<Daily Summary> HSI Ends at 25,935, Decreasing by 16 Points; HSTI Finishes at 5,785, Down 32 Points; TINGYI Rises Over 4%; MTR CORPORATION, CHINA EAST AIR, ZOOMLION, CHINA COAL, and CHINA SUNTIEN Reach New Peaks; Market Turnover Increases

The analyst rating for MTR Corporation was downgraded from Outperform to Hold due to several factors highlighted in the CLSA research report. The reasons include: 1. Flagging Recurring Profit Growth: The company's recurring profit growth is struggling, which is attributed to potential expenditure growth that could negatively impact profits. 2. Sluggish Revenue: MTR Corporation's revenue remains sluggish, further contributing to concerns about its financial performance. 3. Lowered Profit Forecasts: CLSA has significantly reduced its recurring profit forecasts for 2025-26 by 28% and 33%, indicating a more pessimistic outlook for the company's earnings. 4. Unattractive Risk-Reward Profile: The analyst does not find the risk-reward profile of MTR Corporation attractive, especially considering its dividend yield of 4.8% per annum. 5. Potential for Additional Financing: There is a possibility of convertible bond issuance or stock issuance, which could further dilute existing shareholders' value. As a result of these factors, CLSA has cut the target price for MTR Corporation from HKD 30 to HKD 27.

The analyst rating for MTR Corporation is influenced by several factors. HSBC Global Research noted that while the company's 1H25 results showed decent earnings growth, the weaker profit margin in its transportation business was a significant disappointment. Additionally, there are concerns about the risk of increased capital expenditure due to several new railway projects, which could exert downside pressure on the stock price. As a result, HSBC Global Research has a cautious outlook on the stock. Meanwhile, Citi has maintained a Hold rating but slightly reduced its target price, reflecting a similar cautious stance.