MTR's Second-Half Result Better on Residential Development and Tight Cost Control

MTR’s second-half result was slightly better than the first half, as restrictive measures were relaxed in the second half of 2021. This has provided an uplift in patronage across the rail network and an improvement in station commercial revenue, mainly in advertisement revenue. Second-half underlying net profit of HKD 7 billion, took full-year net profit to HKD 11.1 billion. The booking of development properties supported net profit, along with good cost control. Despite domestic patronage recovering to near prepandemic level in the second half, the transport business remained loss making in the second half as borders with mainland China and the world remained largely closed. This remains a key driver for a full recovery in earnings and a positive catalyst for the stock.