business network lines decreased, in the first half 2025, fixed line service revenue dropped to HKD 63 million in the first half of 2025 due to decrease in fixed residential and business lines. During first half of 2025, the group was granted 8 newly authorized patents and 1 software copyright because we are building an AI-powered ecosystem to maximize technology value. As at 30th June 2025, there are a total of 29 authorized patents and 64 software copyrights have been obtained.

We undertook to build the CITIC Hong Kong AI Tech Innovation Center. We launched 2 new products, AI Databank and Workflow+, to assist customers in their endeavors to automate business processes and add value to data elements. We further enhanced the group's Dr. Easy Smart Healthcare Platform tailored for application scenarios in the Macau's medical sector, introducing smart medical services, including online AI advice to support medical institutions to improve operational efficiency. So we offer one-stop smart medical experience.

On innovative AI industry solutions, CTM promoted the integration of AI large models, cloud, network, computing power and security, launching AI industry solutions for key sectors such as public administration, tourism, education and health care. On AI+ Cloud, Network, Security products upgrade were powered by large language models. The SmartCLOUD AI Assistant adopted a natural language Q&A interface, improving the customer service experience.

On AI-driven internal operations for quality and efficiency, we introduced with deepened application of digital and intelligent tools such as big data and AI to improve the effectiveness of channel and staff resource deployment.

In the first half 2025, growth was driven through innovation, and we won a number of global awards with our multiple technologies. For example, we won the third prize in the Open Gateway Global Use Case Innovation Challenge. And then, CTM also got BEYOND EXPO multiple awards. CPC's AI innovative product won Silver Medal at the 50th International Exhibition of Inventions Geneva. CPC won multiple global awards for its information security solutions.

In the first half 2025, we're committed to discharging corporate social responsibility. In terms of ESG ratings, we received A rating in ESG assessments by both WIND and Sino Securities Index. Besides, we got the Privacy-Friendly Award, Gold Award from the Office of the Privacy Commissioner For Personal Data in Hong Kong. And Hong Kong ICAC presented to us the Integrity in Business Charter. Employees retraining Board honored us with ERB Talent Enterprise Recognition Scheme, Talent Enterprise. CTM organized the 12th CTM Youth Growth Program and offered dedicated scholarships to 5 universities in Macau.

So that's all in my presentation. Thank you all.

Thank you, management, for your sharing. Now it is Q&A session. We will first invite questions from on-site investors. [Operator Instructions] Now after on-site investors ask questions, we will give the floor to online investors. So now let's take the first question.

I have a few questions. In the first half, the macro environment was very volatile. What measures have you taken to face up to the challenges? Besides, in the future, where do you think opportunities lie? In terms of strategies, which major projects or development segments will you focus more on?

Thank you. Thank you for your questions. I will ask Mr. Wu to take your questions.

Okay. In the first half, our overall operations and results were rather stable. If we look internally, revenue declined in 2 directions: enterprise solutions and also fixed line business. Now I think it is the same with your feelings. The economic environment is complex and volatile. So enterprise solution business decline is just natural and forgettable.

And then for fixed line business, I think you at home seldom use fixed line already, so this is a mainstream trend globally. But how could we still maintain operational stability? I think the management and our overall team put an effort in 4 areas. First, regarding traditional businesses, we enhanced our service quality to make sure that the related businesses can maintain steady development.

If we use mobile telecom as an example, in the first half of the year, we achieved some growth in Macau. We continue to be #1 in market share. For 5G users, there are already 800,000, so for customer coverage in Macau, we are almost 100%. So if we do not offer good service quality, it is difficult to achieve this result. Besides, I think that in terms of advanced equipment manufacturers and also mobile operators internationally, we enhanced our collaboration with them. And gradually, we have signed a number of strategic cooperation agreements.

In terms of broadband Internet service in -- with the effort of CTM, in the market, we are the first to introduce the F5.5G optic broadband Internet service, so 50 GPON 5.5G and Wi-Fi 7 technologies. We're the first to get into or introduce the 10-gigabit neighborhood. This is leading in the industry.

