China Unicom Pivots to AI, Lifts Payout Ratio to 61.3%

China Unicom Earmarks Over 35% of 2026 Capex for AI

China Unicom is reallocating significant capital towards artificial intelligence and cloud infrastructure, signaling a major strategic pivot. The company projects its capital expenditure for 2026 will be approximately RMB 50 billion, a decrease from the RMB 54.2 billion spent in 2025. Crucially, over 35% of this future spending is designated for computing power. This move marks a decisive shift from traditional telecom investments toward high-growth digital services. The company is also improving capital efficiency, with its capital expenditure as a percentage of service revenue declining to 16% in 2025.

Dividend Payout Rises to 61.3% Amid Strategic Shift

Despite the substantial investment in new technologies, China Unicom is strengthening its commitment to shareholder returns. The company's board proposed a final dividend of RMB 0.1329 per share, bringing the total for the year to RMB 0.417 per share—a 3.1% increase from the prior year. This raises the full-year dividend payout ratio to 61.3%. The enhanced shareholder return policy is supported by steady 2025 performance, which saw operating revenue reach RMB 392.2 billion and pre-tax profit hit RMB 25.5 billion. This dual strategy of investing in future growth while boosting dividends suggests management's confidence in its long-term financial health and operational discipline.

New Partnerships Underscore Digital Ecosystem Push

China Unicom's strategy extends beyond internal capital investment, incorporating partnerships to build out its digital capabilities. Reinforcing this ecosystem approach, recent disclosures from customer engagement software provider Aurora Mobile (NASDAQ: JG) named China Unicom as a new key customer for its global EngageLab platform. This indicates that as China Unicom builds its own computing infrastructure, it is also actively collaborating with specialized SaaS providers to accelerate its service offerings and improve customer engagement, adopting a multi-faceted approach to its digital transformation.