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The following is the interim results of China Unicom (Hong Kong) limited (“China Unicom” or “Company” in brief) in 2011 (SEHK code: 0762, NYSE: CHU).

The following is the interim results of China Unicom (Hong Kong) limited (“China Unicom” or “Company” in brief) in 2011 (SEHK code: 0762, NYSE: CHU).

In the first half of 2011, the income continues to increase, and the structure and network capacity continue to be optimized with improving profits, showing a rapid and sound development momentum.

In the first half, the Company has realized 101.385 billion yuan in operation revenue (exclude the deferred revenue from the initial installation fees of fixed lines unless otherwise specified), an increase of 22.9% year on year, of which the service revenue is 90.350 billion yuan, an increase of 13.0%. EBITDA is 32.017 billion yuan, an increase of 4.2%; the net profit is 2.637 billion yuan, a decrease of 5.5%. The profitability is improving on a quarterly basis. The basic earnings per share are 0.113 yuan (include the deferred revenue from the initial installation fees of fixed lines).

In the first half of this year, the Company has realized 34.352 billion yuan RMB in cash flow, an increase of 10.5% year on year; the capital expenditure is25.968 billion yuan RMB, a decrease of 22.1% year on year; by June 30, 2011, the debt capital ratio is 32.0%, and the net debt capital ratio is 24.6%, showing a stable debt/capital structure.

In the first half, the mobile business continues to grow and the fixed business remains stable with 2.9% higher than other industries in terms of growth rate. Our market share continues to increase; the income of mobile business has accounted for 54.2% of the total service revenue, an increase of 5.3% year on year.

In the first half, the Company promotes the development of 3G both in quantity and quality and strengthens the performance of 2G. By June 30, 2011, the total number of mobile users of the Company has reached 181.61 million, an increase of 15.7% year on year, of which the 3G penetration is 13.2% The integrated ARPU of mobile users has reached 46.8 yuan, an increase of 9.3%; the service income has reached 48.998 billion yuan, an increase of 25.3%, of which the income of 3G service has accounted for 26.9%.

In the first half, the net increase of 3G users is 9.885 million, bringing the total to 23.945 million; the user ARPU is 117.5 yuan, a decrease of 11.7%; the service income is 13.180 billion yuan, an increase of 234% with average quarterly increase of 31.6%. The net increase of users of GSM is 4.299 million, bringing the total to 157.665 million; the user ARPU is 38.3 yuan, a decrease of 3.8%; the service income is 35.818 billion yuan, an increase of 1.9%.

In the first half, the net increase of broadband users is 5.098 million, bringing the total to 52.322 million, an increase of 19.6% year on year; the income of broadband is 17.172 billion yuan, an increase of 18.7%. The income of fixed business is 40.903 billion yuan, an increase of 2.5% year on year.

In the second half, the Company will seize the market opportunity to speed up development, ensure the rapid revenue growth, and improve our profitability. The main operation measures of the second half include:

Develop key businesses. Based on terminals, subsidies, key industry applications, marketing, and incentive policies, promote the scale of 3G businesses; Push forward the rapid growth of broadband; strengthen the combined marketing of integrated products; and keep the stability of fixed businesses. We shall realize new breakthroughs in key markets; expand key industry applications and the scale of group customers; achieve breakthroughs in youth market for 3G and other key businesses; improve the penetration of integrated businesses in rural markets; give full play of the advantages of international products and services; increase the share in the international market. We shall strengthen the network capacity and the operation support; continue to push forward the building of 3G networks; optimize the coverage of 2G networks; speed up indoor coverage and WLAN construction; upgrade the network speed. Push forward the management reform in key areas. Actively promote the business transformation based on grid marketing and self-owned business halls; constantly optimize the management mechanism and business procedures; carry out complete cost management; strengthen examination and wage distribution to stimulate the vitality of employees.

Note: except the earnings per share, all the other incomes and profits exclude the impact of the deferred revenue from the initial installation fees of fixed lines (15 million yuan in the first half of 2011 and 130 million for the same period of last year).

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