Form 6-K
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the Month of April 2015

Commission File Number 1-15028

 

 

China Unicom (Hong Kong) Limited

(Exact Name of Registrant as Specified in Its Charter)

 

 

75/F, The Center,

99 Queen’s Road Central, Hong Kong

(Address of principal executive offices)

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F  x            Form 40-F  ¨

(Indicate by check mark if the registrant is submitting the Form 6-K on paper as permitted by Regulation S-T

Rule 101(b)(1):  ¨.)

(Indicate by check mark if the registrant is submitting the Form 6-K on paper as permitted by Regulation S-T

Rule 101(b)(7):   ¨.)

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes   ¨            No  x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-            .)

 

 

 


Table of Contents

TABLE OF CONTENTS

 

EXHIBITS

FORWARD-LOOKING STATEMENTS

SIGNATURES


Table of Contents

EXHIBITS

 

Exhibit

Number

   
1   Announcement in relation to the unaudited condensed consolidated financial results of China Unicom (Hong Kong) Limited for the three months ended March 31, 2015.

FORWARD-LOOKING STATEMENTS

This announcement contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may include, without limitation, statements relating to (i) the Company’s plans and strategies and the ability to successfully execute these plans and strategies, including those in connection with mergers and acquisitions and capital expenditures (ii) the Company’s plans for network expansion, including those in connection with the build-out of mobile broadband services, which consisted of third generation mobile telecommunications, or 3G, and fourth generation mobile telecommunications, or 4G, digital cellular businesses, and network infrastructures; (iii) the Company’s competitive position, including the ability to upgrade and expand existing networks and increase network efficiency, to improve existing services and offer new services, to develop new technological applications and to leverage the Company’s position as an integrated telecommunications operator and expand into new businesses and markets; (iv) the Company’s future business condition, including future financial results, cash flows, financing plans and dividends; (v) the future growth of market demand of, and opportunities for, the Company’s new and existing products and services, in particular, mobile broadband services; and (vi) future regulatory and other developments in the PRC telecommunications industry.

The words “anticipate”, “believe”, “could”, “estimate”, “intend”, “may”, “seek”, “will” and similar expressions, as they relate to the Company, are intended to identify certain of these forward-looking statements. The Company does not intend to update any of these forward-looking statements and are under no obligation to do so.

The forward-looking statements contained in this announcement are, by their nature, subject to significant risks and uncertainties. In addition, these forward-looking statements reflect the Company’s current views with respect to future events and are not a guarantee of the Company’s future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of a number of factors, including, without limitation:

 

  changes in the regulatory regime and policies for the PRC telecommunications industry, including, without limitation, changes in the regulatory policies of the Ministry of Industry and Information Technology (which has assumed the regulatory functions of the former Ministry of Information Industry), the State-owned Assets Supervision and Administration Commission, and other relevant government authorities of the PRC;


Table of Contents
  changes in the PRC telecommunications industry resulting from the issuance of licenses for telecommunications services by the central government of the PRC;

 

  changes in telecommunications and related technologies and applications based on such technologies;

 

  the level of demand for telecommunications services, in particular, mobile broadband services;

 

  competitive forces from more liberalized markets and the Company’s ability to retain market share in the face of competition from existing telecommunications companies and potential new market entrants;

 

  effects of restructuring and integration (if any) in the PRC telecommunications industry and any cooperation among the PRC telecommunications operators;

 

  the availability, terms and deployment of capital and the impact of regulatory and competitive developments on capital outlays;

 

  changes in the assumptions upon which the Company has prepared its projected financial information and capital expenditure plans;

 

  effects of the imposition of and changes in value-added tax relating to the PRC telecommunications business;

 

  effects of any anti-monopoly investigation by the National Development and Reform Commission of the PRC relating to the price charged for Internet dedicated leased line access service provided by the Company to Internet service providers; and

 

  changes in the political, economic, legal, tax and social conditions in the PRC, including the PRC government’s policies and initiatives with respect to foreign exchange policies, foreign investment activities and policies, entry by foreign companies into the PRC telecommunications market and structural changes in the PRC telecommunications industry.

Please also see the “Risk Factors” section of the Company’s latest Annual Report on Form 20-F, as filed with the U.S. Securities and Exchange Commission.


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CHINA UNICOM (HONG KONG) LIMITED

                             (Registrant)

Date: April 24, 2015

 

            By:

 

/s/ Chang Xiaobing

            Name: Chang Xiaobing
            Title: Chairman and Chief Executive Officer


Table of Contents

Exhibit 1

Hong Kong Exchange and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

 

LOGO

(incorporated in Hong Kong with limited liability)

(Stock Code: 0762)

ANNOUNCEMENT

The Board of the Company is pleased to announce the unaudited condensed consolidated results of the Group for the three months ended 31 March 2015.

