CITIC Telecom Announces 2020 Interim Results Stable Progress in Overall Operations Steady Growth in Business Results Profit Attributable to Shareholders Exceeds HK$510 Million Distributes Interim Dividend of HK5.0 Cents per Share

CITIC Telecom Announces 2020 Interim Results

*  *  *  *

Profit attributable to equity shareholders Exceeds HK$510 Million  Interim Dividend of HK5.0 Cents per Share

(18 August 2020, Hong Kong) — CITIC Telecom International Holdings Limited (“CITIC Telecom” or the “Group”; stock code: 1883), a leading international integrated telecommunications, and information and communications technologies services provider in Asia, has reported a profit attributable to equity shareholders of HK$512 million for the six months ended 30 June 2020, similar to that of the corresponding period of last year. Excluding the effect of property revaluation, the period-on-period increase would be 5.3%.

 The Group reported HK$4,025 million in revenue from its principal business of telecommunications services, representing a growth of approximately 11.3% over the corresponding period of last year.

Basic earnings per share amounted to HK14.0 cents, similar to that of the last corresponding period.

The Board declared an interim dividend of HK5.0 cents per share for 2020, equivalent to that of the same period last year.

Mr Xin Yue Jiang, Chairman of CITIC Telecom, said, “During the first half of the year, the Group made a full effort to implement anti-pandemic measures as well as complete various tasks in corporate business development, in a fine display of its remarkable resilience against risks, the fruits of its endeavour in recent years to drive corporate development through team building, and its notable improvements in organisation and efficiency through quality enhancement initiatives and delicacy management. It has also been a fine testimony to the commitment and dedication amongst all staff to fulfill the Group’s mission. All in all, the Group reported stable progress in overall operations and maintained steady growth in business results.”

The Group has maintained a healthy financial position and a strong cash flow. As at 30 June 2020, the Group recorded cash and bank deposits of approximately HK$1,345 million, sufficient to meet its financial obligations and contractual capital commitments in the coming 12 months.

Business Highlights
CTM completed first stage of 5G network construction as scheduled, making Macau one of the first cities in Asia with full outdoor coverage of 5G network. As at 30 June 2020, the Group had approximately 44.6% market share in the Macau mobile market and approximately 46.1% market share in the 4G subscribers of the Macau mobile market, and continued to maintain its market leading position. During the period, revenue from the Group’s mobile services decreased by 20.1% period-on-period to HK$493 million compared to the same period last year, mainly due to the decline in roaming revenues as a result of the COVID-19 pandemic. As for 5G, apart from the completion of first stage of 5G network construction, the Group also completed 5G roaming testing for 7 carriers, Companhia de Telecomunicações de Macau, S.A.R.L. (“CTM”) has fulfilled the conditions required for the commercial launch of 5G. The Group continued to maintain the premium quality of its network to ensure network security and provide quality network service to customers.

Revenue growth of internet services driven by the continuously increasing number of broadband users. During the period, revenue from the Group’s internet services increased by 4.2% period-on-period to HK$552 million, mainly due to the number of broadband users increased by approximately 3.0% period-on-period to more than 194,000, leading to the revenue growth from fibre broadband service. Phase III(A) of the Group’s CITIC Telecom Tower Data Centre has been fully leased, while phase III(B) with an even larger scale is currently under construction with smooth progress, scheduled for market launch in mid-2021.

Engaged in a full effort in international market development for enterprise solutions, continued to extend business coverage and established foothold in Southeast Asia. Revenue from enterprise solutions increased by 13.3% period-on-period to HK$1,718 million, mainly attributable to the higher project revenue from government, resorts and other enterprises, as well as growth in leased lines revenue in Macau, and encouraging growth in enterprise solutions services in Southeast Asia and Mainland China. The Group’s exclusive MPLS service TrueCONNECT™ continued to gain ground, covering more than 130 countries globally with over 140 PoPs. During the first half of 2020, the Group established new PoPs in Quanzhou in Fujian, Weifang in Shandong, Wenzhou in Zhejiang, Guiyang in Guizhou and Nanning in Guangxi, as well as a second PoP in Ho Chi Minh City in Vietnam. Besides, the Group’s cloud computing services currently offer 8 Cloud Computing solutions which have been developed to complement the Group’s 18 Cloud Services Centres in a Cloud Computing service network covering Greater China, Singapore, Japan, North America, Europe, Russia and South Africa to meet the ever-growing demands of customers.

Established market leadership in internet-based messaging services and maintained rapid development. Revenue from international telecommunications services increased by 39.0% period-on-period to HK$1,165 million during the period. The Group continued to seize new business opportunities brought by the increasing demand for messaging services such as authentication services and confirmation of transactions. Therefore, messaging services revenue surged 137.3% period-on-period to HK$560 million. Revenue from voice business increased by 6.1% to HK$588 million during the period as the Group was able to capture the increase in demand for voice traffic

to regions with higher revenue per minute as a result of the change in traffic pattern for voice services.

Development Strategies
Looking ahead, though many difficulties and challenges remain in the Group’s business development, it will continue to address such challenges and pressure in a calm and yet proactive manner, and to identify and seize opportunities even amidst difficulties. In this connection, the Group will diligently reflect and develop new opportunities and new competences in business development, in an endeavour to groom new opportunities amidst crises and embark on new ventures amidst changes.

The rapid development of the internet and the growing penetration of online applications, coupled with the swift application of IoT, Cloud Computing, AR/VR and other new technologies, have brought about new opportunities for development to the Group’s enterprise solutions business, internet business, 5G business, messaging business and data centre business. The Group will continue to increase its investment in technological innovation and R&D, as part of its effort to transform into an internet-based integrated telecommunications enterprise. The Group will strive for higher standards in our internet-based operations and enhance our integrated ICT servicing ability, while driving CTM towards transformation into a smart-city operator to consolidate its leading position in Macau’s telecommunications industry.

As the dominant telecommunications operator in Macau, the Group assumes vital responsibility in connection with the society and future development of Macau. The Group will ensure the proper fulfilment of social responsibilities by CTM in addition to offering excellent telecommunications services, as it continues to make contributions to the stable and thriving development of Macau in the long term.

In connection with its data centre business, the Group will continue to enhance its ability to customise, responsiveness to customers’ requests and specialised integrated technical servicing ability and persist in the strategy of the “scale expansion of data centre business”. The Group will expedite the development of the “digital upgrade project” of CITIC Telecom Tower in accordance with the established strategy of “centralised planning and stage-by-stage development” to heighten the scale and efficiency of the Group’s data centre business in various regions.

Besides, The Group will continue to prioritise the development of smart city services on the basis of its global enterprise services, regional enterprise services and local enterprise services, while increasing investment at the platform, enhancing the consolidation of resources to support the market development of enterprises in Southeast Asia, in order to strengthen the Southeast Asian business segment. The Group will also continue to strengthen the business development of CPC Europe. The CPC European sales team will enhance its market development ability and work closely with the Asian teams to achieve better synergy and be consistently innovative in their approach to cooperation, in a bid to strive for greater shares of the enterprise market.

Mr Cai Dawai, Chief Executive Officer of CITIC Telecom, said, “The novel coronavirus pandemic has posed challenges to our production, operation and business development. Leveraging our comprehensive development across different sectors and dedication of our teams, the Group still recorded satisfactory results in the first half. We have full confidence in the performance for the second half. We will also adhere to the corporate spirit of ‘Wisdom and Integrity to Foster Prosperity’, continue to make innovations, and strive to achieve healthy development.”