Summary

  • Revenue fell 1.8% to RMB48,693 million and EBITDA fell 11.6% to RMB30,252 million, while attributable profit rose 30.1% to RMB7,489 million because depreciation and amortisation fell 25.2% to RMB19,141 million.
  • Net cash generated from operating activities fell 75.1% to RMB7,135 million and free cash flow turned negative at RMB4,515 million, as customer payment cycles lengthened and collections arrived increasingly as bills.
  • The board raised the interim dividend 44.3% to RMB0.19122 per share, faster than earnings per share grew, while gearing rose to 31.5% and receivables aged into the six-month-to-two-year buckets.

Two directions at once

China Tower's first-half 2026 results contain two opposing movements. Revenue was RMB48,693 million, down 1.8% from RMB49,601 million a year earlier, and EBITDA was RMB30,252 million, down 11.6% from RMB34,227 million, a 62.1% margin. Attributable profit, however, rose 30.1% to RMB7,489 million, with basic earnings per share of RMB0.4284. The figures come from the company's 2026 interim results announcement and its 2026 interim report.

The arithmetic that reconciles them is depreciation. Depreciation and amortisation fell 25.2% to RMB19,141 million from RMB25,598 million. China Tower attributes that decline to acquired tower assets reaching the end of their depreciation schedules and to a revision of the estimated useful lives of indoor distribution (DAS) assets, as set out in its 2026 interim results investor presentation. Because depreciation is added back in the company's EBITDA definition, the same decline lifts operating profit without lifting EBITDA: operating profit rose 28.8% to RMB11,111 million even as EBITDA fell by RMB3,975 million.

That is not a hidden accounting irregularity. It is the normal end of a depreciation tail at an asset-heavy operator, and it is disclosed. What it does mean is that the reported profit growth is not a measure of improved trading. Other operating expenses rose 41.6% to RMB6,919 million, repairs and maintenance rose 19.0% to RMB3,791 million and site operation and support rose 14.0% to RMB2,889 million. Net finance costs fell 2.5% to RMB1,205 million and the effective tax rate was broadly stable at about 24.7%, so neither interest nor tax explains the swing.

The cash statement diverges

Net cash generated from operating activities fell 75.1% to RMB7,135 million from RMB28,679 million, which the company attributes mainly to prolonged customer payment cycles and to collections increasingly settled by bills rather than cash. Capital expenditure fell 6.0% to RMB11,650 million, but not enough to offset the operating cash decline: free cash flow was negative RMB4,515 million, against positive RMB16,287 million in the first half of 2025.

Receivables show where the cash went. Trade and other receivables rose to RMB110,687 million at 30 June 2026 from RMB88,510 million at 31 December 2025, with gross trade receivables at RMB90,750 million and bills receivable at RMB19,865 million. The expected credit loss allowance rose to RMB7,098 million from RMB5,822 million, and the ageing profile shifted into older buckets: RMB21,498 million aged six months to one year, up from RMB15,452 million, and RMB21,662 million aged one to two years, up from RMB15,179 million. Contract liabilities, which represent customer prepayments, fell to RMB3,750 million from RMB4,392 million.

The instrument mix also changed. Commercial acceptance bills rose to RMB18,599 million from RMB11,311 million, while bank and other finance company acceptance notes fell to RMB1,266 million from RMB2,238 million. Commercial paper issued by counterparties is a weaker settlement promise than a bank acceptance, and the company's own allowance increase is consistent with that read. How much of the bill-settled collection was subsequently discounted, and how much of the receivables book is owed by the three Chinese carriers, is not disclosed in the retrieved documents.

Sites grow, tenancies do not

At 30 June 2026 China Tower managed 2.172 million tower sites, 23,000 more than at end-2025, with 3.871 million tenants, up 0.7% year on year, and a tower tenancy ratio of 1.78. Tower-service-provider tenants were 3.565 million, down 2,000 from end-2025, with a tenancy ratio of 1.69. Average annual revenue per site fell 6.9% to RMB18,790 from RMB20,187.

That combination — more sites, marginally more tenants, fewer carrier tenants and lower revenue per site — is the footprint of co-build and co-share, and of carrier network optimisation. The company attributes the EBITDA decline to lease cancellations caused by tower-service-provider network optimisation and adjustment, the effect of simplified base station upgrades, and higher repairs and maintenance on tower assets whose service lives were extended after reaching maturity.

Tower business revenue fell 6.7% to RMB35,263 million, while the non-tower businesses grew: DAS revenue rose 9.2% to RMB5,094 million, the Smart Tower business rose 12.8% to RMB5,332 million and the Energy business rose 17.3% to RMB2,591 million. The tower-service-provider business was 82.9% of revenue and the two so-called Wings businesses 16.3%.

A dividend that outruns the cash

The board resolved to pay an interim dividend of RMB0.19122 per share pre-tax, roughly RMB3,343 million in total and 44.3% above the RMB0.13250 per share paid in the first half of 2025 — faster than the 30.1% growth in earnings per share. The final FY2025 dividend of RMB0.32539 per share, about RMB5,688 million, was approved at the annual general meeting on 15 May 2026. The company states it will work towards steady growth in annual dividend payment per share, and the 2026 interim dividend is expected to be paid on or around 30 October 2026 to shareholders on the register on 11 September 2026.

Gearing reached 31.5% at 30 June 2026, up 3.8 percentage points from end-2025, with interest-bearing liabilities of RMB101,392 million and total assets of RMB351,237 million. A dividend increase alongside negative free cash flow and rising gearing is a capital-allocation choice, not by itself a policy failure; it is financeable from the balance sheet. It does mean the payout is currently being funded from a source other than operating cash generation, and the company has not disclosed the conditions under which its dividend growth policy would be revised.

What this half does and does not establish

What it establishes is a state difference in the quality of reported results: profit and dividend per share rose while the operating cash measure, revenue per site and EBITDA fell, and the balance sheet absorbed the difference through receivables, allowances and debt. Management's framing on the second-quarter call, as rendered by a third-party earnings call transcript, is consistent with the filings; the transcript is used here for corroboration only, not as a primary financial source, and the company's investor relations site carries the underlying documents. Company explanations are attributed to the company throughout; derived ratios such as margin, per-site revenue and gearing change are arithmetic on reported figures.

What it does not establish is that the depreciation effect is exhausted, that the Wings businesses can replace tower economics in profit and cash terms, or that receivables quality has stabilised. The filings do not quantify how much of the depreciation decline came from fully depreciated acquired assets versus the DAS useful-life revision — a distinction that matters because one is a one-off step-down and the other is a permanent accounting change. Until that split is disclosed, the durability of the profit bridge is unproven.

More on the company is filed in the BTW directory entry for China Tower Corporation Limited.