It's not too late to get aboard the MTR express, says Macquarie in a comment on the passenger figures for last year.
While the stock price has risen recently, the shares still offer a solid 12-month total return for shareholders of more than 13.5 per cent at the report-day level of $16.50. This consists of 10.3 per cent upside in capital value and a 3.3 per cent dividend yield.
The broker reiterates its 'outperform' recommendation and sets a 12-month price target of $18.20. It sees catalysts for the stock as confirmation of China projects; economic and tourism growth and a buoyant Hong Kong property market; and a resolution of the merger with the Kowloon-Canton Railway Corp.
Passenger figures are expected to increase further this year, which should underpin the broker's 10 per cent upside in capital value.
Passenger using MTR lines increased 2 per cent year on year in December but possibly the World Trade Organisation convention dampened the growth figures. The Airport Express Line performed strongly with passenger numbers increasing 14.9 per cent year on year in December.
Patronage increased 2.9 per cent for MTR lines and 6.7 per cent for the Airport Express last year, driven by the strengthening Hong Kong economy, growing employment and tourist inflows.
