China / Hong Kong Company Guide China Tower Version 1 | Bloomberg: 788 HK Equity | Reuters: 0788.HK Refer to important disclosures at the end of this report
DBS Group Research . Equity 12 Jul 2019
BUY(Initiating Coverage) Final call to participate in 5G rally • Faster 5G rollout driving stronger demand for tower services Last Traded Price ( 11 Jul 2019):HK$2.14(HSI : 28,432) Price Target 12-mth:HK$3.10 (44.9% upside) • Increase of macro cells in BTS mix in FY20-21 will lead to stronger business growth
Analyst • Expect continuous re-rating driven by stronger growth outlook Tsz-Wang TAM, CFA+852 36684195, [email protected] and higher profitability Chris KO CFA,+852 36684172, [email protected] • Initiating coverage with BUY rating and a TP of HK$3.1 for re- Price Relative rating potential and 5G beneficiary
Largest tower company benefiting from 5G rollout in China. China Tower is the largest tower company in China with a market share of 96%. We are initiating coverage with a BUY rating as China Tower will benefit from stronger demand for tower services driven by acceleration of 5G rollout and increase of macro cells in base transceiver station (BTS) mix in FY20-21.
Where we differ. Increase of macro cells in BTS mix. In FY19,
telecom operators are focusing on 4G network optimisation which Forecasts and Valuation utilises more small cells and distributive antenna systems (DAS) in FY Dec (RMBm) 2018A 2019F 2020F 2021F Turnover 71,819 78,081 87,633 97,459 the mix of BTS. China Tower has a smaller market share in these EBITDA 41,926 46,218 52,467 59,113 two products. For 5G network buildouts in FY20-21, we expect the Pre-tax Profit 3,475 7,828 13,106 17,561 mix of BTS to shift to macro cells, in which China Tower has more Net Profit 2,650 5,871 9,830 13,171 than 90% market share. This will accelerate the company’s growth. Net Pft (Pre Ex) (core profit) 2,650 5,871 9,830 13,171 Net Profit Gth (Pre-ex) (%) 36.4 121.6 67.4 34.0 Potential catalyst. Increase in capex budgets of telecom operators. EPS (RMB) 0.02 0.03 0.06 0.08 EPS (HK$) 0.02 0.04 0.06 0.09 There are more signs of acceleration of 5G rollout. The 5G licenses EPS Gth (%) 18.8 90.8 67.4 34.0 were released on 6 Jun 2019, which was earlier than market Diluted EPS (HK$) 0.02 0.04 0.06 0.09 expectations. China Mobile’s (941 HK, CM) 5G commercial services DPS (HK$) 0.00 0.02 0.04 0.06 will be launched in 50 cities in 2019 and all prefecture-level cities, BV Per Share (HK$) 1.38 1.23 1.27 1.32 PE (X) 105.4 55.3 33.0 24.6 which include 300+ cities and represent a nation-wide scale (vs P/Cash Flow (X) 6.1 5.4 8.5 4.6 previous market expectations of selected regions only) in 2020. P/Free CF (X) 21.8 9.3 99.5 9.1 These may lead to increase in capex budgets of telecom operators. EV/EBITDA (X) 8.9 8.4 7.5 6.2 Net Div Yield (%) 0.1 1.0 1.8 2.6 Valuation: P/Book Value (X) 1.5 1.7 1.7 1.6 Net Debt/Equity (X) 0.5 0.3 0.4 0.2 Our TP of HK$3.1 is based on 12x FY19F EV/EBITDA, which is 20% ROAE(%) 1.7 3.2 5.2 6.7 below the average valuation of 15x of its global peers.
Earnings Rev (%): New New New Key Risks to Our View: Consensus EPS (RMB) 0.03 0.05 0.07 Slower 5G development due to tech war. Sino-US tech conflict may Other Broker Recs: B:21 S:2 H:5 slow down the global 5G technology development and lead to Source of all data on this page: Company, DBS Bank (Hong Kong) slower 5G deployment in China. Limited (“DBS HK”), Thomson Reuters CT/CU merger. The merger of China Telecom (CT) and China Unicom (CU) will reduce the demand for tower services in China.
At A Glance Issued Capital (m shrs) 176,008 Mkt Cap (HK$m/US$m) 374,898 / 47,930 Major Shareholders (%) (H shrs) Hillhouse Capital Advisors, Ltd. 7.0 Wellington Management Company, LLP 6.6 GIC Private Limited 6.0 Free Float (%) (H shrs) 80.4 3m Avg. Daily Val. (US$m) 169.66 ICB Industry: Telecommunications / Mobile Telecommunications
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Company Guide
China Tower
Table of Contents
Investment Summary 3 Valuation & Peers Comparison 4 Key Risks 5 SWOT Analysis 6 Critical Factors 7 Financials 9 Environment, Social & Governance (ESG) 10 Company Background 11 Management 15
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Company Guide
China Tower
Investment Summary of self-built towers reached 74%. We forecast a higher tenancy ratio of 1.7x in FY21. China Tower is the largest tower company in China with a market share of c.96%. We are initiating coverage on China Despite offering discounts of 30-45% for sharing, the Tower with a BUY rating for its re-rating potential and being a incremental costs such as depreciation and maintenance costs key beneficiary of 5G commercial launch in 2020. We forecast of serving the second and third tenant in the same tower is earnings to grow at a CAGR of 71% in FY19-21 thanks to minimal. China tower’s overall profitability will significantly increasing demand for tower sites, and improving profitability increase along with the tenancy ratio due to the high driven by higher tenancy ratio. operating leverage. We forecast the net profit margin of the company to improve from 3.7% in FY18 to 13.5% in FY21. Increasing number of tenants
China Tower had a total number of 3,009k tenants with Tenancy ratios of China Tower (FY15-21) 2,837k tower tenants, 31.4k Distributive antenna system (DAS) tenants and 141k Trans-sector site application and 2.0 information (TSSAI) tenants. Telecom operators plan to launch 5G services commercially in 2020. This will lead to an increase in demand for tower services. Driven by 5G network buildout 1.5 and 4G network optimisation, we forecast the total number of tenants to increase by c.10% p.a. to 3,311k and 3,638k in 1.0 FY19 and FY20 respectively.
