reports
- Chris Hoare
Chinese Telcos & Towers Outlook 2024 – Expect another good year for t...
2023 was another decent year for the telcos largely driven by Enterprise. Stocks (especially China Mobile and Telecom) outperformed the weak local index. We expect trends to last through 2024 with good revenue growth and reducing margin pressure and the potential for shareholder remuneration to surprise
- Chris Hoare
China Tower (Buy, TP: HKD 1.7, +136%) Q3 23 Quick Take: Better overal...
China Tower reported another robust set of figures with good bottom-line growth, supported by an improvement in topline and EBITDA. YTD net profit has grown 14.8% YoY, against consensus’ 8.9% growth for the full year. Despite the recent margin pressure associated with its higher-growth Two Wings business, net profit growth has remained strong on lower depreciation and finance costs.
- Chris Hoare
- David Lopes
EM Tower Trends Faster quarter in Africa and Indonesia; IHS’ MTN Nige...
Amongst our EM Tower coverage, African TowerCos like IHS continue to trend well on topline and EBITDA; Indonesian towers reported faster EBITDA growth ahead of topline again; China Tower slowed again as Towers revenue were impacted by MSA renegotiation effective from 2023; its Two Wings business continue to show healthy growth, however. Indian towers reported better numbers, supported by Indus performance as the lower bad debt costs helped offset its higher energy costs.
- Chris Hoare
- Chris Hoare
EM Tower Trends Africa outperforming; Q1 CY2023 review
Amongst our EM Tower coverage, African TowerCos continue to outperform. At this stage, we prefer IHS as it offers the best EBITDA growth profile, coupled with its Project Green and considering that diesel prices in Nigeria are falling, we should see meaningful pull through for the year, despite the recent devaluation of the Naira.
- Chris Hoare
China Tower (Buy, TP: HK$1.7, +70%) Q1 23: Decent start to the year,...
China Tower has reported a decent set of Q1 results. Core trends slowed, impacted by the new commercial pricing agreements and service agreements, but the fact that total revenue continued to post positive growth is encouraging in our view. Even more encouraging is the improvement in EBITDA trends and net profit up 15% YoY this quarter despite the MSR renegotiation
- Chris Hoare
- David Lopes
- Chris Hoare
- David Lopes
New Street: Chinese Telcos & Towers Outlook 2023: Expect another good...
2022 was a good year for the telcos largely driven by Enterprise. We expect trends to last through 2023 with high single digit revenue growth though some near-term margin pressure is expected. Shareholder remuneration is guided to improve. We remain Buyers of all 3. China Tower should also do well in 2023 we think given more certainty following the new contract.
- Chris Hoare
New Street: China Tower (Buy, TP: HK$1.7, +82%) Our thoughts on the 2...
China Tower shares spiked 13% today on the revised 2022 Service Framework Agreement, where the key changes include the 2.4% rise in co-tenancy discounts on the base price. In our view, the dilutive impact on the 2023E ARP/Tenant is less than what the market had anticipated – 1.6% vs market’s expectation of a 3% decline.
- Chris Hoare
- David Lopes
New Street: EM Towers Q3 CY2022 review: A decent quarter for the EM s...
Q3 was a decent quarter overall for EM Tower companies. In Indonesia, headline growth slowed due to TBIG’s 2012 contract expiration but was otherwise healthy on an organic basis, up mid-single digits. There was a small slowdown in top line trends for Indus and China Tower, but performance was broadly in line with our expectations.
- Chris Hoare
New Street: China Tower (Buy, TP: HK$1.7, +107%) Q3 22 Quick Take: St...
China Tower reported its Q3 22 results yesterday. Overall revenue slowed slightly and EBITDA down but net profit performed strongly, probably as depreciation fell. Its Two Wings growth has been better than expected with their contribution at 9.9% this quarter (Q2: 9.6%), further validating our thesis that it will contribute materially.
- Chris Hoare
- David Lopes
New Street: China Tower (Buy, TP: HK$1.7, +95%) Two Wings Take Off, P...
We revisit our thesis on China Tower as its new growth engines begin to contribute meaningfully. Aptly named “Two Wings”, it is comprised of the Smart Tower and Energy business. We see China Tower’s diversification efforts working and expect it to provide material incremental growth.
- Chris Hoare
- David Lopes
- Chris Hoare
New Street: China Tower (Buy, TP: HK$1.2, +20%) IR Small Group Call
We hosted a call yesterday evening HK time with IR at China Tower. Despite the continued uncertainty around the expiry of the MSA at the end of the year, China Tower has been recovering this year, with the profit outlook on an underlying basis improving, and with ancillary services driving growth and creating an investment thesis unlike other TowerCos we think.
- Chris Hoare
- Chris Hoare
New Street: EM Tower Trends Decent quarter, continue to prefer Indone...
Tower companies fared decently on the topline but saw pressure on their EBITDA margin in Q1. Indus Towers had a stable quarter; Indonesian towers’ growth continued to supported by acquisitions while China Tower rebounded from its weaker Q4 (due to one-off discounts).
- Chris Hoare
New Street: China Tower (Buy, TP: HK$1.2, +33%) IR Small Group Call
We hosted a call this evening HK time with IR at China Tower. Unlike the telcos (China Telecom feedback HERE, replay HERE; China Unicom feedback HERE, replay HERE, China Mobile feedback HERE, replay HERE), China Tower remains under margin pressure despite improved revenue growth over the last 18 months.
- Chris Hoare
New Street: China Tower (Buy, TP: HK$1.2, +31%) Q1 22: Mixed results ...
China Tower reported a mixed set of 1Q22 results as EBITDA growth slowed while revenue growth was decent, trending up 7% YoY, from 5.4% in 4Q21. We are hosting a small group call with the company tomorrow at 8am ET/1pm London, 8pm HK/SIN, 10pm SYD. Please register via your NSR salesperson if you would like to attend.
- Chris Hoare
- Chris Hoare
New Street: Chinese Telcos Data Centres: A valuation anomaly that is ...
In a separate note published today we analyse the Data Centre opportunity for EM Telcos globally which shows that the best value opportunity for those that can invest is probably in China. The 3 Chinese Telcos are each among the top 6 providers of co-location DC capacity globally, and generate 3-9% of group revenues from IDC.
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