China Tower Corporation Limited Announces Robust 2025 Annual Results

Key Financial Highlights

• Operating Revenue: RMB100,411 million, up 2.7% YoY
• EBITDA: RMB65,814 million, strong margin of 65.5%
• Profit Attributable to Owners: RMB11,630 million, up 8.4% YoY
• Net Cash from Operating Activities: RMB56,116 million, up 13.4% YoY
• Free Cash Flow: RMB26,630 million, up RMB9,103 million YoY
• Capital Expenditures: RMB29,486 million, down 7.7% YoY
• Dividend: Proposed final dividend of RMB0.32539 per share (pre-tax), with total full-year dividend at RMB0.45789 per share (pre-tax), equivalent to a 77% payout ratio
• Gearing Ratio: Improved to 27.7%, down 3.3 percentage points
• Total Assets: RMB336,579 million
• Share Capital: Significant capital reduction and share consolidation implemented

Business Segment Performance

• TSP Business: Revenue of RMB84,725 million, up 0.7%. Tower business revenue decreased slightly (-0.3%) to RMB75,498 million, reflecting lease terminations and site/power fee reductions. DAS business grew strongly (+9.5%) to RMB9,227 million, with expanded coverage and new high-value scenarios.
• Smart Tower Business: Revenue surged 14.2% to RMB10,172 million, driven by expanded applications in digital governance, AI, and key sectors such as disaster prevention, rural development, and environmental protection.
• Energy Business: Revenue up 7.5% to RMB4,813 million. Battery exchange business accounted for RMB3,029 million (+21.2%), solidifying leadership in low-speed EV battery exchange.
• Other Business: RMB701 million, mainly from agent construction for transmission facilities.

Revenue Structure Shift

The group’s revenue mix is changing, with non-tower businesses (DAS and Two Wings) now making up 24.8% of operating revenue, up from 22.6% in 2024. This reflects the company’s strategic shift towards higher growth segments, which could drive future share price appreciation.

Cost Management & Profitability

• Operating Expenses: RMB83,051 million, up 2.0%, but as a proportion of revenue, down 0.6pp to 82.7%. Cost control campaigns and asset life extensions contributed.
• Depreciation & Amortisation: Down 3.5% (RMB1,775 million), due to change in DAS asset useful life (from 7 to 10 years) and full depreciation of 2015 tower assets. This resulted in RMB890 million reduction in depreciation expense and RMB1,710 million from tower assets.
• Repairs & Maintenance: Up 1.6% to RMB7,103 million, reflecting increased integrated service revenue and extended asset lives.
• Employee Benefits: Up 5.3% to RMB10,077 million, due to R&D investment, regional management reform, and performance incentives.
• Finance Costs: Net finance costs fell 6.4% to RMB2,410 million, aided by reduced interest-bearing liabilities and low-cost financing.

Innovation & R&D

• R&D investment increased 82%, and headcount up 22%. Patent applications rose 77%, authorizations up 54%. Multiple international standards and new products (shared micro repeaters, monitoring platforms, “one code for all”) commercialized.
• Six regional innovation centers built, with enhanced efficiency and performance.

Corporate Governance & ESG

• Strict compliance with Hong Kong listing rules and ESG standards; legal and risk controls enhanced.
• Social responsibility initiatives: disaster relief, rural telecom upgrades, green energy deployment (photovoltaics, energy storage), and rural revitalization support.

Capital Structure & Shareholder Returns

• Share Consolidation & Capital Reduction: Effective February 2025, every 10 shares consolidated into 1, capital reduced from RMB176,008 million to RMB17,601 million. This increases per-share metrics and may affect share liquidity and price behavior.
• Dividend Policy: High payout ratio (77%) signals commitment to shareholder returns. Final dividend of RMB0.32539 per share proposed, subject to AGM approval. Special tax arrangements apply to H share holders, with detailed withholding rules depending on residency and tax treaties.

Balance Sheet & Cash Flow

• Total Assets: RMB336,579 million; Total Liabilities: RMB132,671 million
• Liabilities-to-assets ratio: 39.4%, down 0.5pp
• Gearing ratio: 27.7%, down 3.3pp
• Net Debt: RMB78,148 million
• Operating cash flow: RMB56,116 million; Free cash flow: RMB26,630 million

Strategic Outlook

• Focus on “One Core and Two Wings” strategy for continued high-quality growth.
• Expansion in 5G-A, edge computing, AI applications, low-altitude economy, and DAS+ businesses.
• Further optimization of battery exchange networks, scaling up power backup and photovoltaic/energy storage businesses.
• Technological innovation to drive new quality productivity and support Digital China.

Shareholder & Price Sensitive Information

• Dividend Proposal: Pending AGM approval, dividend payment and tax arrangements may affect share price due to high payout and changes in capital structure.
• Share Consolidation & Capital Reduction: Major corporate action – increases per-share performance metrics, may impact liquidity and investor perception.
• R&D Surge: Significant increase in innovation investment and patent activity positions the company for future growth.
• Revenue Mix Shift: Growth in non-tower businesses signals diversification and higher margin potential.
• Depreciation Policy Change: Extension of asset useful life reduces expenses and boosts profit, positively impacting valuation metrics.
• No Material Legal Proceedings or Contingent Liabilities: Clean legal profile, reducing operational risk.

Important Dates

• AGM: 15 May 2026
• Dividend Record Date: 28 May 2026
• Expected Dividend Payment: On or around 30 June 2026
• Register Closure: 22 May to 28 May 2026 for dividend entitlement

Risks & Forward-Looking Statements

While the company has delivered robust financials, continued high dividends, and a strategic shift towards innovative, high-growth segments, investors should note that past performance is not indicative of future results. The company’s forward-looking statements are subject to risks and uncertainties, and actual outcomes may differ materially.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own analysis and consult with professional advisors before making investment decisions. The information herein is based on the company’s public filings and may be subject to change. No liability is accepted for any loss arising from reliance on this article.

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