We raised our target price from HK $1.02 to HK $1.12 and maintained the company's "collection" investment rating. We forecast earnings per share of RMB0.050 / 0.059 / 0.063 for fiscal year 2022-2024. In view of the company's continuous transformation from a communications tower to a digital tower, we raise the target price and maintain the investment rating of "Collection".

China Tower Corporation's performance in the first half of fiscal year 2022 is in line with our expectations. In the first half of fiscal 2022, revenue rose 6.6 per cent year-on-year, while shareholder net profit rose 22.2 per cent. Revenue from tower business, office business, Zhaopin business and energy business increased by 2.3%, 32.0% / 39.4% / 61.3% respectively compared with the same period last year.

We expect tower business to maintain low single-digit growth in the second half of 2022. We expect to build about 600000 5G base stations in both 2022 and 2023, so we expect the tower business to maintain steady and small growth. In addition, due to the strong demand for deep coverage of buildings, subways and high-speed rail tunnels, we expect room business to maintain strong growth in the second half of 2022.

We expect the growth rate of the "two wings" business to exceed market expectations. Relying on a wide range of site resources and strong capabilities, we expect the company's tower video business and site leasing business to further expand to more customers and deeper levels. In addition, Zhaopin business will continue to change from simply providing site resources to providing integrated information services, and the value of a single station will continue to increase. With its expanding network resources and huge market demand, we expect the energy business to maintain strong growth.

Catalyst: an increase in dividend payout.

Risk hint: the growth rate of the "two wings" business is slower than expected; the epidemic situation repeatedly may affect the construction progress.