UBS released a research report noting that MTR Corporation announced its full-year results for the period ending December last week. The company reported an underlying profit of HKD 16.7 billion, a decrease of 4% year-on-year, which was in line with the bank's expectations. However, recurring EBIT fell by 13% compared to the previous year, falling short of UBS's forecasts. The bank set a target price of HKD 24 for MTR Corporation and maintained a "Sell" rating.

During the earnings briefing, MTR indicated that the South Island Line (West) and Pak Shek Kok Station are currently in the planning phase. Together with the Northern Link Phase 2, UBS anticipates that capital expenditure details for these three new projects will be disclosed in the second half of this year. The bank expects the stock price to react negatively to the weaker-than-expected recurring profit performance.

Regarding land tenders, MTR plans to launch tenders for Kam Sheung Road Station Phase 2 and Tuen Mun Area 16 Station Phase 2 within the next 12 months. Given the large development scale of the Tuen Mun site (totaling 5,510 units), UBS believes that even with the recent market recovery, the upside potential for land prices compared to Phase 1 (HKD 4,314 per square foot, including lump-sum payments and profit sharing) is limited. Nevertheless, the final land price should still be lower than the land premium amount of HKD 5,621 per square foot.

On capital expenditure, MTR guided that maintenance capital expenditure over the next three years will be HKD 41.6 billion, remaining largely unchanged on a half-year comparison.