UBS: Gives MTR Corporation (00066) a "sell" rating with a target price of 21.6 Hong Kong dollars.

UBS released a research report stating that they give MTR CORPORATION (00066) a "sell" rating. They anticipate that the upcoming capital expenditures for the Hong Kong Northern Link project may face upward pressure due to inflation, with a target price of 21.6 Hong Kong dollars in the next 12 months. The report states that MTR CORPORATION signed a project agreement with the Hong Kong government (represented by the Secretary for Transport and Housing) yesterday to determine the financing arrangements, design, construction, operation, and maintenance of the Hung Hom station. The estimated cost of the Hung Hom station is approximately 7 billion Hong Kong dollars at current prices. The bank estimates that the reduction in the project unit price is still lower than the land premium paid by SHK PPT (00016) for the Fanling agricultural land in July. Considering that the capital expenditure for the Hung Hom station has been raised from the previous guidance of 4.1 billion Hong Kong dollars to 7 billion Hong Kong dollars, the stock price is expected to have a slightly negative reaction.