Operator
So present at today's event, we have the following management team. Mr. Zhang Zhiyong, Executive Director and Chairman of the company. Mr. Chen Li, Executive Director and General Manager. And Mr. Hu Shaofeng, Chief Accountant of the company. Today's presentation is divided into two parts. Firstly, the management team is going to present on the performance of the company for the year 2025. And then we're going to have the Q&A session. Now we're going to give the floor to Chairman, and he's going to present you on the overall performance of the company for the year 2025. Ladies and gentlemen, welcome to the 2025 annual results announcement of China Tower. And I'd like to take this opportunity to thank you for your ongoing support and interest in our company. Today's presentation is divided into three parts. First, I'm going to talk about the overall performance of the company, and then we're going to look at the business performance and financial performance of the company. I will be firstly present to you about the overall performance of the company for 2025. And then General Manager, Mr. Chen Li, and Chief Accountant, Mr. Hu Shaofeng, are going to talk about business performance and financial performance. And finally, we are going to answer your questions together. For last year, through our effort, we have the following highlights for the company's performance. Firstly, the overall operational performance remained robust, with net profit increasing 8.4 percent year on year. Secondly, a multi-pillar development structure has taken shape, with revenue from the two wings business increasing increasing to 14.9 percent. Thirdly, we actively serve digital governance, with 252,000 digital towers serving thousands of industries. Fourthly, we continue to enhance technological innovation, with R&D expenses increasing by 80.2 percent year-on-year. Fifthly, we place strong emphasis in shareholders' returns, with a full-year dividend payout ratio rising to 77%. In terms of key indicators, we have a chart here. As you can see, the overall performance is very good. The company recorded operating revenue of RMB 100.4 billion, up 2.7% year-on-year and 3.1% on a comparable basis. That's to consider the differences in electricity or energy price. Net profit was R&B 11.63 billion, up 8.4 percent year-on-year. EBITDA totaled R&B 65.81 billion, down 1.1 percent year-on-year. Due to an increase in talent termination orders resulting from the integration of networks, the growth rate of the number of talents has slowed down. As of the end of 2025, the number of tenants reached 3.856 million, with a tower tenancy ratio of 1.79, slightly lower than that of last year. The company's cash flow remained sound in 2025. Net cash flow generated from operating activities for the year was R&B 56.12 billion, up R&B 6.65 billion year-on-year. year, free cash flow was R&B 26.63 billion, up R&B 9.1 billion year on year. In 2025, the company continued to seize the opportunities arising from the separate China and digital China initiatives and the dual carbon goals. All business segments performed in line with expectations, achieved a steady overall growth, as you can see from the chart. For our TSP business, its revenue reached R&B 84.73 billion, accounting for 84.4 percent of total revenue. Revenue from the two wins business was R&B 14.99 billion, that's close to 15 billion, up 11.9 percent year on year, and a growth of 14.9 percent on a comparable basis, accounting for 14.9 percent of total revenue. The OneCoin2Win strategy continued to solidify. Regarding the TSP business, the company continues to strengthen its new 5G telecommunication infrastructure and implemented specialized projects such as the signals upgrades and the extension of broadband coverage to all border areas and forests. As a result, TSP business remained stable. For tower business, capitalizing on clients' ongoing network expansion and leveraging competitiveness strengths of efficient delivery, superior maintenance, and optimal cost structure while minimizing management risks. The company built 364,000 5G stations during the year, bringing the total to 3.123 million. More than 95 percent of 5G projects were delivered through site co-location, helping operators effectively deploy and centralize the 5G network. For DAS business, the focus was on high-value and livelihood scenarios, while strengthening capabilities in resource coordination and sharing and collaborative construction. In 2025, a total of 2.47 billion square meters of building floor areas was added, bringing the total coverage to 15.15 billion square meters. We also added 4,346 kilometers of coverage in subways and railway tunnels, with total coverage reaching 33,661 kilometers. Total coverage continued to expand steadily. Regarding smart tower business, the company has firmly established itself in the spatial digital intelligence governance field leverages rich resources and capabilities. It continued to perform well in smart tower business, with revenue exceeding RMB 10 billion. First, we continued to deepen key industries and scenarios and steadily increase our market share in key areas such as straw burning, farmland protection, and disaster alerts. Secondly, we continued to advance our nationwide one-single network for the distributed