Investment Rating - The report maintains a "Buy" rating for China Tower (0788.HK) [3]. Core Views - The company's performance is driven by its "One Body, Two Wings" strategy, leading to steady growth and an increased focus on shareholder returns through a higher dividend payout ratio [1]. - In 2024, the company reported a revenue of RMB 97.772 billion, a year-on-year increase of 4.0%, with a net profit of RMB 10.729 billion, reflecting a 10% growth [1]. - The EBITDA for 2024 reached RMB 66.559 billion, up 4.7%, with an EBITDA margin of 68.1% [1]. Summary by Sections Revenue and Profitability - The operator business generated revenue of RMB 84.119 billion, growing by 2.4%, while the two wings business saw revenue of RMB 13.388 billion, up 16.4% [1]. - The company achieved a significant improvement in cash flow, with operating cash flow of RMB 49.468 billion, a year-on-year increase of RMB 16.628 billion [1]. Operator Business - The tower business revenue was RMB 75.689 billion, a 0.9% increase, with the number of tower sites increasing to 2.094 million [1]. - The indoor distribution business revenue reached RMB 8.430 billion, growing by 18.1%, with significant expansions in coverage areas [1]. Two Wings Business - The smart connection business generated RMB 8.911 billion, a 22.4% increase, focusing on sectors like emergency services and agriculture [1]. - The energy business revenue was RMB 4.477 billion, up 6.2%, while the battery swap business revenue reached RMB 2.5 billion, growing by 20.9% [1]. Shareholder Returns - The company increased its dividend payout ratio, distributing a total dividend of RMB 0.41696 per share for 2024, an 11.5% increase from 2023 [1]. - The depreciation and amortization as a percentage of revenue decreased from 52.2% in 2023 to 51.4% in 2024, indicating effective investment management [1]. Profit Forecast and Valuation - The net profit forecast for 2025 and 2026 has been adjusted downwards by 10% and 14% to RMB 11.726 billion and RMB 18.123 billion, respectively, with a new forecast for 2027 at RMB 19.2 billion [1]. - The report emphasizes the potential for significant profit growth in 2026 due to the expiration of certain tower depreciations [1].

Investment Rating - The report maintains a "Hold" rating for China Tower Corporation with a target price raised to HKD 13.7, reflecting an increase in valuation from 3.1x to 4.0x based on the 2025 fiscal year EV/EBITDA [1][7][3]. Core Views - China Tower's fiscal year 2024 performance met expectations, with revenue increasing by 4.0% year-on-year to RMB 97.8 billion, and net profit rising by 10.0% to RMB 10.7 billion, slightly above internal forecasts but below Bloomberg consensus [1][2]. - The traditional tower business, accounting for 77% of revenue, saw a modest growth of 0.9%, while the indoor distribution and two wings businesses experienced double-digit growth, achieving RMB 84 billion (up 18%) and RMB 134 billion (up 16%) respectively [1][2]. - The company announced a share consolidation to optimize its capital structure and enhance shareholder value [1]. Financial Summary - Revenue projections for FY25E are set at RMB 101.8 billion, with a growth rate of 4.1% [2][10]. - EBITDA is expected to reach RMB 69.1 billion in FY25E, reflecting a 3.7% increase [2][10]. - Net profit is forecasted to grow by 13.0% to RMB 12.1 billion in FY25E, with earnings per share projected at RMB 0.69 [2][10]. - The company plans to maintain a dividend of RMB 0.42 per share for FY24, indicating a payout ratio of 76% [7][1]. Shareholder Structure - Major shareholders include Citigroup with 9.0% and GIC with 7.0% [4]. Stock Performance - The current stock price is HKD 12.24, with a potential upside of 11.9% to the target price [3]. - The stock has shown a 26.2% absolute return over the past six months [5]. Business Segments - The traditional tower business is expected to face continued pressure due to low single-digit growth forecasts for domestic telecom operators, while the indoor distribution and two wings businesses are anticipated to maintain double-digit growth rates [7][1]. - The indoor distribution business is projected to grow by 14.0% and 11.6% in FY25E and FY26E respectively, driven by market opportunities [7]. - The two wings business, particularly the Tower Intelligence segment, is expected to see significant revenue growth due to projects related to national disaster warning and agricultural protection [7].