0.5 Total number of tenants for China Tower (FY16-21) 0.0
'000
FY15
FY16
FY17
FY18
FY19 FY20 4,500 FY21 4,000 Total tenancy ratio Tower business DAS business 3,500 3,000 Source: Companies, DBS HK 2,500 2,000 Expect continuous re-rating 1,500 1,000 Compared to global peers, China Tower is trading at a 40% discount to their average valuation of 15x FY19 EV/EBITDA. 500 China is at the forefront of 5G rollout which will drive 0
unprecedented demand for tower services in the next few
FY16
FY17
FY18
FY19 FY20 FY21 years. We expect the valuation of China Tower to continue to Tower business DAS business TSSAI business re-rate thanks to acceleration of 5G network rollout in China and its monopolistic position in a fast-growing market.
Source: Companies, DBS HK Initiate coverage with a BUY and TP of HK$3.1
Rising tenancy ratio enhances profitability We initiate coverage on China Tower with a BUY rating as it will benefit from stronger demand for tower services driven by China Tower’s overall tenancy ratio, which is the total number acceleration of 5G rollout and increase of macro cells in base of tenants divided by total number of sites, was 1.55x as of transceiver station (BTS) mix in FY20-21. We forecast earnings end-FY18. This still has room to grow as a part of the new 5G to grow at CAGR of 71% in FY19-21 thanks to increasing BTSs utilise existing towers, and newly self-built towers have demand for tower sites and improving profitability driven by higher sharing ratios. As of 31 Dec 2018, the co-location level higher tenancy ratio and operating leverage.
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Company Guide
China Tower
Valuation & Peers Comparison re-rate thanks to acceleration of 5G network rollout in China and its monopolistic position in a fast-growing market. For local peers, there were over 200 companies providing telecommunications tower infrastructure services in the We initiate coverage on China Tower with a BUY rating as it industry as of end-2017 according to Frost & Sullivan (F&S). will benefit from stronger demand for tower services driven by China Tower has a dominant market share of 96% in China acceleration of 5G rollout and increase of macro cells in base and there are only less than 10 companies that own more transceiver station (BTS) mix in FY20-21 We forecast earnings than 1,000 sites. China Tower is the only listed Chinese tower to grow at CAGR of 71% in FY19-21 thanks to increasing company. demand for tower sites and improving profitability driven by higher tenancy ratio and operating leverage. Our TP of Compared to global peers, China Tower is trading at 40% HK$3.1 is based on 12x FY19 EV/EBITDA, which is 20% below discount to their average valuation of 15x FY19 EV/EBITDA. the average valuation of 15x of its global peers China is at the forefront of 5G rollout which will drive unprecedented demand for tower services in the next few years. We expect the valuation of China Tower to continue to
Peers comparison
Mk t PE PE Yield Yield P/Bk P/Bk EV/EBITDA ROE ROE Price Cap F iscal 19F 20F 19F 20F 19F 20F 19F 20F 19F 20F Company Name Code Currency Local$ US$m Yr x x % % x x x x % % China Tower 'H'* 788 HK HKD 2.14 25,531 Dec 55.3 33.0 1.0 1.8 1.7 1.7 8.4 7.5 3.2 5.2 American Tower AMT US USD 209.26 92,498 Dec 57.3 49.3 1.8 2.1 18.0 26.1 23.6 22.0 28.4 41.4 Crown Castle Intl. CCI US USD 134.21 55,797 Dec 78.5 70.9 3.4 3.7 5.0 5.7 20.4 19.3 6.1 7.8 Bharti Infratel# BHIN IN INR 264.9 7,157 Mar 19.8 18.8 5.0 5.2 3.3 3.3 9.3 8.9 16.7 17.9 Cellnex Telecom CLNX SM EUR 33.2 11,160 Dec 137.8 83.4 0.3 0.3 6.0 5.9 17.8 12.1 6.5 9.2 Sarana Menara Nusantara TOWR IJ IDR 805 2,919 Dec 16.8 15.4 3.3 3.6 4.4 3.9 9.0 8.5 28.6 27.7 Tower Bersama Infr. TBIG IJ IDR 4250 1,369 Dec 19.1 16.4 3.7 3.6 5.0 4.4 10.1 9.4 28.2 28.7 A v erage 54.9 41.0 2.6 2.9 6.2 7.3 14.1 12.5 16.8 19.7 # FY19: FY20; FY20: FY21
Source: Thomson Reuters, *DBS HK
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Company Guide
China Tower
Key Risks impact the pricing power of China Tower. China Tower has signed tower leasing agreements covering the period FY18-22 CT/CU Merger with telecom operators. Unfavorable terms such as lower pricing upon renewal of leasing agreements with customers In order to promote the efficiency of network construction, will be negative to the company. some investors are speculating on the possibility of a merger of China Telecom (728 HK, CT) and China Unicom (762 HK, Lower-than-expected dividend payout CU). The merger will reduce the number of major telecom operators from three to two, and lower demand for tower The company has a dividend payout policy of not less than services in China. 50% of distributable net profit. In the long run, investors expect the dividend payout ratio to increase gradually to Slow 5G development pace due to Sino-US tech conflict provide a stable dividend return from the company. A lower- than-expected dividend payout will reduce the attractiveness The Sino-US tech conflict may slow down global 5G of the stock, and lead to a possible de-rating of China Tower. technology development and lead to slower 5G deployment in China. The may reduce the demand for tower sites. However, Technology innovation that reduces demand for tower sites Chinese government may still push the rollout of 5G network. Technology innovation may lead to improvement in efficiency,
