China Tower (Buy, TP: HK$14, +24%) Q2 25 Quick Take: Stable growth, Dividends rising
Both revenue and EBITDA trends slowed but were in-line with expectations. Margins improved again which led to earnings progression and a 21% rise in interim dividends. We see our thesis playing out as stabilised revenue growth coupled with falling depreciation is supportive of earnings and therefore dividends growth. The stock had a good run but remains relatively cheap (4.7x FY25 EV/EBITDA), hence we remain Buyers with a HK$ 14 price targetCHINA TOWER CORPORATION LIMITED is a China-based telecommunications tower infrastructure service provider. The Company mainly has three business segments. The Tower Business segment mainly uses sites to carry out macro cell and small cell businesses with telecommunications service providers (TSPs). The Indoor Distributed Antenna System (DAS) Business segment mainly provides indoor distributed antenna systems to TSPs and to attach their telecommunications equipment. The Trans-sector Site Application and Information Business (TSSAI business) segment mainly uses the sites dispersed nationwide and provide site resource services, including infrastructure, maintenance services and power services, to host different types of devices for customers from different industries and support them to build up different types of nationwide or regional networks.
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