China Tower Furthered “One Core and Two Wings” Strategy

HONG KONG SAR – Media OutReach – 3 August 2023 – 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 year ended 30 June 2023.

Performance Highlights

Our revenue grew steadily in the first half of 2023, reaching RMB46,461 million, an increase of 2.2% year-on-year. After excluding the impact of the Commercial Pricing Agreements, revenue increased by 6.2% on a comparable basis over the same period last year. EBITDA[1] amounted to RMB32,021 million with an EBITDA margin[2] of 68.9%. Profit attributable to the owners of the Company was RMB4,841 million, up by 14.6% year-on-year, with a net profit margin of 10.4%, marking a further improvement in profitability.

In the first half of 2023, our net cash generated from operating activities amounted to RMB11,555 million, and capital expenditure was RMB12,822 million. As of 30 June 2023, our total assets amounted to RMB318,063 million, with interest-bearing liabilities of RMB92,223 million, with a gearing ratio[3] of 31.6%. Our financial position remained stable.

5G network penetration and coverage in China continues to expand and we seized the opportunities this presented. By strengthening resource coordination and sharing and operational efficiencies, we were able to meet customer network construction needs in an intensive and effective manner. We steadily implemented the new phase of the Commercial Pricing Agreements with the TSPs. In the first half of 2023, the revenue from our TSP business was RMB40,905 million, a decrease of 1.1% compared to the same period last year; however, when the impact of the Commercial Pricing Agreements is excluded, revenue reached RMB42,762 million on a comparable basis, an increase of 3.4% year-on-year.

Tower business. Centering around 5G network construction, we harnessed policy support for unleashing and sharing of public and cross-sector resources. These initiatives have helped reduce the entry barrier and social costs of reinforcing our competitiveness in resource coordination. A higher level of sharing of existing site resources, wider use of social resources and more effort in promoting the adoption of our integrated wireless communications coverage solutions has enabled us to comprehensively satisfy customer demand for 5G construction. We completed approximately 325,000 5G construction demand in the first half of 2023, of which more than 95% were fulfilled by sharing existing resources. We proactively captured the increased demand for low-frequency network construction and for new construction arising from network optimization. As a result, the number of new projects increased rapidly, effectively supporting the stable growth of our Tower business. Leveraging thorough knowledge of the construction features of comprehensive 5G coverage, we continued to launch innovative low-cost construction solutions, products and services to satisfy customer demand in an economical and effective manner. In the first half of 2023, our tower business revenue accounted for RMB37,481 million, down by 2.9% over the same period last year. After excluding the impact of the Commercial Pricing Agreements, our revenue reached RMB39,338 million on a comparable basis, an increase of 1.9% year-on-year. As of 30 June 2023, the Company was managing a total of 2.061 million tower sites, representing a net increase of 6,000 sites from the end of 2022. During the same period, we gained 61,000 new tenants, bringing the total number of TSP tenants to 3.423 million. Our TSP tenancy ratio increased from 1.65 at the end of 2022 to 1.67, showing a continuous increase in the level of site co-location.

DAS business. Our DAS business benefited from continued enhancements to design and quality management while leveraging the advantages of low cost, service quality, and low energy consumption. We further integrated and better coordinated “resources + demands”, fully leveraging unified site entry and coordinated construction, enabling us to expand 5G coverage in key industries such as education, cultural tourism, transportation, and healthcare, and to offer better service to support the newly established DAS market segments. Innovation in DAS products and comprehensive service solutions allowed us to provide customers with differentiated passive and active DAS sharing solutions, satisfying the demand for 5G upgrading of existing DAS. By further exploring shared value and expanding the scale of the business, we have consolidated DAS business as the “second engine” for development of our TSP business. In the first half of 2023, our DAS business recorded revenue of RMB3,424 million, an increase of 24.4% compared to the same period last year. As of 30 June 2023, we had covered buildings with a cumulative area of 8,820 million square meters, up by 47.7% year-on-year, while the coverage in high-speed railway tunnels and subways totaled a cumulative length of 22,135 kilometers, an increase of 21.1% over the same period last year.

Forged capabilities to maintain strong growth of Two Wings business

To maximize new opportunities brought by the development of the “Digital Economy” and the “dual carbon” goals, we continued to enhance our innovative development capabilities, improve core competitiveness, and promote rapid growth of the Two Wings business. In the first half of 2023, the revenue of the Two Wings business reached RMB5,361 million and accounted for 11.5% of our overall operating revenue, an increase of 2.7 percentage points over the same period last year, further reinforcing the Company’s multi-pillar structure for business development.