architecture and coverage. This may affect the number or Unfavourable pricing on renewal of service agreements with customers types of telecommunications tower infrastructure needed to provide connectivity to a given geographic area, and hence Major shareholders of the company i.e. the three major reduce demand for tower sites. telecom operators are also major customers of the company, accounting for more than 90% of total revenue. This may
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Company Guide
China Tower
SWOT Analysis
Strengths Weaknesses
• Nationwide coverage with 1.9m tower sites • Shareholders are also its primary customers, which may affect pricing power • Favourable government policies such as not allowing telecom operators to build towers will support the • Limited number of telecom operators in China development of the tower industry
Opportunities Threats
• Nationwide 5G rollout driving a new wave of demand for • CT/CU merger China Tower’s services • Slower development in 5G capex • Newly started DAS and TSSAI businesses generating
additional revenue streams from indoor coverage demand and hosting different types of devices for different industries
Source: DBS HK
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Company Guide
China Tower
Critical Factors Number of 5G BTS in China (2018-2026) Number of tenants
'000 Increasing number of tenants. As at end of FY18, China 7,000 Tower had a total number of 3,009k tenants with 2,837k tower tenants, 31.4k distributed antenna system (DAS) 6,000 tenants and 141k Trans-sector site application and 5,000 information (TSSAI) tenants. Telecom operators plan to launch 5G services commercially in 2020. This will lead to an increase 4,000 in demand for tower services. Driven by 5G network buildout 3,000 and 4G network optimisation, we forecast the total number of tenants to increase by c.10% and c.10% to 3,311k and 2,000 3,638k in FY19 and FY20 respectively. 1,000
0
Total number of tenants for China Tower (FY16-21)
2018
2019
2020
2021
2022
2023
2024
2025 2026
'000 4,500 Source: Companies, DBS HK 4,000
3,500 Our industry checks with equipment suppliers suggested that 3,000 macro cells are likely to be built at the initial stage for 2,500 extensive coverage. We expect China Tower to capture 90%+ 2,000 of the market share for macro cell business. Deployment of 1,500 small cells and DAS will follow with 1-2 year-time lag 1,000 depending on the demand for data traffic and applications 500 development. 0
5G technology requires higher density base stations compared
FY16
FY17
FY18
FY19
FY20 FY21 to 4G because the higher frequency spectrum band will have Tower business DAS business TSSAI business a shorter transmission distance and lower penetration power. In addition to macro cell, 5G will drive more DAS and small Source: Companies, DBS HK cells to help boost the signals.
Expect 5G rollout to accelerate in China
There is potential upside for China Tower from the acceleration of 5G rollout as there more signs of larger and faster 5G network service rollout in China. First, 5G licenses were released to telecom operators on 6 Jun 2019, which was earlier than market expectations of 3Q19. China Mobile (CM) announced that 5G commercial services will be launched in 50 cities in 2019 and all prefecture-level cities, which include more than 300 cities and represent a nation-wide scale (vs previous market expectations of selected regions only) in 2020. China Tower will be well positioned to benefit from the unprecedented demand for tower services driven by 5G network buildout. We forecast the number of 5G base transceiver stations (BTSs) to be 103k in 2019 and 819k in 2020 and reaching 6,619k by 2026.
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Company Guide
China Tower
Continuous optimisation of 4G network coverage Tenancy ratios of China Tower (FY15-21) We expect telecom operators to continue to optimise the 4G network as 4G and 5G networks will co-exist for a long time. 2.0 The density of 4G base stations in the PRC market can be further enhanced to cope with increasing data traffic or to strengthen signals in some areas. This will mainly drive 1.5 demand for small cell and DAS businesses going forward. We estimate the number of 4G BTS to increase by 21% and 7% 1.0 to 5,760k and 6,180k in 2019 and 2020 respectively.
