Group 1: Production Recovery - The company has five major production bases: Shouguang, Zhanjiang, Huanggang, Jiangxi, and Jilin. Currently, the Shouguang base has fully resumed operations, while Huanggang and Jiangxi's second plant are in normal production. The first plant in Jiangxi, Jilin, and Zhanjiang bases are still under maintenance, with efforts to resume production as soon as possible [2] - The funding required for resuming operations has been secured, with a capital injection of 1 billion CNY from the government and a completed approval for a syndicated loan of 2.31 billion CNY, with the first tranche already disbursed [2][3] Group 2: Government Support - Local governments have established a task force to facilitate production recovery, including forming a debt committee and coordinating the issuance of a 2.31 billion CNY loan specifically for resuming operations. Measures include maintaining existing credit lines and providing support such as loan extensions and interest rate reductions [3] Group 3: Asset Management - The company is actively working to manage and dispose of non-core assets, with an asset management center established to enhance efficiency. The disposal of properties located in key cities like Shanghai, Jinan, and Shenzhen is being accelerated [3] Group 4: Financial Challenges - The company is addressing its debt issues by negotiating extensions and interest reductions with most financial institutions, which has already reduced financial costs by approximately 700 million CNY. Further efforts include accelerating the disposal of non-core assets and enhancing the collection of receivables [3] - The company plans to leverage operational cash flow post-resumption to continue reducing debt levels [3] Group 5: Industry Outlook - The paper industry is facing challenges due to increased production capacity and weakened terminal demand, leading to supply-demand imbalances. However, with the implementation of the "dual carbon" strategy and policies aimed at reducing competition, the industry is expected to see improved conditions in the medium to long term. The overall performance is anticipated to gradually recover as domestic demand policies take effect [4]

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].