In 2021, our operating revenue reached RMB848.3 billion, up by 10.4% compared to the previous year, of which revenue from telecommunications services was RMB751.4 billion, up by 8.0% compared to the previous year. We further promoted scale-based and value-oriented operations, fostered the all-round and integrated development of CHBN markets and achieved solid growth in revenue.

Our revenue from voice services continued to decline, with the annual revenue from voice services being RMB76.2 billion, down by 3.3% compared to the previous year. Total voice usage decreased by 1.2% compared to the previous year.

Our revenue from SMS & MMS services was RMB31.1 billion, up by 5.5% compared to the previous year, mainly because we further advanced value-oriented operations of our SMS services, thereby achieving stable growth in revenue.

We persisted in advancing the integrated development of “data access, applications and customer benefits”. The annual revenue from wireless data traffic stepped up its growth momentum and reached RMB392.9 billion, up by 1.9% compared to the previous year.

Our broadband business continued to expand as we enhanced the quality and coverage of our high-speed broadband services and rolled out broadband speed enhancement and integrated marketing initiatives. Revenue from wireline broadband services reached RMB94.2 billion, up by 16.6% compared to the previous year, and continued to maintain a strong growth, and its relative contribution to the revenue from telecommunications services increased year-on-year.

Benefiting from rapid growth across DICT and other corporate businesses, “Mobaihe” and other family value-added services, as well as “MIGU Video” and other new businesses, our annual revenue from applications and information services reached RMB137.0 billion, up by 35.6% compared to the previous year, and contributed 5.2 percentage points of the increase in revenue from telecommunications services. It maintained a strong growth momentum and contributed to the further optimization of our overall revenue structure.

Driven by handsets, ICT equipment and other smart devices, revenue from the sales of products and others was RMB96.8 billion, up by 33.8% compared to the previous year. Our device sales business mainly serves to facilitate the expansion of core telecommunications services, and hence its contribution to our profit is relatively low.

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

In 2021, our operating expenses were RMB730.3 billion, up by 11.4% compared to the previous year. Operating expenses represented 86.1% of operating revenue.

Network operation and support expenses were RMB225.0 billion, up by 9.0% compared to the previous year and representing 26.5% of operating revenue. Among these, maintenance, operation support and related expenses saw a 16.4% increase compared to the previous year and reached RMB137.1 billion, mainly affected by increased investments in development of smart home business, DICT product innovation and other efforts in transformation. Meanwhile, through initiatives such as controlling electricity cost, implementing a variety of cost-reduction and efficiency-enhancement measures and promoting application of innovative electricity-saving technologies, power and utilities expenses decreased by 2.1% compared to the previous year.

Depreciation and amortization were RMB193.0 billion, up by 12.0% compared to the previous year and representing 22.8% of operating revenue. The scale of assets increased due to accelerated network upgrades and business transformation, at the same time, annual depreciation of fixed assets increased by RMB9.4 billion in 2021 as a result of an adjustment in the residual value of certain assets to 0; after excluding the effect of such adjustment, depreciation and amortization would have increased by 6.5%.

Employee benefit and related expenses were RMB118.7 billion, up by 11.5% compared to the previous year and representing 14.0% of operating revenue. We continued to adjust and optimize our personnel structure, and increased investments in research and development talents in the fields of 5G and AICDE as well as management talents in the “Business” and “New” markets, providing strong personnel support for our reform, innovation, transformation and development.

Selling expenses were RMB48.2 billion, down by 3.4% compared to the previous year and representing 5.7% of operating revenue. While ensuring necessary marketing and sales efforts, we have speeded up our transformation of channels, constantly upgraded our online sales and services capabilities, and continued to enhance our efficiency in utilization of marketing resources.

Cost of products sold was RMB96.1 billion, up by 31.4% compared to the previous year and representing 11.3% of operating revenue. The increase was mainly driven by the growth in revenue from the sales of products.

Other operating expenses were RMB49.2 billion, up by 4.7% compared to the previous year and representing 5.8% of operating revenue. In 2021, we continued to increase our investments in research and development, and promoted technical breakthroughs and construction of core capabilities to empower our smart development.

In 2021, we continued to improve our quality and efficiency of operations, enhanced our value to shareholders, and maintained an industry-leading level of profitability. Profit from operations was RMB118.0 billion, up by 4.6% compared to the previous year. EBITDA was RMB311.0 billion, up by 9.1% compared to the previous year, and EBITDA margin was 36.7%, down by 0.4 percentage points compared to the previous year. Benefitting from steady growth in revenue and better cost control, profit attributable to equity shareholders was RMB116.1 billion in 2021, up by 7.7% compared to the previous year. The margin of profit attributable to equity shareholders was 13.7%.

Our financial position continued to remain robust. As at the end of 2021, total assets and total liabilities were RMB1,841.3 billion and RMB631.0 billion, respectively. The liabilities to assets ratio was 34.3%.

We consistently and firmly adhered to our prudent financial risk management policies and maintained sound repayment capabilities. The effective interest coverage multiple was 52 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 level, thereby ensuring 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 2021, our cash flow remained healthy. Net cash inflow from operating activities was RMB314.8 billion, which continued to increase and remained at a high level. Net cash outflow from investing activities was RMB238.3 billion, up by 26.7% compared to the previous year. Net cash outflow from financing activities was RMB45.2 billion, down by 45.0% compared to the previous year, mainly consisting of subscription funds received in relation to the RMB Share Issue. Free cash flow was RMB131.2 billion, up by 3.2% compared to the previous year. As at the end of 2021, our total cash and bank balances were RMB342.2 billion, of which 97.6%, 0.7% and 1.6% 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 Stable from Moody’s. These ratings reflect that our sound financial strength, favourable business potential and solid financial management are highly recognized by the market.