Core Viewpoint - UBS maintains a "Sell" rating on MTR Corporation (00066) due to unattractive risk/return profile and lowers earnings per share forecasts for 2025 to 2027 by 2% to 12% reflecting higher interest expenses [1] Financial Projections - Target price increased from HKD 21.6 to HKD 24, representing a 30% discount to net asset value per share [1] - Estimated funding gap of HKD 117 billion for MTR from 2025 to 2029 due to rising capital expenditures on new railway projects and increased interest expenses [1] Dividend and Cash Flow Analysis - MTR's dividend yield is 4.7%, compared to an average of 5.4% for leading developers, indicating limited upside for dividends and weak independent credit status [1] - Projected negative free cash flow after dividends for 2025 is HKD -12.98 billion, with further negative projections for 2026 to 2029 of HKD -8.517 billion, HKD -26.369 billion, HKD -34.47 billion, and HKD -35.078 billion respectively [1] - Expected dividend per share for the next two years is HKD 1.31 [1]

FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | 截至月份: | 2025年7月31日 | 狀態: 新提交 | | --- | --- | --- | | 致：香港交易及結算所有限公司 | | | | 公司名稱: | 香港鐵路有限公司 | | | 呈交日期: | 2025年8月5日 | | | I. 法定/註冊股本變動 | 不適用 | | II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00066 | 說明 | 不適用 | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 6,224,823,171 | | 0 | | 6,224,823,171 | | 增加 / 減少 (-) | | | 0 ...

Core Viewpoint - Morgan Stanley has initiated coverage on MTR Corporation (00066) with a target price of HKD 29 and a "Neutral" rating, highlighting the company's unique business model that combines railway operations with real estate development [1] Summary by Relevant Categories Business Model - MTR Corporation utilizes a distinctive business model that integrates railway operations with real estate development, leveraging its transportation infrastructure to unlock real estate investment opportunities [1] Financial Performance - The risk-reward profile for MTR appears balanced, with local railway operations in Hong Kong showing a rebound post-pandemic [1] - However, the company's upside potential is constrained by several factors, including sluggish growth in leasing business and anticipated slowdown in real estate development profits starting in 2027 [1] Capital Expenditure and Profit Outlook - The development of the Northern Link project in Hong Kong is expected to increase capital expenditure requirements [1] - These factors collectively suggest a potential 16% decline in MTR's earnings compound annual growth rate (CAGR) for the fiscal years 2025-2027, which may limit the possibility of significant revaluation of its stock [1] Dividend Expectations - Despite the challenges, Morgan Stanley anticipates that MTR's dividends will remain stable [1]

小摩表示，港铁采用独特的商业模式，将铁路营运与房地产开发相结合，利用其交通基础设施释放房地 产投资机会。目前，港铁的风险回报似乎处于平衡状态，香港本地铁路运营在疫情后反弹的势头已充分 反映。然而，其上行潜力受到以下几个因素的限制：1)租赁业务增长乏力;2) 预计从2027年开始房地产 开发利润将放缓;3) 香港北环线开发项目提供资金导致资本支出需求将增加。 智通财经APP获悉，摩根大通发布研报称，首予港铁公司(00066)目标价29港元和"中性"评级。 这些因素共同导致港铁2025-2027财年的盈利复合或有16%的下降，这可能会限制其估值大幅重估的可 能性。不过，小摩预期股息将保持稳定。 ...