GROUP RESULTS

China Unicom (Hong Kong) Limited (the “Company”) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (the “Group”) for the three months ended 31 March 2015.

 

1


Table of Contents

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(All amounts in Renminbi (“RMB”) millions)

 

     31 March
2015
    31 December
2014
 

ASSETS

    

Non-current assets

    

Property, plant and equipment

     425,193        438,321   

Lease prepayments

     8,777        9,211   

Goodwill

     2,771        2,771   

Interest in associates

     2,855        3,037   

Interest in joint venture

     1,020        —     

Deferred income tax assets

     7,126        6,215   

Financial assets at fair value through other comprehensive income

     5,860        5,902   

Other assets

     24,649        23,041   
  

 

 

   

 

 

 
  478,251      488,498   
  

 

 

   

 

 

 

Current assets

Inventories and consumables

  6,018      4,378   

Accounts receivable

  17,628      14,671   

Prepayments and other current assets

  10,870      10,029   

Amounts due from related parties

  8      12   

Amounts due from domestic carriers

  2,412      2,120   

Short-term bank deposits

  55      56   

Cash and cash equivalents

  25,004      25,308   
  

 

 

   

 

 

 
  61,995      56,574   
  

 

 

   

 

 

 

Total assets

  540,246      545,072   
  

 

 

   

 

 

 

EQUITY

Equity attributable to equity shareholders of the Company

Share capital

  179,102      179,101   

Other reserves

  (19,549   (19,482

Retained profits

– Proposed 2014 final dividend

  4,789      4,789   

– Others

  66,326      63,133   
  

 

 

   

 

 

 

Total equity

  230,668      227,541   
  

 

 

   

 

 

 

 

2


Table of Contents
     31 March
2015
    31 December
2014
 

LIABILITIES

    

Non-current liabilities

    

Long-term bank loans

     400        420   

Promissory notes

     21,607        21,460   

Corporate bonds

     2,000        2,000   

Deferred income tax liabilities

     17        17   

Deferred revenue

     1,441        1,497   

Other obligations

     195        217   
  

 

 

   

 

 

 
  25,660      25,611   
  

 

 

   

 

 

 

Current liabilities

Short-term bank loans

  83,259      91,503   

Commercial papers

  19,954      9,979   

Current portion of long-term bank loans

  44      45   

Convertible bonds

  11,262      11,167   

Accounts payable and accrued liabilities

  110,642      120,371   

Taxes payable

  2,370      1,466   

Amounts due to ultimate holding company

  1,573      1,622   

Amounts due to related parties

  3,278      3,542   

Amounts due to domestic carriers

  1,652      1,402   

Dividend payable

  771      771   

Current portion of deferred revenue

  445      462   

Current portion of other obligations

  2,665      2,698   

Advances from customers

  46,003      46,892   
  

 

 

   

 

 

 
  283,918      291,920   
  

 

 

   

 

 

 

Total liabilities

  309,578      317,531   
  

 

 

   

 

 

 

Total equity and liabilities

  540,246      545,072   
  

 

 

   

 

 

 

Net current liabilities

  (221,923   (235,346
  

 

 

   

 

 

 

Total assets less current liabilities

  256,328      253,152   
  

 

 

   

 

 

 

 

3


Table of Contents

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME

(All amounts in RMB millions, except per share data)

 

            Three months ended 31 March  
     Note      2015     2014  

Revenue

        74,303        76,471   

Interconnection charges

        (3,185     (3,717

Depreciation and amortisation

        (19,361     (18,216

Network, operation and support expenses

        (9,701     (8,994

Employee benefit expenses

        (8,825     (8,261

Costs of telecommunications products sold

        (14,360     (14,538

Other operating expenses

        (12,885     (16,963

Finance costs

        (1,634     (1,628

Interest income

        70        77   

Share of loss of associates

        (181     —     

Other income – net

        140        161   
     

 

 

   

 

 

 

Profit before income tax

  4,381      4,392   

Income tax expenses

  (1,217   (1,090
     

 

 

   

 

 

 

Profit for the period

  3,164      3,302   
     

 

 

   

 

 

 

Profit attributable to:

Equity shareholders of the Company

  3,164      3,302   
     

 

 

   

 

 

 

Earnings per share for profit attributable to equity shareholders of the Company during the period:

Basic earnings per share (RMB)

  3      0.13      0.14   
     

 

 

   

 

 

 

Diluted earnings per share (RMB)

  3      0.13      0.14   
     

 

 

   

 

 

 

 

4


Table of Contents

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(All amounts in RMB millions)

 

