In the first half of 2026, the new round of technological and industrial revolutions saw accelerated breakthroughs, with innovation in artificial intelligence (AI) technology entering an unprecedentedly active phase. This has profoundly empowered the transformation and upgrading of industries across all sectors, accelerating the formation of a new model of intelligent economy. The Group has anticipated and adapted to changes proactively, continued to deepen the connotation of its strategic positioning as a "New Generation Integrated Smart Service Provider", leveraging its strengths as a "Pioneer of Digital Intelligence Consulting", a "Navigator of Digital Intelligence Infrastructure", a "Leader of Digital Intelligence Maintenance and Operation" and a "Provider of Digital Intelligence Products" (collectively referred to as the "4 Roles"). The Group has also mapped out new tracks for the "Six Major Growth Areas+", vigorously advanced the "AI+" initiative, comprehensively facilitated the internal application and external empowerment of artificial intelligence, and accelerated the cultivation and strengthening of new growth drivers, thereby ensuring its steady and sustainable high-quality development.

Adhering to its overall roadmap of "Value-Driven, Seeking Steady Yet Progressive Growth and High-Quality Development", the Group accelerated the transformation and upgrading of its business while steadfastly advancing cost reduction and efficiency improvements, with revenues remaining generally stable. In the first half of the year, the Group's revenues amounted to RMB74,480 million, representing a year-on-year decrease of 3.2%. Among this, revenue from telecommunications infrastructure ("TIS") services amounted to RMB36,602 million; revenue from business process outsourcing ("BPO") services amounted to RMB22,104 million; and revenue from applications, content and other ("ACO") services amounted to RMB15,774 million. Gross profit amounted to RMB7,432 million, representing a year-on-year decrease of 5.8%. Gross profit margin was 10.0%, with the rate of decline slowing down (a year-on-year decrease of 0.3 percentage points). The Group fully leveraged its strengths in artificial intelligence technology, continued to strengthen synergistic operation, and comprehensively enhanced the level of refined management. Selling, general and administrative expenses amounted to RMB5,706 million, representing a year-on-year decrease of 7.7%. Operating profit¹ was RMB1,726 million, representing a year-on-year increase of 1.2%. Net profit amounted to RMB1,970 million, representing a year-on-year decrease of 7.5%; on a comparable basis², net profit saw a year-on-year decrease of 3.2%. Net profit margin on a comparable basis remained stable. Basic earnings per share were RMB0.284. To further enhance the stability, sustainability, and predictability of cash dividends, and to demonstrate confidence in its future development, the Company has formulated a shareholder dividend return plan for the next three years. Provided profit distribution conditions are met, operating performance remains steady and cash flow can ensure normal operations and development, the Group will steadily increase the dividend payout ratio from 2026 to 2028, and such ratio is expected to be no less than 46% for the fiscal year ending 31 December 2028.

Note 1: Operating profit = Gross profit - Selling, general and administrative expenses

Note 2: Figures on a comparable basis exclude the impact of dividend income as a non-comparable factor.

Keeping pace with the development trends in artificial intelligence, the Group is committed to leveraging technological innovation as a key lever to comprehensively and deeply advance its "AI+" initiative. By focusing on its core businesses, strengthening its core capabilities and building a strong team, the Group is laying a new digital and intelligent foundation for the enterprise. The Group actively seized the vast market opportunities brought by the booming development of AI. In the first half of 2026, new contracts in the AI+ sector amounted to RMB12.3 billion, representing a year-on-year increase of 39%, with revenue reaching RMB7.4 billion, up by 62% year-on-year, accounting for 10% of the Group's revenues. Among these, the Group accelerated the large-scale delivery of AIDC, with new contracts in the AIDC business growing by 33% year-on-year. The Group focused on advantageous vertical industry scenarios to develop standardized products, with new contracts in AI applications growing by 109% year-on-year.

In the field of AIDC, the Group has strengthened its integrated service capabilities in "Planning, Construction, Maintenance and Operation". Focusing on the full lifecycle of AIDC, the Group has integrated its strengths in IDC general contracting, green and energy conservation, and high-speed networking to achieve rapid construction and large-scale delivery. This has effectively supported the deployment of national-level intelligent computing hubs and the construction of a nationwide integrated computing power network, with its customer base comprehensively covering the eight national computing hubs. By establishing a full-stack service model featuring "EPCO general contracting + green liquid cooling + intelligent computing power maintenance + computing-electricity coordination", the Group has innovatively front-loaded the operation & maintenance (O) system into the entire process of design, procurement and construction. This approach has provided customers with green, secure and efficient comprehensive digital infrastructure construction and service support, earning industry recognition and winning multiple awards at the 17th China Data Center Summit. In the first half of the year, the value of new contracts signed in this field saw a year-on-year increase of 33%.