Core Viewpoint - The Railway Technology Innovation Alliance is focused on enhancing technological self-reliance and high-quality development in the railway sector through collaborative innovation and the establishment of an international standardization committee [1][2]. Group 1: Achievements and Innovations - The alliance has successfully implemented an innovation-driven development strategy, resulting in significant achievements such as the "Fuxing" high-speed train project winning the National Science and Technology Progress Award [1]. - Key technological advancements include the design and successful release of the CR450 train prototype, the regular operation of 30,000-ton heavy-duty trains, and the deepening of technological innovations in various fields such as mobile equipment and communication signals [1][2]. Group 2: Future Plans and Strategic Focus - The alliance plans to integrate research resources and enhance the synergy between technological and industrial innovation to elevate the overall effectiveness of the railway innovation system [2]. - Future initiatives will focus on major technological breakthroughs, promoting the transformation of scientific achievements into practical applications, and improving the railway technology innovation system [2][3]. Group 3: International Collaboration and Standardization - The establishment of the International Standardization Working Committee aims to convert alliance innovations into national and industry standards, enhancing China's railway standards on an international level [2][3]. - A joint funding agreement was signed to expand the scale of the railway basic research fund, promoting deeper collaboration between Hong Kong and mainland railway technology sectors [3].

Operational Performance - MTR Corporation achieved a punctuality rate of 99.9% for passenger journeys[23] - The total passenger volume exceeded 1.9 billion trips during the year[23] - Total passenger numbers for local railway services in 2023 were 1,601.7 million, a 0.9% increase from 2022[36] - The total passenger volume for Hong Kong railway services reached 1,953.5 million, a 3.0% increase year-on-year[95] - Local railway services recorded a total passenger volume of 1,601.7 million, up 0.9%, while cross-border services saw a significant increase of 37.6% to 98.4 million passengers[96] - MTR's punctuality rate for heavy rail services reached 99.9%, exceeding operational targets and demonstrating high service reliability[108] - Train service punctuality across various lines reached 99.9%, exceeding the operational target of 99.0%[109] - Customer satisfaction index for local rail services increased to 72 in 2024 from 70 in 2023[112] Financial Performance - Total revenue for 2024 reached HKD 60,011 million, a 5.3% increase from HKD 56,982 million in 2023[28] - Regular business revenue from Hong Kong passenger services was HKD 28,356 million, up 12.3% from HKD 25,248 million in 2023[28] - EBITDA for regular business increased to HKD 17,907 million, representing a 16.9% growth from HKD 15,323 million in the previous year[28] - Net profit attributable to shareholders for the year was HKD 15,772 million, a significant increase of 102.6% from HKD 7,784 million in 2023[28] - The company reported a pre-tax profit of HKD 19,525 million, an 82.7% increase from HKD 10,685 million in the previous year[28] - The property development business in Hong Kong generated an EBITDA of HKD 12,185 million, a remarkable increase of 423.2% from HKD 2,329 million in 2023[28] - The company’s earnings per share (EPS) increased significantly, reflecting strong operational performance and strategic growth initiatives[28] - The company's recurring profit attributable to shareholders increased by 68.4% to HKD 7.21 billion for the year, alongside property development profits of HKD 10.27 billion, leading to a total profit of HKD 17.48 billion[61] Property Development - The company is continuing to advance 13 residential property projects[23] - The first phase of the Tung Chung East Station property development project has been awarded[23] - The company plans to provide approximately 10,000 residential units to the Hong Kong market through ongoing development projects[59] - As of the end of 2024, MTR has 13 residential property projects under development, expected to provide approximately 10,000 units to the local housing market[76] - The company has sold 72% of the units in the "Lang Yan Feng" project as of December 31, 2024, which was launched for pre-sale in April 2024[161] - The "Blue Coast" and "Blue Coast II" projects achieved sales of 89% and 51% respectively by the end of 2024, following their pre-sale launches in April and October 2024[163] - The total floor area for the approved property development projects is approximately 1,000,000 square