In 2022, as China continues to implement the state strategies of "Cyberpower", "Digital China" and "dual carbon", China Tower Corporation Limited (the "Company" or "we") embraced the opportunities by working together as a cohesive team and upholding our founding philosophy of resource sharing. Positioning ourselves as a world-class information and communications infrastructure service provider and a highly competitive information and new energy applications provider, we centered our business around sharing, service, innovation, technology, and value creation, built upon an operating system that is professional, intensive, delicate, efficient, and digitalized. The continued implementation of the "One Core and Two Wings" strategy has helped all businesses achieve steady growth. Our overall performance remained stable and new benefits offered by high-quality development have promoted further growth and enhanced the value of the Company.
Our operating revenue grew steadily by 6.5% year-on-year, reaching RMB92,170 million in 2022. EBITDA1 reached RMB62,844 million, with an EBITDA margin2 of 68.2%. Profit attributable to owners of the Company was RMB8,787 million, with a year-on-year growth of 19.9%. Our net profit margin was 9.5%, showing a continued improvement in profitability.
Our cash flow remained robust, with net cash generated from operating activities for 2022 reaching RMB65,134 million. Capital expenditures stood at RMB26,207 million, while free cash flow reached RMB38,927 million, or growth of 10.2% year-on-year. Our financial position remained healthy. As of 31 December 2022, total assets reached RMB305,560 million, interest-bearing liabilities were RMB79,119 million and our gearing ratio3 was 27.7%, a decrease of 5.7 percentage points from the year before.
Shareholder returns are one of our priorities. After considering our profitability, cash flow, and future development needs, the Board has recommended a final dividend of RMB0.03232 per share (pre-tax) for the year ended 31 December 2022, equivalent to a payout ratio of 72% of our annual distributable net profit.
By unwaveringly adhering to and implementing the "One Core and Two Wings" strategy, we strengthened our ability in coordinating and sharing resources in 2022 while elevating reforms and innovation. As a result, our TSP business continued to see stable development, while our Smart Tower and Energy businesses maintained strong growth.
Driven by the "5G + DAS" dual growth engines, TSP business grew steadily
We capitalized on the increasing penetration of 5G network coverage by reinforcing our advantages in resource coordination and sharing and professional management to streamline our construction and service models. This has enabled us to address our customers' network construction needs in an intensive and effective manner. Our TSP business revenue reached RMB83,031 million in 2022, an increase of 3.5% year-on-year.
Tower business. We advocated for the inclusion of 5G base-station sites in development planning and played an active role in setting the wireless communications specifications for buildings. Complying with these specifications, we have been included in the administrative approval process for new construction projects, further strengthening our ability to coordinate and share resources. We launched innovative low-cost construction solutions to sharpen our capability in providing integrated wireless communications coverage solutions. A higher level of resource sharing enabled us to comprehensively satisfy customer demand for 5G construction. We completed approximately 745,000 5G base-stations during the year, of which more than 96% were delivered through sharing existing resources. In addition, we focused our efforts on tackling difficult sites and continued to enhance our service quality. Alongside an improving capability in site maintenance, customer satisfaction grew. In 2022, our Tower business generated revenue of RMB77,204 million, or year-on-year growth of 1.8%. As of 31 December 2022, we managed 2.055 million tower sites, representing a net increase of 17,000 sites from the end of 2021. The number of TSP tenants reached 3.362 million, an increase of 102,000 from the end of 2021, and the TSP tenancy ratio also increased from 1.60 to 1.65 over the same period of last year, showing a continuous increase in the level of site co-location.
