Chinese Tower

Company Profile


China Tower (00788) is the world's largest provider of communication tower infrastructure services. It was established in July 2014 by China's three major telecom operators (China Mobile, China Unicom, China Telecom) to implement "network power" in China. The strategy plays an indispensable role in promoting.

According to industry reports, China Tower ranks first among global communication tower infrastructure service providers in terms of number of sites, number of tenants and revenue. As of the end of the first quarter of 2018, the company operated and managed more than 1.88 million sites and served more than 2.73 million tenants; as of the end of 2017, the company's site number accounted for 96.3% of the China Telecom Tower infrastructure market share; In terms of revenue, the company's share of China's communications tower infrastructure market reached 97.3%.

IPO information

Hong Kong Offer Shares: 2,155,740,000 H Shares (5%)

International Offer Shares: 40,959,060,000 H Shares (95%)

Issue price: HK$1.26-1.58

H-share market capitalization: HK$543.25-681.21 billion

Board lot size: 2,000 shares

Tangible net assets per share after issuance: HK$1.17-1.26


Sponsor: China International Capital Corporation Hong Kong Securities Co., Ltd., Goldman Sachs (Asia) Co., Ltd.

Underwriters: China International Capital Corporation Hong Kong Securities Limited, Goldman Sachs (Asia) LLC, Merrill Lynch (Asia Pacific) Limited, JP Morgan Securities (Asia Pacific) Limited, ABC International Securities Limited, BNP Paribas Securities (Asia) Limited Company, BOC International Asia Limited, CCB International Capital Limited, China Merchants Securities (Hong Kong) Limited, CITIC Jiantou (International) Finance Co., Ltd., CMB International Capital Limited, The Hongkong and Shanghai Banking Corporation Limited, ICBC International Securities Limited, Morgan Stanley Asia Limited, UBS AG Hong Kong Branch

Callback mechanism: 15-50 times (7.5%); 50-100 times (10%); 100 times or more (20%)

Cornerstone Investors: Gaochun Capital ($400 million), OZ Funds ($300 million), Darsana Master Fund LP ($175 million), Taobao China Holdings Limited (HK$784.8 million), China National Petroleum Corporation Capital Limited ( 100 million US dollars), Invus Public Equities, LP (100 million US dollars), Beijing Haidian District State-owned Capital Operation and Management Center (US$98.5 million), Industrial and Commercial Bank of China Co., Ltd. - Financial Planning Agent (US$50 million), Hualong (Hong Kong) Co., Ltd. (US$50 million), Shanghai Automotive Hong Kong Investment Co., Ltd. (US$50 million)


Prospectus: 2018/7/25 (Wednesday) to 2018/7/31 (Tuesday)

Pricing date: 2018/8/1 (Wednesday)

Announcement of the distribution result: 2018/8/7 (Tuesday)

Listing transaction: 2018/8/8 (Wednesday)


development path

On July 15, 2014, under the background of implementing the “Network Power” strategy, deepening the reform of state-owned enterprises, and promoting the sharing of telecommunications infrastructure resources, the three major operators initiated the establishment of “China Communications Facilities Service Co., Ltd.” (the predecessor of China Tower). The promoters China Mobile, China Unicom and China Telecom accounted for 40.0%, 30.1% and 29.9% respectively. In September 2014, the company officially changed its name to “China Tower Co., Ltd.”.

In December 2015, China Tower increased its capital and shares, and issued new shares to the three major operators as part of the consideration for the acquisition of certain stock communication towers and related assets. At the same time, China Guoxin Holdings Co., Ltd. (China Guoxin), as a new shareholder, subscribed for new shares issued by China Tower in cash. After the capital increase and share expansion, China Mobile, China Unicom, China Telecom and China Guoxin respectively held 38.0%, 28.1%, 27.9% and 6.0% of the shares of China Tower.

Schematic diagram of shareholding structure:



Year 2014

"China Communications Facilities Service Co., Ltd." was established;

The company changed its name to "China Tower Co., Ltd.";

At the end of the year, 31 provincial branches were established.