meters, with various completion dates ranging from 2024 to 2031[165][168] Sustainability and Innovation - The company plans to install 8 drinking water dispensers at stations during the 2023-2024 fiscal year[25] - The first electric bus has been put into service, and research testing on hydrogen fuel-powered light rail vehicles has been completed[25] - The company is focusing on enhancing operational efficiency and environmental sustainability through innovative technologies, as demonstrated by projects from MTR Lab[57] - The company has completed or is on track to meet all 43 key performance indicators related to environmental, social, and governance standards[62] - The company has launched its first electric bus for passenger service during the review year, aiming to further reduce greenhouse gas emissions[63] - The company is committed to improving the efficiency of existing railway lines to meet the changing needs of passengers[54] - The focus on sustainable and environmentally friendly public transport services is a core aspect of the company's mission[54] Market and Economic Conditions - Future growth will depend on local economic conditions and macroeconomic factors, with ongoing upgrades and updates to the railway system to ensure service quality[91] - The property market performance remains influenced by local and global economic conditions and interest rate trends, with ongoing development opportunities along the railway network[146] - The company is facing challenges in constructing new extensions and stations on operational railway lines, requiring work during non-traffic hours[173] - The company is exploring business opportunities outside Hong Kong, including in mainland China and overseas markets, to enhance its brand and revenue potential[80] Community Engagement and Social Responsibility - Over 150 training sessions on diversity, equality, and inclusion were held for employees[25] - More than 10% of interns were from disabled or diverse ethnic backgrounds[25] - The company is committed to social inclusion, organizing 348 volunteer activities with participation from 5,847 volunteers in 2024[65] - The company has established a scholarship program worth HKD 5 million to support students aspiring to enter the railway industry[66] - MTR Corporation celebrated the 45th anniversary of its metro services, highlighting its significant role in Hong Kong's economic and social development[72] Infrastructure Development - The railway network in Hong Kong spans 271 kilometers with 99 stations, reflecting significant infrastructure development[50] - The company has initiated new railway projects and development plans as part of its long-term economic growth strategy for Hong Kong[54] - The completion of the East Rail Line cross-harbor section two years ago marked a significant advancement in Hong Kong's railway development[54] - The company continues to support the government in planning and constructing new railway projects, marking a new phase in Hong Kong's infrastructure development[76] - The company is actively planning railway expansion projects, including the Tung Chung Line extension and the Tuen Mun South extension, to enhance connectivity and support sustainable economic development[172] Revenue Streams and Business Diversification - MTR's international business diversification includes the opening of new metro stations in Sydney and the completion of the first phase of Shenzhen Metro Line 13[77] - Revenue from the company's subsidiaries in mainland China and Macau increased by 31.2% to HKD 2.589 billion, while international railway business revenue decreased by 4.6% to HKD 22.878 billion[195] - The company operates eight railway services outside Hong Kong, with a total passenger volume of 2.52 billion, providing diversified revenue sources and promoting Hong Kong's brand internationally[188]

Financial Performance - Total revenue for the year ended December 31, 2024, was HKD 60,011 million, representing a 5.3% increase from HKD 56,982 million in 2023[3] - Regular business profit surged by 68.4% to HKD 7,210 million, up from HKD 4,281 million in the previous year[3] - Net profit attributable to shareholders was HKD 15,772 million, reflecting a 102.6% increase from HKD 7,784 million in 2023[3] - The company's profit for the year ended December 31, 2024, was HKD 16,067 million, a significant increase of 99% compared to HKD 8,088 million in 2023[13] - Total comprehensive income for the year was HKD 15,552 million, up from HKD 6,958 million in the previous year, representing a growth of 123%[13] - The adjusted profit attributable to shareholders for the year was HKD 15,772 million, compared to HKD 7,784 million in 2023, representing a growth of 102%[18] - Basic earnings per share for the year ending December 31, 2024, is HKD 2.81, up