In the field of AI applications, as new generation artificial intelligence technologies rapidly evolve, they are driving the restructuring of the entire industry chain from energy to applications. The Group has continuously enhanced its digital and intelligent service capabilities and developed standardized products focusing on vertical industry scenarios where it holds a competitive edge, such as emergency management, sports, low-carbon and energy conservation, and grain storage. Leveraging its nationwide localized delivery network, the Group has established a differentiated competitive edge in industry digitalization and engineering implementation, building a cross-industry, multi-tiered and widely-covered customer ecosystem to translate the immense market potential of AI into tangible productive capacity. In the first half of the year, the value of new contracts signed in this field saw a robust year-on-year increase of 109%.

Based on its industry and market insights, the Group has kept pace with external environment changes and evolving customer demand. Leveraging its inherent resource advantages and the strategic positioning of "1 Positioning, 4 Roles", the Group has identified key growth areas for the 15th Five-Year Plan period and continued to deepen its transformation and development. The Group has deeply tapped into the huge market potential of AI+, and in the first half of 2026, revenue from the field of AI+ (AIDC, AI applications) grew by 62% year-on-year, accounting for 10% of revenues. Meanwhile, the Group has deployed in other new tracks such as CCS Smart Maintenance, computing-electricity coordination (dual carbon, power distribution network), and low-altitude economy, to accelerate the implementation of new businesses and fully unleash growth momentum. In the first half of the year, the value of new contracts signed in the "Six Major Growth Areas+" segment saw a year-on-year increase of 11%, accounting for approximately 34% of the total value of new contracts signed, and has become the core driver for the high-quality development of the enterprise.

In the field of AIDC, the Group has strengthened its integrated service capabilities in "Planning, Construction, Maintenance and Operation". Focusing on the full lifecycle of AIDC, the Group has integrated its strengths in IDC general contracting, green and energy conservation, and high-speed networking to achieve rapid construction and large-scale delivery. This has effectively supported the deployment of national-level intelligent computing hubs and the construction of a nationwide integrated computing power network, with its customer base comprehensively covering the eight national computing hubs. By establishing a full-stack service model featuring "EPCO general contracting + green liquid cooling + intelligent computing power maintenance + computing-electricity coordination", the Group has innovatively front-loaded the operation & maintenance (O) system into the entire process of design, procurement and construction. This approach has provided customers with green, secure and efficient comprehensive digital infrastructure construction and service support, earning industry recognition and winning multiple awards at the 17th China Data Center Summit. In the first half of the year, the value of new contracts signed in this field saw a year-on-year increase of 33%.

In the field of AI applications, as new generation artificial intelligence technologies rapidly evolve, they are driving the restructuring of the entire industry chain from energy to applications. The Group has continuously enhanced its digital and intelligent service capabilities and developed standardized products focusing on vertical industry scenarios where it holds a competitive edge, such as emergency management, sports, low-carbon and energy conservation, and grain storage. Leveraging its nationwide localized delivery network, the Group has established a differentiated competitive edge in industry digitalization and engineering implementation, building a cross-industry, multi-tiered and widely-covered customer ecosystem to translate the immense market potential of AI into tangible productive capacity. In the first half of the year, the value of new contracts signed in this field saw a robust year-on-year increase of 109%.

In the field of CCS Smart Maintenance, focusing on key business scenarios, the Group has established mature solutions for typical scenarios, and built a standardized and replicable capability framework to continuously enhance customer loyalty. Targeting the six major technology domains of "CT, IT, DT, OT, AT, and QT"³, the Group has established benchmark cases in data center operation & maintenance, power distribution operation & maintenance, new energy photovoltaic operation & maintenance, smart transportation operation & maintenance, smart city big data platform and operation services, and building energy conservation operations. By strengthening enablement and promotion across key industries, the Group has successfully secured multiple projects with a contract value exceeding RMB100 million each, effectively boosting the brand power of "CCS Smart Maintenance". In the first half of the year, the value of new contracts signed in this field saw a year-on-year increase of 13%.