platform and promoted the application and implementation of large models for spatial governance industries in key scenarios, thereby enhancing the competitiveness of industry products. Thirdly, we continue to develop high-standard service systems and reinforce unified local support and service teams to ensure a swift response to customers' iterative development requirements and continuously enhance our companion service capabilities. Fourthly, we deepened the closed-loop management of network information security risks and carried out special initiatives to comprehensively enhance technical protection capabilities for network information security across terminals, cloud networks, platforms, and data. In 2025, the Smart Tower business maintained rapid growth, with revenue reaching R&B 10.17 billion, up 14.2 percent year-on-year. In the energy business, the company focused on cooperations such as battery exchange and power backup, enhanced refined operation capabilities, strengthened core competencies in product services and platforms, and continued to develop the energy business in a professional manner. Firstly, in terms of product upgrades and iterations, we completed functional enhancements for battery exchange products, continued to improve the overall performance of the battery exchange systems, enriched the standardized product system for power backup, and promoted China Tower's comprehensive energy butler industry solution. Secondly, we strengthened platform support. We enriched intelligent analysis models, comprehensively upgraded the core functions of the energy butler platform, and improved the platform support capabilities. Thirdly, we deepened refined operations. We strengthened asset management across the entire lifecycle, conducted in-depth analysis of asset value and improved asset utilization efficiency. We also enhanced the VIP user operation system to improve the ability to manage user segmentation. Fourthly, we optimized services. We strengthened the development of C-end intelligent customer service, optimized the B-end companion service system, and continue to improve service satisfaction. The energy business achieved revenue of RMB $4.81 billion for the full year, year, a 7.5 percent increase year-on-year, a 16.5 percent increase year-on-year on a comparable basis, with development momentum continuing to strengthen. In 2025, the company strengthened to deeper reforms and improvements, injecting new impetus to the high-quality development of our business. Firstly, we accelerated the deployment of the strategic layout in emerging industries, We actively promoted the implementation of the 100 major projects, strengthened the integrated support of industry plus technology plus talent, accelerated the commercialization of technological achievements, and actively explored new sectors such as low-altitude economy and edge computing. Secondly, we shifted resources to the frontline regions, implemented tiered management and targeted policies, and improved the valuation incentive mechanisms, fostered an atmosphere sphere of competitive excellence. We enhanced efficiency and prevented risks through lean management, promoted integration and empowerment through digital intelligence transformation, and optimized systems and capabilities through intensified operation. The company continued to strengthen its research on key technologies, accelerated the transformation of scientific and technological achievements, and stepped up efforts in scientific and technological innovation. First, we focused on R&D breakthroughs in key areas, including next-generation mobile communications, AI, low-attitude economy, and edge computing networks. The number of invention patents authorized through the year increased by 50.4 percent year-on-year. Secondly, we focused on the commercialization of achievements and promoted the large-scale application of innovative products, such as shared micro-repeaters, edge gateways, and the One Code for All solution. Thirdly, we focused on refining the innovation system. the six scientific and technological innovation centers achieved through high-quality development, while high-level platforms such as post-doctoral workstations and joint innovation centers were upgraded and expanded. The company participated in the formulation of nine international standards, and a total of 16 new technology awards at provincial or ministry level and above were received during the year, further strengthening our scientific and technological innovation system. The company has always adhered to the philosophy of giving back to our shareholders, maintaining a proactive and stable dividend policy to share the fruits of its business development with all shareholders. The Board of Directors recommended a payment of a final dividend, together with the already distributed interim dividend, increased by 9.8 percent compared with last year, a four-year The dividend payout ratio rose to 77 percent. In the future, the company will continue to strengthen our competitiveness, consolidate our development foundation, and comprehensively enhance operational quality, efficiency, and profitability while striving to generate greater value for shareholders. The company consistently promotes the deep integration of ESG into its operations, embedding the