HK Stock Market Move | CHINA TOWER (00788) drops over 5% after earnings report; profit grew by 30% in the first half, but revenue declined and cash flow is negative.

CHINA TOWER (00788) fell over 5% after the earnings report. As of the time of writing, it has dropped 5.14%, trading at HKD 9.22, with a transaction volume of HKD 62.271 million. In terms of news, CHINA TOWER announced its interim results, reporting an operating revenue of RMB 48.693 billion for the first half of the year, a year-on-year decrease of 1.8%; the net profit attributable to the parent company was RMB 7.489 billion, a year-on-year increase of 30.1%. Notably, the company's operating cash flow in the first half of the year was RMB 7.135 billion, a year-on-year decrease of RMB 21.544 billion, mainly due to an increase in payment collection from clients settling by bills. The free cash flow in the first half was -RMB 4.515 billion, a year-on-year decrease of RMB 20.802 billion. CHINA TOWER's executive director and chairman, Zhang Zhiyong, stated that the company's revenue declined 1.8% year-on-year in the first half, which he considers a temporary result. This was primarily affected by the decommissioning and minimal station renovations from the 4G unified network construction by China Telecom Corporation and China United Network Communications. This impact is expected to end this year or next year, and it is anticipated that the companys tower business and indoor distributed antenna system business will remain roughly flat or slightly decline year-on-year.