Good afternoon, ladies and gentlemen. Welcome to China Tower's 2021 annual results announcement. Due to the COVID-19 pandemic, we conduct the event by means of a conference call. Thank you for your continued support to China Tower. It's our pleasure to have you here. Now, I would like to introduce the management attending today's results briefing. Our Executive Director and General Manager, Mr. Gu Xiaomin. Chief Accountant, Mr. Gao Chunlei. Deputy General Manager, Mr. Liu Guofeng, and Deputy General Manager, Mr. Zhang Quan. Today's results announcement covers three parts. First, I'll briefly explain the company's overall performance for the year of 2021. Then Mr. Gu Xiaomin and Mr. Gao Chunlei will explain the operational and financial performance respectively. At the end, we will have a Q&A session. First, let us have a look at the company's key indicators in 2021.
In 2021, the company actively seized opportunities driven by the state strategies of cyber power, Digital China, and dual carbon goals. We continued to promote our sharing philosophy and maintain steady growth trend in our overall performance. The company's revenue maintains healthy growth in 2021. We recorded operating revenue of RMB 86.59 billion, up by 6.8% over last year. Meanwhile, profitability continued to improve. The company's EBITDA increased by 5.9% year-on-year to RMB 63.02 billion, while net profit increased by 14.0% year-on-year to RMB 7.33 billion. We maintained a stable and an abundant cash flow. Our net cash generated from operating activities amounted to RMB 60.50 billion, representing a year-on-year increase of 5.1%.
In addition, tenancy ratio reached 1.7, showing a further enhancement in site co-location rate. Now, let us have a look at the revenue structure and the business development of our One Core and Two Wings strategy. In 2021, the company fully implemented the One Core and Two Wings strategy, continued to improve the core capabilities of resource coordination and sharing, and achieve encouraging development in our individual businesses. Our TSP business grew steadily over the year. Its revenue increased by 4.3% year-on-year to RMB 80.2 billion, accounting for 92.6% of our operating revenue. This has reinforced a solid foundation for the company's development. Meanwhile, the development of Two Wings business started to show remarkable results.
Its revenue increased by 55.6% year-on-year to RMB 6.13 billion, accounting for 7.1% of our operating revenue, while the same for last year was only 4.9%, creating new growth momentum for the company. In 2021, in response to the continuous acceleration of 5G network coverage, the company fully leveraged its advantage in resource coordination and sharing, as well as expertise in operations to satisfy 5G network coverage demands of its TSP and expedite the large-scale construction of 5G networks in an economical and efficient manner. As at the end of December 2021, the company had received a total of 1.226 million 5G construction demand, supporting China to become a global leader in terms of 5G network scale.
In the second half of 2021, revenue from 5G tenants contributed more than 70% to the incremental revenue of the TSP business, further becoming a key growth driver for TSP business. Regarding our Smart Tower business, in response to the opportunities driven by digital transformation, the company leveraged the advantage of its extensive site coverage across the country and the strength of various types of sites and monitoring capabilities by adopting the model of tower plus 5G plus AI to upgrade our telecom towers to digital towers and provide information application services to our customers in various sectors. In 2021, our Smart Tower business achieved a revenue of RMB 4.06 billion, representing a year-on-year increase of 35.2% and sustaining a rapid growth. We are starting to develop into an information application service provider with core competencies.
For our Energy business, we have been working towards the peak carbon emissions and carbon neutrality goals, and leverage our expertise in energy operations and securing power supply to widely serve the society, and made every effort to scale up our Energy business. For our battery exchange business, we focused on sectors such as parcel and food delivery services, accelerated the economical and efficient establishment of extensive green and intelligent battery exchange facilities, making us the largest operator of battery exchange services for light electric vehicles in China. For our power backup business, we focused on key sectors such as healthcare, finance, transportation to create integrated four-in-one solutions that cover power backup, power generation, monitoring, and maintenance. In 2021, our Energy business recorded a revenue of RMB 2.07 billion, representing a year-on-year increase of 121.5%.