DAS business. We focused on providing 5G coverage for key scenarios and key sectors including education, cultural tourism, transportation, and healthcare, with an integrated approach to coordinating resources and demands. Playing an important role in coordinating site entry and construction, we were able to take up all DAS construction demand for key venues, scenarios, and sectors, providing customers with differentiated and diversified indoor coverage solutions. In addition, we stepped up innovation to develop sharable DAS products and solutions. We enhanced our professional capabilities to optimize our advantages in providing low-cost and green and low-carbon DAS solutions, complemented by our quality services, driving accelerated growth in the DAS business. This business has increasingly become the second growth engine of our development. In 2022, our DAS business recorded revenue of RMB5,827 million, representing a year-on-year increase of 34.3%. As of 31 December 2022, we had covered buildings with a cumulative area of 7,390 million square meters, representing a year-on-year increase of 48.1%. Our high-speed railway tunnels and subway coverage reached a cumulative length of 20,040.2 kilometers, a year-on-year increase of 18.5%.
Grasping strategic opportunities to boost strong growth in Two Wings business
By leveraging the opportunities brought forth by the growth of the "digital economy" and the "dual carbon" goals, we focused on product innovation and business optimization to fortify our competitive advantages. As a result, the Two Wings business sustained a robust growth trajectory with revenue in 2022, reaching RMB8,904 million and accounting for 9.7% of our overall operating revenue, an increase of 2.6 percentage points from the same period in 2021. The business contributed 49.7% to our incremental operating revenue for the year, an increase of 9.7 percentage points year-on-year, further solidifying our multi-pillar business development structure.
With a focus on "Digital Tower", Smart Tower business growth accelerated. Serving the national strategic goals. We stood at the forefront of the digital economy to seize opportunities arising from its development, playing a proactive role in building the national governance system. By upgrading over 200,000 "telecommunication towers" to "digital towers", we helped enforce fishing prohibition along the Yangtze River, as well as taking part in ecological restoration, farmland protection, forestry fire prevention and other national initiatives. In doing so, we contributed to projects including alleviating pollution, conserving the ecology of the Yangtze River and safeguarding China's 1.8 billion mu of farmland. This approach not only supported the development of Ecological China and Beautiful China, but also enhanced efficiency and value of the Company. Enhancing product capabilities. We increased investment in research and development (R&D) to speed up product upgrade and iteration. Our Tower Monitoring products continued to establish their leadership centered around five areas - platform, data, algorithm, application, operation. We launched seven industrial application of Tower Monitoring products covering the smart management of forestry, farmland, straw burning, blue skies, reservoirs, fishery, and villages. These products helped us address the diverse needs of our customers. Upgrading customer services. We have built out a one-on-one, face-to-face, and round-the-clock "companion" service system that covers every procedure to offer our customers professional, systematic and personalized services. We put in place sound information security and data protection and are continuously improving our customer service quality. In 2022, our Smart Tower business achieved revenue of RMB5,704 million, a year-on-year increase of 40.5%, of which RMB3,694 million or 64.8% was generated from Tower Monitoring business.
Corporate Governance and Social Responsibility
We always place great emphasis on comprehensive risk management by continually strengthening our internal control and legal compliance system to enhance our ability to prevent and mitigate risks. We continue to streamline our governance mechanism and ability to maintain high-level corporate governance, ensuring a robust foundation for our solid and high-quality development.
We have received wide recognition for our commitment to corporate social responsibility and for meeting our obligations to serve communities. In 2022, we successfully delivered reliable communications services for major events such as the Beijing 2022 Winter Olympics, the Beijing 2022 Paralympics Winter Games, and the Communist Party of China's 20th National Congress. In addition, in times of natural disasters and emergencies - for example, pandemic prevention and control and disaster relief missions - we stood at the forefront and safeguarded communications lifelines. We continued to promote the development of wireless communications infrastructure in remote areas to pave the "information expressway", which is essential for eliminating the digital divide between urban and rural areas and for supporting rural revitalization. Our green operations, including increased sharing, energy saving and emission reduction measures at base-stations, and the use of new energy, have supported China's carbon peaking and carbon neutrality goals.
Looking ahead, we will remain focused on grasping the opportunities brought by the development of 5G new infrastructure, the digital economy, and the green-oriented transition of energy. Anchored around our positioning as a world-class information and communications infrastructure service provider and a highly competitive information and new energy applications provider, we will further the implementation of the "One Core and Two Wings" strategy and continue to drive development centered around sharing, service, innovation, technology, and value creation. In doing so, we will build upon an operating system that is professional, intensive, delicate, efficient, and digitalized, solidifying the new paradigm of high-quality development and creating greater value for shareholders, customers, and society.