In terms of operators, recently, we worked with a renowned operator in Malaysia, and we formed the exclusive -- globally exclusive short messaging service or agency service. So I think this can give good guarantee for growth of our traditional businesses.

The third point is the use of new technologies. Now just now, I think you have heard a lot from Mr. Luan's presentation in relation to innovative businesses driven by AI. So we have a new strategy, and that is we use AI to power our cloud computing, network, telecommunications, information security development. So we introduced a number of products. They are not only limited to traditional services.

For traditional business, we have SmartCLOUD AI Q&A Assistant, and we have also Databank, Workflow+ and so on. Just now, Mr. Luan talked about innovative applications. For example, in Macau, we launched Dr. Easy. So I won't repeat the points. Anyway, in terms of use of new technologies, we are actually increasing our efforts.

The fourth point is about refined management. In Mr. Luan's presentation, he mentioned that, in the first half, by means of refined management and adjustment of our debt structure, our debt cost or financing cost has come down significantly. So with this effort, in the first half of the year, we achieved a steady results and performance.

Now for the future, I believe that there are 2 opportunities for our development. One is technology-driven development. As we all know, AI is developing very rapidly. So for ICT industry, there will be a big change that will come because of AI. This is a big challenge as well as an opportunity besides demand-driven business. So this is related to the technology drive.

Right now, we can feel that when AI develops in terms of computing power, network, information security, customers have more and more demands and needs. And if you look at our group's strategies, we'll continue to increase our R&D input in these areas. With AI empowerment, we hope that we will be a top-rate technology leading enterprise in the industry.

As Mr. Luan said, in Hong Kong, we have taken the -- we have built the CITIC Group AI Innovation Center. With that innovation center, we will make use of the natural advantages of Hong Kong, and we will work with renowned educational institutions in Hong Kong. So we will identify more innovation opportunities in AI. So that is from the perspective of business development.

There is another opportunity in the market. All along, our group is backed by the Mainland, and we are rooted in Hong Kong and Macau, and we are facing the world. In Mainland China, it is a huge market. There are still a lot of opportunities that are yet to develop -- yet to be developed. So we will increase our effort to develop the Mainland market. Besides in Hong Kong and Macau, we would expand our service scope. In Mr. Luan's presentation, he also said that for Digital Macau, actually, CTM has done a lot of development work, and this is going to be a new development direction in the future. For international markets, we need to enhance our competitiveness of enterprise Internet business.

So in -- all over the world, we will actually enhance our development capabilities and network hub to improve our market competitiveness. Southeast Asia is going to be a region with bigger growth potential, so it is going to be our focus for development. So all in all, in the future, there are both opportunities and challenges. I have confidence to work with the management team in new business development. Besides, we will achieve better results in reinforcing traditional businesses as well. Thank you.

Next question. Any other questions, please? If there is no further question on site, let's see whether there are questions on the phone. [Operator Instructions]

[Operator Instructions] So here, we have a question.

My question is in the first half of the year regarding CapEx, comparing with same period last year, there was a slight decrease. So I want to ask the management. For the whole year, how much will be CapEx? And which will be the areas of main CapEx spending? And then in the coming period, what will be the trend of CapEx, please?

Thank you for your question. I will ask Mr. Luan to take the question.

Okay. Thank you for your question. In my presentation slides, we have disclosed the relevant numbers. In the first half 2025, our CapEx was HKD 127 million. And comparing with same period last year, we are down by HKD 22 million. So in terms of the ratio, it is more or less the same numbers. In the first half of the year, our CapEx was mainly spent in the following areas: first, 5G investment -- 5G project investments; building of the group's data center and also upgrading of network system. So these are the key areas. If you talk about traditional telecom industry, you may have realized that every year, our CapEx is spent on these areas. But sometimes, when we have to build new data centers or when we need to invest into 5G, then the number will increase.

