Core Viewpoint - China Tower, established in 2014, has become the world's largest communication infrastructure service provider, supported by the three major telecom operators in China, with a mission to provide essential communication infrastructure and services [1][2]. Group 1: Company Overview - As of June 2025, China Tower's site scale exceeds 2.1 million, with total assets over 330 billion yuan and net assets exceeding 200 billion yuan [1]. - The company has adopted a "one body, two wings" strategy, focusing on operator business while expanding into cross-industry and energy operations, leading to steady revenue growth [1]. Group 2: Financial Performance - Revenue increased from 71.82 billion yuan in 2018 to 97.77 billion yuan in 2024, with a compound annual growth rate (CAGR) of 5.28% [1]. - Net profit grew from 2.65 billion yuan in 2018 to 10.73 billion yuan in 2024, with a CAGR of 26.25% [1]. Group 3: Business Segments - Tower business contributes over 70% of revenue, serving as a stable cash flow source, with site sharing levels improving as the 5G base station construction nears completion [1]. - As of June 2025, the number of tower sites reached 2.119 million, with operator tenants increasing to 3.579 million [1]. Group 4: Two Wings Business Development - The smart connection business, leveraging products like "Tower Vision," has seen double-digit revenue growth, with tenant numbers rising from 199,000 in 2021 to 265,000 in H1 2025 [2]. - The energy business, centered on battery swapping, has established a significant presence in the domestic market, with operations in over 320 cities and 81,000 battery swap points [2]. Group 5: Shareholder Returns - The dividend payout ratio has increased from 14.98% in 2018 to 68.19% in 2024, with the company distributing its first interim dividend in 2024 [3]. - As depreciation costs from large-scale tower construction decrease, profits are expected to accelerate, enhancing shareholder returns [3].

Investment Rating - The report assigns an "Accumulate" rating for China Tower (00788) as a first-time coverage [6]. Core Viewpoints - China Tower, established in 2014, is the world's largest communication infrastructure service provider, backed by the three major telecom operators in China, ensuring a solid industry leadership position [1][15]. - The company has adopted a "one body, two wings" strategy, focusing on operator business while expanding into cross-industry and energy operations, leading to steady revenue growth [2][24]. - The tower business remains a stable cash flow source, contributing over 70% of revenue, while the indoor distribution and energy businesses are rapidly growing [3][4]. Summary by Sections Company Overview - China Tower was established to address the issue of redundant construction in the telecom industry, providing site space, supporting facilities, maintenance, and power services [15][18]. - As of June 2025, the company has over 2.1 million sites and total assets exceeding 330 billion yuan [1][15]. Business Strategy - The "one body, two wings" strategy integrates operator business as the core, with intelligent connection and energy businesses as the wings, enhancing growth potential [2][24]. - The company has seen a shift in revenue structure, with the tower business's share decreasing from 93.4% in 2019 to 76.2% in H1 2025, while the contributions from intelligent connection and energy businesses are increasing [25][24]. Financial Performance - Revenue has grown from 71.82 billion yuan in 2018 to an expected 97.77 billion yuan in 2024, with a compound annual growth rate (CAGR) of 5.28% [2][28]. - Net profit has increased significantly from 2.65 billion yuan in 2018 to an expected 10.73 billion yuan in 2024, with a CAGR of 26.25% [2][31]. - The company has a high dividend payout ratio, increasing from 14.98% in 2018 to 68.19% in 2024, reflecting a commitment to shareholder returns [5][45]. Business Segments - The tower business is entering a phase of stock operation, with site sharing levels improving; as of June 2025, the number of tower sites reached 2.119 million [3][81]. - The indoor distribution business has seen rapid growth, with revenue increasing from 1.82 billion yuan in 2018 to 8.43 billion yuan in 2024, maintaining a CAGR of 29% [93]. - The energy business, focusing on battery swapping, has expanded rapidly, with over 320 cities offering services and a market share nearing 50% [4][34]. Market Position - China Tower leads the global market in terms of revenue, with 97.77 billion yuan in 2024, while also facing competition from American and Indian tower companies [53][56]. - The company benefits from a stable ownership structure, primarily held by the three major telecom operators, ensuring a solid operational foundation [20][24].