Investment Rating - The report maintains a "Hold" rating for China Tower Corporation with a target price raised to HKD 13.7, reflecting an increase in valuation from 3.1x to 4.0x based on the 2025 fiscal year EV/EBITDA [1][7][3]. Core Views - China Tower's fiscal year 2024 performance met expectations, with revenue increasing by 4.0% year-on-year to RMB 97.8 billion and net profit rising by 10.0% to RMB 10.7 billion, slightly above internal forecasts but below Bloomberg consensus [1][2]. - The traditional tower business, accounting for 77% of revenue, saw a modest growth of 0.9%, while the indoor distribution and two wings businesses experienced double-digit growth, achieving RMB 84 billion (up 18%) and RMB 134 billion (up 16%) respectively [1][2]. - The company announced a stock consolidation plan to optimize its capital structure and enhance shareholder value [1]. Financial Summary - Revenue projections for FY25E are set at RMB 101.8 billion, with a growth rate of 4.1%, followed by RMB 104.4 billion in FY26E and RMB 108.4 billion in FY27E [2][10]. - EBITDA is expected to reach RMB 69.1 billion in FY25E, with a net profit forecast of RMB 12.1 billion, reflecting a 13.0% year-on-year growth [2][10]. - The company plans to maintain a dividend of RMB 0.42 per share for FY24, indicating a payout ratio of 76% [7][10]. Shareholder Structure - Major shareholders include Citigroup with 9.0% and GIC with 7.0% [4]. Stock Performance - The stock has shown a 13.3% increase over the past three months, although it has underperformed relative to the market by 7.5% [5].

Investment Rating - The report maintains a "Hold" rating for China Tower Corporation [1][3] Core Views - The company's 2024 fiscal year performance met expectations, with a revenue increase of 4.0% year-on-year, reaching RMB 97.7 billion, and a net profit growth of 10.0%, amounting to RMB 10.7 billion [1] - The report highlights the stable performance of legacy businesses, while Distributed Antenna System (DAS) and Two Wings (smart towers and energy) segments continue to show double-digit growth [2][3] - The target price has been raised to HKD 13.7, based on a 4.0x FY25E EV/EBITDA, reflecting a higher valuation due to the company's efforts to enhance shareholder returns [3] Financial Summary - Revenue for FY24 is reported at RMB 97,772 million, with a projected growth rate of 4.1% for FY25 and 2.5% for FY26 [4] - Net profit for FY24 is RMB 10,729 million, with expected growth rates of 13.0% for FY25 and 13.2% for FY26 [4] - The company announced a total dividend of RMB 0.42 per share for 2024, indicating a payout ratio of 76% [3] Business Segments - Tower business revenue, which constitutes 77% of total revenue, reached RMB 75.7 billion, growing by 0.9% year-on-year [1] - DAS revenue, accounting for 9% of total revenue, increased by 18% to RMB 8.4 billion, while the Two Wings segment, making up 14%, grew by 16% to RMB 13.4 billion [1][2] Market Outlook - The report anticipates continued growth in the DAS segment, projecting a revenue increase of 14.0% and 11.6% for FY25 and FY26, respectively [2] - The Two Wings business is expected to grow by 17.5% and 16.2% in FY25 and FY26, respectively, driven by new revenue from national disaster warning and farmland protection projects [2]

Investment Rating - The report maintains a HOLD rating for China Tower with a new target price of HK$13.7, reflecting an upside potential of 11.9% from the current price of HK$12.24 [1][3]. Core Insights - China Tower's FY24 results were in line with expectations, showing a revenue increase of 4.0% YoY to RMB97.8 billion and a net profit increase of 10.0% to RMB10.7 billion [1]. - The Tower segment, which constitutes 77% of total revenue, saw a modest growth of 0.9% YoY, while the DAS and Two Wings segments experienced double-digit growth rates of 18% and 16% YoY, respectively [1][6]. - The company is focusing on optimizing its capital structure through a stock consolidation (1 for 10) announced in February 2025 [1]. Financial Performance Summary - Revenue for FY24 was RMB97.8 billion, with projected revenues of RMB101.8 billion for FY25 and RMB104.4 billion for FY26, indicating a growth rate of 4.1% and 2.5% respectively [2][14]. - Net profit for FY24 was RMB10.7 billion, with estimates of RMB12.1 billion for FY25 and RMB13.7 billion for FY26, reflecting growth rates of 13.0% and 13.2% respectively [2][14]. - The EBITDA for FY24 was RMB66.6 billion, with projections of RMB69.1 billion for FY25 and RMB71.2 billion for FY26 [2][14]. Segment Analysis - The Tower business is expected to remain stable, with a projected low single-digit growth for China telcos from 2025 to 2027 [6]. - The DAS segment is forecasted to grow by 14.0% YoY in 2025 and 11.6% YoY in 2026, driven by market opportunities such as signal strength upgrade projects [6]. - The Two Wings segment, which includes smart tower and energy solutions, is anticipated to grow by 17.5% YoY in 2025 and 16.2% YoY in 2026, bolstered by projects like national disaster alerts [6]. Valuation Metrics - The new target price of HK$13.7 is based on a 4.0x FY25 EV/EBITDA, which aligns with the company's 5-year average forward EV/EBITDA [1][6]. - The report indicates a dividend payout ratio of 76% for 2024, up from previous years, suggesting a commitment to returning value to shareholders [6].

