Morgan Stanley has released a research report stating that it has positive expectations for MTR Corporation's (00066) performance in the first half of the year. The expected increase in earnings per share and stable dividends will enable MTR to outperform most local developers. It also considers its valuation attractive and gives a "shareholding" rating with a target price of HKD 30.
The bank predicts that MTR's basic profits in the first half of the year will increase by 20% year-on-year to reach HKD 3.8 billion, and the expected recurring business profits will increase by 18% to reach HKD 2.9 billion. The mid-term dividend is expected to remain at HKD 0.42 per share. MTR is expected to complete four property development projects with about 4,500 residential units this year, mainly in the second half. Morgan Stanley pointed out that since the government withdrew its cooling measures in late February, MTR projects have sold more than 2,500 units, and the prospects for property development profits are expected to improve. Benefiting from strong sales of inventory, it is expected that MTR's property development business profits in the first half of this year will increase by 28% year-on-year to HKD 0.9 billion.