from HKD 1.03 in 2023, reflecting a significant increase in profit attributable to shareholders of HKD 15.772 billion[30] - Diluted earnings per share also stands at HKD 2.81 for the year ending December 31, 2024, based on a profit of HKD 17.475 billion from core operations[30] Property Development - Property development profit reached HKD 10,265 million, a significant increase of 392.8% compared to HKD 2,083 million in 2023[3] - The profit from property development in Hong Kong was HKD 10,235 million for 2024, compared to HKD 2,035 million in 2023, indicating a growth of 404%[19] - The company reported a significant increase in revenue from property development, with HKD 12,185 million before tax in 2024, up from HKD 2,329 million in 2023[19] - The company plans to recognize property development profits from various projects, including the second phase of Ho Man Tin Station and the third phase of South Island Line[8] - The first phase of the East Tung Chung Station property development project was approved in December 2024[6] Dividends - The company proposed a final dividend of HKD 0.89 per share, maintaining the total dividend for the year at HKD 1.31 per share, unchanged from 2023[3] - The company declared an interim dividend of HKD 0.42 per share for the year 2024, consistent with the previous year[27] - The board proposed a final ordinary dividend of HKD 0.89 per share, maintaining the total annual dividend at HKD 1.31 per share, consistent with 2023[72] Revenue Sources - Hong Kong railway operations revenue increased to HKD 23,013 million from HKD 20,131 million, while station commercial revenue rose to HKD 5,343 million from HKD 5,117 million[8] - The profit contribution from Hong Kong passenger services was HKD 3.710 billion for 2024, up from HKD 2.681 billion in 2023[32] - Total revenue from Hong Kong operations increased by 14.3% to HKD 23.013 billion, with EBITDA rising by 29.2% to HKD 7.694 billion[77] - The company reported a substantial increase in cross-border service revenue by 61.5% to HKD 3.562 billion, reflecting a recovery in operations[78] Financial Position - The net assets increased to HKD 186,133 million in 2024 from HKD 178,856 million in 2023, reflecting a rise of 4%[15] - The total equity attributable to shareholders increased to HKD 185,625 million in 2024 from HKD 178,344 million in 2023, a growth of 4%[15] - The company’s total assets reached HKD 367,499 million in 2024, compared to HKD 346,426 million in 2023, reflecting an increase of 6%[15] - The company’s liabilities decreased from HKD 181,366 million in 2023 to HKD 167,570 million in 2024, a reduction of 8%[15] Taxation - The current tax expense for Hong Kong profits tax for the year ended December 31, 2024, was HKD 2.086 billion, significantly higher than HKD 610 million in 2023[23] - The total deferred tax expense for the year ended December 31, 2024, was HKD 983 million, compared to HKD 588 million in 2023[23] - The total tax amount related to the initial payment and assumed liabilities from the merger of the two railways from 2007 to 2025 is HKD 5.8 billion, with HKD 2 billion recognized as tax provision as of December 31, 2024[24] Operational Highlights - Total passenger numbers for local railway services increased to 1,601.7 million in 2024 from 1,586.7 million in 2023, representing a growth of 0.9%[63] - The average daily passenger numbers for cross-border services rose to 268.8 thousand in 2024, compared to 195.9 thousand in 2023, marking an increase of 37.1%[63] - The punctuality rate for heavy rail services reached 99.9%, exceeding operational targets and demonstrating high service reliability[83] - The number of reportable incidents for heavy and light rail networks decreased by 25% and 6% respectively, indicating improved safety performance[84] Strategic Initiatives - The company is focused on prudent financial management, optimizing capital arrangements, and maintaining a strong balance sheet to support new railway construction[8] - The company plans to continue supporting government infrastructure projects, including the construction of new railway lines, with significant capital expenditures anticipated for these developments[73] - The company aims to expand its railway network into densely populated areas of Hong Kong, aligning with government planning and infrastructure development strategies[74] Challenges and Provisions - The company has not made any provisions in its financial statements for potential liabilities related to further overruns as of December 31, 2024[43] - The company continues to negotiate with the Hong Kong government regarding the payment responsibilities for the Hung Hom incident costs[50] - The company has not accounted for any potential claims from other parties related to the Hung Hom incident in the provisions[51] Sustainability and Governance - The company raised HKD 7.4 billion under its sustainable financing framework, including the issuance of offshore RMB green bonds worth RMB 4.5 billion, demonstrating a commitment to sustainable development[138] - The company established 43 key performance indicators to measure progress towards environmental and social goals, achieving or on track to achieve all targets during the year[137] - The company completed the installation of solar photovoltaic systems at three locations, generating more renewable energy[138]

