Goldman Sachs maintains a "buy" rating on MTR Corporation (00066) and slightly increases the target price to HK$31.6.

Goldman Sachs released a research report maintaining a "buy" rating on MTR CORPORATION (00066), with the target price adjusted from 31.5 Hong Kong dollars to 31.6 Hong Kong dollars. Considering the latest business trends and development property income recognition plan, the earnings per share forecast for MTR for the 2025 to 2026 fiscal years have been respectively raised by 13% and lowered by 1%. The bank believes that the stock price performance will continue to be driven by the sentiment of the Hong Kong residential market, specifically the willingness of developers to bid for property rights - the latter has always been the main driver of the group's new railway investment in the past few cycles. As expected by the bank, MTR will maintain its final dividend per share at 0.89 Hong Kong dollars, totaling 1.31 Hong Kong dollars for the year, the same as last year. Goldman Sachs stated that MTR CORPORATION's net profit last year was 15.8 billion Hong Kong dollars. Excluding the net loss of 1.7 billion Hong Kong dollars from the revaluation of leased properties, its core net profit more than doubled year-on-year, reaching 17.5 billion Hong Kong dollars, higher than the bank's and the market's estimated 14-15 billion Hong Kong dollars. This is mainly due to property development profits exceeding expectations, mainly from the recognition of the 11th phase of LOHAS Park, the 1st phase of Ho Man Tin Station, and the 1st/2nd/4th/5th phases of "THE SOUTHSIDE" projects. This was partially offset by lower-than-expected returns from the Hong Kong railway and investment property business, attributed to increased employee costs, and accelerated depreciation expenses for some trains in the second half of 2024.