0.5 Number of 4G BTS in China (2012-2021) 0.0
'000
FY15
FY16
FY17
FY18
FY19 FY20 7,000 FY21
6,000 Total tenancy ratio Tower business DAS business
5,000 Source: Companies, DBS HJ 4,000
3,000 Co-location discount for tower tenants 2,000
1,000 Co-location discount for base price If shared by 2 tenants 30% (35% for the anchor tenant) 0
If shared by 3 tenants 40% (45% for the anchor tenant)
2012
2013
2014
2015
2016
2017
2018
2019 2020 2021 Co-location discount for site see and/or power access fee Source: Companies, DBS HK If shared by 2 tenants 40% (45% for the anchor tenant) If shared by 3 tenants 50% (55% for the anchor tenant)
Tenancy ratio Source: Companies, DBS HK
China Tower’s overall tenancy ratio, which is the total number of tenants divided by total number of sites, was 1.55x as of Illustrative example of having multiple tenants end-FY18. This still has room to grow as a part of the new 5G BTSs utilise existing towers, and newly self-built towers have (Rmb) 1 tenant 2 tenants 3 tenants higher sharing ratios. As of 31 Dec 2018, the co-location level Illustrative revenue per tower 47,660 61,701 79,445 of self-built towers reached 74%. We forecast a higher Operation expense per tower 14,400 14,400 14,400 tenancy ratio of 1.7x in FY21. EBITDA per tower 33,260 47,301 65,045 EBITDA margin 69.8% 76.7% 81.9% Despite offering discounts of 30-45% for sharing, the Depreciation and amortisation 30,023 30,023 30,023 incremental costs such as depreciation and maintenance costs EBIT 3,237 17,278 35,022 of serving the second and third tenant in the same tower is EBIT margin 6.8% 28.0% 44.1% minimal. China tower’s overall profitability will significantly Source: Companies, DBS HK increase along with the tenancy ratio due to the high operating leverage. We forecast the net profit margin of the company to improve from 3.7% in FY18 to 13.5% in FY21.
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Company Guide
China Tower
Financials Revenue of China Tower (FY16-21) FY18 annual results
Operating revenue increased by 5% y-o-y to Rmb71,819m in Rmb mn FY18, primarily driven by an increase in the number of 120,000 25% tenants. The number of total tenants increased by 12% y-o-y to 3,009k, lifting the tenancy ratio from 1.44 in FY17 to 1.55 100,000 20% in FY18. 80,000 15% Segment wise, revenue from tower business increased by 2% y-o-y, due to construction of new sites and co-location 60,000 promotions. Revenue from DAS business grew 42% y-o-y, 10% driven by the growing demand for indoor coverage, to 40,000 account for 2.5%% of total revenue. Revenue from TSSAI 5% business increased 623% during the same period, due to an 20,000 increase in number of TSSAI tenants from c.19k in FY17 to 0 0% 141k in FY18. FY16 FY17 FY18 FY19 FY20 FY21
EBITDA increased by 4% y-o-y to Rmb41,773m but margin Revenue (LHS) Growth y-o-y (RHS) contracted slightly by 0.6ppt to 58.2% in FY18. Operating profit increased by 18% y-o-y to 9,081 with margin Source: Companies, DBS HK expanding from 11.2% in FY17 to 12.6% in FY18, thanks to operating leverage. Net profit increased by 36% y-o-y to Rmb2,650m. The board has recommended a dividend payment of Rmb0.00225 per share, representing a payout Net profit of China Tower (FY16-21) ratio of 55% of its annual distributable net profit.
Net cash generated from operating activities increased by Rmb mn 30% y-o-y to Rmb45,540m. Capital expenditures decreased 14,000 16% by 4% to Rmb26,466m in FY18 resulting in a free cash flow 14% of Rmb19,074 million. 12,000 12% 10,000 Financial forecast 10% 8,000 Benefiting from the increasing demand for tower sites driven 8% by 5G network buildout and 4G network optimisation, we 6,000 6% forecast the company’s revenue to grow by 9% in FY19 and 4,000 12% in FY20. We also expect its EBITDA to increase by 10% 4% and 14% to Rmb46,068m in FY19 and Rmb52,317m in FY20 2,000 2% respectively with margin expansion driven by improvement in tenancy ratio. We forecast earnings to grow by 122% and 0 0% 67% to Rmb5,871m and Rmb9,830m in FY19 and FY20 FY16 FY17 FY18 FY19 FY20 FY21 respectively. Net profit (LHS) Net profit margin (RHS)
Source: Companies, DBS HK
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Company Guide
China Tower
Environment, Social & Governance (ESG) employee benefits mandated by the government may increase the cost of operation for the company. Environment: A large electricity consumer. The company consumes a large amount of electricity to support the Governance: Most revenue from major shareholders. Some operations of telecommunication equipment. The company investors are concerned that the major shareholders of the has been trying to optimise the use of electricity to save company i.e. the three major telecom operators, are also the energy and costs for its customers. It also utilises batteries to major customers of the company, accounting for more than provide backup power source to the telecommunication 90% of its total revenue. This may impact the pricing power equipment. More restrictions on the use disposal of batteries of China Tower. The connected-party transactions for China may increase its cost. Tower to provide services to telecom operators will require minority shareholders’ approval. This will mitigate some Social: A SOE bearing a lot of employment. The construction concern on renewal pricing of tower leasing for the company. and maintenance services of tower infrastructure is labour intensive while China Tower outsources most of the work to contractors. Increase in minimum wage and/or other
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Company Guide
China Tower
Company Background Business overview
World’s largest telecom tower provider China Tower’s major customers are CM, CU, and CT. It has 3 business segments: (1) Towers, (2) DAS solutions and (3) TSSAI China Tower is the largest tower company in China with 96% business which accounted for 95.5% 2.5% and 1.7% of total market share. As of 31 Dec 2018, it operated 1,925k tower revenue in FY18 respectively. sites and 23k distributed antenna system (DAS) sites and serves 3,009k tenants, translating to a tenancy ratio of 1.55x. Revenue breakdown by customer (FY18) The company primarily generates rental income from leasing its tower sites to telecom operators. The philosophy behind Others China Tower is “sharing”. It operates under a co-location 2% model in that multiple tenants occupy the same tower site. China Tower gives significant discounts of 30-45% to China Telecom customers who share tower sites but enjoys much higher 22% margins.