In the field of dual carbon, the Group has leveraged its technical capabilities in integrated source-grid-load-storage, AI energy saving and full lifecycle carbon asset management, deepened its presence in three core scenarios, including computing-electricity coordination, the construction and operation & maintenance of new energy projects, and AI-powered energy and carbon management services, to consolidate its new energy business in wind, photovoltaic, storage and charging projects, seize opportunities in the energy and carbon management market for public institutions, deploy innovative tracks such as zero-carbon industrial parks and virtual power plants. The Group has also developed a series of core products such as the source-grid-load-storage integrated management platform and the AI-powered energy and carbon management platform. These efforts have generated robust economic benefits while delivering substantial ecological and social benefits, thereby injecting strong momentum into the comprehensive green transition of economic and social development.

In the field of power distribution network, the Group has actively participated in the construction of the national new-type power system, focusing on key business scenarios such as high-voltage power distribution networks of 110kV and above, urban-rural distribution networks, microgrids, and direct green power connections. The Group has built end-to-end general contracting service capabilities for computing-electricity coordination, strengthened market enablement and resource integration for computing power parks and new energy investors, and collaborated closely with its AIDC business and dual carbon business for market development. The Group has delivered EPC general contracting project with a contract value exceeding RMB100 million, developed replicable project implementation models, and provided solid support for regional grid upgrades and coordinated development of computing and electricity.

In the field of low-altitude economy, the Group has deeply cultivated key industry customers such as transportation, government and emergency management sectors, fully leveraging its consulting-led approach to drive an integrated business model combining "consulting & design + equipment procurement + implementation & delivery". The Group has iterated and optimized self-developed products such as the drone detection platform and the "Lingkong" low-altitude emergency response practical application platform to meet customers' business needs in low-altitude supervision, low-altitude security, "one-platform unified flight management", emergency rescue, training and capacity enablement, and drone pilot services. In the first half of the year, the growth rate of value of new contracts signed in this field reached 66%.

Note 3: CT (Communications Technology), IT (Information Technology), DT (Data Technology), OT (Operational Technology), AT (Artificial Intelligence Technology), and QT (Quantum Technology).

In the domestic telecommunications operator market, the Group seized customers' demand for the accelerated construction of new digital information infrastructure. Leveraging its end-to-end expertise in "Planning, Construction, Maintenance and Operation", the Group strengthened cooperation in the fields of AIDC construction and AI applications, effectively mitigating the impact of reduced customer investment in traditional areas. In the first half of 2026, revenue from this market stabilized and rebounded, reaching RMB38,922 million, representing a year-on-year increase of 1.9%.

The Group will proactively seize opportunities arising from domestic telecommunications operators' increasing investment in emerging areas such as new computing infrastructure, while deeply cultivating business opportunities in traditional areas such as energy-saving retrofit of existing data centers and operation and maintenance. This will support domestic telecommunications operators in serving and integrating into the development of the next-generation communications network and the national integrated computing power network construction, and continuously strengthen the Group's core business foundation.

In the first half of 2026, the Group navigated a complex external environment as well as various pressures and challenges, actively capitalized on the window of opportunity presented by the transition from old to new growth drivers in the industry, and focused on deepening its presence in high-value businesses. In the domestic non-operator market, the Group focused on key industries of significant strategic importance, high economic value and close relevance to people's livelihoods. The Group accelerated the business development of new growth drivers such as CCS Smart Maintenance, low-altitude economy and power distribution network, concentrated resources on expanding high-value projects, and proactively controlled projects of low efficiency. In the first half of 2026, revenue from this market amounted to RMB33,248 million, representing a year-on-year decrease of 9.1%.

The Group will closely track the RMB trillion-level market potential brought by national initiatives such as the "Six Networks" and urban renewal, alongside with the accelerating growth in emerging sectors such as AI+, computing-electricity coordination, and CCS Smart Maintenance. The Group will optimize its business in key industries, strengthen new quality businesses, and strive to achieve steady growth in the domestic non-operator market.

In the overseas market, the Group navigated a complex and ever-changing international landscape by actively and prudently advancing its overseas development. The Group deepened its presence in emerging "Belt and Road" markets such as Southeast Asia and the Middle East, consolidated its fundamental communications business, accelerated business transformation and upgrading, and successfully secured overseas AIDC benchmark projects. In the first half of 2026, revenue from the overseas market amounted to RMB2,310 million, representing a year-on-year increase of 7.4%, achieving relatively rapid growth. Among which, the Asia-Pacific region grew by nearly 40%, serving as the primary driver of overseas market.

