MTR CORPORATION Collaborates with CRRC Subsidiary to Win Significant Contract for Sydney Metro West Line

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.