Shares of China Unicom (00762) opened sharply lower by nearly 8% in Hong Kong trading on Tuesday, continuing to weigh on sentiment as investors digested the company's weaker-than-expected first-half results. As of the time of writing, the stock had dropped 7.74% to HK$5.785, with turnover reaching HK$51.39 million, reflecting active selling pressure from the market.

The decline follows the telecom giant's latest earnings report, which showed that revenue for the first half of the year reached RMB 201.4 billion, representing a modest year-on-year increase of 0.6%. However, revenue from core business operations slipped 0.2% to RMB 178 billion. More notably, net profit attributable to shareholders plunged 34.8% to RMB 4.1 billion, while total profit before tax fell 36.6% to RMB 11.2 billion during the reporting period.

Adding to the negative sentiment, the company announced that it would not distribute an interim dividend for the 2026 fiscal year. Management attributed the periodic earnings volatility to a combination of factors, including changes in the timing of labor cost investments, in addition to the impact of value-added tax. Despite the current downturn, the company expects full-year labor costs to remain stable, which should help narrow the decline in profit significantly over the coming quarters.

In terms of capital expenditure, China Unicom invested RMB 24.1 billion in the first half, aligned with its "six networks" strategic deployment aimed at strengthening its computing power network and next-generation communication infrastructure. Notably, investment in computing power rose to 37% of total capex, with spending in this area surging by more than 80% year-on-year, underscoring the company's commitment to digital transformation and high-growth segments despite the earnings headwinds.