Financial Performance - Total revenue reached HKD 29.3 billion, an increase of 6.2% compared to the previous period[2] - Regular business profit amounted to HKD 4.0 billion, reflecting a significant growth of 66.3%[2] - Net profit attributable to shareholders was HKD 6.0 billion, representing a growth of 44.7%[2] - In the first half of 2024, the company reported a profit attributable to shareholders of HKD 4.024 billion, an increase of 82.9% compared to the same period in 2023[16] - The company achieved a net profit of HKD 6.044 billion, which represents a year-on-year increase of 44.7%, equivalent to earnings per share of HKD 0.97[16] - The profit from Hong Kong passenger services rose significantly by 125.8% to HKD 2,312 million, up from HKD 1,024 million[79] - The company reported a profit attributable to shareholders of HKD 6.044 billion for the six months ended June 30, 2024, compared to HKD 4.178 billion for the same period in 2023, representing a year-over-year increase of 44.7%[160] Property Development - Property development profit surged to HKD 1.7 billion, marking a remarkable increase of 137.7%[2] - The profit from property development (after tax) in Hong Kong was HKD 1,722 million, a 141.9% increase from HKD 712 million[79] - The company is actively developing 14 residential property projects, expected to provide approximately 12,000 units to the Hong Kong housing market in the coming years[22] - The total floor area for upcoming property development projects is 826,000 square meters for residential, 30,000 square meters for commercial, and 4,500 square meters for kindergartens, with completion expected between 2030 and 2042[47] - The company recorded a post-tax profit of HKD 1.722 billion from property development in the first half of 2024, mainly from several ongoing projects[45] Operational Efficiency - The company continues to enhance its asset management and operational efficiency to increase shareholder value and ensure sustainable development[14] - The company achieved a train punctuality rate of 99.9% during the first half of the year, maintaining world-class operational standards[22] - The introduction of a cloud-based AI platform for train scheduling aims to optimize train mileage adjustments and planning[22] - The company is enhancing customer experience by increasing train services on the East Rail Line by 76 additional services on weekends and public holidays[36] Environmental and Social Governance (ESG) - The company has set 43 key performance indicators related to environmental, social, and governance (ESG) for 2024[17] - The company has installed solar photovoltaic systems at Kwun Tong Station, Tuen Mun Depot, and Tai Wai Depot, contributing to its goal of reducing carbon emissions[18] - The company has launched the "EmpowerZ" training pilot program for multi-ethnic and disabled individuals in the first half of 2024[19] - The company has initiated the "Train Outshine Every Journey 2.0 Program," focusing on social innovation and equipping youth with future skills[20] Infrastructure Development - The company is actively preparing multiple new railway projects to support Hong Kong's future development, including the construction of Hung Shui Kiu Station, which was approved in March 2024[15] - The company is advancing multiple new railway infrastructure projects to strengthen connectivity within Hong Kong and with the Greater Bay Area[23] - The East Rail Line extension project is expected to be completed by 2029, enhancing transportation links in the North Lantau area[51] - The Tuen Mun South Extension project is anticipated to be completed by 2030, extending the Tuen Mun Line approximately 2.4 kilometers[51] Financial Position - Total assets increased to HKD 361.0 billion, a rise of 4.2% compared to December 31, 2023[2] - Net asset value stood at HKD 179.0 billion, showing a slight increase of 0.1%[2] - The net debt-to-equity ratio improved to 27.5%, a decrease of 1.0 percentage point from December 31, 2023[2] - Operating cash flow for the six months ended June 30, 2024, was HKD 8.179 billion, compared to HKD 3.870 billion for the same period in 2023, driven by increased recurring business profits and reduced tax payments[95] Shareholder Returns - The interim dividend remained