philosophy of social responsibility throughout its entire development progress. In terms of social responsibility, the company established a highly efficient emergency communication support system to fully ensure the smooth running of rescue operations, onsite command, and communication security during emergency operations. We have supported network infrastructure in rural areas, empowering rural revitalization through digitalization. We also built rider homes to foster a sense of community and convey city's care and warmth. In terms of green development, the company practiced shared green and low-carbon operations. We vigorously promoted energy conservation and emission reduction at base stations and expanded the application of green energy, such as the use of PV and energy storage. We also deepened the application of digital intelligence to empower ecological conservation, promote green travel, and encourage convenient low-carbon lifestyles. In terms of the governance foundation, the company continuously enhances corporate governance standards and compliance management capabilities through a clearly defined governance mechanism, a sound compliance management system, and a transparent information disclosure and investor communication. Looking ahead, the company will continue to uphold the philosophy of resource sharing and Anker is positioning as a three-service provider. And you can find information on the slide and adhere to the one core two wind strategy to continuously enhance core capabilities and core competitiveness. In terms of the TSP business, we will seize the opportunities presented by such a signal upgrade and expansion of broadband coverage to all border areas and forest and grassland, the upgrade of sailing action plan, as well as high-quality urban development strategy centered on innovation, resilience and smart have brought vast development opportunities, reinforced our competitiveness as a service provider, offering efficient delivery, superior maintenance and optimal cost structure while minimizing management risks to realize stable development. As for the two wins business, the company will deepen the development of core resources and expand the development of new markets such as low-attitude economy, edge computing, in battery charging and exchange and PV energy storage. This will help to nurture and enhance the capabilities of demand acquisition. Now I'm going to give the floor to Mr. Chen Li, who is going to talk about the business performance of the company. Thank you, Mr. Chairman. Now I'm going to report to you the business development of company. As you can see from the slide, the company's various business performed very well. Now I'm going to provide you with further explanation. In 2025, the company's various business performed very well and the multi-pillar revenue growth pattern continued to take shape. Operating revenue reached R&B 100.41 billion, representing a year-on-year increase of 2.7 percent and a growth of 3.1 percent on a comparable basis. In terms of growth structure, the TSB business maintained sound development. Thanks to the decrease of lower side fees, power generation costs, and other social expenses, together with the impact from the increase in talent termination orders resulting from the integration of networks, revenue from the tower business recorded a slight decrease. The DAS business developed rapidly with an incremental contribution of 26.7 percent representing an increase of 0.8 percentage points. The incremental revenue contribution from the two-way business reached 65.1 percent, of which the smart tower business contributed 42.3 percent, driving revenue growth by 1.3 percentage points. The incremental revenue contribution from the energy business was 22.8 percent, a growth of 0.7 percentage point. Next, I'm going to provide a detailed overview of the development of our key businesses. Regarding the tower business, the company focused on addressing customers' needs. Firstly, we fully implemented embedded service mechanisms to continuously meet customers' demands for in-depth and broad coverage. Secondly, we enhanced network optimization capabilities and strengthened collaboration with TSPs on precise planning and construction to better serve customers. Thirdly, we adhere to a customer-oriented philosophy, the needs of network coverage in culture and tourism, education, transportation, and other sectors, and constantly optimize the business processes and management, comprehensively enhance the capabilities in demand acquisition, resource coordination, and sharing customer service. Any revenue from the tower business reached R&B 75.5 billion as of the end of 2025. 