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MTR (SEHK:66): Assessing Valuation After Strong Discount-Driven Sales at One Park Place in Yau Tong

Simply Wall St · 2d ago

MTR (SEHK:66) just rode a wave of strong demand at the One Park Place launch in Yau Tong, where discounted units moved quickly and reignited investor attention on its property development income stream.

See our latest analysis for MTR.

That backdrop helps explain why MTR’s share price has climbed around the mid teens on a year to date basis and delivered a similar one year share price return, even though the longer term total shareholder return over three and five years is still negative, suggesting momentum is rebuilding from a low base.

If this property led interest has you thinking more broadly about opportunities, it could be worth exploring fast growing stocks with high insider ownership as a way to spot other under the radar ideas.

Given MTR’s improving sentiment but still weak three and five year returns, is today’s valuation a chance to buy into a transport and property recovery, or has the market already priced in the next leg of growth?

Most Popular Narrative Narrative: 11% Overvalued

With MTR closing at HK$30.86 against a narrative fair value of HK$27.86, the current price embeds a premium to projected fundamentals.

The planned HK$140 billion in new railway investments and HK$65 billion over 5 years for maintenance signal a major long term CapEx cycle. If passenger growth disappoints due to remote/hybrid work or population trends, revenue growth may fail to keep pace with rising debt and funding costs, compressing net margins and dampening earnings.

Read the complete narrative.

Want to see the math behind paying a growth style multiple for falling earnings and softer margins? The narrative leans on one bold profitability path. Curious which assumption really drives that call.

Result: Fair Value of HK$27.86 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained passenger and rental growth from new lines and overseas projects, alongside tech driven efficiency gains, could support higher margins than analysts expect.

Find out about the key risks to this MTR narrative.

Build Your Own MTR Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in minutes: Do it your way.

A great starting point for your MTR research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.