MTR Earnings: Strong Property Development Profit; Shares Attractive Despite Near-Term Challenges

Narrow-moat MTR’s 2024 results were above our expectations, driven by strong profit from Hong Kong property development. Overall underlying profit surged 175% year on year to HKD 17.5 billion, with profit from the recurrent businesses growing 68% due to the continued recovery from pandemic lows and the full-year contributions of new shopping malls. Meanwhile, pretax Hong Kong property development profit hit a record high of HKD 12.2 billion, attributed to the booking of six residential projects. Despite the robust performance, MTR kept its full-year dividend per share unchanged at HKD 1.31 given higher capital expenditure requirements, primarily for new railway projects and railway maintenance.