stable at HKD 0.42 per share, unchanged from the interim dividend in 2023[2] - The company declared an interim dividend of HKD 0.42 per share, consistent with the first half of 2023[26] - The company aims to achieve a female board member ratio of 25% by 2025, currently exceeding 20% with four female members, representing over 22% of the board[104] Market and Competition - The company is actively pursuing new opportunities in mainland China and international markets, with the Melbourne urban railway network franchise extended to November 2027 and the Sydney Metro city and southwest line nearing completion[25] - The company announced a fare adjustment of +3.09% for the 2024/2025 fiscal year, in line with affordability guidelines[22] - The company is competing for the next round of the Elizabeth Line franchise in the UK[15] Challenges and Risks - The company reported a loss of HKD 132 million from its railway, property leasing, and property management subsidiaries in mainland China and Macau in the first half of 2024[58] - The company plans to exit the Beijing "Ginza Mall" business by May 2024 due to challenges in the retail property market in mainland China[62] - The company has faced challenges such as archaeological discoveries and delays in site handover, impacting the project timeline and costs[177]

Financial Performance - Total revenue for the six months ended June 30, 2024, was HKD 29,271 million, representing a 6.2% increase from HKD 27,574 million in the same period of 2023[3] - Regular business profit increased by 66.3% to HKD 4,024 million, up from HKD 2,420 million year-on-year[3] - The company reported a net profit attributable to shareholders of HKD 6,044 million, a 44.7% increase from HKD 4,178 million in the previous year[3] - Basic earnings per share increased to HKD 0.97, up from HKD 0.67 year-on-year[9] - The profit for the six months ended June 30, 2024, was HKD 6,144 million, an increase of 41.2% compared to HKD 4,353 million for the same period in 2023[10] - Total comprehensive income for the period was HKD 5,755 million, up 60.5% from HKD 3,586 million in the previous year[10] - The profit attributable to shareholders for the six months ended June 30, 2024, was HKD 5,662 million, compared to HKD 3,415 million in 2023, representing a 66.0% increase[10] - The profit from property development in Hong Kong for the six months ended June 30, 2024, was HKD 1,722 million, a significant increase from HKD 712 million in the same period of 2023[15] - The company reported a pre-tax profit from Hong Kong property development of HKD 2,024 million for the six months ended June 30, 2024, compared to HKD 783 million in 2023[15] - The company reported a profit attributable to shareholders from core operations of HKD 5,764 million, up from HKD 3,152 million, indicating an increase of 83%[50] Property Development - Property development profit reached HKD 1,740 million, a significant increase of 137.7% compared to HKD 732 million in the previous year[3] - The Hong Kong property development profit was primarily driven by projects such as "Jinhuan" and "Yanghai"[4] - The company anticipates property development profits from several projects in the second half of 2024, depending on construction and sales progress[6] - The profit attributable to shareholders from property development was HKD 1.74 billion for the six months ending June 30, 2024, compared to HKD 0.732 billion in 2023, indicating a significant increase[26] - The property development segment recorded a post-tax profit of HKD 1.722 billion in the first half of 2024, primarily from projects "Jinhuan," "Yanghai," and "Kaibofeng"[75] - As of June 30, 2024, the company had 14 residential property development projects in progress, expected to provide approximately 12,000 units to the Hong Kong housing market[52] Dividends - The company declared an interim dividend of HKD 0.42 per share[3] - The interim ordinary dividend declared per share for the six months ended June 30, 2024, was HKD 0.42, consistent with the dividend declared for the same period in 2023[22] - The company declared an interim dividend of HKD 0.42 per share for the six months ending June 30, 2024, with the aim of maintaining or gradually increasing the dividend each year[23] Assets and Liabilities - The company's cash and bank balances increased to HKD 31,266 million as of June 30, 2024, from HKD 22,375 million at the end of 2023, reflecting a growth of 39.8%[11] - The total assets of the company as of June 30, 2024, were HKD 361,017 million, compared to HKD 346,426 million at the end of 2023, indicating a 4.2% increase[11] - The company's liabilities decreased slightly to HKD 182,064 million as of June 30, 2024, from HKD 167,570 million at the end of 2023[11] - Total liabilities rose by 8.6% to HKD 182.064 billion, mainly