Shareholding structure China Mobile 54% Chinese telecom operators used to own and operate their China own towers. On 15 July 2014, China Tower was founded as Unicom the result of consolidation of towers between China Mobile 22% (CM, 941 HK), China Unicom (CU, 762 HK) and China Telecom (CT, 728 HK), who became its major shareholders with stakes of 38%, 28.1% and 27.9% respectively. On December 31, 2015, the company issued additional shares to Source: Company China Reform amounting to 6% of total shares. The company completed its initial public offering (IPO) on the Hong Kong Stock Exchange on 8 Aug 2018 with an issuance of c.47bn H- shares at HK$1.26 per share. The total net proceeds from the Revenue breakdown by segment (FY18) IPO was HK$58,797m. TSSAI DAS business Others Shareholding structure business 2% 0% 3%
China Mobile Public 28% shares 27%
China Tower Reform business 4% 95% China China Unicom Telecom 21% 20%
Source: Company Source: Company
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Company Guide
China Tower
Tower business Site colocation For tower business, the company provides site space, including towers and shelters or cabinets to tenants, and hosts antennas and other macro cell equipment. There are two types of towers, (1) Macro cell: a traditional long-range reception tower, and (2) Small cell: smaller supplementary reception devices, designed for signal boost in dense, high data traffic areas (e.g. tourist spots, shopping districts).
Macro cell towers. Macro cell towers have the longest range and they serve as a base for other services to build upon. They are commonly built on the ground or on rooftops.
Macro Cell Tower
Source: Company
Small Cell Towers. Small cell business supports telecom operators to densify the coverage and increase the capacity of wireless communications networks built by the macro cells. Small cells are more flexible in terms of location and can be built on lighting poles, surveillance poles, utility poles, bus stop boards, sides of bridges etc.
Small Cell Tower
Source: Company
Source: Company
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Company Guide
China Tower
DAS Business TSSAI business
Distributive antenna system (DAS) solutions provide coverage The Trans-sector site application and information (TSSAI) for indoor venues such as tunnels and buildings. The indoor business utilises China Towers’ nationwide infrastructure to antenna system can be used in conjunction with towers to provide information services to customers beyond just telecom extend coverage indoors. As of 31 Dec 2018, DAS business operators. This is accomplished by adding data collection served 31.4k tenants. Revenues increased by 42% y-o-y to devices and data platforms into each of their tower sites. Rmb1,819m to account for 2.5% of revenue in FY18. This Using the data collected, China Tower can create tailored, was driven by increased in demand from operators to enhance value-added services for its customers. Some examples include 4G indoor coverage. Some major DAS projects include: environmental protection data collection for air quality Zhongguo Zun, the highest skyscraper in Beijing, Terminal 2 of monitoring, outdoor advertising, and IoT equipment for real- Guangzhou Baiyun International Airport, and Shanghai- time surveillance. Kunming High-speed Railway. Data analytics is an emerging critical component in all aspects of commerce, which has enabled China Tower to grow its DAS System tenants base by 655% from 19k in FY17 to 141k in FY18. TSSAI revenue grew by 623% y-o-y to Rmb1,222m in FY18.
TSAAI system
Source: Company
Source: Company DAS System
Source: Company
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Company Guide
China Tower
Competitive advantages venues such as subways, high-speed railways and other transportation hubs. China Tower shall coordinate the co- Nationwide coverage with vast number of tower sites location of telecommunications towers. In addition, MIIT, Ministry of Land and Resources (MLR) and Ministry of Housing China Tower has nationwide coverage with a vast number of and Urban-Rural Development (MOHURD) jointly issued tower sites, which is essential to enable telecom operators to Circular [2017] No. 234, which specifies that local build mobile networks efficiently and quickly by utilising governments at all levels and other relevant administrative existing towers. It will take enormous time and capital for departments shall (i) support telecommunications tower competitive to accumulate a similar scale of tower sites. infrastructure construction, (ii) resolve property title issues of existing sites step by step, (iii) strengthen site planning, (iv) Favourable policy support. improve land administration for site uses, and (v) optimise related application and approval procedures. The Ministry of Industry and Information Technology (MIIT) and State-owned Assets Supervision and Administration Commission (SASAC) has issued circulars to promote the co- location of telecommunications infrastructure. Telecom operators are not allowed to build towers and DAS systems at
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Company Guide
China Tower
Management
Board of Directors
Name Position Description Tong Jilu (佟吉祿) Executive Director, Chairman of Mr TONG takes charge of the overall affairs of the Board, participates in the formulation and implementation of the Board, General Manager the business and operation strategies of the company and makes significant business and operational decisions of the company through the Board. He was the executive director and senior vice president of China Unicom from Mar 2011 to Aug 2014.