     Three months ended
31 March
 
     2015     2014  

Profit for the period

     3,164        3,302   
  

 

 

   

 

 

 

Other comprehensive income

Items that will not be reclassified to statement of income:

Changes in fair value of financial assets through other comprehensive income

  (42   (159

Tax effect on changes in fair value of financial assets through other comprehensive income

  10      40   
  

 

 

   

 

 

 

Changes in fair value of financial assets through other comprehensive income, net of tax

  (32   (119

Remeasurement of net defined benefit liability, net of tax

  1      1   
  

 

 

   

 

 

 
  (31   (118
  

 

 

   

 

 

 

Items that may be reclassified to statement of income:

Currency translation differences

  (7   3   
  

 

 

   

 

 

 

Other comprehensive income for the period, net of tax

  (38   (115
  

 

 

   

 

 

 

Total comprehensive income for the period

  3,126      3,187   
  

 

 

   

 

 

 

Total comprehensive income attributable to:

Equity shareholders of the Company

  3,126      3,187   
  

 

 

   

 

 

 

 

5


Table of Contents

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(All amounts in RMB millions)

 

     Three months ended
31 March
 
     2015     2014  

Cash flows from operating activities

    

Cash generated from operations

     19,680        18,980   

Income tax paid

     (634     (778
  

 

 

   

 

 

 

Net cash inflow from operating activities

  19,046      18,202   
  

 

 

   

 

 

 

Cash flows from investing activities

Purchase of property, plant and equipment

  (20,202   (14,852

Other cash flows arising from investing activities

  (719   (217
  

 

 

   

 

 

 

Net cash outflow from investing activities

  (20,921   (15,069
  

 

 

   

 

 

 

Cash flows from financing activities

Net cash inflow/(outflow) from financing activities

  1,572      (2,168
  

 

 

   

 

 

 

Net (decrease)/increase in cash and cash equivalents

  (303   965   

Cash and cash equivalents, beginning of period

  25,308      21,506   

Effect of changes in foreign exchange rate

  (1   (8
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

  25,004      22,463   
  

 

 

   

 

 

 

Analysis of the balances of cash and cash equivalents:

Cash balances

  4      4   

Bank balances

  25,000      22,459   
  

 

 

   

 

 

 
  25,004      22,463   
  

 

 

   

 

 

 

 

6


Table of Contents

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION FOR THE THREE MONTHS ENDED 31 MARCH 2015

 

1. GENERAL INFORMATION

China Unicom (Hong Kong) Limited (the “Company”) was incorporated as a limited liability company in the Hong Kong Special Administrative Region (“Hong Kong”), the People’s Republic of China (the “PRC”) on 8 February 2000. The principal activity of the Company is investment holding. The principal activities of the Company’s subsidiaries are the provision of cellular and fixed-line voice and related value-added services, broadband and other Internet-related services, information communications technology services, and business and data communications services in the PRC. The GSM cellular voice, WCDMA cellular voice, TD-LTE cellular voice, LTE FDD cellular voice and related value-added services are referred to as the “mobile business”. The services aforementioned other than the mobile business are hereinafter collectively referred to as the “fixed-line business”. The Company and its subsidiaries are hereinafter referred to as the “Group”.

 

2. BASIS OF PREPARATION

Going Concern Assumption

As at 31 March 2015, current liabilities of the Group exceeded current assets by approximately RMB221.9 billion (31 December 2014: approximately RMB235.3 billion). Given the current global economic conditions and the Group’s expected capital expenditures in the foreseeable future, management has comprehensively considered the Group’s available sources of funds as follows:

 

    The Group’s continuous net cash inflows from operating activities;

•    Approximately RMB355.9 billion of revolving banking facilities and registered quota of commercial papers, promissory notes and corporate bonds, of which approximately RMB227.4 billion was unutilised as at 31 March 2015; and

 

    Other available sources of financing from domestic banks and other financial institutions given the Group’s credit history.

In addition, the Group believes that it has ability to raise funds from the short, medium and long-term perspectives and maintain reasonable financing costs through appropriate financing portfolio.

Based on the above considerations, the Board of Directors is of the opinion that the Group has sufficient funds to meet its working capital requirements and debt obligations. As a result, the unaudited condensed consolidated financial information of the Group for the three months ended 31 March 2015 has been prepared on a going concern basis.

 

7


Table of Contents
3. EARNINGS PER SHARE

Basic earnings per share for the three months ended 31 March 2015 and 2014 were computed by dividing the profit attributable to equity shareholders of the Company by the weighted average number of ordinary shares outstanding during the periods.

