Bank of America Securities: MTR Corporation (00066) 2025 fiscal year profit meets expectations but lacks attractive valuation, maintains "underperform" rating.

Bank of America Securities released a research report stating that the valuation attractiveness of MTR CORPORATION (00066) is insufficient, maintaining a "underperform" rating and a target price of 27 Hong Kong dollars. MTR's core profit decreased by 4% year-on-year to 16.7 billion Hong Kong dollars last year, in line with the bank's expectations. The company maintained a full-year dividend of 1.31 Hong Kong dollars. The bank believes that although MTR is expected to benefit from the current upturn in the Hong Kong real estate market, its dividend growth potential is expected to be limited in the short term due to its large railway capital spending plan. Additionally, as the median household income in Hong Kong only increased by 1% at the end of last year, the likelihood of fare increases this year is low, and it is expected that the profit margin of MTR's Hong Kong railway business for the 2026 fiscal year will continue to be under pressure.