The scale of our Energy business expanded continuously, and we have just developed into an energy application service provider with core competencies. In 2021, the company aimed to achieve high-quality development and focused on operation and management, innovative development, systems and mechanisms reform, building a solid foundation for future development. In terms of operation and management, we continuously promoted digital transformation, implemented platform strategy to create synergies between businesses. At the same time, we constantly improved compliance system and strengthened risk prevention capabilities. In terms of innovative development, we set up key laboratories to improve our core competency to tackle technical problems, enhance innovation in DAS algorithm terminals and platform to support business development.
In terms of systems and mechanisms reform, we promoted the tenure system and contract management, strengthened talents recruitment, and implemented incentive and remuneration mechanism to boost vitality and growth, and promoted the mixed-ownership reform in subsidiary level to raise competitiveness. The company has always upheld a proactive dividend policy and is committed to enhancing shareholders' returns. The Board of Directors recommends paying a final dividend of RMB 0.02624 per share for the year ended December 31, 2021, equivalent to a payout ratio of 70% of our annual distributable net profit. In the future, the company will further enhance its profitability to bring long-term stable return to shareholders. The national strategic 14th Five-Year Plan will further bring favorable prospect to the company's development, and the company is still going through a key period of strategic opportunity.
In the field of 5G infrastructure, macro policy continued to strengthen, and 5G network application continued to develop, thereby creating greater demand for network and information infrastructure construction. In terms of digital development, the digital economy has gradually become the game changer in global competition landscape. As the scale of the economy is rapidly expanding while our Smart Tower business is highly compatible with the national digital economic development strategy, there are ample opportunities for a digital tower market. Against the background of the dual carbon goals, the development of new energy has accelerated the demand for high-efficiency electricity source. The company will usher in a good prospect for business development in terms of new energy applications.
Looking ahead, the company will further its One Core and Two Wings strategy and position itself as a world-class information and communications infrastructure service provider and a highly competitive information and energy applications provider to speed up the development of an operating system that is professional, intensive, delicate, effective, and digitalized in order to build an enterprise centered around sharing, service, and innovation, and driven by technology and value creation, striving for value growth of the company. In 2022, the company will continue to cement its industry leadership in TSP market and further expand the Two Wings business so as to achieve steady growth of operating revenue. Such moves can help maintain stable and healthy cash flow with improvement on the profitability as well as open a new chapter for the company's high-quality development.
Now, I would like to hand over to our Executive Director and General Manager, Mr. Gu Xiaomin. He will explain the company's 2021 operating performance in more detail.
Thank you, Chairman Zhang. Now, I would like to report to you the company's operating performance in 2021 and major business strategies for 2022. This table shows comparable data on the company's various business revenue and key indicators. I'll explain them in detail. In 2021, the company's One Core and Two Wings strategy achieved initial success and thus has further strengthened its multi-pillar development structure to support operating revenue growth. The company's operating revenue increased by RMB 5.49 billion or 6.8% year-on-year. In terms of the breakdown of revenue growth by business segments, the TSP business contributed to 60.1% of the total operating revenue, boosting the revenue growth by 4.1 percentage points, so as to support the company's revenue growth steadily.
Meanwhile, the contribution from the Two Wings business kept growing, accounting for nearly 40% of the increase in revenue and improving the total revenue growth contribution by 2.7 percentage points. Now I would like to explain the development of our business by sectors in detail. In view of the business opportunities arising from 5G network coverage expansion and large-scale deployment, the company continued to leverage its advantage and resource coordination, promote the introduction and implementation of policies including 5G power support and public resources sharing, effectively solving the major problems such as site selection and entry, as well as high cost for 5G construction. The company further improved resource sharing, made full use of the existing resources and social resources to promote resource sharing and service sharing, expand the breadth and depth of sharing, and continuously release the values of sharing.
