China Tower (Buy, TP: HK$14, +20%) Q3 25 Quick Take: Slower on softer Tower trends; lower D&A costs anticipated from useful life extension
Results were a touch behind expectations following an extended decline in Tower revenue, led by lower ARP/Tenant. This impacted margins which partially offset the stabilising/lower D&A costs, resulting in slower earnings growth. Importantly, the company has flagged an increase in useful life of its DAS assets from 7 to 10 years starting from July and is expected to lower its D&A costs by RMB 870m in 2025. This represents 1.7% of consensus D&A costs. Our key takeaways belowCHINA 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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