Goldman Sachs released a research report stating that it gave the MTR Corporation (00066) a “buy” rating and revised the 2024-2026 core earnings forecast for 2024-2026 according to the latest business trends and property development accounting schedule. The target price was raised from HK$32.3 to HK$32.7. The bank anticipates that the MTR Corporation's recurring profit will increase from $5.3 billion in 2023 to $8.6 billion and $9.8 billion in 2024 and 2025, respectively. Revenue for 2024 and 2025 is expected to reach $58.1 billion and $60.2 billion respectively, with dividends of $1.35 and $1.39 per share, respectively.
According to the report, the MTR's net profit decline last year was mainly dragged down by the decline in property development profits. According to the High Commissioner, the decline in MTR's stock price over the past few months was mainly affected by several factors, including: 1 the revaluation of its property, which accounts for half of the MTR's net asset value compared to other Hong Kong real estate companies; 2, concerns about future high capital expenditure budgets; and 3 concerns about dividend sustainability. As discussed in the March 6 report, considering its still healthy balance sheet, the bank expects unrealized revenue related to the tender project to reach 10 billion to 20 billion yuan in the next few years, and does not anticipate much dividend risk.