For building of data centers, after the building of data centers or 5G network is built, then the number will decrease about traditional businesses. So when there are projects, it will rise. When there is no project, then it will remain rather steady and stable.

Looking into the future, in our Chairman's speech as well as in the answer given just now, I think some relevant points are made. In our Chairman's remarks, he said that, in the future, we will strengthen our deployment, strategic deployment in critical areas. We will develop overseas emerging markets, and we'll do more in AI technology R&D. We'll invest more into that. So it is another area on top of the original areas of CapEx. So from this perspective, in the future, our CapEx, apart from building of 5G network and data centers and also data maintenance, apart from these original areas, there will be also AI investment. So we are doing more studies to examine that.

Let's take the next question. [ Yu Yiting ], please.

I have 3 questions to ask. First, about Singapore. I noticed that in the interim results announcement on Page 12, you said that revenue in Singapore from HKD 370 million, it came down to HKD 180 million in first half this year. So the decrease is more than 50%. Besides, I noticed that for enterprise solutions business, there is also significant decrease, so I guess there is some overlapping between these 2. So can you please give some explanations on that and also future outlook, please? That's my first question.

Then I have the second question to ask, too. Contract liability. Now I realize that on contracts signed at the end of last year, it is 150 million. It decreased to under 200 million in middle of this year. So is it true that in the future for enterprise solutions business, there will be even smaller value, smaller volume?

Then my third question is about the network retirement of 3G. Now when 5G penetration rate is moving towards 100%, as you said, 3G network retirement has been completed. So how much cost can be saved for the company in the future? What are the conditions for 5G network retirement? Do you have a timetable for that? These are my questions.

Thank you for your question. So you asked about 3 areas. I will ask Mr. Luan, Mr. Wong and Mr. Poon to answer the questions.

Okay. Thank you for your questions. I think you have read our financial statements in a detailed way. You realized or you took notes of our enterprise solution business. Last year numbers and numbers of the first half this year, there is quite a big change. In my presentation materials, I also made this point.

You also talked about the Singapore business. Your judgment is correct because in Singapore, our main business is regarded as enterprise solutions business. Why is it that the enterprise solutions business in Singapore has declined by quite a large extent? The main point is, last year, there were a few projects that were -- that completed the fundamental revenue. And this year, the major projects were already completed. So that's why there is some impact to the business results.

In Singapore and the whole Southeast Asia, to us, we think that it is a very attractive place. Given the current political environment, we believe that Singapore is still a place that is worth looking forward to. In the future, we will continue to increase investment in Singapore, and we will do a better job in business deployment and layout. Thank you.

Yes, about enterprise business, international telecom attaches much importance to enterprise business development. We kept on enhancing our overall ICT service capability. Now CITIC Group is saying that if you want to go abroad, please come to CITIC. And if you would like to come to China, please find CITIC. And we are -- this is our brand strategy. And as Mr. Wu said, we are building AI SoC. Our SoC in Hong Kong is already within top 3.

At the same time, we increased our network coverage capability. In Vietnam and Indonesia, we increased our backbone bandwidth. And in Europe, we enhanced our network capability as well. So overall speaking, in the future, we will keep on increasing investment into network, including the AI-empowered computing network integration capability in order to drive our development. Thank you.

Yes. Sorry, what's your second question?

It's about network retirement, 3G network retirement.

I see. Well, we have completed 3G network retirement successfully. On 5th of June, we successfully retired the network. Now for -- there are 3 3G operators, and I think we are the most successful 1 in this regard. At that time, we did a lot of work with all our customers so that the degree of their satisfaction is very high. Well, we have some elderly customers, and back then, we replaced 5G handsets for them with new SIM cards. So I believe that my team is really customer centric. So they deliver a very enhanced service to the customers.

And then you asked about the benefits of 3G network retirement. Well, the most important point is in relation to the radio spectrum efficiency. So efficiency is the best. In the past, there are 3G, 4G, 5G using more or less the same bands or spectrum, but then they were cut off rigidly. And so now the phased out 3G operators or the spectrum can be refarmed. And so in this way, our spectrum efficiency can be higher. Then when we make plans for 4G and 5G, for 4G, some bands can be left empty for 5G, and so we can use them in a better way with 5G.

