Call with Head of IR at China Tower

Following the company's Q3 results, this session also serves as an opportune time to revisit our thesis on China Tower. The success of China Tower's Smart Tower and Energy businesses continue to play out in our view, which have helped to offset the decline in Tower revenue (albeit easing). Service revenue contribution have grown to 12% on the back of double digits growth, well on track to meet its 15% target by 2025. However, one concern is on the EBITDA pressure, often associated with higher cost base in these faster growing businesses. So far, China Tower continue to post strong bottom line growth on lower depreciation and interest costs. If this continues and alongside better cost control, we do anticipate EPS growth to accelerate and thus dividend growth is likely to follow suit too.