The company kept promoting innovation in construction mode, developed professional construction capabilities for integrated communications coverage, so as to effectively satisfy the 5G network coverage demands from TSP. The company continuously strengthened its technology-led capability, promote the applications of innovative products, including low-cost towers and ancillary facilities and power supply products, and also promoted sharing and augmentation in DAS projects, all with an aim to expedite the massive 5G network deployment at low cost. In 2021, the company's tower business continued to develop steadily and its revenue increased by RMB 2.49 billion, or 3.4% year-on-year to RMB 75.86 billion, demonstrating a further increase when compared to 2020.
As at 31st December 2021, the total number of TSP tenants was 3.26 million, representing a net increase of 85,000 tenants from the end of 2020. TSP tenancy ratio increased from 1.57 to 1.60, showing a further improvement in site co-location rate and reinforcement in its industry leadership. The company seized the favorable opportunity from 5G network coverage expansion to indoor areas and accelerated development of our DAS business. Revenue from our DAS business increased by RMB 810 million, or 23.0% year on year to RMB 4.34 billion. As of the 31 December 2021, the additional DAS coverage in buildings totaled 930 million sq m.
We also covered subways and high-speed railways tunnels with an additional coverage of approximately 2,126 km and 2,078 km respectively. Our DAS business continued to scale up. In terms of our Smart Tower business, the company actively captured the opportunity of digital transformation at the social level, responded to the demand arising from integrated social governance on targeted key sectors such as landscapes, forests, fields, lakes, grass, and sand. By leveraging our advantageous insight resources, localized operation and maintenance capabilities, and national unified intelligent digital platform, we increased R&D investment, improved Tower Monitoring product features, and provided customers with efficient and convenient video surveillance data services and digital information solution in order to accelerate the upgrade from telecom tower to digital tower.
In 2021, the company achieved steady growth, both in total number of tower sites utilized in Smart Tower business and the number of tenants in Smart Tower business, optimizing our social resource sharing model. In terms of the breakdown of our Smart Tower business, Tower Monitoring business achieved a revenue of RMB 2.096 billion, accounting for 51.60%, while revenue from site lease was RMB 1.964 billion. This reflects a continued shift of our business from resource leasing towards higher value digital applications. In 2021, the company took the national dual carbon goals as guidance, focused on core businesses such as battery exchange and power backup, and continued to step up our efforts in product system construction, platform operation capability, and customer service to develop core competencies and build competitive edge in our Energy business.
The company sped up product iterative upgrade and function optimization, strengthened quality control, and continuously enhanced product portfolio. The company transformed from a single support platform to a composite operation platform, built smart energy platform, and kept strengthening the platform operation capability. The company built a customer-centric service system and improved smart customer service and self-service capabilities to enhance customer service quality. In terms of the breakdown of our Energy business in 2021, the battery exchange business has accumulated more than 600,000 users. Revenue amounted to RMB 1.24 billion, accounting for 60% and up by 239.6% year-on-year, while the power backup and other business recorded a revenue of RMB 830 million, accounting for 40% and up by 45.5% year-on-year.
We have preliminarily built a business structure for coordinated development of our Energy business. In 2022, adhering to the sharing philosophy, the company will continue to strengthen its coordination and professional service capabilities, focus on customer needs, and strive to build dual growth engines of 5G plus DAS to further cement its market leadership. Leveraging our unique advantages in resources and capabilities, the company will ceaselessly promote product portfolio innovation, enhance platform operation capabilities, focus on key sectors and key products to refine our Smart Tower business and Energy business, as well as drive a faster development on expansion of our Two Wings business. The company will maintain good asset management, revenue management, and compliance operations.
The company will also continue to improve its basic management and risk prevention capabilities, reinforce the solid foundation for development, demonstrate innovation attribute, deepen reform, coordinate technology and product innovation, system and mechanism innovation, and ceaselessly enhance the internal driving force of corporate development. Now I would like to hand over to our Chief Accountant, Mr. Gao Chunlei. He will explain the company's financial performance.
