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<Research>UBS Expects MTR CORPORATION to Face HKD117B Funding Gap Over Next 5 Yrs; Rating Kept Sell
Recommend 21 Positive 22 Negative 19 |
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UBS has released a report maintaining a Sell rating on MTR CORPORATION (00066.HK) to reflect the lack of attractive risk/reward. The broker also lowered its 2025-27 EPS forecasts for the company by 2-12% to account for higher interest expenses. Its target price was lifted from HKD21.6 to HKD24, a 30% discount to net asset value per share. Due to the escalating capital expenditure on new railway projects and rising interest expenses, UBS estimated that MTR CORPORATION might face a funding gap of HKD117 billion in 2025-29. If the land market remains sluggish, the company's net debt-to-equity ratio (considering perpetual capital securities as debt) could approach 100% by 2029, sparking concerns over the sustainability of its long-term dividends. AAStocks Financial News |
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