China Tower 5G development gains traction and Two Wings business scales rapidly, Profit attributable to owners of the Company increased by 16.1%

SINGAPORE – Media OutReach – 9 August 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 interim results for the six months ended 30
June 2021.

 

Performance Highlights

	For the six months ended 30 June
RMB Million	2021	2020	Change
Operating revenue	42,673	39,794	+7.2%
EBITDA	31,184	29,100	+7.2%
Profit attributable to owners of the Company	3,457	2,978	+16.1%
Basic earnings per share (RMB yuan)	0.0198	0.0170	+16.5%
Key operating data
Number of tower sites (thousand)	2,035	2,015	+1.0%
Number of tower tenants (thousand)	3,423	3,313	+3.3%
Tower tenancy ratio (tower tenants / tower sites)	1.68	1.64	+2.4%

 

Our total revenue maintained steady growth in the first half of 2021 while
profitability continued to improve. Our operating revenue recorded a
year-on-year increase of 7.2% to RMB42,673 million; our EBITDA¹
amounted to RMB31,184 million, representing growth of 7.2% year-on-year with an
EBITDA margin² of 73.1%. Profit attributable to owners of the
Company totaled RMB3,457 million, up by 16.1% year-on-year, with a net profit
margin of 8.1%.

 

Our cash flow remained sound and ample. In the first half of 2021, net
cash generated from operating activities amounted to RMB24,238 million. Capital
expenditures amounted to RMB10,360 million, a reduction of 27.6% year-on-year,
which resulted in our free cash flow³ reaching RMB13,878 million, an
increase of 8.6% year-on-year. Our debt leverage ratio was contained at a
reasonable and manageable level and our financial position remained healthy. As
of 30 June 2021, our total assets were RMB333,195 million and our
interest-bearing liabilities stood at RMB114,191 million, representing a
gearing ratio⁴ of 37.0%.

In the first half of 2021, centered around our “One Core and Two Wings”
strategy, we continued to leverage the benefits of effective resource
coordination and sharing to achieve higher efficiency in our asset operations,
and as a result further reinforced our competitiveness. Building on the stable
development of our TSP business, our TSSAI and energy businesses continued to
increase in scale and grow rapidly.

 

Maintaining stable and healthy growth in our TSP
business, cementing industry leadership

 

Given the growth in 5G networks deployments during the first half of 2021,
we used our market-oriented approach to focus on customer demands as well as
the new features of 5G network construction. In this context, we utilized our
ability to coordinate and share resources, making full use of our existing and
social resources. We have also focused on construction and service model
innovation, in view of improving our asset operating efficiency and meeting our
customer’s network coverage demands in a cost-effective, intensive and
high-performing manner. As a result, our TSP business maintained stable growth,
further cementing our leadership in the telecommunication infrastructure construction
and operation sector.

 

We completed the infrastructure of approximately 256,000 5G projects in
the first half of 2021, of which 97% were completed by utilizing existing
resources. This underscored our strength in sharing resources to support the
large-scale construction of 5G networks in a cost-effective manner. At the same
time, the impact of 5G on improving our revenue has begun to show its effects,
with 5G becoming the key growth driver of our TSP business. As of the end of
June 2021, we were managing a total of 2.035 million tower sites, a net
cumulative addition of 12,000 sites from the end of 2020. During the same
period, we gained 53,000 new TSP tenants, bringing the total number to 3.228
million. Our TSP tenancy ratio also increased from 1.57 at the end of 2020 to
1.59. Our DAS business cumulatively covered buildings with a total area of 4.41
billion square meters, up by 41.3% year-on-year. We also covered a total of
14,431 kilometers of high-speed railway tunnels and subways, an increase of
31.8% year-on-year.

 

In the first half of 2021, our TSP business revenue amounted to RMB39,808
million, an increase of 4.5% year-on-year, of which our tower business revenue
accounted for RMB37,722 million while our DAS business revenue accounted for
RMB2,086 million, representing a year-on-year growth of 3.7% and 21.3%
respectively.

 

Rapidly scaling our Two Wings business, gaining new
momentum for further development

 

Leveraging our unique advantages in resources and capabilities, we focused
on product innovation and the optimization of our platform operations, to
maximize the benefits of our sharing model. As a result, our Two Wings business
continued to expand rapidly while gaining new momentum for sustainable
development. The Two Wings business has shown potential in supporting and
reinforcing the Company’s multi-pillar development plan. In the first half of
2021, Two Wings business recorded revenue of RMB2,737 million, an increase of
73.3% year-on-year.

TSSAI business: The Company seized opportunities arising from the further
digitalization and informatization in China, fully leveraged our competitive
advantages in mid-and high-point monitoring and proactively promoted the
transformation of “Telecommunications Towers” into “Digital Towers”. Focusing on
our video surveillance services, we enhanced our innovative business model and
implemented unified technology and service standards, platform support and
operations management. We integrated algorithms, terminals, transmission and
data management as well as extended our collaboration with industry partners to
expand our ecosystem. We have officially launched our “Tower Monitoring”
business to serve a wide range of customers across sectors relating to the
national economy and people’s livelihoods, including environmental remediation,
disaster relief, eco-conservation and village governance. Our integrated
information service capabilities were further enhanced, providing a strong
basis for the rapid expansion of our TSSAI business. As of 30 June 2021, we had
195,000 TSSAI tenants and TSSAI revenue for the first half of 2021 was RMB1,853
million, an increase of 46.6% year-on-year.

 

Energy business: We captured opportunities
related to the push toward a low-carbon economy and the thriving new energy
industry. Focusing on our core business segments of battery exchange and power
backup, we expanded the scale of our operations and improved our delicate
management approach. By standardizing our product platform and putting in place
operating and management systems, we strove to enhance our core competitive
advantages as the “largest industry player with best-in-class services”,
creating smart energy applications with “China Tower characteristics”. As of 30
June 2021, we had cumulatively provided around 460,000 users with battery
exchange services, a net increase of 160,000 compared with the end of 2020,
making us the largest supplier of battery exchange services for light electric
vehicles in China. We also cumulatively built 17,000 power backup sites, a net
increase of 5,000 compared with the end of last year. In the first half of
2021, our energy business recorded revenue of RMB884 million, an increase of
180.6% year-on-year.

 

Mr Tong Jilu, Chairman of China Tower said, “Looking forward in the second half of 2021, we will continue to
capture opportunities brought about by the development of 5G new
infrastructure, the digital economy and the new energy industry. Adhering to
our goal of building an enterprise with the best potential for growth and value
creation, we will continue to leverage our advantages in resource sharing and
further implement our ‘One Core and Two Wings’ strategy. In doing so, we will
be in the best position to maintain stable revenue growth, enhance the value of
our Company and provide better returns to our shareholders.”

 

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

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

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

Note 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.