Thank you, Mr. Gu. Now I would like to explain the company's financial performance in 2021. The table on slide 27 shows the company's 2021 key financial indicators. As a whole, in 2021, the company maintained satisfactory financial performance. It demonstrated steady revenue growth, profitability continued to increase, further improvement on cash flow, and capital structure remained healthy.
In 2021, the company continued to develop specific projects for in-depth cost benchmarking of each site and quality and efficiency enhancement in order to strengthen cost and expenses management, as well as further improve the cost and expense utilization efficiency. The operating expenses in 2021 increased by 6.5% year-on-year to RMB 73.55 billion, and the operating expenses to revenue ratio dropped from 85.2% in 2020 to 84.9%, of which depreciation and amortization increased by 5.2% year-on-year to RMB 49.98 billion. On the back of improved construction of intelligent maintenance system by better maintenance expenses, management and promotion of targeting and standardizing maintenance systems, repairs and maintenance expenses decreased by 0.2% year-on-year to RMB 5.79 billion.
Employee benefits and expenses increased by 12.4% year-on-year to RMB 6.88 billion. If excluded non-comparable factors of the restricted shares and the increase in human and financial resources for business development, the employee benefits and expenses would have increased by 7.0% year-on-year. The rapid growth of the Two Wings business led to an increase in business development costs, such as support, service fees and marketing fees amounted to RMB 2.24 billion, or increased 33.1% compared to last year. In 2021, the company implemented steady CapEx strategy, proactively supported 5G construction and Two Wings business development, strengthened investment management model by controlling total investment and enhancing project efficiency.
Affected by construction demand and change of construction structure of TSP business, the CapEx decreased by 32.1% year-on-year to RMB 25.19 billion, of which for new sites construction and augmentation following the gradual completion of 4G network rollout, demand for 4G new site construction and augmentation decreased substantially. At the same time, the company proactively promoted innovative construction of 5G sites and lowered unit construction costs. CapEx for new site construction and augmentation in 2021 decreased by 38.3% year-on-year to RMB 16.0 billion. For the Two Wings business, the company reinforced the centralized management of the business projects, focused on platform construction and network layout, and promoted product innovation and surface capability improvement.
The CapEx of the Two Wings business declined 10.1% year-on-year to RMB 3.03 billion. For site replacement and improvement, we centered around asset operation quality, optimized CapEx for site replacement and improvement, and improved the durability of existing assets. The CapEx for site repair and maintenance was RMB 3.68 billion, about the same as last year. In 2021, the company's profitability improved rapidly on the back of the stable growth in operating revenue and effective cost allocation. Operating profit increased by 8.5% year-on-year to RMB 13.04 billion. EBITDA grows by 5.9% year-on-year to RMB 63.02 billion, with an EBITDA margin of 72.8%.
Excluding the impact of the adoption of IFRS 16, EBITDA margin increased by 0.5 percentage point to 58.8% compared to that of last year. In 2021, the company's net profit grew by 14.0% year-on-year to RMB 7.33 billion. Net profit margin rose by 0.6 percentage point to 8.5%. We maintained a stable and abundant cash flow in 2021. Net cash generated from operating activities amounted to RMB 60.50 billion, up by 5.1% year-on-year. The free cash flow for the year 2021 increased substantially by 72.9% year-on-year to RMB 35.31 billion due to the effective control of CapEx and steady growth of profitability.
In 2021, the company maintained a healthy financial position with stable capital structure. As of the end of 2021, the company had interest-bearing liabilities of RMB 101.30 billion, down by RMB 11.57 billion from the beginning of the year. The liability to asset ratio was 41.4%, a decrease of 3.4 percentage points from early 2021. Gearing ratio was 33.4%, decreased by 3.3 percentage points from the beginning of the year. Looking ahead to 2022, the company will adhere to its One Core and Two Wings strategy, develop an operating system that is professional, intensive, delicate, effective and digitalized. We will strengthen lean management, accelerate high quality development, promote the continuous improvement of the company's efficiency, and create greater value for shareholders. Thank you.