HK Stock Market Move | China Tower (00788) rose nearly 3%, the third quarter profit margin is better than expected, and the expected decrease in depreciation costs is likely to drive profit growth.

China Tower (00788) rose nearly 3%, as of the time of publication, it rose 2.97% to HK$1.04, with a turnover of HK$258 million. In terms of news, China Tower previously released its performance, with revenue and profit in the first 9 months increasing by 3.3% and 11% respectively year-on-year, and in the third quarter by 2.2% and 13%. Morgan Stanley pointed out that China Tower's third-quarter revenue rose by 2.2% year-on-year to 24 billion yuan, which was lower than the bank's expectations. However, EBITDA profit margin increased by 1 percentage point to 68.9% during the period, and net profit increased by 12.6%, both better than expected. The bank mentioned that tower revenue remained flat year-on-year at 19 billion yuan, in line with the bank's expectations. Nomura believes that the company's tower business will remain stable in 2024. Looking ahead, Nomura believes that despite the telecommunications industry being in a downward capital expenditure cycle, China Tower's core business stability may lead to profit growth as depreciation costs decline, and the company's depreciation period may gradually expire from the fourth quarter of 2025.