MTR (0066) AI Stock Analysis

• Market Cap: $167.29B
• Dividend Yield: 5.32%
• Average Volume (3M): 5.71M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.61
• Revenue Growth: 5.32%
• EPS Growth: 102.27%
• Country: HK
• Employees: 31,822
• Sector: Industrials
• Sector Strength: 82
• Industry: Railroads
• EPS (TTM): 2.54
• Shares Outstanding: 6,224,823,000
• 10 Day Avg. Volume: 5,416,482
• 30 Day Avg. Volume: 5,713,901
• PEG Ratio: 0.10
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $25.35
• Price Target Upside: -5.93% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

MTR's strong financial performance, particularly in revenue and profit growth, is offset by concerns over negative free cash flow. Technical indicators are mixed, with some bearish signals. The stock appears undervalued with a solid dividend yield, making it attractive to value and income investors.

Positive Factors

Earnings

FY24 underlying profit more than doubled to HKD17.5bn, ahead of estimates on stronger-than-expected development.

Revenue Growth

Revenue from Hong Kong transportation operations surged 19.2% on higher patronage.

Valuation

The stock is now trading at a 31% discount to the appraised current NAV and is attractively valued from a historical perspective.

Negative Factors

Debt Levels

Higher gearing ahead due to rail network expansion.

Home Prices

Home prices play a crucial role in dictating the company’s future earnings outlook and share price performance.

MTR Business Overview & Revenue Model

Company Description

MTR Corporation Limited designs, constructs, operates, maintains, and invests in railways in Hong Kong, Australia, Mainland China, Macao, Sweden, and the United Kingdom. It operates through Hong Kong Transport Operations; Hong Kong Station Commercial Businesses; Hong Kong Property Rental and Management Businesses; Hong Kong Property Development; Mainland China and International Railway, Property Rental and Management Businesses; Mainland China Property Development; and Other Businesses segments. The company offers domestic and cross-boundary railway services, airport express, and a light rail and bus feeder system. It operates 266.3 kilometers of rail network; and 98 stations. The company also provides intercity railway services; leases advertising, office, retail, and car parking spaces at railway stations; offers telecommunication and bandwidth services in railway premises; provides estate management services; and invests in, develops, manages, and leases properties, including shopping malls and offices. In addition, it is involved in the construction, operation, and maintenance of mass transit railway systems. Further, it operates Octopus, a contactless smartcard common payment system; and provides railway consultancy and project management services, as well as offers railway management, engineering, and technology training services. Additionally, the company administers the operation of MTR academy; and provides station management, financing, technical support, and mobile and fixed telecommunication network and related services. It also operates cable car system and a theme village. MTR Corporation Limited was founded in 1975 and is headquartered in Kowloon Bay, Hong Kong.

How the Company Makes Money

MTR Corporation Limited generates revenue through several key streams. The primary revenue source is from its transport operations, which include fares collected from passengers using its extensive rail network. Additionally, MTR benefits significantly from its property-related businesses, which encompass property development, sales, and leasing. The company develops residential and commercial properties near its rail lines, thus creating a synergistic relationship between transport and real estate. This includes rental income from shopping malls, office spaces, and residential units they manage. MTR also earns from advertising within its stations and trains. Furthermore, MTR engages in international railway consultancy and operations, providing management and technical expertise to rail systems worldwide, which contributes to its earnings. Strategic partnerships with local governments and corporations in the regions where it operates also play a vital role in its business model, allowing for sustainable expansion and revenue growth.

MTR Financial Statement Overview

Summary

MTR shows strong revenue and profit growth, supported by efficient operations. The balance sheet is robust with moderate leverage and strong equity. However, negative free cash flow due to high capital expenditures indicates a need for improved cash flow management.

Income Statement

MTR has demonstrated strong revenue growth, with an 8.5% increase from 2023 to 2024. The gross profit margin improved significantly, reflecting enhanced operational efficiency. The net profit margin also more than doubled, indicating strong profitability. EBIT and EBITDA margins are healthy, showing robust core operations.