Diluted earnings per share for the three months ended 31 March 2015 and 2014 were computed by dividing the profit attributable to equity shareholders of the Company by the weighted average number of ordinary shares outstanding during the periods, after adjusting for the effects of dilutive potential ordinary shares. All dilutive potential ordinary shares for the three months ended 31 March 2015 arose from the convertible bonds, while all dilutive potential ordinary shares for the three months ended 31 March 2014 arose from (i) share options granted under the amended Share Option Scheme; (ii) share options granted under the amended Special Purpose Share Option Scheme and (iii) the convertible bonds.

The following table sets forth the computation of basic and diluted earnings per share:

 

     Three months
ended

31 March
 
     2015      2014  

Numerator (in RMB millions):

     

Profit attributable to equity shareholders of the Company used in computing basic earnings per share

     3,164         3,302   

Imputed finance cost on the liability component of convertible bonds

     52         52   
  

 

 

    

 

 

 

Profit attributable to equity shareholders of the Company used in computing diluted earnings per share

  3,216      3,354   
  

 

 

    

 

 

 

Denominator (in millions):

Weighted average number of ordinary shares outstanding used in computing basic earnings per share

  23,947      23,784   

Dilutive equivalent shares arising from share options

  —        60   

Dilutive equivalent shares arising from convertible bonds

  948      929   
  

 

 

    

 

 

 

Shares used in computing diluted earnings per share

  24,895      24,773   
  

 

 

    

 

 

 

Basic earnings per share (in RMB)

  0.13      0.14   
  

 

 

    

 

 

 

Diluted earnings per share (in RMB)

  0.13      0.14   
  

 

 

    

 

 

 

 

8


Table of Contents

OTHER INFORMATION

The supplementary financial indicators are summarised as follow (All amounts in RMB millions):

 

     Three months ended
31 March
 
     2015     2014  

Total service revenue from mobile business

     36,619        40,675   

Total service revenue from fixed-line business

     23,163        22,917   

Other service revenue

     469        205   
  

 

 

   

 

 

 

Total service revenue

  60,251      63,797   

Sales of telecommunications products

  14,052      12,674   
  

 

 

   

 

 

 

Revenue

  74,303      76,471   
  

 

 

   

 

 

 

Profit for the period

  3,164      3,302   
  

 

 

   

 

 

 

EBITDA

  25,346      23,999   
  

 

 

   

 

 

 

EBITDA as a percentage of service revenue

  42.1   37.6
  

 

 

   

 

 

 

For the first quarter of 2015, service revenue was RMB60.25 billion, down by 5.6% as compared to the same period of last year. The decrease in service revenue was mainly attributed to the impact of output value-added tax (“VAT”) which arose from the replacement of business tax with value-added tax1 (“VAT Reform”) and the transformation of sales and marketing mode etc., but revenue structure continued to optimise.

For the first quarter of 2015, profit for the period was RMB3.16 billion, down by 4.2% as compared to the same period of last year as a result of VAT Reform and other factors. EBITDA2 was RMB25.35 billion for the first quarter of 2015, up by 5.6% as compared to the same period of last year. EBIDTA as a percentage of service revenue was 42.1% for the first quarter of 2015, up by 4.5 percentage points compared to the same period of last year.

 

9


Table of Contents
Note 1: The replacement of business tax with VAT implemented nationwide for the telecommunications industry from 1 June 2014.
Note 2: EBITDA represents profit for the period before finance costs, interest income, other income-net, income tax, depreciation and amortisation. As the telecommunications business is a capital intensive industry, capital expenditures and finance costs may have a significant impact on the net profit of the companies with similar operating results. Therefore, the Company believes that EBITDA may be helpful in analysing the operating results of a telecommunications service operator like our Group.

CAUTION STATEMENT

The Board wishes to remind investors that the unaudited financial information and other information for the three months ended 31 March 2015 are based on the Group’s internal records and management accounts and have not been reviewed or audited by the auditors. The financial information for the three months ended 31 March 2014 are extracted from the unaudited financial information of the Group; and the financial information for the year ended 31 December 2014 are extracted from the audited financial statements as contained in the 2014 Annual Report. Investors are cautioned not to unduly rely on financial data, statistics and comparison for the three months ended 31 March 2015. In the meantime, investors are advised to exercise caution in dealing in the shares of the Company.

By order of the Board

China Unicom (Hong Kong) Limited

Chu Ka Yee

Company Secretary

Hong Kong, 23 April 2015

As at the date of this announcement, the board of directors of the Company comprises:

 

Executive directors: Chang Xiaobing, Lu Yimin, Li Fushen and Zhang Junan
Non-executive director: Cesareo Alierta Izuel
Independent non-executive directors:

Cheung Wing Lam Linus, Wong Wai Ming, Chung Shui Ming Timpson,

Cai Hongbin and Law Fan Chiu Fun Fanny

 

10