In terms of hardware and system expansion in the future, I think we will see better cost effectiveness. Of course, the spectrum is just like that anyway, and it's somewhat fixed. But if we can enhance the utilization and efficiency, then this is something we can do.

Regarding 4G, I think this is too early to comment on that because many mobile licenses or mobile networks, well, they are externally oriented. We also have outgoing and inbound roaming. So -- well, Hong Kong is actually slower. Macau can go faster. If I phase out 4G, then when people outside come in, then there will be some impact. So we have to consider. I believe that there will still be some time for 4G to be used, but of course, gradually, we will be a bit more aggressive to migrate local customers to 5G because in terms of experience and efficiency and effectiveness and also benefits or revenue, there will be potential advantage.

So questions from shareholders. On 5th June, there was successful 3G network retirement. Back then, there were 3 3G operators. So our company is successful in this regard, and customers are very happy with this work. So we have helped elderly customers to replace their handsets and SIM card. So after network retirement, then we can make better use of the radio spectrum. So efficiency is higher.

And then regarding 4G network retirement, it is premature to comment on that right now because still there are customers using 4G at present. Besides, there are other people in the market still using 4G. So in terms of roaming, we still need the support from 4G. So basically, that's the Mandarin translation of the answer.

All right. Are there further questions online? No further questions online. So any questions from the floor here? This side, please.

My question is this. I believe many investors think that investment value into your company is related to your sound business foundation. So what is the biggest uncertainty and challenge for your company's business? Last year, there were some challenges and ups and downs. So management, can you share with us your views, especially about the uncertainty and also challenges in competition?

Yes, please, Mr. Poon (sic) [ Mr. Wu ]?

If you look at our key business segments right now, first of all, we talked about enterprise solutions business just now, and Mr. Wong just gave some explanations. And in relation to enterprise solutions, we will increase investment into AI so as to enhance service capability with enterprises.

So we are doing this. Our peers are also doing the same thing. It is up to the customers to choose eventually. So on this point, I think it is like rowing the boat with opposite direction of waves or currents. If we don't make progress, then we will go backward. So there are still a lot of uncertainties. This is a red ocean competition.

Regarding mobile telecommunications or mobile service, we think that CTM all along had very good word of mouth in the Macau market. And at present, the biggest uncertainty perhaps is that we want to better serve the society and we want to pay back to society. So do we need to lower fees to a certain extent? So there will be some uncertainty here, but CTM has got some ideas. We want to offer better services. And so customers will feel more satisfied. Then in this way, we can maintain stable fee paying rate or ratio from our customers.

When it comes to fixed line, as I said earlier, this is a global downward trend. So this is quite certain. There is no uncertainty in this area. I don't -- I won't repeat the points made at the beginning.

And then in relation to our major business directions, let me see. International telecommunication business, I think there will be some uncertainties. So among global operators, if you talk about interconnection, we offer related service. Again, this is a red ocean competition. The critical point is the service quality that we offer to other operators. So do they accept or recognize our service quality? I mentioned that in Malaysia, there is a renowned operator. So we are working with them on the only short text messaging agency business globally. So there is challenge. There is uncertainty and competition, but there are also opportunities. We will continue to put an effort to improve the results.

In terms of Internet service, in the IDC direction, we are giving some considerations. Uncertainty comes from whether we want to increase investment in the area. So in the future, we'll look at market circumstances to make further judgment. If our judgment is such that this area is full of opportunities, then we'll increase investment. But still, we need to do more assessment. So this is uncertainty in investment directions. I don't know whether you are happy with my answer. Thank you.

Any other questions on site? So you have no further questions. Then, we will conclude Q&A session here. Thank you for your participation. We will conclude the investors presentation session here. Thank you for coming, and thank you for your support. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]