MTR CORPORATION(HK:00066) Zheng Quan Shi Bao Wang·2025-03-14 06:39Core Insights - Hong Kong MTR Corporation (MTR) reported a significant increase in property profits, rising by 392.8%, amidst losses faced by domestic rail companies [1] - For the fiscal year 2024, MTR's total revenue reached HKD 60.011 billion, a slight increase of 5.3% from 2023, with net profit soaring by 102.6% to HKD 15.8 billion [1] - The property development segment emerged as the main driver of MTR's financial health, with profits reaching HKD 10.265 billion, nearly quadrupling year-on-year [1][2] Revenue Structure - MTR's "rail + property" model allows the company to develop land along railway lines, paying for land at pre-construction prices and reaping the benefits post-construction [2] - The property segment now accounts for 65% of total profits, significantly surpassing traditional revenue sources such as passenger services and station businesses [2] - Property leasing income increased by 5.9% to HKD 5.076 billion, bolstered by the opening of new shopping centers [3] Market Dynamics - The recovery of the Hong Kong property market post-policy changes has provided crucial support for MTR's residential projects [5] - Following the government's removal of property cooling measures, the market saw a 17.1% increase in property transaction volume, reaching 67,979 contracts in 2024 [6] - MTR launched several projects shortly after the policy changes, achieving high sales rates for new developments [7] Future Prospects - MTR has a land reserve of 890,000 square meters, with significant residential supply expected in the next 12 months [4] - The company anticipates that property income will not only fund railway construction but also support long-term asset maintenance [4] - Despite the positive outlook, there are concerns about potential market fluctuations affecting profit margins in the property development sector [8][9] Industry Trends - The "rail + property" model is gaining traction in mainland China's rail transit sector, with several companies reporting substantial growth in real estate development revenues [10] - In 2024, 22 cities in China are expected to release 45 parcels of TOD land, indicating a continued push for integrated transport and property development [11] - MTR's operational model differs from mainland counterparts, as it does not directly engage in real estate development but collaborates with developers [12][13]