MTR CORPORATION(00066) 华泰证券·2025-03-10 01:05Investment Rating - The investment rating for the company is "Buy" [8] Core Views - The company reported a net profit of HKD 15.8 billion for 2024, exceeding expectations due to higher-than-expected property development profits [1] - The property development profit reached HKD 10.3 billion in 2024, a significant increase of 393% year-on-year, driven by the accelerated recognition of project profits [2] - The company is expected to enter a peak period for residential handovers in 2025-2026, with a substantial number of projects awaiting recognition [2] - The company plans to upgrade existing railway facilities and construct new rail lines, with capital expenditures projected to reach HKD 90.8 billion from 2025 to 2027 [1] - The company maintains a net debt ratio of 32% as of the end of 2024, which supports a progressive dividend policy [1] Summary by Sections Financial Performance - The company's revenue for 2024 was HKD 60 billion, a year-on-year increase of 5.3% [1] - The recurring business profit was HKD 7.2 billion, up 68% year-on-year, aligning with expectations [1] - The proposed dividend for 2024 is HKD 1.31, maintaining the same level as the previous year, resulting in a dividend yield of 5.0% [1] Property Development - The company is expected to benefit from a large number of projects awaiting recognition in 2025-2026, particularly those located along the metro lines, which are more attractive compared to competitors [2] - The short-term outlook for the Hong Kong property market remains weak, but the company’s projects are expected to provide stable profitability due to their "minimum guarantee + profit sharing" model [2] Retail and Rental Market - The EBIT for Hong Kong station business decreased by 0.5% to HKD 3.773 billion in 2024, impacted by a 9.8% decline in new rental rates despite the recovery of duty-free shops [3] - The EBIT for Hong Kong property leasing and management increased by 4.3% to HKD 4.169 billion, mainly due to contributions from two newly opened shopping malls, although new rental rates still fell by 8.9% [3] International Operations - The EBIT for Hong Kong railway operations improved significantly, moving from a loss of HKD 1.111 billion in 2023 to near breakeven, driven by increased cross-border passenger flow [4] - Revenue from cross-border services, high-speed rail, and airport express services grew by 62%, 33%, and 21% year-on-year, respectively [4] Profit Forecast and Valuation - The forecast for net profit attributable to shareholders for 2025 and 2026 has been adjusted downwards by 10% and 11% to HKD 20.3 billion and HKD 21.2 billion, respectively [5] - The target price has been adjusted to HKD 29.5, reflecting a 20% discount to account for the diversified business valuation [5][13]