Dong Xin (董昕) Non-executive Director Mr DONG participates in the formulation of business plans, strategies and major decisions of the company with his extensive experience in the telecommunications industry. He has been deputy general manager of CMCC since August 2013, and executive director, vice president and chief financial officer of China Mobile since March 2017. Shao Guanglu (邵廣祿) Non-executive Director Mr SHAO participates in the formulation of business plans, strategies and major decisions of the company with his extensive experience in the telecommunications industry. He served as director of China Unicom A Share Company from April 2016 to February 2018, non-executive Director of PCCW Limited since March 2017 and non-executive Director of CCS since June 2017. Zhang Zhiyong (張志勇) Non-executive Director Mr ZHANG participates in the formulation of business plans, strategies and major decisions of the company with his extensive experience in the telecommunications industry. He has been vice president of CTC since November 2017, chairman of the board and executive director of CCS since March 2018 and executive vice president of China Telecom since July 2018. Su Li (蘇力) Independent Non-executive Mr SU supervises and offers independent judgment to the Board and serving on certain committees of the Board Director with his extensive experience in infrastructure engineering. He has been external director of the State Development and Investment Corporation since February 2017 and external director of China Aviation Supplies Holding Company since September 2017. Fan Cheng (樊澄) Independent Non-executive Mr FAN supervises and offers independent judgment to the Board and serving on certain committees of the Board Director with his extensive experience in accounting and management. He has been external director of China Aviation Supplies Holding Company since September 2017 and external director of Xinxing Cathay International Group Co., Ltd since January 2018. Tse Yung Hoi (謝湧海) Independent Non-executive Mr TSE supervises and offers independent judgment to the Board and serving on certain committees of the Board Director with his extensive experience in finance, investment and management. He has also been served as independent non- executive director of BOCOM International Holdings Company Limited since June 2014, independent non- executive director of HJ Capital (International) Holdings Company Limited since July 2014, independent non- executive director of Guoan International Limited since March 2016, independent non-executive director of DTXS Silk Road Investment Holdings Company Limited since November 2017 and independent non-executive director of Vico International Holdings Limited since January 2018. Source: Company
Senior Management
Name Position Description Tong Jilu (佟吉祿) Executive Director, Chairman of Mr TONG takes charge of the overall management and operation of the company. the Board and General Manager Gao Buwen (高步文) Deputy general manager Mr GAO assists in operation of the company, presides over the company’s construction and maintenance work Gu Xiaomin (顧曉敏) Deputy general manager Mr GU assists in operation of the company, presides over the company’s marketing and communications technology research Gao Chunlei (高春雷) Chief accountant Mr GAO assists in operation of the company, presides over the company’s finance, human resources and training 孫寶田 Sun Baotian ( ) Member of senior management Mr SUN is responsible for the disciplinary supervision work of the company Source: Company
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Company Guide
China Tower
CRITICAL FACTORS TO WATCH Total number of tenants ('000)
Critical Factors Increasing number of tenants. As at end of FY18, China Tower had a total number of 3,009k tenants with 2,837k tower tenants, 31.4k DAS tenants and 141k TSSAI tenants. Telecom operators plan to launch 5G services commercially in 2020. This will lead to an increase in demand for tower services. Driven by 5G network buildout and 4G network optimisation, we forecast the total number of tenants to increase by 10% and
10% to 3,311k and 3,638k in FY19 and FY20 respectively. Tenancy ratio
Rising tenancy ratio. China Tower’s overall tenancy ratio was 1.55x as of end-FY18. We expect it still has room to grow as part of new 5G BTSs utilise existing towers and newly self-built towers have higher sharing ratios. As of 31 Dec 2018, the co- location level of accumulated self-built tower reached 74%. China tower’s overall profitability will increase along with the tenancy ratio. Despite offering discounts of 30-45% for sharing, the incremental cost of serving the second and third tenant in the same tower is minimal. We forecast the tenancy ratios to increase to 1.7x in FY21. EBITDA margin (%)
Source: Company, DBS HK
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Company Guide
China Tower
Appendix 1: A look at Company's listed history – what drives its share price?
China Tower share price vs HSI
1.80
1.70 Overhang on CT/CU merger temporarily removed and 1.60 valuation re-rated as a key 1.50 beneficiary of 5G network buildout 1.40
1.30 Concern on possible 1.20 delay of 5G network rollout due to 1.10 sanction on Huawei by the US 1.00 0.90
0.80
Jul-19
Jan-19
Jan-19
Jun-19
Jun-19
Oct-18
Oct-18
Oct-18
Feb-19
Feb-19
Sep-18
Sep-18
Apr-19
Apr-19
Dec-18
Dec-18
Nov-18
Nov-18
Mar-19
Mar-19
Aug-18
Aug-18
May-19
May-19 May-19
China Tower share price vs HSI
Source: Bloomberg Finance L.P., DBS HK
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Company Guide
China Tower
Balance Sheet: Healthy balance sheet with stable income. China Tower has a Leverage & Asset Turnover (x) net debt of Rmb94,174m and net gearing ratio of 52% as at end of FY18. We forecast its capex budget to be Rmb25/35/35bn in FY19-21 which will be supported by its strong operating cash flow generated from stable rental income.
Share Price Drivers: Increase in capex budgets of telecom operators. There were more signs of acceleration of 5G rollout. The 5G licenses were released to telecom operators on 6 Jun 2019, which was earlier Capital Expenditure than market expectations of 3Q19. CM announced that 5G commercial services will be launched in 50 cities in 2019 and more than 300 cities in 2020. These may lead to increase in capex budgets of telecom operators and will be positive to China Tower.
Increased Payout Topline growth combined with falling costs will improve profitability, and which will benefit China Tower’s valuation. As the company finishes its expansion expenditures and increases profits, dividend payouts should increase to match the level of industry peers. ROE
Key Risks: Slower 5G development due to tech war. Sino-US tech war may slow down the global 5G technology development and lead to slower 5G deployment in China.
CT/CU merger. CT/CU merger will reduce the number of telecom operators, and hence demand for tower services in China.
Forward PE Band Environment, Social, Governance: Governance: Most revenue from major shareholders. Some investors are concerned about that major shareholders, i.e. three major telecom operators, of the company are also the major customers of the company accounting for more than 90% of total revenue. This may impact the pricing power of China Tower. The connected party transactions for China Tower to provide services to telecom operators will require minority shareholders’ approval. This will mitigate the concern on renewal pricing of tower leasing for the company. PB Band Company Background China Tower is the largest tower company in China with 1.9m tower sites and c.96% market share. It was established as the result of consolidation of towers between CM, CU and CT in 2014.
