China Tower (788.HK) Continued to Consolidate Core Advantages; Strengthened Profitability with Payout Ratio Further Increased to 68%

HONG KONG SAR – Media
OutReach – 8 March 2021 – The world’s largest telecommunications infrastructure service provider China
Tower Corporation Limited (“China Tower”, or the “Company”) (Stock Code:
0788.HK) is pleased to announce its annual results for the year ended 31
December 2020.

 

Performance Highlights

The Company’s revenue maintained stable and healthy growth in 2020 while
profitability continued to improve. Our operating revenue for 2020 recorded a 6.1%
year-on-year increase to reach RMB81,099 million; our EBITDA¹
amounted to RMB59,527 million, with a 73.4% EBITDA margin². Profit
attributable to owners of the Company totaled RMB6,428 million, up by 23.1%
over the previous year, with a net profit margin of 7.9%.

 

Our cash flow remained strong while the debt leveraging level was stable
and healthy. Net cash generated from operating activities amounted to RMB57,548
million in 2020. Capital expenditures amounted at RMB37,122 million, while our free
cash flow³ reached RMB20,426 million. As of 31 December 2020, our total
assets reached RMB337,380 million and interest-bearing liabilities amounted to
RMB112,871 million, with a gearing ratio⁴ of 36.7%.  

 

Aligned with our commitment to providing good returns to our shareholders,
the Board of Directors recommends to pay a final dividend of RMB0.02235
(pre-tax) per share for the year ended 31 December 2020, equivalent to a payout
ratio of 68% of our annual distributable net profit.

 

Supporting 5G network construction efficiently and
maintaining stable growth in TSP business

 

In 2020, in view of the accelerated 5G network deployment and the scaling
of 5G construction, we strengthened the market-oriented approach with customer
demands and 5G new features in mind. We continued to drive resource sharing by
making full use of both existing resources and social resources and stepping up
technological and product innovation to drive construction and service model
transformation. By accelerating the implementation of our integrated wireless
communications coverage solutions, we were able to meet customer demands with
cost-effective, intensive and high-performing network coverage solutions. Our
competitive advantages in low cost, high efficiency and quality services were further
reinforced, supporting the stable growth of our TSP business. 

 

As of the end of 2020, we managed a total of 2.023 million tower sites, representing
an increase of 29,000 compared to the end of 2019. The number of TSP tenants
reached 3.175 million, representing an increase of 112,000 compared to the end
of 2019. Our TSP tenancy ratio reached 1.57. With regard to our DAS business,
we had covered buildings with a cumulative area of 4,060 million square meters,
while high-speed railway tunnels and subway coverage totaled a cumulative
length of 12,702 kilometers.

 

In 2020, our TSP business revenue reached RMB76,899 million, or a 3.8%
increase year-on-year, among which tower business revenue increased by 2.8% to
RMB73,371 million, while DAS business revenue increased by 32.7% to RMB3,528
million.

 

Fostering competitive advantages to accelerate the growth
of Two Wings business

 

Developing through sharing and collaboration is our founding principle,
which has enabled us to fully leverage our resources and strengths to promote
product innovation and better platform operation in key sectors. The Two Wings
business maintained a good development momentum and has become important driver
for revenue growth and value enhancement. In 2020, the Two Wings business
recorded revenue of RMB3,939 million, or a year-on-year increase of 89.4%.

 

The TSSAI business sustained rapid growth. Along with the accelerated pace
of informatization across society, we captured timely opportunities to develop
two types of services around resource sharing and data information. Targeting
key clients in important sectors relating to national economy and peoples’
livelihoods, such as environmental protection, forestry, lands, water resources,
we enhanced our integrated information service abilities and continued to
deliver rapid growth in our TSSAI business. In 2020, revenue generated from our
TSSAI business reached RMB3,004 million, or a year-on-year growth of 59.2%.

 

The energy operation business achieved considerable breakthrough in scale.
Leveraging the advantage of our site resources and expertise in securing power
supply and operation, we have taken proactive steps to expand socialized energy
applications and services. In 2020, aligned to our core business segments of
battery exchange and power backup, we enhanced our product platform, expanded
our customer base and built our brand advantages. While building up our market
competitiveness, we achieved initial breakthrough in scale. As of 31 December
2020, we have cumulatively developed 301,000 paid users for our battery
exchange services. In 2020, our energy operation business generated revenue of
RMB935 million.

Mr Tong Jilu, Chairman of China Tower said, “Looking forward, we will seize the opportunities to achieve the
goal of building an enterprise with the best potential for growth and value
creation. We will continue to uphold our resource sharing to promote stable
revenue growth and enhance the value of our Company, and to achieve
high-quality development featured ‘One Core and Two Wings’ strategy.”

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¹ EBITDA is
calculated by operating profit plus depreciation and amortization.

² EBITDA margin is calculated by dividing EBITDA by operating revenue, and multiplying the resulting value by 100%.

³ Free cash
flow is the net cash generated from operating activities minus the capital
expenditures.

⁴ Gearing
ratio is calculated as net debt divided by the sum of total equity and net
debt, then multiplied by 100%. Net debt is calculated as the amount of
interest-bearing liabilities minus the amount of cash and cash equivalents.