2005, the number of TSP talents reached 3.567 million, up 0.6 percent year-on-year. The TPS talent ratio was 1.7, maintaining steady overall development. As for the DAS business, we leveraged the integrated resources plus demand development model to continuously solidify our competitiveness as a service provider. We do this by offering efficient delivery, superior maintenance, and optimal cost structure while minimizing management risks and actively expanding the DAS market. We deeply cultivated niche markets, seizing opportunities from the Signal Upgrades Initiative to focus on the coverage of DAS business. We also collaboratively advanced special projects, such as elevators, underground parking lots, and 5G network upgrades on high-speed railways. At the same time, we strengthened our innovation leadership by driving innovation in active and passive products, striving to enhance the market competitiveness of products and solutions. We also leveraged a series of innovative products, such as shared micropower repeaters and 5G spread spectrum leaky coaxial cables. Any revenue from the DS business totaled R&B 9.23 billion, a year-on-year increase of 9.5 percent. Regarding the smart tower business, we have our feet in the field of spatial digital governance, leveraging outreach resources and capabilities, we continue to deeply cultivate key industries and scenarios, upgrading 252,000 telecommunication towers to digital towers, and steadily increase our market share in areas such as straw-burning bans, farmland protection, and disaster alerts. In 2025, the smart tower business maintained rapid growth. Revenue from the tower monitoring business reached R&B $6.33 billion, a year-on-year increase of 14.3 percent accounting for 62.2 percent of total revenue from the smart tower business. Revenue from the tower sharing business reached R&B $3.84 billion, up 14 percent year-on-year accounting for 37.8 percent of the total smart tower revenue. In developing smart tower business the company leveraged its mid to high-point set resources to continuously advance five core competencies. Firstly, we deepen the operational capabilities of distributed platform, strengthen the collaborative platform service, respond quickly, and precisely to customer needs and enhance service value. Secondly, we continuously consolidate the advantages of mid-to-high-point algorithms. Utilizing our library of 900 million mid-to-high-point samples, we strive to achieve greater algorithm system accuracy, faster R&D iteration, and broader service scenarios. Thirdly, we constantly improved product capabilities. By establishing a nationwide integrated R&D iteration system, 15 specialized industry applications now cover over 30 business scenarios, ensuring efficient sharing of product capabilities. Fourthly, we continuously enhanced service capabilities. We implemented the major infrastructure system to strengthen project delivery, Thirdly, deepened professional operations and maintenance and reinforced network management platform to ensure high-quality operation of clients' businesses. Fifthly, we continued to strengthen our innovation capabilities, withdrew technological breakthroughs in key fields to promote the commercialization of large models, and leveraged the national postdoctoral research workstation to enhance our innovation capacity. Regarding the development of the battery exchange business, the company continuously deepened and user operation strategies while improving operation levels across products, services, benefits, and marketing. For example, we increased the allocation ratio of 0.0 battery exchange products, focused on R&D for next generation 5.0 exchange products in areas such as battery lifespan and discharge performance, centered on customer satisfaction, and constructed a full-process smart service system to elevate user experience. We accelerated the construction of community charging infrastructure networks to expand the scale of the user base. Through these measures, we effectively elevated the user experience and customer satisfaction, boosted user stickiness, and maintained steady growth in the number of better exchange users throughout the year. As of December 31st, 2025, China Tower had approximately 1.477 million battery exchange users, an increase of 173,000 from the end of the previous year, further solidifying its leading position in the low-speed electric vehicle battery exchange market. The battery exchange business recorded revenue of RMB 3.03 billion for the year, up 22.4 percent year-on-year on a comparable basis, maintaining its market-leading position. Regarding the development of the power-backup business, first, we deeply cultivated key industries by developing standardized products for typical scenarios and enabling one-stop access to an advanced R&D innovation and regional management reforms. The company recruited additional mid- and senior-level scientific and technical talent and regional management personnel while strengthening performance-linked incentives to boost its development momentum. Second, we upgraded the service model of China Tower's Energy Butler platform to enrich various industry application scenarios and meet customers' needs for power supply, security, carbon reduction, energy conservation, and carbon reduction. Third, we optimized the company service system and leveraged auto-localized maintenance capabilities to improve rapid response capabilities. The revenue from power pack up totaled R&B 1.78 billion for the year, up 7.7 percent. Now, Mr. Hu Xiaofeng will present the company's financial performance for 2025. Thank you, Mr. Chen Li. Now, I'm going to talk about the key financial performance for 2025. The table shows our key financial indicators for 2025. In 2025, the company's overall performance was sound, revenue grew steadily, profitability continued to improve, cash flow improved gradually, and a robust capital structure was