Ubs Securities·2026-03-17 09:40Investment Rating - The report assigns a "Sell" rating to MTR Corporation with a target price of HKD 24 [1] Core Insights - MTR Corporation reported a basic net profit of HKD 16.7 billion for the year ending December, a 4% year-on-year decline, which met UBS's expectations. However, recurring EBIT fell by 13%, which was below UBS's forecast [1] - MTR is currently in the planning stages for the South Island Line (West) and the Pak Shek Kok Station, along with the second phase of the Northern Link. UBS anticipates that the capital expenditures for these three new projects will be disclosed in the second half of this year, expecting a negative market reaction to the lower-than-expected recurring profits [1] - In terms of land bidding, MTR plans to launch tenders for the second phase of the Kam Sheung Road Station and the second phase of the Tuen Mun District 16 Station within the next 12 months. Despite a recent market recovery, UBS believes that the land price for Tuen Mun, which has a large development scale of 5,510 units, has limited upside compared to the first phase price of HKD 4,314 per square foot, including one-time payments and profit sharing. Nevertheless, the final land price is expected to remain below the HKD 5,621 per square foot compensation amount [1] - MTR has guided a maintenance capital expenditure of HKD 41.6 billion for the next three years, which is expected to remain relatively stable on a half-yearly comparison [1]