Core Insights - China Tower reported a revenue of 97.772 billion yuan for 2024, a year-on-year increase of 4.0%, with a net profit of 10.729 billion yuan, up 10.0% from the previous year, indicating enhanced profitability [1] - The company plans to distribute a final dividend of 0.30796 yuan per share, leading to a total annual dividend of 0.41696 yuan per share, which is an increase of 11.5% compared to 2023 [1] - The chairman expressed confidence in the company's role in the low-altitude economy, highlighting the extensive coverage of wireless mobile bases and the potential for resource sharing to reduce infrastructure costs [1] Operator Business Growth - The operator business generated revenue of 84.119 billion yuan in 2024, reflecting a 2.4% year-on-year growth, driven by the company's role in 5G infrastructure development [2] - Tower business revenue reached 75.689 billion yuan, a 0.9% increase, with the number of tower sites growing to 2.094 million, an increase of 48,000 sites from the previous year [2] - The average number of tenants per tower increased from 1.68 to 1.72, indicating improved site-sharing levels [2] Indoor Distribution Business - The indoor distribution business achieved revenue of 8.430 billion yuan, marking an 18.1% increase, with significant growth in coverage areas for buildings and transportation systems [3] - The coverage area for indoor distribution reached 12.68 billion square meters, a 24.9% increase, while the coverage mileage for high-speed rail tunnels and subways reached 29,315 kilometers, up 21.8% [3] Two-Wing Business Development - The two-wing business generated revenue of 13.388 billion yuan, accounting for 13.7% of total revenue, an increase of 1.5% year-on-year [4] - The smart connection business saw revenue of 8.911 billion yuan, a 22.4% increase, with a focus on disaster warning and agricultural protection [4] - The company expanded its partner network and established strategic collaborations to enhance service capabilities [4] Energy Business Growth - The energy business reported revenue of 4.477 billion yuan, a 6.2% increase, with the battery swap business contributing 2.500 billion yuan, accounting for 55.8% of energy revenue [6] - The number of battery swap users reached approximately 1.304 million, an increase of 159,000 users from the previous year, maintaining a leading position in the low-speed electric vehicle market [5][6] - The company is focusing on providing comprehensive solutions for backup power in key industries [6]