maintained. In 2025, the company implemented special projects to reduce costs and increase efficiency. It was strictly managed the income-to-expenditure ratio, prioritizing production expenditure directly related to the expansion of the one-quarter wins business. Reasonable measures were taken to expand the lifespan of aging assets and maintain the sustained and healthy operation of assets in 2005. Operating expenses totaled RMB $83.05 billion, up 2 percent year-on-year. The operating expense-to-revenue ratio was 82.7 percent, down 0.6 percent year-on-year. Depreciation and privatization expenses totaled RMB $48.45 billion, down 3.5 percent year-on-year, mainly due to the adjustment of depreciation period for DES assets and the expiration of depreciation for tower assets acquired in 2015. Repair and maintenance expenses totaled R&B 7.10 billion, up 1.6 percent a year. As the tower assets acquired by the company gradually expire, it is reasonable extending the lives of the region's assets, strengthening safety hazards inspection and rectification for assets, and continuously promoting the construction and application of intelligent operation and maintenance functions. In terms of employee and benefits expenses, it totaled RMB 10.8 billion, up 5.3% year-on-year. To advance R&D innovation and regional management reforms, the company recruited additional meet and senior level scientific and technical talent and regional management personnel while strengthening performance-linked incentives to boost this development momentum. system. Site operation and support expenses totaled R&B $6.13 billion, up 11.3 percent, or R&B $620 million year-on-year. The company accelerated the development of site operations and digital capabilities, resulting in a year-on-year increase of R&B $760 million in costs and IT support expenses related to site operations. Other operating expenses totaled R&B $11.29 billion, up 23.5 percent, or R&B $2.15 billion year-on-year. Business development expenses increased by R&B $1.08 billion, primarily due to increased expenditure on localized technical support services and marketing costs to support the development of the two-way business and advanced the construction of companion services systems and platform operation management capabilities. Other expenses increased by R&B $1.07 billion, mainly due to an increase in provisions for bad assets of approximately RMB $515 million based on a prudent approach as well as a decrease in net gains from asset disposers of approximately RMB $260 million. In 2025, adhering to an efficiency-oriented approach, the company stepped up efforts to benchmark costs of individual sites and reduce expenses while increasing efficiency, thereby maintain stable profit growth. Operating profit reached RMB $17.36 billion in 2025, up 6.3% year-on-year. Net profit attributable to parent company reached R&B $11.63 billion, up 8.4% year-on-year. The company's EBITDA reached R&B $65.81 billion, down 1.1% year-on-year, mainly due to the company's reasonable expense in the service life of aged assets, strengthen the building of digitalization capabilities, et cetera. EBITDA counted for 65.5% of opportunity revenue. In 2025, the company adhered to a total capex plus project lean investment management model, aligning total investment allocation with the overall needs of business development and capacity building. It continues to improve the pre-assessment and post-evaluation of projects, with capex totaling R&B 29.49 billion for the year, down 7.7 percent year-on-year. CAPEX for the new site construction and augmentation totaled R&B 15.13 billion, down 15.8 percent year-on-year. This was primarily due to changes in operation demand, as well as the company's ongoing optimization of construction plans and the adoption of innovative products. CAPEX for site replacement improvement reached R&B 5.47 billion, down 19.9 percent year-on-year. This was mainly attributable to the company's focus on conducting safety hazard inspection and rectification and others. Capital expenditure for smart tower and energy facilities amounted to R&B 5.97 billion, up 24.8 percent year-on-year. This was mainly due to the company's efforts to adapt to the development needs of the Two Winds business, accelerate the construction of a smart tower business platform, and implement product iteration and upgrading. In 2025, the company accelerated advancing the collection of payments for the One Core business. The net cash flow from operating activities for the year amounted to $56.12 billion up $6.65 billion year-on-year. Free cash flow reached $26.63 billion up $9.10 billion year-on-year. As of the end of 2025, the company's total assets stood at $336.58 billion. Total liability was $132 billion. $2.67 billion, of which RMB $78.15 billion was net debt. The company's liability to asset ratio was 39.4 percent. Net gearing ratio was 27.7 percent. In 2026, the company will continue to deepen its one-call-twins business strategy, building upon its professional, intensive, delicate, efficient, and digitized operating system. It will enhance its lean management capabilities and drive continuous improvement in operational efficiency and effectiveness to drive the sustainable and healthy growth of the company and create great value for shareholders. Thank you.
