The MTR Corp is facing a challenging time, with last year's results highlighting the need to expand its non-core revenues. The 5.3 per cent year on year rise in full-year net profit could be attributed basically to impressive cost savings. Revenue from train services on the four urban lines and the Airport Express managed to grow marginally on the back of the extra 10 HK cent surcharge last year and longer trips by passengers, but this year's outlook is hazy. A key question is whether the longer trips will continue and whether the corporation will be able to offset the potential loss of HK$131 million in fare revenue as a result of its decision to shelve a 2.3 per cent fare rise. An even bigger looming challenge, albeit in the longer run, is how it can grow its subway services if it loses its bid for the HK$30 billion Sha Tin to Central rail link. The link, between Tai Wai, Hunghom and Central, is an important part of the SAR's future railway network, but the Government is believed to be strongly favouring the corporation's rival, Kowloon-Canton Railway Corp. If it goes that way, a major threat to the MTR Corp will be soaring competition. It is understood that a response to a losing bid might see the MTR Corp head to the mainland to build and operate railways. Chairman Jack So Chak-kwong is pinning this year's hopes on improved patronage of existing routes and the fresh passengers resulting from commissioning the Tseung Kwan O rail extension in mid-August. However, making things tough is the oversupply in the property market, such as in Tseung Kwan O, and the Government's hazy land sale and housing policies. This will put the corporation in an unfavourable position, as it relies on selling property development rights for profits and to subsidise its rail investments. In Tseung Kwan O alone, it will supply 22 million square feet of space, or 28,796 apartments, above its four train stations. Property director Thomas Ho Hang-kwong believes interest in its Tseung Kwan O's properties will rise when its trains come into service. It is time, however, to expand further into other growth areas - advertising, its Octopus smart-card business, station retailing, consultancy services and telecommunications. Other revenue sources that can grow include property-management services and leasing shopping centres along its lines. Revenue from station activities and rental and management income generated a combined HK$1.86 billion last year, the same as in 2000, despite the economic downturn. The potential for Octopus, which made HK$50 million net profit and contributed HK$29 million to the MTR Corp's bottom line, should not be neglected.