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MTR Corp Ltd 00066

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Stock XHKG Rating as of
HKD 27.15 +0.15 (0.56%)
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As of Delayed Price Closed
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Company Report

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MTR's Rail Passenger and Retail Recovery Continues to Support Revenue Growth

Xinfu Lee, Kathy Chan

Established in 1975, MTR is the sole rail operator in Hong Kong following the rail merger with Kowloon-Canton Railway in 2007. It operates a rail-based transport system, comprising domestic rail services, light rail, Airport Express, and cross-boundary and a high-speed rail service to the mainland. With an average weekday patronage of over 5 million passengers and growing, the company is one of the world’s busiest rail operators. MTR differentiates itself from traditional rail operators with its "rail-plus-property" funding model. It is given the rights for property development along the rail corridor as a government incentive to induce construction. The high-quality rail network and unusual business model of rail plus property are MTR's key strengths, underpinning our narrow economic moat rating.

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Price vs Fair Value

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00066 is trading at a 30% discount.
Price
HKD 27.00
Fair Value
HKD 77.40
Uncertainty
Low
1-Star Price
HKD 57.28
5-Star Price
HKD 84.30
Economic Moat
Hrzzqyb
Capital Allocation
Fvyphnww

Bulls Say, Bears Say

Bulls

New growth opportunities arise as the Hong Kong government continues to support further expansion of Hong Kong's railway network and accelerated long term development, including the "Three Railways" proposal.

Bears

Being 75%-owned by the Hong Kong government, MTR could be influenced by government decisions. A fundamental shift in the regulatory privileges toward the firm’s "rail plus property" business model could weigh on returns.

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Trading Information

Previous Close Price
HKD 27.00
Day Range
HKD 26.90–27.30
52-Week Range
HKD 23.05–40.20
Bid/Ask
HKD 27.10 / HKD 27.15
Market Cap
HKD 168.80 Bil
Volume/Avg
4.8 Mil / 4.3 Mil

Key Statistics

Price/Earnings (Normalized)
26.13
Price/Sales
2.94
Dividend Yield (Trailing)
4.85%
Dividend Yield (Forward)
4.85%
Total Yield
4.85%

Company Profile

MTR constructs and operates Hong Kong's rail network, giving it a monopoly position. In addition to rail operation, the firm makes recurring income from commercial business within the stations. This includes rental of retail outlets and advertisement within the station and investment properties in shopping malls above stations. Residential real estate development forms part of MTR's return for the rail operation. In a normalized environment, average operating profit is approximately 20% in rail operation, 60% in station commercial and property leasing business, and 20% in property development. The Hong Kong government owns 75% of MTR.
Sector
Industrials
Industry
Railroads
Stock Style Box
Large Core
Total Number of Employees
33,405
Website
https://www.mtr.com.hk

Competitors

Valuation

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Metric
00066
01972
H78
Price/Earnings (Normalized)
 26.1312.429.93
Price/Book Value
 0.940.330.23
Price/Sales
 2.946.513.96
Price/Cash Flow
 14.8314.3217.28
Price/Earnings
00066
01972
H78

Financial Strength

Metric
00066
01972
H78
Quick Ratio
 0.520.480.61
Current Ratio
 0.581.031.70
Interest Coverage
 5.687.92−1.16
Quick Ratio
00066
01972
H78

Profitability

Metric
00066
01972
H78
Return on Assets (Normalized)
 2.09%2.11%1.87%
Return on Equity (Normalized)
 3.75%2.54%2.39%
Return on Invested Capital (Normalized)
 3.43%2.33%2.39%
Return on Assets
00066
01972
H78
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