By Sijia Jiang
HONG KONG (Reuters) - Chinese telecom carrier China United Network Communications <600050.SS> is targeting compounded annual profit growth of 68.7 percent through 2020, Chairman Wang Xiaochu said on Thursday.
China's second-biggest telecoms carrier by subscriber numbers is undergoing an ownership reform initiated by Beijing.
Following a private placement totalling $12 billion, China's largest tech firms, including Alibaba Holdings (BABA.N), Tencent Holdings <0700.HK>, Baidu Inc (BIDU.O) and JD.com (JD.O) have become new shareholders and board members of the Shanghai-listed company.
Wang told a media briefing in Hong Kong the company is aiming to grow its pre-tax profit to 25.35 billion yuan in 2020 as part of an employee share incentive scheme for the reform.
It will also continue to streamline operations, after having eliminated around 15 percent of mid-level management since August, he said.
It is targeting growing its service revenue at a compounded annual rate of 6.5 percent to 301.1 billion yuan in 2020.
China Unicom will cooperate with its new shareholders in cloud services, e-commerce, video content, as well as developing new businesses such as connected vehicles, Wang said.
China Unicom Hong Kong <0762.HK>, an indirect subsidiary of the Shanghai entity, on Thursday reported 193 percent rise in net profit to 1.83 billion yuan, as it had flagged.
That included a one-off asset write off of 2.9 billion yuan. Revenue rose 0.2 percent to 274.8 billion yuan, while 4G subscribers rose by 70.33 million to 175 million.
China Unicom said its capital expenditure in 2018 is expected to be no more than 50 billion yuan, compared with 42.1 billion yuan in 2017, as it starts investing in 5G.
Jefferies analyst Edison Lee said before Thursday's results that China Unicom was "kitchen sinking costs" to create a clean slate for the new financial year under the new ownership structure.
(Reporting by Sijia Jiang; Editing by Muralikumar Anantharaman/David Evans)