The Zhitong Finance App learned that Haitong International released a research report saying that it believes that the current stock price of MTR Corporation (00066) reflects potential profit growth in the future, and that it will have large capital expenses in the next few years. The leverage ratio is expected to rise further, downgrading its investment rating to “neutral”, with a target price of HK$28.6.
The bank expects the MTR's revenue to increase by 4% to 5% year-on-year from 2024 to 2026, with core earnings growth of 22%, 46% and 2% respectively, and updated its NAV valuation of net assets per share to $40.8 per share. It believes that the MTR's downside risks include fare adjustments, lower passenger volume than expected, development costs, interest costs and depreciation exceeding expectations.