JPMorgan released a research report maintaining an "Overweight" rating on MTR CORPORATION (00066) with a target price of HK$39, noting that the market underestimates the company's potential as a beneficiary of Hong Kong's economic recovery.
The bank pointed out that MTR CORPORATION's share price performance has outpaced its peers and local property stocks so far this year, with its railway operations supported by cross-border passenger traffic and high-speed rail demand, while its property development segment is entering a profit recognition phase.
MTR CORPORATION is scheduled to announce its first-half 2026 results after the market close on August 13. JPMorgan expects revenue of approximately HK$27 billion and net profit attributable to shareholders before deducting perpetual securities holders of around HK$7.8 billion, both broadly flat year-on-year.
The bank believes that in the railway business, cross-border travel and high-speed rail demand will continue to support passenger volume growth, but the fare mechanism and subsidy structure limit profit growth. In terms of property, MTR CORPORATION is entering a profit recognition period for property development, with pre-tax profit from projects such as Lohas Park and South Island Line expected to rise 50% year-on-year to HK$10 billion.
The report also noted that investors are increasingly focused on how MTR CORPORATION balances capital expenditure and shareholder returns. The stock has risen 10% year-to-date, outperforming the Hang Seng Index over the same period, and its defensive earnings and strong cash flow are expected to continue gaining market recognition.
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