The Group will continuously enhance its overseas project development capabilities and overseas platform operation capabilities, focusing on accelerating the transformation and upgrading of overseas businesses toward AIDC, new energy and other areas. The Group will actively support central state-owned enterprises in their computing power expansion overseas, accelerate the replication of domestic capabilities to empower the overseas industrial digitalization.

In the first half of 2026, the Group recorded gross profit of RMB7,432 million, representing a decrease of 5.8% over RMB7,888 million in the first half of 2025. The Group's gross profit margin in the first half of 2026 was 10.0%, representing a decrease of 0.3 percentage points from 10.3% in the first half of 2025, indicating a moderated decline rate (gross profit margin in the first half of 2025 declined by 0.6 percentage points compared with the same period of 2024). While catering for the scale of its development, the Group will focus more on improving quality and efficiency, guide its subsidiaries through appraisal to select and develop high-gross-profit projects to increase the proportion of high-value businesses and continuously optimize business structure. Meanwhile, the Group will continue to leverage AI and digital tools to strengthen project management and cost control. With the Group's deepening deployment in areas of digital economy, new infrastructure construction and industrial digitalization, the gross profit margin is expected to remain stable and improve over the medium to long term.

In the first half of 2026, the Group continued to deepen quality and efficiency enhancement to drive improvement in profitability. The cost of revenues of the Group amounted to RMB67,048 million, representing a year-on-year decrease of 2.9%. Among which, direct personnel costs amounted to RMB3,287 million, representing a decrease of 11.3% from RMB3,707 million in the first half of 2025. The Group has always kept a reasonable control over its total headcount and continued to optimize the employee structure, while maintaining remuneration per capita largely stable. Subcontracting charges amounted to RMB41,178 million, representing a decrease of 4.1% from RMB42,932 million in the first half of 2025. The Group continuously strengthened management of subcontracting, strived to improve its self-sufficient delivery rate, and promoted the application of AI and digital tools to strengthen penetrative management of projects, resulting in a decline in subcontracting charges as a percentage of revenues. Materials costs amounted to RMB14,497 million, representing an increase of 8.7% from RMB13,341 million in the first half of 2025. The Group will enhance materials cost control by improving its internal procurement system and further implementing centralized procurement.

At present, artificial intelligence serves as a new engine for economic growth and a catalyst for the transition from old to new growth drivers. Digital and intelligent technologies are deeply integrated into all areas of economic and social development, and the scale of core industries in the intelligent economy has already exceeded RMB1 trillion, marking a period of strategic opportunity for the industry. During the 15th Five-Year Plan period, China is steadily advancing the planning and construction of the "Six Networks" and facilitating high-quality urban renewal, thereby providing a vast market for businesses in the "Six Major Growth Areas+". Meanwhile, the growing impact of external changes, mounting pressure from industry transformation and escalating market competition are posing headwinds for corporate development.

2026 marks the 20th anniversary of the Group's listing and the inaugural year of the 15th Five-Year Plan period. Seizing opportunities and rising to challenges, the Group will continue to deepen the new connotation of its "1 Positioning, 4 Roles" strategy, focus on the new tracks in the "Six Major Growth Areas+", and cultivate and strengthen new quality productive forces. To this end, the Group will bolster its AIDC integrated general contracting delivery capabilities, enhance its comprehensive data element service capabilities, deeply refine AI product development and application promotion, and accelerate the build-out of full-stack AI service capabilities, thereby empowering customers to achieve an integrated intelligent, green and secure transformation and upgrading. Furthermore, the Group will comprehensively deepen reforms, elevate its corporate governance capabilities, establish new relations of production tailored to new quality productive forces, strengthen leading enterprises in design, construction and other sectors, while advancing specialized and synergistic operations across its supply chain and property management segments. Leveraging the "Five Major Projects"—transformation and development, reform and renewal, technological innovation, strengthening the enterprise through talent, and safety enhancement—the Group will drive its continued progress toward new opportunities, excellence and sound performance.

The Group attaches great importance to shareholder returns. To further enhance the stability, sustainability, and predictability of cash dividends, and to demonstrate confidence in its future development, the Group has formulated a shareholder dividend return plan for the next three years. Provided profit distribution conditions are met, operating performance remains steady and cash flow can ensure normal operations and development, the Group will steadily increase the dividend payout ratio from 2026 to 2028, and such ratio is expected to be no less than 46%⁴ for the fiscal year ending 31 December 2028. In the past ten years, the dividend payout ratio has generally remained stable with enhancement, while dividend per share has been increasing continuously. Please refer to "Dividend History" for the details.