Financial Performance - The company achieved operating revenue of RMB 97.77 billion for the year, representing a year-on-year growth of 4.0%[3] - Operating business revenue reached RMB 84.12 billion, an increase of 2.4% year-on-year, with tower business revenue at RMB 75.69 billion, growing by 0.9%[3] - EBITDA reached RMB 66.56 billion, reflecting a year-on-year increase of 4.7%, with an EBITDA margin of 68.1%[6] - Net profit attributable to shareholders was RMB 10.73 billion, up 10.0% year-on-year, resulting in a net profit margin of 11.0%[6] - The company generated a net cash flow from operating activities of RMB 49.47 billion, with free cash flow reaching RMB 17.53 billion, an increase of RMB 16.40 billion year-on-year[6] - The total operating revenue for the year ended December 31, 2024, was RMB 97,772 million, an increase of 2.9% from RMB 94,009 million in 2023[26] - Operating profit for the same period was RMB 16,330 million, up 12.6% from RMB 14,502 million in 2023[26] - The net profit attributable to shareholders for 2024 was RMB 10,729 million, representing a 10% increase compared to RMB 9,750 million in 2023[26] - The total comprehensive income for the year was RMB 10,727 million, compared to RMB 9,756 million in 2023, reflecting a growth of 9.9%[28] - The basic and diluted earnings per share for 2024 were RMB 0.6138, an increase from RMB 0.5578 in 2023[28] Assets and Liabilities - The total assets of the company amounted to RMB 332.83 billion, with interest-bearing liabilities of RMB 92.54 billion, leading to a net debt leverage ratio of 31.0%, a decrease of 0.4 percentage points from the previous year[6] - The company's total assets as of December 31, 2024, amounted to RMB 332,834 million, a slight increase from RMB 326,007 million in 2023[30] - The total liabilities decreased to RMB 132,855 million in 2024 from RMB 128,313 million in 2023[31] - The company maintained a healthy financial position with a net debt leverage ratio of 31.0%, a decrease of 0.4 percentage points from the previous year[90] Revenue Breakdown - The revenue from the three major telecommunications operators accounted for 86.69% of total revenue in 2024, down from 88.02% in 2023[38] - The revenue from tower business reached RMB 75,689 million in 2024, up from RMB 75,023 million in 2023, representing a growth of 0.9%[40] - The revenue from indoor distribution business increased by 18% to RMB 8,430 million in 2024, compared to RMB 7,140 million in 2023[40] - The revenue from smart connection business rose by 22% to RMB 8,911 million in 2024, up from RMB 7,283 million in 2023[40] - The energy business reported revenue of RMB 4.477 billion in 2024, a year-on-year increase of 6.2%, with the tower battery swap business generating RMB 2.500 billion, making up 55.8% of energy business revenue[16] Investments and R&D - The company increased its R&D investment and personnel by 40% and 60% respectively in 2024, with the number of patent applications and grants rising by 58% and 68% respectively compared to 2023[17] - The company plans to continue expanding its smart connection and energy businesses, focusing on technological advancements and market penetration strategies[46] Dividends and Shareholder Information - The company proposed a final dividend of RMB 0.30796 per share, resulting in a total dividend of RMB 0.41696 per share for the year, an increase of 11.5% compared to 2023[6] - The company will hold its annual general meeting on May 20, 2025, to discuss the proposed final dividend and other matters[103] - For H-share individual shareholders, a 20% withholding tax will be applied to dividends received through the Hong Kong Stock Connect[110] Corporate Governance - The board's composition includes 10 members, with three executive directors, four non-executive directors, and three independent non-executive directors, which is below the required one-third independent non-executive directors[95] - The company has complied with the corporate governance code and listing rules as of December 31, 2024, after recent board appointments[97] - The company received a waiver from the Hong Kong Stock Exchange regarding the appointment of independent non-executive directors, extending the deadline to September 30, 2024[96] Future Outlook - The company is focusing on enhancing its digital infrastructure services and expanding its market presence in line with national strategies for digitalization and carbon neutrality[5] - The company aims to enhance its core competitiveness and maintain a high-quality development pattern, focusing on the "one body, two wings" strategic layout[21] - The company is committed to promoting green energy applications, including photovoltaic power generation and energy storage systems, to fulfill its "dual carbon" responsibilities[19] - The company will continue to strengthen its technological innovation framework, focusing on key areas such as new generation mobile communication and artificial intelligence[22]

Investment Rating - Buy (Maintained) [8] Core Views - The company proposes a share consolidation and change in trading unit to enhance attractiveness, with the total issued share capital reducing from RMB 1760.08 billion to RMB 176.01 billion, and the trading unit changing from 2000 existing H shares to 500 consolidated and reduced H shares, expected to take effect on February 20, 2025 [3] - The company is leveraging its resource advantages to tap into the low-altitude economy, which is expected to grow significantly, with the low-altitude economy scale in China reaching RMB 5060 billion in 2023, a 33.8% YoY increase, and projected to exceed RMB 1 trillion by 2026 [4] - The company's "One Body, Two Wings" strategy is driving steady growth, with the depreciation of tower assets acquired in 2015 expected to reach an inflection point in 2026, significantly reducing depreciation and amortization expenses and contributing to profit growth [5] - The company is expected to achieve revenues of RMB 983 billion, RMB 1025 billion, and RMB 1068 billion in 2024-2026, with YoY growth rates of 4.5%, 4.3%, and 4.3%, respectively, and net profits attributable to the parent company of RMB 108 billion, RMB 125 billion, and RMB 195 billion, with YoY growth rates of 11.1%, 15.7%, and 55.6%, respectively [6] Financial Forecasts - Revenue is projected to grow from RMB 94,009 million in 2023 to RMB 106,843 million in 2026, with a CAGR of 4.3% [10] - Net profit attributable to the parent company is expected to increase from RMB 9,750 million in 2023 to RMB 19,501 million in 2026, with a CAGR of 26.1% [10] - EPS is forecasted to rise from RMB 0.06 in 2023 to RMB 0.11 in 2026 [10] - The company's P/E ratio is expected to decrease from 15.93x in 2024 to 8.85x in 2026, indicating improving valuation attractiveness [10] Strategic Initiatives - The company is focusing on the low-altitude economy, leveraging its extensive tower resources, with 2.081 million tower sites as of September 2024, and building a comprehensive low-altitude service network, including flight facility networks, low-altitude intelligent networks, and low-altitude service networks [4] - The "One Body, Two Wings" strategy continues to drive growth, with the company expanding its operator business, smart connectivity business, and energy business, particularly in areas like digital governance and energy solutions [5] Industry Outlook - The low-altitude economy is poised for significant growth, driven by policy and technological advancements, with the industry expected to exceed RMB 1 trillion by 2026, encompassing low-altitude infrastructure, manufacturing, operations, and flight support [4]