Source: Company, DBS HK
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Company Guide
China Tower
Key Assumptions FY Dec 2017A 2018A 2019F 2020F 2021F Total number of tenants 2,687.5 3,009.2 3,310.9 3,637.5 3,915.5 ('000) Tenancy ratio 1.4 1.5 1.6 1.7 1.7 EBITDA margin (%) 58.8 58.2 59.0 59.7 60.5 Source: Company, DBS HK
Income Statement (RMB m) FY Dec 2017A 2018A 2019F 2020F 2021F Revenue 68,665 71,819 78,081 87,633 97,459 Cost of Goods Sold (11,336) (12,196) (13,118) (14,459) (15,691) Gross Profit 57,329 59,623 64,963 73,174 81,768 Other Opng (Exp)/Inc (49,614) (50,542) (53,477) (57,567) (61,588) Operating Profit 7,715 9,081 11,486 15,607 20,180 Other Non Opg (Exp)/Inc 149 153 150 150 150 Associates & JV Inc 0 0 0 0 0 Net Interest (Exp)/Inc (5,179) (5,759) (3,808) (2,651) (2,769) Dividend Income 0 0 0 0 0 Exceptional Gain/(Loss) 0 0 0 0 0 Pre-tax Profit 2,685 3,475 7,828 13,106 17,561 Tax (742) (825) (1,957) (3,277) (4,390) Minority Interest 0 0 0 0 0 Preference Dividend 0 0 0 0 0 Net Profit 1,943 2,650 5,871 9,830 13,171 Net Profit before Except. 1,943 2,650 5,871 9,830 13,171 EBITDA 40,506 41,926 46,218 52,467 59,113 Growth Revenue Gth (%) 22.6 4.6 8.7 12.2 11.2 EBITDA Gth (%) 23.9 3.5 10.2 13.5 12.7 Opg Profit Gth (%) 52.2 17.7 26.5 35.9 29.3 Net Profit Gth (%) 2,456.6 36.4 121.6 67.4 34.0 Margins & Ratio Gross Margins (%) 83.5 83.0 83.2 83.5 83.9 Opg Profit Margin (%) 11.2 12.6 14.7 17.8 20.7 Net Profit Margin (%) 2.8 3.7 7.5 11.2 13.5 ROAE (%) 1.5 1.7 3.2 5.2 6.7 ROA (%) 0.6 0.8 1.8 2.9 3.8 ROCE (%) 2.5 2.5 3.0 4.0 5.1 Div Payout Ratio (%) 0.0 14.9 55.0 60.0 65.0 Net Interest Cover (x) 1.5 1.6 3.0 5.9 7.3 Source: Company, DBS HK
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Company Guide
China Tower
Interim Income Statement (RMB m) FY Dec 1H2017 2H2017 1H2018 2H2018
Revenue 33,272 35,393 35,335 36,484 Cost of Goods Sold (5,611) (5,725) (6,021) (6,175) Gross Profit 27,661 29,668 29,314 30,309 Other Oper. (Exp)/Inc (23,553) (26,061) (24,554) (25,988) Operating Profit 4,108 3,607 4,760 4,321 Other Non Opg (Exp)/Inc 40 109 28 125 Associates & JV Inc 0 0 0 0 Net Interest (Exp)/Inc (2,540) (2,639) (3,203) (2,556) Exceptional Gain/(Loss) 0 0 0 0 Pre-tax Profit 1,608 1,077 1,585 1,890 Tax (488) (254) (375) (450) Minority Interest 0 0 0 0 Net Profit 1,120 823 1,210 1,440 Net profit bef Except. 1,120 823 1,210 1,440
Growth Revenue Gth (%) N/A N/A 6.2 3.1 Opg Profit Gth (%) N/A N/A 15.9 19.8 Net Profit Gth (%) N/A N/A 8.0 75.0
Margins Gross Margins (%) 83.1 83.8 83.0 83.1 Opg Profit Margins (%) 12.3 10.2 13.5 11.8 Net Profit Margins (%) 3.4 2.3 3.4 3.9 Source: Company, DBS HK
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Company Guide
China Tower
Balance Sheet (RMB m) FY Dec 2017A 2018A 2019F 2020F 2021F
Net Fixed Assets 258,138 249,055 240,808 241,065 237,675 Invts in Associates & JVs 0 0 0 0 0 Other LT Assets 33,988 34,510 33,175 31,209 30,815 Cash & ST Invts 7,852 4,836 35,191 31,460 57,407 Inventory 0 0 0 0 0 Debtors 15,262 19,158 16,353 23,502 20,822 Other Current Assets 7,403 7,805 7,805 7,805 7,805 Total Assets 322,643 315,364 333,332 335,041 354,524
ST Debt 95,260 79,946 79,946 79,946 79,946 Creditors 31,906 30,591 43,083 38,192 50,402 Other Current Liab 22,875 4,222 4,222 4,222 4,222 LT Debt 43,793 19,064 19,064 19,064 19,064 Other LT Liabilities 1,314 1,039 1,039 1,039 1,039 Shareholder’s Equity 127,495 180,502 185,977 192,578 199,851 Minority Interests 0 0 0 0 0 Total Cap. & Liab. 322,643 315,364 333,332 335,041 354,524
Non-Cash Wkg. Capital (32,116) (7,850) (23,147) (11,107) (25,998) Net Cash/(Debt) (131,201) (94,174) (63,819) (67,550) (41,603) Debtors Turn (avg days) 82.5 87.5 83.0 83.0 83.0 Creditors Turn (avg days) (614.6) (556.5) (626.4) (666.6) (700.2) Inventory Turn (avg days) 0.0 N/A N/A N/A N/A Asset Turnover (x) 0.2 0.2 0.2 0.3 0.3 Current Ratio (x) 0.2 0.3 0.5 0.5 0.6 Quick Ratio (x) 0.2 0.2 0.4 0.4 0.6 Net Debt/Equity (X) 1.0 0.5 0.3 0.4 0.2 Net Debt/Equity ex MI (X) 1.0 0.5 0.3 0.4 0.2 Capex to Debt (%) 37.3 33.0 25.2 35.3 35.3 Z-Score (X) NA NA NA NA NA Source: Company, DBS HK
Cash Flow Statement (RMB m) FY Dec 2017A 2018A 2019F 2020F 2021F
