China Tower Corporation Limited

For 2023, China Tower reported operating revenue of RMB94.01 billion, up 2% year-on-year, and profit attributable to owners of RMB9.78 billion, up 11%. Excluding the impact of commercial pricing agreements, operating revenue was RMB97.72 billion, up 6%. Tenants totaled 3.658 million and tenancy ratio reached 1.79, up 0.05 from the prior year. Operating cash flow was RMB32.84 billion and free cash flow was RMB1.13 billion, while CapEx was RMB31.72 billion, up 21%; operating expenses were RMB79.51 billion, up 0.8%. The board recommended a final dividend of RMB0.03739 per share for 2023, up 15.7%, with a 75% payout ratio of distributable net profit. Looking ahead, management said cash flow should return to a normal level in 2024 as collections recover.

Chairman Zhang said the company made steady progress in 2023 while advancing its 'One Core and Two Wings' strategy and aligning with Cyberpower, Digital China and Dual Carbon initiatives. He emphasized growth in digital towers, smart tower applications and energy services, plus higher R&D investment and shareholder returns. His tone was confident, but he acknowledged the cash flow dip and framed it as temporary, saying it improved in Q4 and continued to recover in early 2024.

Chief Accountant Hu focused on cost discipline, asset utilization and cash flow. He cited operating expenses of RMB79.51 billion, depreciation and amortization of RMB49.05 billion, repairs and maintenance of RMB7.41 billion, employee benefits of RMB8.84 billion, and CapEx of RMB31.72 billion; he also noted leverage remained healthy with a liability-to-asset ratio of 39.4% and a gearing ratio of 31.4%. On cash, he said operating cash flow was RMB32.84 billion and free cash flow RMB1.13 billion, with second-half operating cash flow of RMB21.29 billion and free cash flow of RMB2.39 billion as collections improved.

There was no real analyst Q&A in the transcript; management instead preemptively addressed the main concern, which was weaker operating cash flow. They attributed it to new pricing and service agreements that required billing system upgrades, order verification and renegotiated service standards, and said receivables were pressured in the first half but improved in the second half. Management also said January and February 2024 collections were trending positively, suggesting the issue is temporary.