due to net loan withdrawals and the provision for the 2023 final dividend[120] Taxation - The current tax provision for Hong Kong profits tax for the six months ended June 30, 2024, was HKD 851 million, compared to HKD 525 million for the same period in 2023, representing a 62% increase[18] - Income tax expense increased by HKD 237 million or 41.7% to HKD 806 million, primarily due to the rise in regular business profit[113] Operational Highlights - The company is actively pursuing new railway infrastructure projects to enhance connectivity and service reliability in Hong Kong[51] - The company is currently reviewing the concerns raised by the Hong Kong government regarding its performance obligations under the commissioning agreement[30] - The company is exploring opportunities to develop additional data centers while continuing to operate its data center business in Tseung Kwan O[70] - The company is committed to communicating with the Hong Kong government after completing its review of the raised concerns[30] Challenges and Risks - The company is facing challenges from macroeconomic uncertainties and geopolitical risks, necessitating prudent financial management and innovative operational strategies[51] - The company has acknowledged the need for professional project management skills and oversight, which were found lacking in the investigation report[39] Environmental and Social Governance - The company has set 43 key performance indicators related to environmental, social, and governance (ESG) standards for 2024, focusing on reducing greenhouse gas emissions and promoting social inclusion[100] - The first electric bus was put into service in June 2024, with plans to purchase 35 more to upgrade the fleet and reduce carbon emissions[101] Revenue from Operations - Total revenue for Hong Kong's railway operations reached HKD 11.138 billion for the six months ended June 30, 2024, representing a 19.2% increase compared to HKD 9.342 billion in the same period last year[59] - Revenue from the Hong Kong passenger service segment was HKD 13.78 billion for the six months ending June 30, 2024, compared to HKD 11.76 billion in 2023, marking an increase of 17.2%[26] - Total revenue from station business activities increased by 9.2% year-on-year to HKD 2.638 billion for the first half of 2024[69] Future Projects - The East Rail Line extension project is expected to be completed by 2029, enhancing transportation links in the North Lantau area[78] - The Tuen Mun South Extension project is projected to be completed by 2030, extending the Tuen Ma Line by approximately 2.4 kilometers[79] - The company is also working on the construction of the Siu Ho Wan Station, expected to be completed by 2030, to improve transportation links in North Lantau[81]

Investment Rating - The investment rating for MTR Corporation has been downgraded to NEUTRAL [2][3]. Core Insights - MTR Corporation's total revenue for FY23 increased by 19% year-on-year, while attributable profit to major shareholders decreased by 21%. Core profit, which includes property development but excludes fair value changes, fell by 40% year-on-year. The final dividend was maintained at HK$0.89, resulting in a full-year dividend of HK$1.31, which corresponds to a 5% yield based on the last closing price. The current stock price is believed to reflect potential future profit growth, leading to the revision of the target price to HK$28.60 and the downgrade to NEUTRAL [3][8]. Revenue and Profit Analysis - Revenue from Hong Kong transport operations rose significantly by 50% to HK$20.13 billion, while revenue from station commercial businesses increased by 66% to HK$5.12 billion. Revenue from property rental and management businesses in Hong Kong grew by 6% to HK$5.08 billion. However, revenue from Mainland China and international railway operations remained stable at HK$25.96 billion [6][7]. - The overall market share of MTR in the Hong Kong public transport market increased from 48% to 50% in FY23, with local railway passenger volume rising by 19% to 1.58 billion trips [3][6]. Future Capital Expenditure and Leverage - MTR Corporation anticipates significant capital expenditures in the coming years, with projected capital expenditures of HK$26.1 billion, HK$31.5 billion, and HK$30.3 billion for FY24, FY25, and FY26, respectively. This is expected to increase the company's leverage, with the net debt-to-equity ratio rising by 3 percentage points to 26.5% in FY23 [3][5][6]. Financial Projections - Revenue is expected to grow by 4-5% annually from FY24 to FY26, while core net profit is projected to increase by 22%, 46%, and 2% in the same period. The updated NAV per share is estimated at HK$40.80, with a target price of HK$28.60 reflecting a 30% discount due to anticipated increases in leverage [3][4][6].