Pre-Tax Profit 2,685 3,475 7,828 13,106 17,561 Dep. & Amort. 32,642 32,692 34,582 36,710 38,783 Tax Paid 104 (217) (1,804) (2,165) (3,397) Assoc. & JV Inc/(loss) 0 0 0 0 0 (Pft)/ Loss on disposal of FAs 0 0 0 0 0 Chg in Wkg.Cap. (7,005) 2,987 15,297 (12,041) 14,891 Other Operating CF 6,509 6,603 3,808 2,651 2,769 Net Operating CF 34,935 45,540 59,711 38,261 70,607 Capital Exp.(net) (51,837) (32,713) (25,000) (35,000) (35,000) Other Invts.(net) 0 0 0 0 0 Invts in Assoc. & JV 0 (8) 0 0 0 Div from Assoc & JV 0 0 0 0 0 Other Investing CF (78) (202) 0 0 0 Net Investing CF (51,915) (32,923) (25,000) (35,000) (35,000) Div Paid 0 0 (396) (3,229) (5,898) Chg in Gross Debt 88,556 (40,359) 0 0 0 Capital Issues 0 51,165 0 0 0 Other Financing CF (80,973) (26,440) (3,960) (3,762) (3,762) Net Financing CF 7,583 (15,634) (4,356) (6,992) (9,660) Currency Adjustments 0 1 0 0 0 Chg in Cash (9,397) (3,016) 30,355 (3,730) 25,947 Opg CFPS (RMB) 0.32 0.29 0.26 0.29 0.32 Free CFPS (RMB) (0.13) 0.09 0.20 0.02 0.21
Source: Company, DBS HK
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Company Guide
China Tower
DBS HK recommendations are based on an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return, i.e., > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable share price catalysts within this time frame)
*Share price appreciation + dividends
Completed Date: 12 Jul 2019 9:43:05 (HKT) Dissemination Date: 12 Jul 2019 10:53:22 (HKT) Sources for all charts and tables are DBS HK unless otherwise specified.
GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by DBS Bank (Hong Kong) Limited (“DBS HK”). This report is solely intended for the clients of DBS Bank Ltd., DBS HK, DBS Vickers (Hong Kong) Limited (“DBSV HK”), and DBS Vickers Securities (Singapore) Pte Ltd. (“DBSVS”), its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS HK.
The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., DBS HK, DBSV HK, DBSVS, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.
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Company Guide
China Tower
ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.
COMPANY-SPECIFIC / REGULATORY DISCLOSURES
1. DBS Bank Ltd, DBS HK, DBSVS or their subsidiaries and/or other affiliates have proprietary positions in China Tower Corp Ltd (788 HK) recommended in this report as of 10 Jul 2019.
2. Neither DBS Bank Ltd nor DBS HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.
3. Compensation for investment banking services: DBS Bank Ltd, DBS HK, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from Tower Bersama Infrastructure Terbuka (TBIG IJ), Bank of Communications Co Ltd (3328 HK) and Bank Of Communications Company Limited (601328 CH) as of 30 Jun 2019.
DBS Bank Ltd, DBS HK, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA, within the next 3 months, will receive or intend to seek compensation for investment banking services from Bank of Communications Co Ltd (3328 HK) and Bank Of Communications Company Limited (601328 CH) as of 30 Jun 2019.
DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
4. Disclosure of previous investment recommendation produced: DBS Bank Ltd, DBSVS, DBS HK, their subsidiaries and/or other affiliates of DBSVUSA may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS HK, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA in the preceding 12 months.
1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.
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Company Guide
China Tower
RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Australia This report is being distributed in Australia by DBS Bank Ltd, DBSVS or DBSV HK. DBS Bank Ltd holds Australian Financial Services Licence no. 475946. DBSVS and DBSV HK are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS Bank Ltd and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSV HK is regulated by the Hong Kong Securities and Futures Commission under the laws of Hong Kong, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.
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China Tower
United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent. United States This report was prepared by DBS HK. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate. Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. DBS Bank (Hong Kong) Limited 13 th Floor One Island East, 18 Westlands Road, Quarry Bay, Hong Kong Tel: (852) 3668-4181, Fax: (852) 2521-1812
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China Tower
DBS Regional Research Offices
HONG KONG MALAYSIA SINGAPORE DBS Bank (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Carol Wu Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 13th Floor One Island East, 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 18 Westlands Road, Capital Square, Marina Bay Financial Centre Tower 3 Quarry Bay, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 852 3668 4181 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 852 2521 1812 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] e-mail: [email protected] Company Regn. No. 196800306E
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