In 2023, our operating revenue reached RMB1,009.3 billion, up by 7.7% year-on-year, of which revenue from telecommunications services was RMB863.5 billion, up by 6.3% year-on-year. We furthered value-oriented operations by leveraging our business scale, drove the comprehensive and integrated development of our CHBN markets, and achieved solid growth in revenue.

We furthered the integrated development of data access, applications and customer benefits, expedited customers’ migration to 5G, continued to boost 5G customer penetration rate, and persisted in the optimization of our revenue structure. Our revenue from wireless data traffic services for the year was RMB394.8 billion, down by 3.1 percentage points when expressed as a percentage of revenue from telecommunications services.

Our broadband business continued to expand as we enhanced the quality and coverage of our broadband services, and as we accelerated the transformation and upgrade of our “Home” business towards HDICT integrated solutions. Our revenue from wireline broadband services continued to make up a growing portion of our revenue from year to year and reached RMB118.8 billion, up by 13.1% year-on-year and by 0.8 percentage points when expressed as a percentage of revenue from telecommunications services.

Benefiting from rapid growth across DICT and other businesses in the “Business” market, “Mobile HD” and other value-added services in the “Home” market, as well as “MIGU Video” and other businesses in the “New” market, our revenue from applications and information services for the year reached RMB221.6 billion, up by 21.5% year-on-year, and contributed 4.8 percentage points of the increase in revenue from telecommunications services. It maintained a solid growth momentum and contributed to the further optimization of our overall revenue structure.

Driven by sales of handsets and other terminals, our revenue from sales of products and others was RMB145.8 billion, up by 16.4% year-on-year. Our terminal sales business mainly serves to support the expansion of our principal telecommunications businesses, and hence its contribution to our profit is relatively low.

We actively promoted our low-cost, high-efficiency operating model, stepped up measures to reduce costs and enhance efficiency, strengthened our “All Members, All Elements, All Processes” cost control practices, and continued to improve and refine our management. Meanwhile, we constantly optimized the structure of resource deployment, and endeavoured to strike a balance between short-term operating results and long-term development, in order to maintain our sound profitability.

In 2023, our operating expenses were RMB875.0 billion, up by 8.3% year-on-year. Our operating expenses represented 86.7% of our operating revenue.

Network operation and support expenses were RMB268.9 billion, up by 5.8% year-on-year and representing 26.6% of operating revenue. Of which, maintenance, operation support and related expenses increased by 8.9% year-on-year and reached RMB175.6 billion, primarily driven by rapid commissioning of new infrastructure projects and increased transformation-related investments.

Depreciation and amortization were RMB207.1 billion, up by 3.5% year-on-year and representing 20.5% of operating revenue. This was primarily driven by an increase in depreciation of fixed assets, as we accelerated network upgrades and business transformation and maintained substantial capital expenditure.

Employee benefit and related expenses were RMB144.3 billion, up by 10.9% year-on-year and representing 14.3% of operating revenue. We continued to refine and optimize our workforce structure, and stepped up incentives for talents in technological innovation, to provide solid talent support for our reform, innovation, transformation and development.

Selling expenses were RMB52.5 billion, up by 5.8% year-on-year and representing 5.2% of operating revenue, down by 0.1 percentage points year-on-year. The increase in selling expenses was primarily driven by increases in channel operation support services and business development efforts with small and medium enterprises.

Cost of products sold was RMB142.8 billion, up by 16.3% year-on-year and representing 14.1% of operating revenue. The increase was primarily driven by the growth in revenue from sales of products.

Other operating expenses were RMB59.3 billion, up by 15.4% year-on-year and representing 5.9% of operating revenue. The increase was primarily driven by expected credit losses in accounts receivable and increases in international roaming expenses.

In 2023, we continued to improve the quality and efficiency of our operations, enhanced our value to shareholders, and maintained an industry-leading level of profitability. Profit from operations was RMB134.3 billion, up by 4.1% year-on-year. EBITDA was RMB341.5 billion, up by 3.7% year-on-year, and EBITDA margin was 33.8%, down by 1.3 percentage points year-on-year. Benefiting from healthy growth in revenue and better cost control, profit attributable to equity shareholders was RMB131.8 billion in 2023, up by 5.0% year-on-year. The margin of profit attributable to equity shareholders was 13.1%.

Our financial position continued to remain robust. As at the end of 2023, total assets and total liabilities were RMB1,992.7 billion and RMB646.7 billion, respectively. The liabilities to assets ratio was 32.5%.

We consistently and firmly adhered to our prudent financial risk management policies and maintained sound repayment capabilities. The effective interest coverage multiple was 41 times.

We consistently and firmly adhered to our sound and prudent financial policies and stringent fund management systems, and strived to maintain a healthy cash flow and ensure the safety and integrity of our funds through our highly centralized management of investing and financing activities. Meanwhile, we continued to reinforce our centralized fund management efforts and made appropriate allocations of our funds, thereby fully leveraging our fund scale efficiency.

In 2023, our cash flow remained healthy. Net cash generated from operating activities was RMB303.8 billion, up by 8.2% year-on-year. Net cash used in investing activities was RMB205.7 billion, down by 13.6% year-on-year. Net cash used in financing activities was RMB123.8 billion, up by 2.8% year-on-year. Free cash flow was RMB123.5 billion, up by 29.2% year-on-year. As at the end of 2023, our total cash and bank balances were RMB234.2 billion, of which 91.6%, 2.4% and 5.8% were denominated in Renminbi, U.S. dollars and Hong Kong dollars, respectively. Our robust fund management and healthy cash flow provided a solid foundation for our sustainable and healthy development.

Currently, the Company’s corporate credit ratings are equivalent to China’s sovereign credit ratings, namely, A+/Outlook Stable from Standard & Poor’s and A1/Outlook Negative from Moody’s. These ratings reflect that our sound financial strength, favourable business potential and solid financial management are highly recognized by the market.