研究报告全文：15Dec2022CMBInternationalGlobalMarketsEquityResearchCompanyUpdateChinaTower788HKHOLDMaintainAclearingeventthatinvestorshavebeenTargetPriceHK101waitingforMaintainHOLDPreviousTPHK101UpDownside84ChinaTowerannounceditsnewfive-year2023-2027agreementwithChinaCurrentPriceHK093telcoson14Dec2022WeviewthiseventasapositivedevelopmentfortheCompanyasitremovesinvestorsconcernsoverapossiblesignificantpricingChinaTechnologySectordiscountorlowercostmarkupintheanticipatednewagreementInresponsetheCompanyssharepricesurged1341toclosetheday14DecwithHK093LilyYangPhDMaintainHOLDwithTPofHK10185239163716lilyyangcmbicomhkNewagreementwillprovidebetterclarityandcertaintyovertheCompanysbusinessgoingforwardChinaTowerwillcontinuetoprovideAlexNgrelevantservicesoftowerDAStransmissionandserviceproductstoChina85239000881telcoforanothertermoffiveyearsPrincipalamendmentstotheagreementalexngcmbicomhkincludeanadditional24discounttoco-locationtenantsCostmarginof10remainsunchangedTheCompanyexpects1aflatrevenuegeneratedundertheagreementmainlytowerplusDASbusinesses2anincreasedtotalrevenueand3astableoperatingmarginfor2023whichisinlinewithourpreviousexpectation202324revenuesareexpectedtomaintainsingle-digitgrowth4442YoYChinatelcosbusinesstowerplusDAScontributed91of9M221revenueWetrackedakeyindicatortoestimateChinatelcostowerleasingburdenfigure2whichshowedadecliningtrendpossiblyduetosoftening5GspendingLookingforwardweexpectitslegacybusinesstoremainflat1717growthin202324Eoffsettinghighergrowth293224fromnewbusinesssegmentsMaintainHOLDwithunchangedTPofHK101Wethinkthetelecominvestmentfocushasshiftedfrom5GtohighergrowthareasindustrialdigitalizationandcloudcomputingetcThereforeoverallgrowthforChinaTowerislimitedMaintainHOLDTPofHK101isbasedonthesame27xEVEBITDAwhichis1SDbelow2-yearforwardEVEBITDAmultipleEarningsSummaryYE31DecFY20AFY21AFY22EFY23EFY24ETurnoverRMBmn81099865859248196537100566YoYgrowth6168684442EBITDARMBmn5952763017649866749970315RelatedReportsNetprofitRMBmn6428732986689649106981China5GSectorExpectEPSRMB004004005006006telecomnamescontinuetoYoYgrowth236140183113109showstrengthinbroadmarketConsensusEPSRMBNANA005005006weakness16Sep2022LinkEVEBITDAx3934312621PBx0808080707Yield27323945512China5GSectorDefensiveROE3539454953playwithupsidepotential4Netgearing45138227814723May2022LinkSourceCompanydataBloombergCMBIGMestimates1ChinaTowerstelcorevenueovertelcosCOGSplusrelatedoperatingexpPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk15Dec2022Figure1RevenuebreakdownLegacybusinessFigure2ChinaTowersrevenueaccountedforatowerDAScontributed91of9M22revenuesmalleroftelcosCOGSoperatingexpRMBbn12065606058100576053805560504045204003520182019202020219M22ChinaTowersTSPrevenuetowerDASTowerbusinessDASbusinessTSSAIenergyOthersasaoftelcosCOGSplusoperatingexpSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesFigure312MforwardEVEBITDAbandFigure412MforwardEVEBITDAchart50HKD20401530102005100012-2003-2106-2109-2112-2103-2206-2209-22122003210621092112210322062209221-yrfwdEVEBITDAMeanClosingPx226x276xMean1SDMean-1SD325x374x423xSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE215Dec2022FinancialSummaryChinaTower788HKIncomestatementCashflowsummaryYE31DecRMBmnFY20AFY21AFY22EFY23EFY24EYE31DecRMBmnFY20AFY21AFY22EFY23EFY24ERevenue81099865859248196537100566Netprofit840796158668964910698Depreciationamortization4751549982387044025441940Sellingexp46275161509853225544Changeinworkingcapital28146581116735451690Adminexp58055796708976417960Others44407487205741428114009RDexp61156875768381168455Netcashfromoperating5754860503562736472864956Financecosts39233723341529362649Otheroperatingexp8955795105101111105095108631Capex3780032513305193089231175Operatingprofit1201213035146541545616542Other97998117210931150Netcashfrominvesting3789731515293472979930026Othernon-operexp36053420326027742480Pre-taxprofit84079615113941268214061Shareissuance00000Dividendpaid25613934461856356465Incometaxexpense19802287272630343364Other18276236261756387418533Minorityinterests11Netcashfromfinancing2083727560221811437614998Netprofittoshareholders642873298668964910698Netchangeincash1186142847452055319932Cashatbeginningoftheyear6223504264711121631768Exchangedifference51000Cashattheendoftheyear50426471112163176851701BalancesheetKeyratiosYE31DecRMBmnFY20AFY21AFY22EFY23EFY24EYE31DecRMBmnFY20AFY21AFY22EFY23EFY24ECurrentassets4320448344622847832198140RevenuemixCashequivalents50426471112163176851701Towerbusiness7337175857775337852279481Accountreceivables3065834194448124002239637DASbusiness35284340574261906672Inventory00000TSSAIenergy3939613189491156814155Prepayment75047679625665316803Others261257257257257Othercurrentassets00000GrowthNon-currentassets294176274915251155230408208155Revenue6168684442PPE231684221419203705185299164449Operatingprofit65851245570Deferredtaxassets14571892260141065605Netprofit231140183113109Othernon-currentassets6103551604448484100338101Totalassets337380323259313439308729306295ProfitlossratioOperatingmargin148151158160164Currentliabilities10663576182704496262558093Netprofitmargin798594100106STborrowings6199937142311932699923907Accountpayables3146025264252042240321681BalancesheetratioTaxpayable00000Netdebttotalequity45138227814723Othercurrentliabilities1317613776140511322212505Currentratiox0406091317Receivableturnoverdays102113135140125Non-currentliabilities4449957723495864868746553Inventoryturnoverdays00000LTborrowings2712141572337933374932345Payableturnoverdays1371201009080Deferredtaxliability00000Othernon-currentliabilities1737816151157931493814208ProfitabilityTotalliabilities151134133905120034111312104646ROE3539454953ROA1923283135Sharecapital176008176008176008176008176008Reserve00000PersharedataRMBRetainedearnings1023713346173962141025642EPS004004005006006Other000DPSH-shareinHKD002003003004004Minorityinterest10000BPS107108111113115Totalequity186246189354193404197418201650Totalliabilitiesandequity337380323259313439308729306295SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE315Dec2022DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE4