Citi released a research report stating that it maintained the MTR Corporation (00066) “sell and sell” rating and lowered the target price from HK$26.5 to HK$23. The company said it will re-launch the first phase of the Tung Chung East Station project for tender within this year, but the bank estimates that the economic benefits obtained by the MTR from the project may fall far short of expectations.
According to the report, they were surprised by the Hong Kong government's complete withdrawal, but they still believe that due to current interest levels and buyers' lack of confidence, demand for housing in Hong Kong will still be suppressed in the short term, and that it is too early to expect that developers' intention to bid for the MTR project will improve. MTR's basic profit in 2023 fell 40% year on year to $6.364 billion, lower than market expectations of $7.018 billion, mainly due to a sharp drop of 80% in property development revenue during the period. Thanks to the recovery of cross-border transportation and high-speed rail business, Hong Kong's vehicle operating losses narrowed by 76.5% year-on-year to $1,111 billion last year.