MTR’s Strategic Expansion and Strong Earnings Justify Buy Rating with Target Price of HKD30.30

In a report released today, Jeff Yau from DBS maintained a Buy rating on MTR (MTRJF – Research Report), with a price target of HK$30.30.

Jeff Yau has given his Buy rating due to a combination of factors including MTR’s significant increase in underlying profit for FY24, which more than doubled to HKD17.5 billion, surpassing expectations. This growth is attributed to stronger-than-expected development earnings and positions MTR as a key player in Hong Kong’s economic expansion.
The company’s strategic railway expansion is expected to unlock further property development opportunities, enhancing its leverage on the region’s long-term growth. Additionally, MTR’s dual growth drivers, including increased residential project completions and new shopping malls, are anticipated to boost property development earnings and rental income. Despite higher gearing due to substantial capital expenditures on new railway projects, the stock’s current valuation offers an attractive discount, justifying the Buy rating with a target price of HKD30.30.