TSP business: We are dedicated to meeting the network construction needs of our customers through our innovative construction and service models. We will provide low-cost and highly efficient coverage to our customers through promoting our integrated wireless communications coverage solutions. Built on the Commercial Pricing Agreements and Service Agreements with the TSPs, we will continue to introduce innovative service solutions, enhance service capabilities, and improve customer experience, foster customer cooperation, to consolidate our market competitiveness. In view of the extension of 5G network to wider indoor coverage, we will coordinate resources and customer construction needs while innovating in our products and solutions. Coordinated site entry and construction will help us reduce construction time and improve the delivery efficiency of DAS projects. Our goal is to establish a commanding position in the new DAS market and consolidate the "5G + DAS" dual growth engines. In terms of accelerating the implementation of digitalized operations, we will follow the principles of "coordinated planning, phased implementation, prioritizing capabilities, and making constant progress" to achieve a higher level of digitalized and precise management that will enhance our professional operations and maintenance capabilities, as well as further expedite digitalization.
Smart Tower business: Our primary focus will be on leveraging the advantages of extensive site locations and coverage, and mid-to-high point monitoring capabilities, continuing to transform "telecommunication towers" into "digital towers", and turning "telecommunication shelters" into "digital shelters". Speeding up the R&D of Tower Monitoring industrial applications products will help us better meet the market demand for customized products. This will enable us to forge our market leadership in both products and services. Furthermore, we will actively explore ways to empower industries serving the national economy and people's livelihoods with digitalization. We will strengthen our customer-centric "companion" services by improving our service system and response process to address customer requests in a timely manner, with an aim to enhance the customer experience.
Energy business: In terms of battery exchange, we will deep-dive into the takeaway and courier businesses, with the aim of improving service quality and enhancing customer satisfaction. We will consolidate our leading position in the light electric vehicle mobility market. In addition, we will provide reliable power backup service to key industries, promoting a comprehensive solution that includes power backup, power generation, monitoring, and maintenance. This will not only improve our competitiveness across different segments but also establish us as a trusted "energy butler" for our customers. To achieve these goals, we will increase our investment in R&D and build a smart energy platform, enhancing the intelligent operation and management of our Energy business.
Looking forward, we will remain focused on innovation as a key driving force for our development. Centering on key areas and critical projects, we will systematically progress the R&D in technology and products related to DAS, Tower Monitoring Al, green energy applications and more. We will leverage high-quality innovation in technology and products to generate new growth momentum. Moreover, we will deepen collaboration with enterprises along the industry chain, as well as universities and research institutions, to foster the innovation and R&D ecosystem that embraces open cooperation. By doing so, we will promote innovation across the board. Lastly, we will continue to simulate the creativity and vitality of our talent by putting in place robust systems and mechanisms to create a conducive environment for tech talent and drive the sustainable development of the Company.
Finally, I would like to take this opportunity to express my heartfelt gratitude to Mr. Deng Shiji, who has resigned as a director of the Company, for his outstanding contributions to the Company's development during his term of service. I would also like to extend my warmest welcome to Mr. Fang Xiaobing, Mr. Dong Chunbo, and Mr. Sin Hendrick, who have joined the Board as new members.
On behalf of the Board, I would like to thank all our employees for their dedication, our customers for their strong support, all our shareholders for their trust, and the wider community for the assistance and encouragement we have received over the years.
Beijing, China, 2 March 2023
- EBITDA is calculated by operating profit plus depreciation and amortization.
- EBITDA margin is calculated by dividing EBITDA by operating revenue, and multiplying the resulting value by 100%.
- Gearing ratio is calculated as net debts divided by the sum of total equity and net debt, then multiplied by 100%. Net debt is calculated as the amount of interest-bearing liabilities minus the amount of cash and cash equivalents