Balance Sheet

The company maintains a stable balance sheet with a debt-to-equity ratio of 0.42, indicating a conservative use of leverage. ROE improved to 8.5%, showing increased efficiency in generating profits from equity. The equity ratio of 50.5% suggests a solid financial position with reasonable equity financing.

Cash Flow

Free cash flow improved but remains negative, highlighting ongoing capital expenditures. Operating cash flow covers net income well, suggesting strong cash generation from operations. However, free cash flow to net income is less favorable, indicating potential cash management challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
60.01B	56.98B	47.81B	47.20B	42.54B
	Gross Profit
13.71B	10.91B	2.47B	3.03B	95.00M
	EBIT
11.76B	15.68B	1.82B	2.46B	-422.00M
	EBITDA
27.06B	11.56B	17.90B	17.80B	2.71B
	Net Income Common Stockholders
15.77B	7.78B	9.83B	9.55B	-4.81B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.89B	22.38B	16.37B	21.20B	21.22B
	Total Assets
367.50B	346.43B	327.08B	292.08B	290.57B
	Total Debt
77.68B	59.63B	58.13B	54.13B	60.79B
	Net Debt
49.80B	37.26B	47.89B	43.38B	48.91B
	Total Liabilities
181.37B	167.57B	147.17B	112.05B	113.59B
	Stockholders Equity
185.63B	178.34B	179.29B	179.71B	176.79B
Cash Flow		Free Cash Flow
-925.00M	-1.14B	-12.53B	-1.17B	-5.35B
	Operating Cash Flow
18.49B	11.20B	6.76B	7.47B	772.00M
	Investing Cash Flow
-20.27B	-7.72B	-1.99B	5.97B	-675.00M
	Financing Cash Flow
8.50B	1.87B	-4.57B	-14.53B	2.84B

MTR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0066, the sentiment is Positive. The current price of 26.95 is above the 20-day moving average (MA) of 26.02, above the 50-day MA of 26.06, and above the 200-day MA of 26.56, indicating a bullish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 59.75 is Neutral, neither overbought nor oversold. The STOCH value of 52.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0066.

MTR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0066	72 Outperform	$167.29B	10.60	8.65%	5.32%	5.32%	102.27%
Sector *	64 Neutral	$4.30B	11.84	5.23%	249.82%	4.06%	-10.21%

MTR Corporate Events

MTR Corporation Announces Board and Executive Directorate Composition

MTR Corporation Limited has announced the composition of its Board and Executive Directorate, highlighting the roles and functions of its members. The announcement underscores the company’s commitment to governance and strategic oversight, with various committees focusing on areas such as audit and risk, capital works, and environmental and social responsibility. This structure is poised to enhance MTR’s operational efficiency and strengthen its industry positioning, potentially benefiting stakeholders through improved management and oversight.

MTR Corporation Appoints Kevin Choi as Alternate Director

MTR Corporation Limited has announced the appointment of Mr. Kevin Choi as an Alternate Director to the office of the Secretary for Transport and Logistics, effective from April 14, 2025. Mr. Choi, who has an extensive background in various governmental roles, including the Chief Executive’s Office and the Transport and Housing Bureau, will bring his expertise to the company, potentially impacting its strategic direction and strengthening its ties with the Hong Kong government.

MTR Corporation Announces 2025 AGM with Key Resolutions

MTR Corporation Limited has announced its annual general meeting (AGM) scheduled for May 21, 2025, where key business matters will be addressed. These include the approval of financial statements, declaration of dividends, re-election of board members, and the election of a new director. Additionally, a resolution will be considered to authorize the board to issue new shares, with specific conditions set on the discount and volume of shares to be issued. This meeting is crucial for stakeholders as it outlines the company’s future governance and financial strategies, potentially impacting its market position and shareholder value.

MTR Corporation to Approve 2024 Financial Results and Consider Final Dividend

MTR Corporation Limited has scheduled a Board of Directors meeting for 6 March 2025 to approve the audited financial results for the year ending 31 December 2024 and to consider recommending a final dividend. This announcement is a routine but significant corporate event, as it involves key financial disclosures and decisions that impact shareholders and other stakeholders.