Financial Performance - The company's operating revenue for the first three quarters of 2024 reached RMB 72,452 million, representing a year-on-year growth of 3.3%[2] - Revenue from operator business was RMB 63,124 million, up 2.4% year-on-year, with tower business revenue at RMB 56,902 million (0.9% growth) and indoor distributed antenna system revenue at RMB 6,222 million (18.0% growth)[3] - EBITDA for the period was RMB 49,717 million, reflecting a 3.4% increase year-on-year, with an EBITDA margin of 68.6%[5] - Profit attributable to shareholders was RMB 8,153 million, marking an 11.0% increase compared to the previous year[3] - The pre-tax profit for the first three quarters was RMB 10,758 million, an increase of 11.3% year-on-year[3] Operational Metrics - The number of tower sites reached 2.081 million, with a net increase of 95,000 tenants, totaling 3.753 million tenants, and an average of 1.80 tenants per site[5] - The revenue contribution from the two wings business increased from 11.7% to 12.6% of total operating revenue[5] Assets and Liabilities - Total assets as of September 30, 2024, were RMB 324,491 million, while total liabilities were RMB 125,178 million[3] Strategic Focus - The company aims to continue its strategy of shared development, focusing on becoming a world-class digital infrastructure provider[6] Cautionary Note - The company emphasizes the importance of cautious reliance on the financial data provided, as it has not been reviewed or audited by external auditors[7]

Investment Rating - The report assigns a "Buy" rating for China Tower (00788.HK) [1] Core Views - China Tower is the largest communication tower infrastructure provider globally, with an expected improvement in profitability due to a decrease in depreciation expenses as the useful life of acquired sites extends from 10 to 20 years [3][10] - The company's "one body, two wings" strategy is expected to sustain growth, with the operator business remaining stable and the "two wings" (smart connection and energy businesses) showing significant growth potential [3][4] - The company has initiated its first interim dividend, reflecting a commitment to shareholder interests and improved dividend capacity [4][12] Summary by Sections 1. Company Overview - China Tower was established to enhance resource sharing and reduce redundant construction, becoming the largest communication infrastructure service provider with over 2 million sites and total assets exceeding 320 billion RMB [3][10] - The management team has extensive experience in the telecommunications industry, contributing to a stable corporate structure [11][12] 2. Business Performance - For H1 2024, China Tower reported revenue of 48.247 billion RMB, a year-on-year increase of 3.8%, with net profit rising by 10.1% to 5.33 billion RMB [4][13] - The operator business, which includes tower and indoor distribution services, remains the main revenue driver, while the "two wings" businesses are gaining traction [16][32] 3. Financial Projections - Revenue forecasts for 2024-2026 are projected at 98.216 billion, 102.768 billion, and 107.224 billion RMB, respectively, with corresponding PE ratios significantly lower than comparable companies [4][19] - The company’s EBITDA for H1 2024 reached 33.045 billion RMB, indicating a stable financial outlook [4][13] 4. Business Segments - The operator business, including tower and indoor distribution services, accounted for 79.8% of total revenue, while the smart connection and energy businesses contributed 12.4% [16][32] - The smart connection business is expected to benefit from the digital economy's growth, while the energy business, particularly battery swapping, is positioned for long-term growth [3][32][33] 5. Market Position - China Tower holds a dominant position in the domestic market, with a significant share of the telecommunications infrastructure sector, and is well-positioned to capitalize on the upcoming 5G-A construction phase [19][20] - The company has signed a new five-year pricing agreement with major operators, which is expected to stabilize revenue and improve cash flow [22][24]