Acquired certain stock communication towers and related assets from the three major operators, and started commercial operations in full;

New shares will be issued to the three major operators and China;

Obtained the “Basic Telecommunications Business Operation License” (domestic communication facility service business) and the “Value-added Telecommunications Business Operation License” (web hosting) issued by the Ministry of Industry and Information Technology.


Signed a Business Pricing Agreement with China Mobile, China Unicom and China Telecom;

The issuance of asset-backed notes in the inter-bank bond market in China was RMB 4.95 billion.


Become a member of the International Telecommunication Union.


Signed a “Supply Agreement on Business Pricing Agreement” and a “Service Agreement” with China Mobile, China Unicom and China Telecom;

Signed a strategic cooperation framework agreement with State Grid Corporation and China Southern Power Grid Co., Ltd. respectively.

Profit model

The business of China Tower is mainly divided into three categories, namely tower business, room division business and cross-industry site application and information business. The tower business is the core business of the company, and the tower business includes the macro station business and the micro station business. In addition, the company also carries out other businesses including transmission services.


Macro Station Business - Mobile communications for telecom operators cover a wide range of needs across China. The company conducts macro station services based on tower locations throughout the country. The company provided the towers and equipment rooms/cabinets at the tower site to the operators and installed their antennas and other macro station equipment. In the macro station business, the specific service content provided by the company to the operator mainly includes the site space, maintenance service and power service. In 2015, 2016, 2017 and the first quarter of 2018, revenue from the macro station business accounted for 99.5%, 99.2%, 97.3% and 96.5% of the company's total revenue, respectively.

Micro-station service - In order to help operators' mobile communication to cover areas with dense population and buildings in the city and specific areas outside the city, the company provides the station station space to install the operator's micro-station equipment and carry out the micro-station business. With the deepening of mobile communication coverage, micro-station equipment is becoming an important part of operators' mobile communication networks, and is widely used in commercial areas, streets, residential areas, tourist attractions and transportation hubs. The company cooperates with many large enterprises, communities and other entities in China to obtain street lights, monitor poles, power poles, bus stop signs, bridge sides, residential buildings and buildings in these areas and other areas with high traffic. The wall serves as the site, and the installation space of the micro-station equipment is reserved on the tower, in the bus stop or on the wall of the building.

Room-divided business - The company's mobile communications for operators deeply cover the needs of buildings and tunnels. The company actively undertakes the construction of commercial buildings, large-scale venues, subway tunnels, high-speed rail tunnels and highway tunnels, and carries out divisional services. The company provides operators with room sub-sites, connecting their communication equipment to the company's indoor distributed antenna system, helping them receive and transmit indoor mobile communication signals, and to make mobile communication signals cover buildings and tunnels.

In response to the needs of telecom operators for indoor and outdoor collaborative coverage of specific regional mobile communications and the integration of macro and micro-station coverage, as well as the need to continuously promote the convergence of macro station services, micro-station services and room-based services, the company provides mobile communication coverage to customers. solution. Through the complement and cooperation of macro stations, micro stations and room divisions, the company can help customers improve the coverage area of mobile communication in specific areas and improve the quality of indoor and outdoor mobile communication networks at a lower cost. The following figure is a simplified diagram of a comprehensive solution for mobile communication coverage:


The site is the cornerstone of the company's business. According to its own site layout plan or customer's needs, the company strictly selects the appropriate geographical location, obtains the ownership or use rights of the property at the location and builds the site. The company's core competitive advantage relies on a large number of sites and a reasonable site distribution to adequately meet the mobile communications coverage needs of telecom operators and the specific needs of customers in different industries in China's vast and complex geographic environment. As of the end of the first quarter of 2018, the number of sites that the company has put into use is 1,868,226, ranking first among global communication tower infrastructure companies, and the number of sites that have exceeded the number 2-10 in the world. sum.

According to the application scenario of the mobile communication infrastructure, the company's site can be divided into the tower site and the station site. By the end of the first quarter of 2018, the tower site and the station site accounted for 99.0% of the total number of sites already in use. And 1.0%. The tower site can be applied to the ground or the roof, usually containing an iron tower, machine room/cabinet and related equipment; the room sub-site can be applied to buildings or tunnels, usually containing an indoor distributed antenna system placed in the building and Supporting equipment, or leaking cables and supporting equipment in a tunnel. As far as the tower site is concerned, its components include iron towers, machine rooms or cabinets, supporting equipment and site sites. The iron tower is the core asset of the company and is mainly used to install the antenna of the telecom operator.

