Citigroup: Maintains "Sell" rating for MTR CORPORATION (00066) with a target price of 23 Hong Kong dollars.

Citi released a research report maintaining a "sell" rating on MTR CORPORATION (00066) with a target price of 23 Hong Kong dollars, expecting MTR to pay a dividend of 1.31 Hong Kong dollars per share from 2025 to 2027. The bank stated that although it believes MTR will be able to meet its capital expenditure needs through borrowing, the resulting increase in leverage could lead to a widening gap between earnings per share and dividends per share. It is expected that MTR's dividends per share will remain at zero growth in the coming years. Management reiterated that MTR adopts a progressive dividend policy with the aim of steadily increasing or at least maintaining the amount of ordinary dividends per share each year. Citi pointed out that as MTR CORPORATION continues to expand its new railway projects, its capital expenditure will continue to increase. The expected capital expenditures from this year to 2027 are 33.8 billion Hong Kong dollars, 29.8 billion Hong Kong dollars, and 27.2 billion Hong Kong dollars respectively. With increasing capital expenditures from new railway projects, if more new lines are approved for construction, the expenditures will further rise. On the other hand, it is expected that the economic benefits from land bidding will decrease, and it is anticipated that the economic benefits obtained by MTR from land bidding will be significantly lower than in previous years.