Taking into the consideration of the long-term interest and sustainable development of the Company, and with the support of the Group's profitability, the Group strives to maintain the continuity and stability of the dividend policy. The factors to be considered by the Group when formulating the dividend distribution plan are as follows:
1. Current and expected operating results and cash flow performance;
2. Future business development strategies and operating position, as well as future capital needs;
3. Daily working capital needs;
4. Expectations of shareholders and investors; and
5. Other factors that the Board deems appropriate.

Note 4: The dividend payout ratio in 2025 was 43%.

China Comservice ("China Communications Services Corporation Limited") is a leading service provider in the informatization sector in the PRC that positions itself as a "New Generation Integrated Smart Service Provider", leverages its strengths as a "Pioneer of Digital Intelligence Consulting", a "Navigator of Digital Intelligence Infrastructure", a "Leader of Digital Intelligence Maintenance and Operation" and a "Provider of Digital Intelligence Products" ("1 Positioning, 4 Roles"), the Group commits to "Building Smart Society, Boosting Digital Economy, Serving a Good Life". The Group provides integrated comprehensive smart solutions for the digital intelligence sector. It is also the largest telecommunications infrastructure service provider in the PRC. Our services include telecommunications infrastructure services ("TIS") covering design, construction, and project supervision and management; business process outsourcing services ("BPO") covering network maintenance, property management, supply chain and products distribution; applications, content and other services ("ACO") covering system integration, software development and system support, value-added services and other services. (Please refer to "Corporate Profile" and "History" for more details)

The Company was listed on the Stock Exchange of Hong Kong on December 8, 2006. The offering price was HK$2.20 per share. (Please refer to "Share Information Overview" for more details)

China Telecommunications Corporation is our controlling shareholder which holds 3,393 million domestic shares, representing 48.99% of our total issued shares. In addition, China Mobile Communications Group Co., Ltd., China United Network Communications Group Company Limited, State Grid Information & Telecommunication Group Co., Ltd. and China National Postal and Telecommunications Appliances Co., Ltd. hold 608 million, 236 million, 166 million and 131 million domestic shares, representing 8.78%, 3.41%, 2.40% and 1.89% of total issued shares respectively. The public holding is 2,391 million H share, representing 34.53% of our total issued shares. (Please refer to "Shareholding Structure" for more details)

All major telecommunications operators in China, namely, China Telecommunications Corporation, China Mobile Communications Group Co., Ltd., China United Network Communications Group Company Limited, China Radio and Television Network Co., Ltd and China Tower Corporation Limited are our customers. We also provide services to domestic non-telecom operator (the "domestic non-operator") customers and overseas customers. In the first half of 2026, revenue from domestic telecommunications operator customers accounted for 52.2% of revenues, revenue from domestic non-operator customers accounted for 44.7% of revenues and revenue from overseas customers accounted for 3.1% of revenues.

While further developing domestic telecommunications operator market, the Group has also endeavored to expand the domestic non-telecom operator market. The Group proactively provides services, such as smart city solutions, municipal infrastructure, intelligence building and data center construction, to key customers such as government agencies and customers in the industries of construction, Internet & IT, transportation, electricity, etc.

Other than China, the Group's business also covers dozens of countries and regions globally, and its overseas customers are mainly located in the emerging markets including Asia Pacific, the Middle East and Africa. (Please refer to "Our Business" for more details)

The Group is the largest telecommunications infrastructure service group in the PRC, providing a full range of telecommunications infrastructure services to telecommunications operators in China and overseas. These services include planning, design, construction and project supervision for fixed line, mobile, broadband networks and supporting systems. The Group also provides construction services of ancillary communications networks, integrated solutions for informatization and intelligentization solutions of industries to domestic non-operator customers such as government agencies, industrial customers and SMEs, as well as overseas customers. (Please refer to "Our Business" for more details)

The Group is the largest integrated provider of business process outsourcing services in the communications industry in China. The Company can provide customers with all-round quality outsourcing services including management of infrastructure for information technology ("network maintenance"), general facilities management ("property management"), supply chain and products distribution services. The target of our services includes domestic and overseas telecommunications operator customers, government agencies and enterprises customers. The Group focused on OPEX-driven business of domestic telecommunications operators, and strengthened the synergistic operation and brand building of OPEX-driven business. (Please refer to "Our Business" for more details)

The Group provides information system integration and project implementation, industrial digitalization application and solutions, proprietary software and platform product development, digitalization business and IT system support as well as value-added services to customers including domestic and overseas telecommunications operators, government agencies and enterprise customers. (Please refer to "Our Business" for more details)