The company's business processes mainly include demand acquisition, site selection, construction and maintenance. The company's business operations are mainly driven by demand. After acquiring the customer's mobile communication coverage requirements, the customer needs are matched with the company's site resources, and the existing sites are filtered according to the matching results for sharing and transformation, or site selection and construction of new sites. To meet their needs. After delivering the site to the customer, the company carried out a series of maintenance work on the site to assist the normal operation of the customer's equipment.

The company's customers are all from China, and the three major telecom operators are the most important customers. The revenue from the three major operators accounts for the vast majority of the company's total revenue. At the beginning of 2018, the company and the three major operators respectively entered into the "Commercial Pricing Agreement Supplementary Agreement", according to which the company adjusted some of the parameters in the service standard pricing formula in the macro station business, and traced back to 2018. Effective on the 1st of the month, which mainly involves the adjustment of the cost plus rate and the sharing discount, including: the cost-added rate charged for the site space and maintenance service of the macro station service is adjusted from 15% to 10%; The benchmark price sharing discount is adjusted by the two companies to the second discount of 20% to 30% discount, and the three share to the second and third discount 30% to 40%...

Industry overview

The communication tower infrastructure industry refers to the market where communication tower infrastructure service providers provide site resources and related services to telecom operators and other customers. Telecom operators need sites to install communication devices to provide mobile communication services to mobile communication users. In order to alleviate capital expenditures and operating cost pressures, more and more telecom operators choose to split or sell their site resources and corresponding assets to communication tower infrastructure service providers. The tower site is currently the most important site type in the communications tower infrastructure industry. About 91.1% of the sites operated by the communications tower infrastructure service providers worldwide are tower sites.

According to industry reports, as of the end of 2017, there were more than 200 market participants in the communications tower infrastructure industry that provided communications tower infrastructure services, of which less than 10 had more than 1,000 sites. China Tower has more than 1.872 million sites and annual revenues of RMB 68.7 billion, ranking first in the industry. In contrast, the second-ranked company has only 19,300 sites and annual revenues of about 545 million yuan.

The main drivers of the future growth of China's communications tower infrastructure market include: the number of mobile communication users and the growth of data traffic drive the increase in network coverage; the 4G network coverage and base station density still have room for improvement; the development of new technologies has driven a new round of Large-scale networking needs; site sharing drives telecom operators to accelerate network layout. Compared with several major mobile communication markets in the world, there is still room for growth in mobile communication user penetration and data traffic consumption in the Chinese market. As of the end of 2017, the penetration rate of China's mobile communication users was 101.9%, of which the penetration rate of 4G users was 71.7%, and the average mobile communication data per user was 17.4 GB.


Financial overview


Advantages and prospects

1. The world's largest communications tower infrastructure service provider has an unassailable leading position in the Chinese market.

2. Benefit from the sustainable development environment of China's mobile communications industry and enjoy the support of many favorable policies of the government.

3. The major customers and major shareholders are the three major telecom operators in China, and have signed long-term cooperation agreements with stable revenue and cash flow.

Risk and crisis

1. The vast majority of revenue comes from communications tower infrastructure services, and performance depends on the overall growth of the communications tower infrastructure industry and the demand for communications tower infrastructure services.

2. With the cost-plus pricing model, business revenue and operating profit margins may be maximized.

3. The huge capital expenditure is mainly used for the acquisition of the tower assets, the construction, renovation and renewal of the site and supporting facilities, which may lead to large cash outflows and increase financing needs.

company information

Company Name China Tower Co., Ltd.

Time to market 2018-08-08

Official website

management team

Chairman Ji Jilu

General Manager

Chief Accountant Gao Chunlei

Listed exchange

Hong Kong Stock Exchange

Industry IT equipment

Address 19th Floor, No. 73, Fucheng Road, Haidian District, Beijing

China Mobile Communications Group Co., Ltd.

AUGUST 2, 2018

shide lim